February 25, 2021

Occasional Tweets: How the MMT fraud works

 
 

Refutation of the MMT sectoral balances equation

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February 24, 2021

Occasional Tweets: Once upon a time there was Orthodoxy and Heterodoxy

 


Orthodoxy / Heterodoxy

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Occasional Tweets: MMT is not science, MMTers are not scientists

 

For the final clarification of the finer points of profit theory in an earlier discussion with Brian Romanchuk see AXECquery.
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February 23, 2021

Occasional Tweets: The Kelton Myth

 

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For the full-spectrum refutation of MMT see cross-references MMT.


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Twitter Mar 18


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Wikimedia AXEC152b


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February 22, 2021

Occasional Tweets: Distribution is the problem not inflation

 

For more on inflation see AXECquery.
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Occasional Tweets: Clueless economists / Phillips Curve (I)

 

For more on the Phillips Curve see AXECquery.
For more on clueless economists see AXECquery.
For more on Employment Law see AXECquery.
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Occasional Tweets: Macroeconomics

 

For more on macroeconomics see AXECquery 


Wikimedia AXEC121i

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February 21, 2021

The MMT fraud in slow motion, so that even economists can get it

Comment on Matt Franko on ‘Treasury issuance’


The macroeconomic 4-sector Profit Law reads Q≡(G−T)+(I−S)+(X−M)+Yd. Let us reduce it to 3 sectors (household, business, government, and Yd=0, I=0), i.e. to Q≡(G−T)−S. In plain language it now says: The profit of the business sector Q is equal to the government's budget deficit (G−T)>0 minus the household sector's saving S.

So, if the budget deficit (G−T) increases and household sector saving S remains unchanged the business sector's profit Q increases by the same amount. The Profit Law implies Public Deficit = Private Profit. That's pretty straightforward. So, what can be expected from the increased deficit-spending/money-creation that has been started by Mr. Trump and is continued by Mr. Biden is a profit explosion subject to the secondary condition that household sector saving S and the foreign trade balance (X−M) remain fairly stable.#1

The business sector can hold the increased monetary profit as cash/deposit or buy interest-bearing bills/notes/bonds. Figure 6 shows how every single item increased in 2020.

Source: MNE Matt Franko

Matt Franko comments: “You can see how Treasury issuance has been exceeding non-govt savings (ofc unqualified call this “the debt!”) starting last year after shutdown policy was implemented and still being maintained at > $1T... And it has largely been accomplished by increasing issuance of bills... So govt has been forcing the non-govt to save in an additional $1T + balance of short-term Treasury Bills that the non-govt neither wants or needs.”

The peculiarity of Matt Franko's comment consists of the fact that he does NOT differentiate between household sector and business sector but talks of the non-government sector aka private sector and that he does not differentiate between household sector saving and business sector profit. The business sector vanishes, three sectors are reduced to two: govt and non-govt. By collapsing the household and the business sector to the non-gov/private sector, MMTers let the profit-rabbit vanish in the macroeconomic top hat.

In formal terms, Matt Franko takes the Profit Law Q≡(G−T)−S and rewrites it as Q+S=(G−T), and calls the left-hand side (Q+S) non-government saving. Thus, the business sector and profit vanish and he ends up with the MMT slogan Public Deficit = Non-Government Saving or as Stephanie Kelton is wont to say: The government's red ink’ becomes our ‘black ink’. What people always overlook is that “our” does not mean WeThePeople but WeTheOligarchy.#2

The false We/Our and the rewriting of the Profit Law are the semantic and formal tricks that MMTers use to deceive WeThePeople. The rest of the economics profession is either too stupid to check the fraud or complicit.#3

Egmont Kakarot-Handtke




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REPLY to Matt Franko on Feb 21

You say: “Everyone already knows that business makes bazillions of USDs all the time it’s not unique or interesting ...”

Agree, but why then does profit Q (= balance of the business sector) not appear in the MMT sectoral balances equation (I−S)+(G−T)+(X−M)=0? #1

Could it be that then even the blind could immediately see that Public Deficit = Private Profit and that MMTers are NOT the nice-progressive-humanitarian-righteous champions for WeThePeople but rather the rotten-mendacious-stupid-corrupt agenda pushers for the Oligarchy?



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Twitter Oct 15

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February 19, 2021

Occasional Tweets: Economics is materially/ formally inconsistent, i.e. proto-scientific garbage

 


Material/formal consistency

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Proving Bill Mitchell wrong ― burying MMT for good

Comment on Bill Mitchell on ‘The income-expenditure relationship in macroeconomics ― graphic treatment’*


Bill Mitchell introduces his macroeconomic approach: “Over the last several months by way of advancing Modern Monetary Theory (MMT) education initiatives, we have been involved in development a MOOC, i.e. Modern Monetary Theory: Economics for the 21st Century.” and “As part of the planning I have been thinking of simplified frameworks for teaching rather complicated concepts and relationships.”

In his course material, Bill Mitchell deals with nominal flows only, real flows and connecting variables like wage rate, price, productivity are left out of the picture. This ends up in a lethal mistake that invalidates the whole of MMT.

Here is the proof.

The elementary production-consumption economy is defined with this set of macroeconomic axioms: (A0) The economy consists of the household and the business sector which, in turn, consists initially of one giant fully integrated firm. (A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L, (A2) O=RL output O is equal to productivity R times working hours L, (A3) Ec=PX consumption expenditure Ec is equal to price P times quantity bought/sold X.

Under the conditions of market-clearing X=O and budget-balancing Ec=Yw in each period, the price as the dependent variable is given by P=W/R. The elementary production-consumption economy is shown on Wikimedia AXEC31a.#1


This graph is a bit more complex but with regard to nominal flows absolutely identical with Bill Mitchell's graph which simply says Yw=Ec.#2


So the starting point of the analysis of nominal flows is identical.

For the time being, real balances are excluded, i.e. it holds X=O. The condition of budget balancing, i.e. Ec=Yw, is now skipped. The resulting monetary saving/dissaving of the household sector is defined as S≡Yw−Ec. The monetary profit/loss of the business sector is defined as Q≡Ec−Yw. So, the balances of the two sectors are complementary, i.e. Q≡−S. In other words, the balances add up to zero, just as they are supposed to do according to the rules of accounting.

The mirror image of household sector saving S is business sector loss −Q. The mirror image of household sector dissaving −S is business sector profit Q. So, Q≡−S is the elementary version of the macroeconomic Profit Law.

Macroeconomic profit, though, is entirely missing in Bill Mitchell's presentation of the income-expenditure relationships. Now, any presentation of the elementary economic system that does not contain the foundational economic variable profit is scientifically worthless. From the fact that the conceptional foundations of macroeconomics are provably false follows that the whole analytic superstructure of MMT is false.#3-#6 This is all one needs to know about Bill Mitchell and MMT.

Egmont Kakarot-Handtke


#1 Wikimedia AXEC31a
⇒ Section Provably False/MMT


For more on Bill Mitchell see AXECquery.
For more on proof see AXECquery.
For more on sectoral balances see AXECquery.
For the full-spectrum refutation of MMT see cross-references MMT.
For an extended discussion about defective MMT macrofoundations with Peter Cooper see AXECquery.

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Wikimedia AXEC118d

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February 18, 2021

The memorable Kelton/Trump victory against WeThePeople

Comment on George Eaton on ‘MMT economist Stephanie Kelton: “Donald Trump changed the terms of economic debate”’*


George Eaton reports: “I asked Kelton whether she believes Donald Trump has changed the terms of economic debate. “Absolutely. When he passed the $1.9trn tax cuts in 2018, which everybody knew were going to increase the deficit, I saw Senator Sanders, and he said to me, ‘Is this you? Did you do this?’ And I replied, ‘It’s a good thing. It’s a good thing in that it’s going to show you can make use of the budget when you have power to carry out your agenda.’”

Yes, of course, it was a good thing, because deficit-spending/money-creation has always been a good thing for the Oligarchy.#1 The 3-sector Profit Law Q≡(G−T)+(I−S)+Yd implies Public Deficit = Private Profit. Therefore, more deficit-spending/money-creation results in due time in a macroeconomic profit explosion.

The relationship between deficit and profit as given by the Profit Law, however, is either not well understood or deliberately obfuscated in the public debate. MMTers, of course, do not openly admit that they are working for the Oligarchy but pretend to fight as upright Progressives against austerity and for the welfare of WeThePeople. The result has been an utterly confused and confusing propaganda war.#2-#6

President Trump finally did what Stephanie Kelton and the other MMT agenda pushers have argued for in academia and on social media long before 2018: “What did we [the US] do? We spent trillions of dollars [to save the economy]. So do I feel vindicated? Hell yeah, I feel vindicated. It’s been apparent to anyone paying attention who has been getting this stuff right.”#7 Except for the fact, that MMT as economic theory is refuted on all counts.#8

Without a doubt, President Trump's tax cut was a triumph for all the Oligarchy's women and men. In the meantime, MMT has been declared an official doctrine.#9

However, the propaganda war goes on. As Stephanie Kelton announced: “We’re still going to have differences, but at least our debate won’t be bogged down by this threat of running out of money or bankrupting our children and grandchildren, all that stuff.”

Yes, the counterfeiter household never runs out of money and never stops stealing from the rest of society and will with an emphatic smile trick the children of WeThePeople into paying in all eternity interest to the children of the Oligarchy.

COV19 is a godsend for the Oligarchy. The Profit Law says, the bigger the public deficit the higher the private profit.#10 Mr. Trump handed out a massive free lunch to the Oligarchy, Mr. Biden will even surpass him. Academic economists will cover the fraud and deceive WeThePeople with proto-scientific garbage. After all, serving the Oligarchy has always been the actual job of presidents and professors.

Egmont Kakarot-Handtke



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REPLY to Andrew Anderson on Feb 20

You say: “No, the monetary sovereign MAY and SHOULD create new fiat.”

Of course, the Central Bank should provide additional transaction money if the economy and the wage bill are growing. This is exactly what CB's are for. Things go badly wrong, though, if the additional money is not injected on the supply side but on the demand side. In this case, the CB acts like a counterfeiter.#1, #2 Creating money and buying stuff means stealing from the rest of society and pushing up the profit of the business sector, i.e. creating the insane distribution of financial wealth you can observe by switching on your brain and looking out of the window.



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Twitter/X Jun 19, 2023, Roughly speaking, debt explosion means profit explosion

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February 17, 2021

Occasional Tweets: Economics is not yet a science

 

Economics: Not yet a science

“So we really ought to look into theories that don't work, and science that isn't science.” (Feynman)



Wikimedia AXEC169

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Occasional Tweets: The MMT fraud hides behind the false "We"

 
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February 14, 2021

Occasional Tweets: Macroeconomics is proto-scientific garbage just like microeconomics

 

 

Macrofoundations


More on David Andolfatto see AXECquery.
More on David Glasner see AXECquery.
More on William Luther see AXECquery.

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Occasional Tweets: Oops, the scientific reset in economics already happened

 
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February 13, 2021

Occasional Tweets: Old snake oil salesmen again on promotion tour

 


Economists: 200+ years of proto-scientific garbage and agenda-pushing

Contrary to the obtrusive self-portrayal, economics is NOT science but political agenda-pushing. Economists are NOT scientists but clowns and useful idiots in the Circus Maximus. Accelerated by COV19, there runs now a world-wide campaign for deficit-spending. What is advertised as New Economic Thinking is in fact the same old agenda-pushing for the Oligarchy as ever.

The 3-sector macroeconomic #ProfitLaw Q≡(G−T)+(I−S)+Yd implies Public Deficit = Private Profit. So, more deficit-spending/money-creation will produce a profit explosion.

Paul Krugman and Larry Summers are long known as failed/fake scientists but are still members of good standing in the economics profession and half-witted enough for doing op-eds, interviews, talk shows, Tweets, and all the other PR stuff, thus spreading the new economic policy gospel of deficits-are-good-and-debt-does-not-matter-and-inflation-is-not-a-thing which, of course, is scientifically baseless and plain deception of WeThePeople. MMTers are doing this for years already and now the rest of academia and their troll brigade are jumping on the bandwagon.


For more on Paul Krugman see AXECquery.
For more on Larry Summers see AXECquery.
For more on Stephanie Kelton see AXECquery.
For more on Bill Mitchell see AXECquery.

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Wikimedia AXEC144b

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February 12, 2021

Do economists finally wake up from their methodological delirium?

Comment on Lars Syll on ‘Does it — really — take a model to beat a model? No!’


Lars Syll maintains: “A more realistic approach needs to be adopted, which means one that is more practical in its methodological assumptions, more comprehensive in its substantive assumptions and more modest in its aims. At minimum, this means adopting an institution and accounting-based approach instead of a strictly axiomatic one. For starters, a stock-flow consistent approach such as advanced by Wynne Godley based on accounting.”

Right. Macroeconomic accounting is the objective-systemic core of economics and NOT some silly behavioral assumption. Methodological rule #1: If it isn't macro-axiomatized it isn't economics.

Economics is a failed science because the major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are provably false. This includes Godley’s and Lavoie’s approach. More precisely, Godley’s and Lavoie’s program ― the integrated approach to credit, money, income, production, and wealth ― is basically correct but at some point, a lethal inconsistency slipped in and that happened exactly in Section 8.2, page 262, eq. 8.25 (Godley et al., 2007).#1-#5 This blunder carries over to MMT and invalidates it also.

Lars Syll is a bit slow. The Paradigm Shift from false Walrasian microfoundations and false Keynesian macrofoundations to true macrofoundations is an accomplished fact.#6

Egmont Kakarot-Handtke


#1 Godley, W., and Lavoie, M. (2007). Monetary Economics. An Integrated Approach to Credit, Money, Income and Wealth. Houndmills, Basingstoke, New York: Palgrave Macmillan.

For more on Godley see AXECquery.
For more on Syll see AXECquery.
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Occasional Tweets: The end of political economics

 

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Occasional Tweets: Basic economic laws and their implications

 
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Occasional Tweets: Unfit for science ― meet the representative economist

 

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For more on Steve Keen see AXECquery.
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February 11, 2021

Occasional Tweets: Brace for a profit explosion (II)

 


The macroeconomic Profit Law in action

For more on the Profit Law see AXECquery.

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Twitter May 3


Twitter May 4

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Occasional Tweets: MMTers are too stupid for science but well-suited as useful idiots

 


MMT is not science but trolling for the Oligarchy

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February 10, 2021

Occasional Tweets: Look, how they jump on the deficit/profit bandwagon

 

The deficit/profit bandwagon

The 4 essential things to know about MMT are (I) MMT is scientifically worthless because MMTers don't get macrofoundations right, (ii) MMT is political agenda pushing for the benefit of the Oligarchy, (iii) deficit-spending/money-creation matters for distribution, (iv) MMT is the biggest redistribution program ever.

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Occasional Tweets: It's the framing, stupid!

 


MMT: Just another political fraud

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