April 3, 2018

MMT vs Neoliberalism: Just another clown show

Comment on Bill Mitchell on ‘My response to a German critic of MMT ― Part 3’

Blog-Reference and Blog-Reference

Bill Mitchell criticizes the MMT critic Martin Höpner: “But I expect researchers, especially those associated with highly credible institutions such as the Max Planck Institute in Köln, to first of all do their research before they make public comment. Many of the issues raised in the Makroskop article have been ‘done to death’ over the last 25 years.”

Indeed, the whole discussion is standard MMT stuff. Over the last 25 years, MMT has conditioned the public parrot with a handful of catchy slogans:
• There is a fundamental difference between currency issuer and currency user.
• The household analogy holds neither in the short nor in the long run.
• Tax revenue is not required to fund public expenditure.
• A currency-issuing government is not financially constrained.
• The government never runs out of money.
• Taxes make people accept fiat money.
• Government spending is the precondition of taxation.
• Inflation can at any time be contained through taxation.
• Public deficits supply the economy with money.
• Public deficits create financial assets for the non-government sector.
• Growing public debt is no problem, the currency issuer can never go bankrupt.

This set of slogans is only 50 percent economically true but 100 percent politically effective.#1

Against the MMT promise of a bright future for the people, Martin Höpner argues psychologically that if the public realizes that the government is not financially constrained all hell will break loose, with the result of reckless spending, inflation, and ultimate economic collapse. This, of course, is soapbox economics. Consequently, Bill Mitchell has no difficulty debunking Martin Höpner as a useful neoliberal idiot.

In essence, MMT argues that public deficit is good for the ninety-nine-percenters and for democracy. The fact of the matter is that public deficit is good for the one-percenters and the Oligarchy.#2 The macroeconomic Profit Law says Public Deficit = Private Profit and here lies the fundamental scientific error/political fraud of MMT.#3

This is why the spectacular MMT vs Neoliberalism wrestling has NOTHING at all to do with economics but only with mob entertainment in the political Circus Maximus.

Egmont Kakarot-Handtke

#1 For the full-spectrum refutation of MMT see cross-references MMT
#2 MMT is dead: An unfriendly critique of Bill Mitchell
#3 Keynes, Lerner, MMT, Trump and exploding profit

Related 'MMT is NOT an alternative to Neoliberalism' and 'MMT and grassroots movements'.


REPLY to ANC Driver on Mar 4

When you cite me you should supply the reference. So: “Overall economic conditions are especially favorable when the households (private and public) dissave (cf. Wray, 1991, p. 962).” (Kakarot-Handtke, 2001, p. 17)#1

You say “It’s a strange feeling knowing that being debt free and always spending less than I earn I am contributing to the instability of employment!”

The point to grasp is that the monetary economy is either exploding or imploding (in slow motion) and this is why the concept of equilibrium is sheer methodological madness and this is why all supply-demand-equilibrium economics is scientifically worthless for 150+ years and this is why one can use almost the whole stock of economic journals/textbooks for winter heating without any loss of valuable scientific knowledge.#2

The other point is that MMT articles/posts in general and Bob Mitchell’s, in particular, is also proto-scientific garbage because MMTers get the relationship of macroeconomic profit/saving for 25 years wrong.

REPLY to Kristjan on Mar 5

You ask: “How long have you been parroting this profit bs? Every time I see your comments it is: ‘MMT gets the private profit wrong’ bullshit.”

How long has MMT been proclaiming that public deficit is good for the ninety-nine-percenters and for democracy while the fact of the matter is that Public Deficit = Private Profit is good for the one-percenters and for oligarchy?

How long are Bill Mitchell, Stephanie Kelton, Warren Mosler, and the rest of MMTers presenting a provably false balances equation to the public and pushing the agenda of Wall Street?#1

How long does it take you to stop reading my posts or to understand the clear-cut proof of MMTers scientific incompetence#2 or to return to your cozy couch and never stop again watching Goofy & Friends?

#2 For the full-spectrum refutation of MMT see cross-references MMT