August 30, 2018

Secret Champagne for the MMT gods

Comment on Michael Norman on ‘Deficit is the highest in 6 years. Where are all the MMT gods??’


Michael Norman wonders: “The deficit is now $766 bln, the highest in 6 years and the highest in 5 years as a % of GDP. Where are all the MMT gods touting this as bullish? Mosler’s still bearish. He’s been bearish for 4 years. Missed the entire rally. Kelton? Still criticizing Trump.”

The embarrassment is this: MMT is about deficit-spending/money-creation. Deficit-spending/money-creation is money-making for the Oligarchy. The macroeconomic Profit Law clearly implies Public Deficit = Private Profit.

This, however, is an economic policy that cannot be sold to the people. So, the MMT gods developed a smart communication strategy:
  • They made the profit effect disappear in their monetary theory with the help of a false sectoral balances equation.#1
  • They put potential positive employment effects of deficit spending in the foreground.
  • They tell people that public debt is not really debt but private savings.#2
  • They tell people that debt does not really matter but is only some digits on an account.
  • They tell people that budget-balancers are either retarded Swabian housewives or Neoliberal austerity sadists.

In brief, MMTers sell deficit-spending/money-creation as a social benefit, with Stephanie Kelton as the pepped-up Mother Theresa of Late Capitalism.#3

Now, as it happens, Mr. Trump has realized the highest public deficit in 6 years. Michael Norman of Wall Street is very excited about this, and rightly so. Mr. Trump is the straightforward implementer of MMT.#4 The embarrassment of the MMT gods consists of the obvious PR disaster that Mr. Trump did not care to put on the social fig leaf which is of overriding importance for the political credibility of MMTers.#5

But, in business and politics, only success counts. While Wall Street’s MMTer Michael Norman can openly rejoice,#6 the academic MMT gods click glasses with Mr. Trump behind closed doors, with Stephanie Kelton chiding Mr. Trump for unthinkingly busting the social cover of the MMT deficit-spenders/money-creators.

Egmont Kakarot-Handtke

#1 MMT and the magical profit disappearance
#2 For details of the big picture see cross-references MMT
#3 The Kelton-Fraud
#4 Keynes, Lerner, MMT, Trump, etc. and exploding profit
#5 MMT and grassroots movements
#6 “… at Mike Norman Economics we look at FLOWS. It gave us the bullish signal a long time ago.”

Related 'Why the British Labor Party should NOT adopt MMT' and 'MMT-Progressives: stupid or corrupt or both?' and 'MMT: If you’ve got a problem, I don’t care what it is, let me help' and 'MMT works just fine (for the Oligarchy)' and 'The memorable Kelton/Trump victory against WeThePeople'.

REPLY to Matt Franko on Aug 31

You say: “Ah yes now we have the ‘neo-neoliberal conspiracy!!!’”

No conspiracy, merely the peaceful pluralism of scientific incompetence and political corruption:

Mike Norman Economics Sep 9