October 30, 2018

What comes first: eco-self-destruction or oeco-self-destruction?

Comment on Sandwichman on ‘Business As Usual: Running on Empty’

Blog-Reference

Ecological self-destruction is the subject-matter of physics, biology, climatology, etcetera. Economists have nothing to say about these scientific issues because they are simply too incompetent for science. Economics is, after 200+ years, still at the proto-scientific level.

To make matters short, the central economic question is: Is the monetary economy sustainable on its own terms, that is, even if it faces no physical limits? The answer is NO.

Let us agree that, roughly speaking, the monetary economy as we know it can only exist if macroeconomic profit is positive and that the economy will break down if macroeconomic profit turns to loss. So, the question is, can it happen? and in case of yes, when will it happen?

Now, the axiomatically correct macroeconomic Profit Law says Q=Qm+Qn (i) with Qm=Yd+(X−M)+(G−T)+(I−Sm) (ii) which simplifies to Qm=I−Sm (iii) if Qn, Yd, X, M, G, T is set to zero.#1 Eq. (iii) says that monetary profit Qm is positive as long as the business sector’s investment expenditures are greater than the household sector’s saving. Or, if the household sector’s budget is balanced in each period, i.e. Sm=0 ⇒ Qm=I (iv), and this means that monetary profit Qm is positive as long as investment expenditures are positive (depreciation is a sub-item of Qn). In other words, the economy must grow or it drops dead. This may happen before the economy reaches the physical limits of growth.

The basic message of the Profit Law is that the monetary economy gets in trouble as soon as economic growth, expressed by I, slows down. The critical point is in the most elementary case at I=0.

However, the economically critical point may be reached earlier or later. The axiomatically correct macroeconomic Profit Law tells everyone that the point is reached earlier if, for example, the household sector’s saving Sm is greater than zero. The point is reached later if the government runs a deficit, i.e. if G−T is greater than zero.

The task of economic policy is to end economic growth before the physical limits are reached without destroying the economy by unknowingly switching from macroeconomic profit to loss. Needless to emphasize that economists have NO idea how to accomplish this feat. Walrasian, Keynesian, Marxian, and Austrian economics is proto-scientific garbage and therefore absolutely useless for economic policy.

The sad fate of humanity is: the (world-)economy will NOT break down for physical/ ecological reasons but because of the scientific incompetence a.k.a. stupidity of economists. How shabby an end compared to flood or fire.

Egmont Kakarot-Handtke


#1 For details of the big picture see cross-references Profit

Related 'Which breakdown?' and 'Mathematical Proof of the Breakdown of Capitalism' and 'Zero-sum capitalism' and 'Major Defects of the Market Economy' and 'Squaring the Investment Cycle'.

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REPLY to Anonymous on Nov 1

Obviously, you lack basic knowledge of the history of economic thought: “Late in life, moreover, he [Napoleon] claimed that he had always believed that if an empire were made of granite the ideas of economists if listened to, would suffice to reduce it to dust.” (Viner, 1963)

Nothing has changed since Napoleon. The stupidity of economists is as destructive as it ever was.#1, #2


#1 As Napoleon said: don’t listen to economists
#2 Economists and the destructive power of stupidity

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REPLY to Sandwichman on Nov 1

You complain: “GDP and GDP growth has become the increasingly opaque lens through which we view society and ‘the economy.’ It is a cracked, scratched, smudged, distorting lens that may not even enable us to tell whether what we view through it is upside up or upside down.”

Fact is that economists have never gotten their foundational concepts straight and are too stupid for the elementary mathematics that underlies macroeconomics. The concept of GDP is a case in point.

For the axiomatically correct relationship between aggregate demand, investment, depreciation, productivity, price, income, and profit see Squaring the Investment Cycle.

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REPLY to Barkley Rosser, Sandwichman on Nov 2

Thank you for the information, the improved sentence reads: “The axiomatically correct macroeconomic Profit Law tells everyone that the [critical] point is reached earlier if, for example, the household sector’s saving Sm is greater than zero. The point is reached later if the government runs a deficit, i.e. if G−T is greater than zero.”

The beauty of this summary consists of answering the fundamental economic question: “... is the existing economic system in any significant sense self-adjusting.” (Keynes)

So, macrofounded economics tells everyone that microfounded equilibrium or steady-state models are a priori false and that the market system will eventually break down because of its built-in positive feedback mechanisms and NOT for sociological reasons, i.e. the revolution of the proletariat, or for ecological reasons, i.e. the limitedness of resources or the overabundance of pollution.

At the moment, the US economy runs already on life-support, i.e. on government deficit spending. Take it away and macroeconomic profit turns into macroeconomic loss and the economy breaks down. There is really no need for economists to calculate the “ … costs of abating carbon dioxide emissions and the long term future climate impacts from climate change.” (Newbold, Summary of the DICE model) because the economy as we know it has NO long-term future.#1

Economists should know how the economic system works but they don’t. For 140+ years, they waffle about supply-demand-equilibrium implying that the system regulates itself. This tenet is either a self-deception or a fraud or both. In any case, it catapults economists out of science.


#1 Mathematical Proof of the Breakdown of Capitalism

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REPLY to Blissex on Nov 4

You say: “Dear Sandwichman welcome to the branch of Rabbit Hole Studies that is national statistics. :-)”

Economists know that science is about formal and material consistency: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant) Logical consistency is secured by applying the axiomatic-deductive method and empirical consistency is secured by applying state-of-art testing.

Economists know also that their proper business is political agenda pushing and NOT science. So, they deliberately try to keep everything in the swamp of vagueness and inconclusiveness because they know also: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman) This, of course, is the life insurance of failed/fake scientists.#1, #2

It is not an accident that economists apply concepts like utility, rational expectations, aggregate real capital, which are obviously not measurable. And when the discussion comes to empirical testing, economists vanish trough the jib-door like the would-be gold makers of earlier times. The door bears the inscription ‘Measurement Problems’.

Political agenda pushers have learned this trick from priests.#3 The subject-matter of priests is NONENTITIES. As J. S. Mill put it: “Mankind in all ages have had a strong propensity to conclude that wherever there is a name, there must be a distinguishable separate entity corresponding to the name; ...” This is the Fallacy of Reification.

The characteristic of economists is that they avoid well-defined concepts like the plague. Note that income, monetary profit, aggregate demand, GDP can, in principle, be defined and measured with the precision of two decimal places but economists have managed to make a veritable mess of these foundational concepts.#4, #5

Economists advertise their stuff as science, well knowing that their theories/models are built upon NONENTITIES and that they will break down as soon as it comes to testing: “… suppose they did reject all theories that were empirically falsified ... Nothing would be left standing; there would be no economics.” (Hands)

National Statistics is NOT a Rabbit Hole but has been deliberately made a jib-door through which failed/fake economists vanish when their proto-scientific fool’s gold is put to the acid test.#6, #7


#1 Postmodernism — the philosophy of scientific write-offs
#2 For details see cross-references Failed/Fake Scientists
#3 Wikipedia, Priest
#4 The Common Error of Common Sense: An Essential Rectification of the Accounting Approach
#5 Wikipedia and the promotion of economists’ idiotism
#6 Go! ― test the Profit and Employment Law
#7 Failed economics: The losers’ long list of lame excuses

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REPLY to Blissex on Nov 6

You say: “… unfortunately I very strongly disagree that studies of the political economy can be a ‘science’ as in proper accuracy and falsification, in large part because experiments are difficult and repeatability is pretty rare, and never mind with the measurement problems, because the ‘Laws of Economics’ are not immutable, unless they are kept in ‘the swamp of vagueness and inconclusiveness’.”

Of course, you disagree. Take notice that your worn-out excuses have been refuted long ago.#1

According to its self-definition, economics is a science since Adam Smith/Karl Marx and this is celebrated once a year with the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.#2 So, economics has to be judged according to the well-known scientific standards of material/formal consistency.

Your fatal blunder is to maintain that economics is a social science while, in fact, it is a system science.#3 And while there are no behavioral laws there are systemic laws.

Economists did not figure out these laws to this day. In fact, they are too stupid for the elementary mathematics that underlies macroeconomics.

Keynes’ scientific incompetence can be exactly located in the GT: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)

Keynes got macroeconomic profit wrong: “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)

Let this sink in: the economist Keynes NEVER understood the foundational concept of his subject matter. Because profit is ill-defined the complete theoretical superstructure of Keynesianism is false. Keynesian policy guidance NEVER had valid scientific foundations. It has NEVER been anything else than political blather.

The elementary version of the axiomatically correct Profit Law, which is measurable with the precision of two decimal places, reads Qm=I−Sm with Qm as monetary profit and Sm as monetary saving. And this means that since Keynes/Hicks ALL I=S/IS-LM models are false.#4 Macroeconomics is proto-scientific garbage. Microeconomics is even worse.

So after 80+ years of storytelling/blather, Keynesians, Post-Keynesians, Anti-Keynesians, New Keynesians, MMTers, Sandwichman, Blissex, and the rest of stupid/corrupt political agenda pushers together with all their peer-reviewed articles/textbooks/blog posts have finally to be flushed down the scientific toilet.


#1 Failed economics: The losers’ long list of lame excuses
#2 The real problem with the economics Nobel
#3 Economics is NOT a social science
#4 Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It

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EconoSpeak, Sandwichman's self-destruction Nov 6 and Nov 7

October 29, 2018

More on economists’ sticky brains

Comment on David Glasner on ‘More on Sticky Wages’

Blog-Reference and Blog-Reference on Oct 31

Economics is one of the most embarrassing failures in the history of modern science. The biggest blunders are profit theory and employment theory. Keynes saw the defects of employment theory but could not rectify them.#1 Eventually, the analysis got stuck in inconclusive blather about sticky wages.#2, #3, #4

David Glasner clearly recognizes that standard economics is one big Fallacy of Composition: “Keynes’s criticism here is entirely correct. But I would restate slightly differently. Standard microeconomic reasoning about preferences, demand, cost and supply is partial-equilibrium analysis.” And: “… Keynes was certainly correct to reject the naïve transfer of partial equilibrium theorizing … to macroeconomic theorizing about economy-wide disturbances in which the assumptions underlying the comparative-statics analysis used in microeconomics are clearly not satisfied.”

Obviously, a paradigm shift is needed: “The search for that different kind of theorizing is the challenge that has always faced macroeconomics. Despite heroic attempts to avoid facing that challenge and pretend that macroeconomics can be built as if it were microeconomics, the search for a different kind of theorizing will continue; it must continue.”

David Glasner is too late. What escaped his attention is that the paradigm shift from false microfoundations to true macrofoundations is a done deal.#5

From the axiomatically correct macrofoundations#6 follows the elementary version of the objective-systemic Employment Law as shown on Wikimedia.#7


From this equation follows inter alia:
(i) An increase in the expenditure ratio ρE leads to higher employment L (the Greek letter ρ stands for ratio). An expenditure ratio ρE greater than 1 indicates a budget deficit = credit expansion, a ratio ρE less than 1 indicates credit contraction.
(ii) Increasing investment expenditures I exert a positive influence on employment.
(iii) An increase in the factor cost ratio ρF=W/PR leads to higher employment.

The complete Employment Law contains in addition profit distribution, the public sector, and foreign trade.

Item (i) and (ii) cover Keynes’ familiar arguments about aggregate demand. The factor cost ratio ρF as defined in (iii) embodies the macroeconomic price mechanism. The fact of the matter is that overall employment INCREASES if the AVERAGE wage rate W INCREASES relative to average price P and productivity R. This is the OPPOSITE of what microfounded economics teaches.

The macroeconomic price mechanism, which is formally embodied in ρF, tells everyone that downward stickiness of wages has NEVER been the problem but upward stickiness.

False theory leads to false policy guidance. With their defective microfounded employment theory, economists bear for 140+ years the political responsibility for the social devastation of mass unemployment.#8

Egmont Kakarot-Handtke


#1 Keynes saw the problems but did not solve them
#2 Employment theory as an example of proto-scientific soapbubbling
#3 Full employment, the Phillips Curve, and the end of Gaganomics
#4 Go! ― test the Profit and Employment Law
#5 From false microfoundations to true macrofoundations
#6 The macrofoundations approach starts with three axioms: (A0) The objectively given and most elementary configuration of 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) C=PX consumption expenditure C is equal to price P times quantity bought/sold X. For a start it holds X=O.
#7 Wikimedia, Employment Law
#8 For details of the big picture see cross-references Employment

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AXEC113o

October 27, 2018

Oxford economics — still at the proto-scientific level

Comment on Simon Wren-Lewis on ‘Why should someone who is anti-austerity care about debt’

Blog-Reference

Simon Wren-Lewis summarizes: “This is not the only reason why raising government debt to GDP in the long run can be detrimental, but this one is simple because it depends only on some basic economics, algebra and logic.”

The fact of the matter is that to this day economists do not get basic economics, algebra and logic right. Simon-Wren Lewis is no exception. He is too stupid for the elementary algebra that underlies macroeconomics.

To make matters short: The central problem of the MMT policy of permanent deficit-spending/money-creation and a permanently growing debt is NOT inflation but distribution. In political terms, MMT policy benefits WeTheOligarchy and NOT WeThePeople.

The macroeconomic Profit Law, which is unknown to the Oxford economist Simon Wren-Lewis, says Public Deficit = Private Profit and this follows straight from the TRUE sectoral balances equation (X−M)+(G−T)+(I−Sm)−(Qm−Yd)=0 which compares to the FALSE Post-Keynesian/MMT balances equation (X−M)+(G−T)+(I−S)=0.#1, #2, #3

Neither MMTers nor Mainstreamers ever got profit right. As Mirowski put it: “... one of the most convoluted and muddled areas in economic theory: the theory of profit.”#4 This is why economics never rose above the proto-scientific level and why the debate about austerity and budget-balancing is so utterly absurd.

Oxford economics, in particular, is a scientific failure.#5

Simon Wren-Lewis argues: “However there is another reason to demand a higher nominal interest rate on debt, and that is if you think there will be additional inflation in the country. Spending more without raising taxes will tends to increase inflation.”

This is the standard argument against MMT and it is patently false. Deficit-spending/ money-creation causes a small one-off price hike but NO inflation.#6, #7 So, as a matter of principle, public debt can grow steadily for an indefinite time without ever causing inflation.

Economically, the permanent growth of public debt is a program for the self-alimentation of the Oligarchy. Whether they are aware of it or not does not matter, but de facto MMTers are the agenda-pushers of Wall Street.#8, #9

Egmont Kakarot-Handtke


#1 Wikipedia and the promotion of economists’ idiotism (II)
#2 Truth by definition? The Profit Theory is axiomatically false for 200+ years
#3 Back-of-the-envelope proof:
If the total wage income of the household sector is 100 in a given period and the household sector spends all on consumption, then the macroeconomic profit of the business sector is zero.
If the total wage income of the household sector is 100 and the household sector spends all on consumption and the government sector applies deficit-spending/money-creation of 10, then the profit of the business sector is 10.
Generalization: Public Deficit = Private Profit.
#4 For details of the big picture see cross-references Profit
#5 Where economics went wrong (II)
#6 MMT was right all along: Gov-Deficits do NOT cause inflation
#7 Economics as tireless production of proto-scientific toilet paper: inflation theory as an example
#8 MMT and the overall political corruption of economics
#9 Mission impossible: economists join WeThePeople

Related 'Legitimacy lost' and 'The biggest scientific mistake of the last centuries, and it has much to do with academic economists' and 'The economist as useful political idiot' and 'The demise of phony experts: macroeconomics is provably false' and 'Why is economics a total scientific failure?' and 'Macroeconomics: self-delusion and empty promises' and 'Economics has arrived at the bottom of the proto-scientific shithole' and 'How MMT fools the ninety-nine-percenters' and 'Political economics: Who hijacks British Labour?' and 'Deficits matter for distribution' and 'How MMT got inflation wrong' and 'Inflation: back to basics'.

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AXEC141e


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TWITTER on Oct 29

The interest effect of public debt is deflationary because the propensity to consume of the interest receivers is lower than that of the average taxpayer.


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TWITTER on Oct 29

MMT's permanent deficit-spending/money-creation is lethal because of the distribution effect and NOT of the inflation effect.


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TWITTER on Oct 29

#PublicDeficitIsPrivateProfit
#WeTheOligarchy


Links on James Petras’ ‘Big Business Strikes Back: The Class Struggle from Above’

Blog-Reference*

Economics is a failed/fake science. To this day, economists do not know what profit is. By consequence, they got the concept of class struggle badly wrong.

If we only had classes
Ricardo and the invention of class war
Capitalism, poverty, exploitation, and cross-over exploitation
Profit: after 200+ years still elusive
The Profit Theory is False Since Adam Smith
Keynesianism as ultimate profit machine
Karl Marx, fake scientist
Economists: scientists or political clowns?
For details of the big picture see cross-references Profit

Egmont Kakarot-Handtke


* James Petras, Big Business Strikes Back: The Class Struggle from Above PDF

#Economics #FailedScience #FakeScience #CargoCultScience #ScientificIncompetence #Economists #PoliticalEconomics #OrthodoxEconomics #HeterodoxEconomics #Pluralism #ProfitTheory #DistributionTheory #NewEconomicThinking #DeleteEconomics #ParadigmShift #NewParadigm #Science #Axiomatization

October 24, 2018

MMT and the overall political corruption of economics

Comment on Bill Mitchell on ‘Progressive political leadership is absent but required’

Blog-Reference and Blog-Reference

Bill Mitchell writes: “One of the themes that has emerged in the discussions of the British Labour Party Fiscal Credibility Rule … is when is the right time for a political party to show leadership and start educating the public on new ideas. The Modern Monetary Theory (MMT) project has been, in part, about educating people even if our ideas have been strongly resisted by the mainstream. The mainstream (New Keynesian) paradigm in economics is degenerative … and eventually it will fade into historical obscurity.”

The general public finds nothing objectionable in this statement. Fact is that Bill Mitchell violates the first rule of science which says that science and politics are two spheres that have to be strictly kept apart. This is known since J. S. Mill: “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.”#1

Economists violate the first rule of science since Adam Smith/Karl Marx. As a result, economists have to this day produced NOTHING of scientific value. Fact is that economists have messed up
• profit theory, for 200+ years,
• microfoundations, for 140+ years,
• macrofoundations, for 80+ years,
• the application of elementary logic and mathematics since the founding fathers.

Economists do not know to this day how the price- and profit-mechanism works. The four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism are mutually contradictory, axiomatically false, and materially/formally inconsistent.

Because of this, economic policy guidance has NO sound scientific foundation since the founding fathers. MMT is NO exception. MMT is proto-scientific garbage, the Post-Keynesian sectoral balances equation that underlies the whole analytical edifice is provably false.

Economists including MMTers have absolutely NO legitimacy to educate the general public or to lecture politicians.

Economists are scientifically incompetent and too stupid for the elementary mathematics that underlies macroeconomics. But nobody is too stupid for political agenda pushing. From history we know that every talented actor/actress can climb on a soapbox, tell any outlandish BS they want, as long as the narrative kicks off emotions, gets people into action or at least keeps them entertained.

Every moron can do political economics, but no moron can do science.

It has been proved that the foundational MMT balances equation is false. Now, one knows from methodology, if the premises/axioms are false the whole analytical superstructure is false. MMT is scientifically worthless and by consequence, MMT policy guidance has NO sound scientific foundations at all. Yet, what has no scientific foundations is nothing but brain-dead political agenda pushing.#2

Walrasianism, Keynesianism, Marxianism, Austrianism are only diverse forms of political agenda pushing. The same holds for MMT. Economists have always been incompetent scientists and useful political idiots.

MMT policy guidance boils down to deficit-spending/money-creation and is advertised as helping WeThePeople. The fraud of MMTers, who call themselves Progressives, consists of promising social benefits and hiding the fact that WeThePeople themselves pay in real terms for every single benefit either through open or stealth taxation and by hiding the fact that deficit-spending/money-creation feeds the Oligarchy.

Deficit-spending/money-creation is the final cause of the extremely skewed distribution of income and financial wealth. Needless to emphasize that Progressives condemn the unequal distribution between the ninety-nine-percenters and the one-percenters which is the direct result of MMT policy.#3

Bill Mitchell has NO legitimacy whatsoever to educate the general public or to lecture the elected representatives of British Labour or their Shadow Chancellor in economic or political matters.

Egmont Kakarot-Handtke


#1 For details of the big picture see cross-references Political Economics/Stupidity/Corruption
#2 Very busy these days: Wall Street’s agents
#3 Keynes, Lerner, MMT, Trump and exploding profit

Related 'Mission impossible: economists join WeThePeople' and 'If we only had classes' and 'Legitimacy lost' and 'Where economics went wrong' and 'Links on Liza N. Burby‘s ‘Cutting-Edge Economist Stephanie Kelton Delivers Presidential Lecture’.

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AXEC141c

Links on Lars P. Syll’s ‘Wren-Lewis insults medical science’

Blog-Reference

Fact is that economics is one of the worst failures in the history of modern science.

Stop beating mainstream economics ― it is long dead
Economics: 200+ years of scientific incompetence and fraud
Heterodoxy and Pluralism, too, is proto-scientific junk
Where economics went wrong
Reverse Alchemy: from scientific gold to political shit
Lars Syll, fake scientist
Cross-references NOT a Science of Behavior

Egmont Kakarot-Handtke


#Economics #FailedScience #FakeScience #CargoCultScience #ScientificIncompetence  #Economists #OrthodoxEconomics #HeterodoxEconomics #Pluralism #MicroFoundations #MacroEconomics #ProfitTheory #DeleteEconomics #NewEconomicThinking #ParadigmShift #NewParadigm #Science #MacroFoundations #Axiomatization

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REPLY to Matt Franko on Oct 25

Matt Franko cites Lars Syll: “'Laws' in economics only hold ceteris paribus. That fundamentally means that these laws/regularities only hold when the right conditions are at hand for giving rise to them.” and concludes “This is simply the definition of the Liberal Art methodology....”

Not exactly, it is more PsySoc methodology. To recall, Orthodoxy/Walrasianism is based on behavioral axioms.#1 This leads necessarily to behavioral “laws” like the supply-curve, the demand-curve and the microeconomic “law” of supply and demand. This, of course, is proto-scientific garbage. There is NO such thing as “laws” of behavior.#2, #3

However, there are systemic laws, e.g. the Profit Law and the Employment Law.#4

So, both Orthodoxy and Heterodoxy’s Lars Syll fail to adapt the scientific concept of law to economics.

As a matter of fact, Lars Syll ruined heterodox methodology and with it the once leading Swedish School of Economics. His pupil Asad Zaman does the same now in Pakistan.#5


#1 The problem with macro in two words
#2 PsySoc — the scourge of economics
#3 For details see cross-references NOT a Science of Behavior
#4 Go! ― test the Profit and Employment Law
#5 Heterodox economics: When stupidity becomes a public danger

October 23, 2018

Links on Liza N. Burby‘s ‘Cutting-Edge Economist Stephanie Kelton Delivers Presidential Lecture’

Blog-Reference

Science is about true/false. MMT is provably false. Stephanie Kelton is NOT a cutting-edge scientist but a quite ordinary political fraud.

In the run-up to the midterms, MMT philosopher Tom Hickey is advertising Stephanie Kelton: “MMT now has its own rock-star economist”. Philosophy, too, has finally landed in the intellectual cesspit.

The Kelton-Fraud
Down with idiocy!
Stephanie and Noah ― economics at the intellectual zero lower bound
MMT = Modern Monetary Trash
MMT: agenda-pushing and money-making for the Oligarchy
Richard Murphy: the MMT fraudster dressed up as realist
MMT: Just another political fraud
MMT is ALWAYS a bad deal for the 99-percenters
MMT, Bill Mitchell, and the lack of basic scientific integrity
Dean Baker: progressive agenda pusher for the Oligarchy
MMT, Warren Mosler, and the little helpers from Wall Street and Academia
MMT: The one deadly error/fraud of Warren Mosler

Egmont Kakarot-Handtke


Related 'Very busy these days: Wall Street’s agents'.

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COMMENT on Asad Zaman on Nov 4 and Blog-Reference MNE

#PublicDeficitIsPrivateProfit

Stephanie Kelton, Bill Mitchell, Warren Mosler, and the other MMT loudspeakers push ― intentionally or unintentionally doesn’t matter ― the agenda of Wall Street#1, #2 and Asad Zaman is ― intentionally or unintentionally doesn’t matter ― obscuring this fact with his waffling about the MMT/inflation red-herring. Therefore, he is ― intentionally or unintentionally doesn’t matter ― complicit in political fraud.#4


#1 Very busy these days: Wall Street’s agents
#2 For the full-spectrum refutation of MMT see cross-references MMT
#3 MMT and the inflation-red-herring
#4 MMT and the overall political corruption of economics

October 20, 2018

Very busy these days: Wall Street’s agents

Comment on Kaivey on ‘Presidential Lecture Series: Stephanie Kelton’

Blog-Reference

Matt Franko cites Bill Mitchell: “I mean by that, that while MMT provides a clear lens for viewing the system, to advance specific policy platforms, one has impose a value system (an ideology) onto that understanding.” and resumes “They are not politically neutral... they are Democrat/Labour allied....”

NO!

MMT is NOT a clear scientific lens but an obscure political smoke-screen. Science tells everyone that Public Deficit = Private Profit and this follows straight from the TRUE sectoral balances equation (X−M)+(G−T)+(I−Sm)−(Qm−Yd)=0 which compares to the FALSE MMT balances equation (X−M)+(G−T)+(I−S)=0 which obviously LACKS/HIDES macroeconomic profit.

The scientific content of MMT is ZERO. Looking at the economy through the MMT lens is as enlightening as looking through the toilet seat.

Of course, MMT is NOT politically neutral. Just the opposite. MMT is plain political agenda pushing, and it is NOT for the cause of WeThePeople but against it. MMT is an attempt to capture the genuine grassroots movements in the US and the UK. Under the banner of Progressives, MMTers pretend to overtake the traditional Left and to be the true Friends-of-the-People.#1…#7

Bill Mitchell resumed his recent meeting with John McDonnell in London: “I said that the social democratic parties had let the progressive side of politics down in recent years and that it was good to see this oppositional left capacity coming back into British politics to give people an effective choice.”

Isn’t it a bit curious that an academic from Australia tours around the world and lectures the Labour Party? It is NOT curious at all if one sees Bill Mitchell and Stephanie Kelton as fake scientists and agents of Wall Street.

Bloomberg hypes Warren Mosler as a “hedge fund guy Lefties can love” and Tom Hickey sells MMT on this blog as modern Marxism. This is more than naive because Alternative History has in the meantime arrived at the conclusion that “Karl Marx is, and always was, a double agent working for bankers and industrialists.”#8

Economics has finally to get rid of 200+ years of political BS. The scientific and historical fact of the matter is: deficit-spending/money-creation is and has always been a program for the self-alimentation of the Oligarchy.#9

Bill Mitchell reports: “JMD [John McDonnell, British Labour's Shadow Chancellor] began the meeting by asking me ‘What are we getting right?’” My guess is that Bill Mitchell told him that British Labour has still some way to go to meet Wall Street’s strategic goals.

Egmont Kakarot-Handtke


#1 MMT: agenda-pushing and money-making for the Oligarchy
#2 MMT and the promotion of Wall Street socialism
#3 MMT, Warren Mosler, and the little helpers from Wall Street and Academia
#4 The Kelton-Fraud
#5 MMT, Bill Mitchell, and the lack of basic scientific integrity
#6 MMTers are NOT Friends-of-the-People
#7 For the full-spectrum refutation see cross-references MMT
#8 Reddit
#9 MMT = proto-scientific junk + deception of the 99-percenters

Related 'Mission impossible: economists join WeThePeople' and 'Dean Baker: progressive agenda pusher for the Oligarchy' and 'MMT = Modern Monetary Trash' and 'Smart! How to make people fund their brain-washing' and 'Good news for the one-percenters' and 'Both Mainstreamer and MMTer are either stupid or corrupt or both' and 'Forget mainstream economics, scrap MMT, move on to the new paradigm' and 'Both mainstream economics and MMT are axiomatically false' and 'MMT and the single most stupid physicist' and 'MMT: How WeTheOligarchy communicates with WeThePeople' and 'Why the British Labour Party should NOT adopt MMT' and 'MMT-Progressives: stupid or corrupt or both?' and 'How Bill Mitchell stalks Jeremy Corbyn' and 'Links on Liza N. Burby‘s ‘Cutting-Edge Economist Stephanie Kelton Delivers Presidential Lecture’' and 'MMT and the overall political corruption of economics.'

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REPLY to Matt Franco, Andrew Anderson, Ralph Musgrave on Oct 22

Lest the crucial point gets lost: Stephanie Kelton, Bill Mitchell, and the other MMT loudspeakers push ― intentionally or unintentionally doesn’t matter ― the agenda of Wall Street#1 and you are ― intentionally or unintentionally doesn’t matter ― obscuring this fact with your waffling about the Job Guarantee. Therefore, you are ― intentionally or unintentionally doesn’t matter ― complicit in political fraud.


#1 For details of the big picture see cross-references MMT

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Wikimedia, AXEC122

October 18, 2018

Reverse Alchemy: from scientific gold to political shit

Comment on Barkley Rosser on ‘MBS Must Go’

Blog-Reference

The key to understanding economics is that there are TWO versions: political economics and theoretical economics. The main differences are: (i) The objective of political economics is to successfully push an agenda, the objective of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics, anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.

Theoretical economics (= science) had been hijacked from the very beginning by the agenda pushers of political economics. Political economics has NOT achieved anything of scientific value. This is the actual state of economics, provably false:
• profit theory, for 200+ years,
• microfoundations, for 140+ years,
• macrofoundations, for 80+ years,
• the application of elementary logic and mathematics since the founding fathers.

Needless to emphasize that this was not a linear process. There were always economists who were committed to the scientific standards of material/formal consistency but in the end, political agenda pushing retained the upper hand and economics never got out of the proto-scientific swamp.

The vast majority of economists has been devoured by the swamp. Barkley Rosser is a case in point. His post ‘MBS Must Go’ has ZERO scientific content and is plain political agenda pushing.

Since the founding fathers, economics violates the first rule of science, i.e. the strict separation of science and politics.#1 As a result, economics fell prey to the Reverse Alchemy of Communication which means: If transposed from the sphere of science to the sphere of politics, every scientific idea (tentative or well-established through numerous logical and empirical cross-checks), is with absolute necessity perverted/inverted in the process.

As a failed science, economics needs a paradigm shift. Paradigm shift means in methodological terms a change of foundational premises/axioms. Needless to emphasize, that economists also perverted the concept of paradigm shift. Transposed from the scientific sphere to the political sphere of agenda pushing it now means nothing else than a change of policy.

“So how do you change paradigms? Thomas Kuhn, who wrote the seminal book about the great paradigm shifts of science, has a lot to say about that.
• You keep pointing at the anomalies and failures in the old paradigm.
• You keep speaking and acting, loudly and with assurance, from the new one.
• You insert people with the new paradigm in places of public visibility and power.
• You don’t waste time with reactionaries; rather, you work with active change agents and with the vast middle ground of people who are open-minded.”#2

Of course, these tips are the basics of marketing/public relations/rhetoric/ propaganda/ proselytizing/agenda pushing.

To this day, economists do not understand what science and a paradigm shift is all about.#3 Since Adam Smith/Karl Marx, they never rose above the level of useful political idiots.

Egmont Kakarot-Handtke


#1 For details of the big picture see cross-references Political Economics/Stupidity/Corruption
#2 Links to Twitter, Kate Raworth, Club of Rome
#3 The inexorable paradigm shift in economics
From false microfoundations to true macrofoundations
The new macroeconomic paradigm

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AXEC123d


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REPLY to The Economists Challenge on Oct 20

Economics is about how the economy works. Scientists, by consequence, focus their communication strictly on the diverse aspects that constitute the economy. Incompetent scientists, though, do not talk about the economy but about what Walras or Keynes has written in their books or told their students as oral tradition of their Alma Mater or that Walras was not a Neoliberal but had socialist leanings or that Keynes was bisexual, and all this other irrelevant gossip. In one word, incompetent scientists do not stick to the subject-matter but get almost immediately lost in meta-communication = storytelling = empty blather = propaganda = agenda pushing (e.g. Barkley Rosser’s MBS Must Go).

This explains why economists never got to the bottom of their subject matter, i.e. to the foundational concept profit. Historical fact is that economists are too stupid for the elementary mathematics that underlies macroeconomic accounting. Because of this, one can safely forget all the rest from supply-demand-equilibrium to DSGE and New Keynesianism.

In the end, meta-communication boils down to motive-speculation/imputation. Schumpeter has said all about this nuisance: “Remember: occasionally, it may be an interesting question to ask why a man says what he says; but whatever the answer, it does not tell us anything about whether what he says is true or false.”

The only content of a scientific debate is: Is the statement S about how the economy works true or false? With truth well-defined since 2000+ years.

So, all you (or Barkley Rosser, for that matter) say about yourself or this guy Egmont is plain talk-show BS and has NOTHING to do with the subject-matter of economics. If you think the macrofounded Profit or Employment Law is false, do what a scientist is supposed to do: demonstrate that it is materially/formally inconsistent.#1 Science is about proof, politics exhausts itself in brain-dead blather and self-stylisation as savior of the nation/world/universe.

The only thing you (or Barkley Rosser, for that matter) can do for the progress of science and the welfare of humanity is to take a shovel and to bury yourself at the Flat-Earth-Cemetery.



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REPLY to Barkley Rosser on Oct 21

Economics is dead. Supply-demand-equilibrium, Walrasianism, Keynesianism, Post-Keynesianism, DSGE, New Keynesianism, etcetera is provably false.

Economics needs a paradigm shift from microfoundations to macrofoundations.

There is one elementary question for every economist to answer: which of the two macroeconomic balances equations is true
1 (X−M)+(G−T)+(I−Sm)−(Qm−Yd)=0
2 (X−M)+(G−T)+(I−S)=0?

You have exactly one character for an answer. To recall: “No one ignorant of elementary mathematics and true macrofoundations can be admitted to economics.”

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REPLY to Barkley Rosser on Oct 22

You cannot answer an elementary economic question. “Both are correct” is the false answer because eq. 2 represents a zero-profit economy. There NEVER has been a zero-profit economy in the history of the world.

If simplified, eq. 2 boils down to the Keynesian I=S and this tells everyone that macroeconomics is provably false for 80+ years and that economists ― both orthodox and heterodox economists ― are too stupid for elementary mathematics.

In your bottomless scientific incompetence you have, of course, realized nothing in your whole academic career.

You started this thread with “MBS Must Go”. You produced NOT ONE scientifically valid sentence during the whole debate. So, it is the fake scientist Barkley Rosser who must go.

Take a shovel, go to the Flat-Earth-Cemetery, bury yourself and deliver us from your brain-dead blather.

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REPLY to Barkley Rosser on Oct 23

I always acknowledged your superior knowledge of the family tree of the House of Sa’ud.

Jul 13, 2017: “Your true competence has always been insightful comments on the sex life of the House of Sa’ud and other celebrities as demonstrated in two recent pieces:
• Muhammed Bin Nayef Bin Abdulaziz Al Sa’ud Confined To His Palace
• Was Thomas Jefferson A Monstrous Rapist?

Economics has never been your thing. Good for society to learn that you have left profit, capital, equilibrium, and other nonentities behind for good and dedicate your talent now fully to Sexual Research.”#1

Sep 28, 2017: “During his whole professional life as a cargo cult economist, Barkley Rosser never realized that there is something fundamentally wrong with both Walrasianism and Keynesianism. Neither did he resolve any contradictions nor rectify anything, except perhaps the family tree of the House of Sa’ud.”#2

Jun 1, 2018: “You have not realized either that your academic colleagues, the MMT money printers and deficit spenders, are deceiving the general public by obfuscating the profit effect of public deficit spending.

Macroeconomics is provably false since Keynes, academic economists push the agenda of Wall Street by telling people that public debt does not matter, and Barkley Rosser, an economist who never understood what profit is, entertains the audience with the Happiness Curve, how the Saudi crown prince tortures fellow princes, with the assassination of MLK and JFK, the death of Yeshua bin Yusuf, and the infighting of the Bolsheviks back in the 1920s.

Whatever you are doing, it is NOT economics and NOT science.”#3




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REPLY to Barkley Rosser on Oct 23

You never understood what profit is, so all you ever said about economics is senseless blather/political agenda pushing.

You are the perfect example of the representative economist. Just like your academic colleagues you have never produced anything of scientific value. You cannot even answer which of the two macroeconomic balances equations is true: 1 (X−M)+(G−T)+(I−Sm)−(Qm−Yd)=0 or 2 (X−M)+(G−T)+(I−S)=0.

The answers to the questions of The Economists Challenge cannot be found in the heap of proto-scientific garbage called Orthodoxy and Heterodoxy but only in macrofounded Constructive Heterodoxy, see cross-references.

If The Economists Challenge was a serious researcher he had easily found this out for himself. Obviously, he is as fake as Anonymous and the rest of Barkley Rosser’s troll circus at EconoSpeak.

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REPLY to Barkley Rosser on Oct 25 

You are whining: “There you have it even more, Economists Challenge. You sought advice from Egmont, and what you get for your efforts is to be labeled a ‘fake’ and part of our ‘troll circus’ here.”

You and The Economists Challenge could have easily avoided any effort/pain if your capability of reading/understanding was only slightly above absolute zero.

Take notice of this disclaimer: “This site does not hand out advice about how to avoid taxes, to get rich on the stock market, to be successful in business, to increase the wealth of nations, to run an economy, to maximize welfare, to prevent national/global bankruptcy, to improve the institutional setup, to get out of national/global depression, or how to save humankind or a subgroup thereof. The effective solution of economic problems and the attainment of worthwhile goals presupposes the correct economic theory, which in turn presupposes the correct axiom set, which becomes the ultimate source of accountable advice. Because of this, this site is strictly about axiomatization. Economic advice of any sort is an entirely separate matter.”#1

You have NO correct Profit Theory but pester the world with your advice, I have the axiomatically correct Profit Theory but give NO advice to a random imbecile who calls himself The Economists Challenge.

This exactly is the difference between a soapbox economist and a scientist.


October 12, 2018

MMT, Warren Mosler, and the little helpers from Wall Street and Academia

Comment on Katia Dmitrieva/Bloomberg/Businessweek on ‘A Hedge Fund Guy Lefties Can Love’

Blog-Reference

There is the entertainment industry and it is about personalities/emotions. There is science and it is about knowledge/consistency. There are not many people who prefer science over entertainment. In order to appeal to the majority, one has no choice but to gossip about personality.

Accordingly, Warren Mosler is introduced: “He ran a hedge fund, lives in a Caribbean tax haven, and loves fast cars and yachts ― not obvious qualifications for a left-wing guru. But that’s what Warren Mosler is rapidly becoming.”

And this is his message: “Its [MMT’s] main argument is that governments with their own currencies can’t go broke. They have more room to spend than is usually supposed and don’t need to collect taxes (or even borrow) to pay for it. One thing they can, and should, spend money on is a jobs guarantee ― offering work to anyone who wants it.”

All this, of course, is way beside the point. Economics claims for 200+ years to be a science, MMT claims to be a superior scientific theory, so the point at issue is NOT the personality of Warren Mosler but whether MMT is true/false according to well-defined scientific criteria.

The unambiguous answer is: MMT is materially/formally false, MMTers are fake scientists, MMT’s policy proposals boil down to deficit-spending/money-creation and this translates to money-making for the Oligarchy because the macroeconomic Profit Law implicates Public Deficit = Private Profit which follows straight from the axiomatically correct sectoral balances equation (X−M)+(G−T)+(I−Sm)−(Qm−Yd)=0.#1…#7

In sum, MMT is refuted proto-scientific garbage and its social rhetoric is plain political fraud and its effect ― intended or unintended does no matter ― is to undermine genuine grassroots movements. MMT lacks sound scientific foundations and is not more than gossip/entertainment/fraud in the political Circus Maximus.

Deficit-spending/money-creation has always been a program for the self-alimentation of the Oligarchy#8 and quite naturally enjoys the support of Wall Street in general and Bloomberg in particular.

According to Stephanie Kelton, the MMT snake oil works just fine: “Democrats are beginning to see that all the stories they’ve been told, and that they in fact even repeated themselves, weren’t good stories.”#9

Indeed, but the MMT story isn’t one iota better.#10

Egmont Kakarot-Handtke


#1 MMT: agenda-pushing and money-making for the Oligarchy
#2 Rectification of MMT macro accounting
#3 MMT and the single most stupid physicist
#4 MMT and the promotion of Wall Street socialism
#5 MMT: The one deadly error/fraud of Warren Mosler
#6 MMTers are NOT Friends-of-the-People
#7 For the full-spectrum refutation see cross-references MMT
#8 Keynes, Lerner, MMT, Trump and exploding profit
#9 The Kelton-Fraud
#10 MMT: How WeTheOligarchy communicates with WeThePeople

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Wikimedia, AXEC142


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REPLY to Kaivey on Oct 14

You say: “Egmont offers no answer, just more poverty for most people.”

The task of the economist as a scientist is to figure out how the economy works. Unfortunately, economists have done nothing of the sort over the last 200+ years because they were preoccupied with agenda-pushing.

As a result, the answers economists have offered from Adam Smith/Karl Marx onward have NO scientific content and have never been more than brain-dead political blather.

Needless to emphasize that people with some scientific instinct have realized this long ago: “What is now taught as standard economic theory will eventually disappear … because it simply doesn’t work: were it engineering, the bridge would collapse.” (McCauley)

But economists have NO scientific instinct. They are clowns and useful idiots in the political Circus Maximus.

This is quite obvious in the case of Warren Mosler. Yes, he gives answers and offers solutions. The humanitarian mission of Warren Mosler, Stephanie Kelton and the rest of MMTers is to end the poverty of the one-percenters by deficit-spending/money-creation.

To be sure, I have no qualms with MMTers pulling off a political fraud.#1 Politics is NOT the issue! What has to be made clear is that Modern Monetary Theory is NO valid theory and that MMT has NOTHING to do with science.

MMT is failed science, MMTers are fake scientists, MMT academics are campaigners for Warren Mosler, Warren Mosler, in turn, is a campaigner for Wall Street.#2



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REPLY to Kaivey on Oct 14

You say: “Now, if the government taxes the people and spends it on public services, doesn/t that money also end up the pockets of the rich.”

I have presented the axiomatically correct Profit Law on more than one occasion.#1 It reads Qm=Yd+(I−Sm)+(G−T)+(X−M) and answers ALL your questions. If the government taxes the household sector and thereby balances the budget, then G=T and the profit effect is ZERO. It is deficit-spending/money-creation that produces the macroeconomic profit of the business sector and benefits the Oligarchy immediately and exactly by the same amount. Get it: Public Deficit = Private Profit.

The Profit Law tells one also that it does not matter whether deficit-spending is private or public. The effect on profit is the same.

In the MMT balances equation (X−M)+(G−T)+(I−S)=0 profit does not appear. Isn’t that a bit curious? An economic theory that is completely silent about profit?#2

The MMT balances equation is mathematically false. And exactly at this point, MMT is out of science. If profit theory is false, the whole analytical superstructure is false, including employment theory.#3 A policy that is based on a false theory is a fraud. This holds also for the MMT Job Guarantee.#4

So, the matter is settled. Warren Mosler is a political fraud and MMT academics are his useful idiots.#5


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

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REPLY to Calgacus on Oct 15

Bloomberg presents Warren Mosler as the “guy Lefties can love”.

Calgacus presents himself as a class-fighter who can read the minds of the enemies: “But the purpose and action of such neoliberals and business leaders is NOT to enrich themselves in absolute terms, but rather in relative terms, to keep themselves in the saddle, to create and maintain rigid class divisions.”#1

Bill Mitchell presents himself as a Progressive, i.e. as a true Left who brings the somewhat naive and disoriented Socialist Parties back on the right path.#2

Tom Hickey uses every opportunity to make it clear that MMT is more than macroeconomic accounting and has deep philosophical roots in Hegel/Marx.#3

Stephanie Kelton presents herself as the Mother Theresa of economics who cares about everything between babies and global warming and promises a golden MMT future with “a pony for every American”.#4

All this is crappy personality marketing.

Fact is that MMTers are NOT in any sense Left or social or caring or fighting for WeThePeople. MMT is objectively ― i.e. independently of what MMTers think or say of themselves ― agenda-pushing for WeTheOligarchy.#5 Calgacus is part of it.



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REPLY to Kaivey on Oct 15

You say: “Did you watch the Spiders Web video I put out, which was about Britain’s second empire? These are the real issues if today.”

That Britain is NOT a sovereign nation but the annex to the money-making and money-laundering machine called the City of London is a well-known fact since the founding of the Bank of England.

The real issue of today is how economists helped to bring this state of affairs about. The curious fact of today is that Warren Mosler lives in a tax haven and promises full employment for WeThePeople by applying perpetual deficit-spending/money-creation. And he is supported by incompetent academics and brain-dead trolls like Kaivey.

The real issue of today is that the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” has been awarded. This has to be put in perspective.#1 Provably false:
• profit theory, for 200+ years,
• microfoundations, for 140+ years,
• macrofoundations, for 80+ years,
• the application of elementary logic and mathematics since the founding fathers.

For everyone with some scientific instinct it is quite obvious:
• Economics is a cargo cult science,
• Both Nordhaus and Romer are fake scientists,
• The economics Nobel is a fraud.

MMT perfectly fits into the big picture. The political fraud of MMT, the corruption of the British banking system, the agenda-pushing since Smith/Marx are bad, but the worst thing of all is the scientific corruption of economics in all its variants from Walrasianism, Keynesianism, Marxianism, Austrianism, Pluralism, to MMT.

This is the real issue of today



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REPLY to Calgacus on Oct 16

You say: “Attacks on deficit spending are almost always on ‘MMT welfare spending’ or ‘New Deal spending’ In that case that Egmont AND the oligarchs attack ― it is VERY clearly the opposite of the truth.”

The smart folks in the kindergarten already know that nobody can give a sh* on what politicians say about deficit-spending or austerity.#1, #2 This has always been propaganda and NOT economics. My argument is NOT about deficit-spending but about the profit effect of deficit spending.#3 It is exactly here, where the MMT fraud sneaks in.#4

You say: “… if there is a Job Guarantee there is no unemployment. Period.” Agree, but that is not the point at issue. There can be a Job Guarantee with a balanced budget and then the profit effect is ZERO. Or, there can be a Job Guarantee with deficit-spending. In this case, the Profit Law tells us that Public Deficit = Private Profit#5 and therefore the Oligarchy benefits biggly from the Job Guarantee. This is a bit ‘irrational’ for a social policy measure.

I have no qualms with the Job Guarantee. This is a political decision of the Legitimate Sovereign which the economist as a scientist does NOT comment on but simply takes as a datum. My point is that the Job Guarantee is abused by MMTers to push the agenda of the Oligarchy. There are distributionally neutral ways to achieve full-employment.#6

The fraud of MMTers consists of promising social benefits and hiding the fact that WeThePeople themselves pay in real terms for every single benefit either through open or stealth taxation and by hiding the fact that deficit-spending/money-creation feeds the Oligarchy.

The social policy of MMT is a fraud. I am NOT arguing against the goals of social policy but against the fraud.#7 Whoever claims that Warren Mosler is a guy WeThePeople can love or that MMT policy benefits WeThePeople is either stupid or corrupt or both.


#7 For details of the big picture see cross-references MMT