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’


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, and 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, its social rhetoric is a 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's idea of social policy
#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, Biden and exploding profit
#9 The Kelton-Fraud
#10 MMT: How the Oligarchy communicates with WeThePeople

Wikimedia AXEC142b

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 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, and Warren Mosler, in turn, is a campaigner for Wall Street.#2

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 outside 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

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.

The fact is that MMTers are NOT in any sense Left or social or caring or fighting for WeThePeople. MMT is objective ― i.e. independent of what MMTers think or say of themselves ― agenda-pushing for the Oligarchy.#5 Calgacus is part of it.

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 150+ 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, and 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

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* about 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