November 15, 2018

MMT: A free lunch for the Oligarchy

Comment on Clint Ballinger on ‘MMT & the Fourth Spark Plug: Descriptive vs. Prescriptive revisited’

Blog-Reference and Blog-Reference

Like every good snake oil seller, Clint Ballinger first takes people away in a dream world: “Imagine you are an experienced mechanic. One day your neighbour comes home with a newly purchased used car. It is running terribly – sputtering and running slowly with little power. You look under the hood. It is a four cylinder car in good condition, and you notice that one of the spark plug cables is simply unconnected. The only thing that needs to be done to make the car run smoothly and with 100% power is to connect that spark plug so that all four cylinders fire. This is the case with economics and the economy. There are a minority of economists, MMT and Post Keynesian economists especially, who actually observe the real properties and understand the fundamentals of how the economy functions …”

The fact of the matter is, though, that neither MMTers nor Post-Keynesians understand how the economy works. Both approaches do not satisfy the scientific criteria of material and formal consistency. In other words, MMT is provably false. MMTers are NOT like the experienced mechanic, they are simply too stupid for the elementary mathematics that underlies macroeconomics.#1

As a result, the MMT policy of deficit-spending/money-creation has NO sound scientific foundations. MMTers are quite ordinary snake oil sellers.#2

Technically speaking, MMT is based on this sectoral balances equation (X−M)+(G−T)+(I−S)=0 and this equation is mathematically false. The correct balances equation reads (I−S)+(G−T)+(X−M)−(Q−Yd)=0 and this implies Public Deficit = Private Profit. In other words, the MMT policy of deficit-spending/money-creation boils down to money-making for the Oligarchy. The free lunch Clint Ballinger promises is indeed a free lunch but NOT for WeThePeople but for the Oligarchy.#3

For WeThePeople, the essential points to know about MMT are
• MMT has NO sound scientific foundations,
• MMT’s foundational sectoral balances equation is mathematically false,
• MMTers do NOT know how the monetary economy works,
• MMT is political agenda pushing in a scientific bluff package,
• MMT policy is NOT for the benefit of WeThePeople,#4
• MMT is just another political fraud,
• the storyteller Clint Ballinger is a pushy member of the MMT snake oil sales team.#5, #6, #7, #8

Egmont Kakarot-Handtke


#1 For the full-spectrum refutation of MMT see cross-references MMT *
#2 MMT, Warren Mosler, and the little helpers from Wall Street and Academia
#3 Why the MMT benefactors of humanity never talk about profit
#4 MMT is ALWAYS a bad deal for the 99-percenters
#5 The Kelton-Fraud
#6 MMT: The one deadly error/fraud of Warren Mosler
#7 Richard Murphy: the MMT fraudster dressed up as realist
#8 MMT: Academic snake oil for the people

Related 'Keynes, Lerner, MMT, Trump and exploding profit' and 'Keynesianism as ultimate profit machine' and 'MMT sucks' and 'MMT: The fusion of Wall Street and Academia' and 'Economics, MMT, and the capture of science by the political mob' and 'Economics, MMT, and the corruption of science'.

*  The formal proof is to be found here: Wikipedia, economics, scientific knowledge, or political agenda pushing?'. Because the foundational sectoral balances equation is false the whole MMT approach is false, see Refuting MMT’s Macroeconomics Textbook.

***
Wikimedia AXEC118d