March 11, 2019

Hype does not help: MMT is toast

Comment on Bill Mitchell on ‘The conga line of MMT critics ― marching into oblivion’

Blog-Reference and Blog-Reference Mar 12 and Blog-Reference Mar 13

After 200+ years of failure, economists still present themselves as scientists and experts. Fact is, though, that economics is NOT part of science but an integral part of the political Circus Maximus. Accordingly, by mentioning MMT in the context of her Green New Deal initiative, the representative Alexandria Ocasio-Cortez’s triggered an avalanche of political/economical comments.

As Bill Mitchell observes: “The rising popularity of MMT is bringing out a lot of people from the woodwork who have ignored our work until now but who, for one reason or another, feel they have to have a stake in the game or look stupid.”

It is indeed pretty obvious that a lot of mainstream critique of MMT is just stupid.#1 This is no surprise because, by definition, one must be rather stupid to be a card-carrying mainstreamer, which means still failing to realize that standard economics is proto-scientific garbage. Therefore, Bill Mitchell is right: “And, they mostly end up looking foolish given the quality of their criticisms.”

To win an argument against a mainstreamer is easy but does by no stretch of the imagination imply that MMT itself is scientifically acceptable. What MMT has actually achieved is this: “The whole MMT journey to date has been to caution readers about the actual nature of constraints on government spending rather than the false constraints taught in economics courses around the world and wheeled out continually by self-serving politicians and lobbyists. By showing there are no intrinsic financial constraints on such spending, MMT, in no way, is advocating a carte blanche.”

This, though, is a rather trivial point. MMT has clarified a lot of silly misunderstandings and the unqualified critique of mainstreamers. MMT is clearly superior to mainstream economics because it is macrofounded. However, MMT has not answered to the scientific refutation, i.e. the proof of inconsistency#2 and its far-reaching implication.#3

• MMT’s macroeconomic foundations are unacceptable, i.e. MMT’s foundational sectoral balances equation is mathematically false, more specifically (I−S)+(G−T)+(X−M)=0 is false and (I−S)+(G−T)+(X−M)−(Q−Yd)=0 is true. This is a testable proposition.

• Because the axiomatic foundations are false, one can safely forget the rest. MMT is fake science.

• By not addressing refutation but systematically blocking it, MMTers violate scientific standards.

• On the one hand, Bill Mitchell claims: “MMT is not about political theory or praxis.” On the other hand, MMTers present themselves as Progressives and criticize the genuine left-wing parties and movements for having swallowed Neoliberalism.#4

• As a matter of fact, MMT is political agenda pushing in a scientific bluff package.

• Because of the macroeconomic Profit Law, i.e. Public Deficit = Private Profit, the MMT policy of deficit-spending/money-creation is NOT for the benefit of WeThePeople but of the Oligarchy.#5 MMT is just another political fraud.

In the final analysis, MMTers are either stupid or corrupt ― just like mainstream economists. This turns every discussion between the two political sects into an absurd proto-scientific performance.#6

Egmont Kakarot-Handtke

#1 Paul’s and Stephanie’s economic delirium talk
#2 The final implosion of MMT
#3 MMT for beginners
#4 MMT Progressives: stupid or corrupt or both?
#5 Very busy these days: Wall Street’s agents
#6 The clock runs down on economics

Related 'MMT-Refutation for Dummies' and 'Misrepresenting MMT' and 'Krugman vs MMT ― like the blind talking about colors' and 'The half-truths and half-falsehoods of MMT' and 'Opinion, conversation, interpretation, blather: the economist’s major immunizing stratagems' and 'From MMT misunderstandings to the true Theory of Money' and 'Debunking idiots does not prove that MMT is valid' and 'Very busy these days: Wall Street’s agents' and 'MMT and the promotion of Wall Street's idea of social policy' and 'MMT = proto-scientific garbage + deception of the 99-percenters' and 'How MMT enlightens Washington' and 'MMT, Warren Mosler, and the little helpers from Wall Street and Academia' and 'MMT: The fusion of Wall Street and Academia'.