July 1, 2019

MMT and the woes of useful political idiots

Comment on Bill Mitchell on ‘Why the financial markets are seeking an MMT understanding’

Blog-Reference and Blog-Reference

“One of the shifts I have observed in the last year or so in the way that Modern Monetary Theory (MMT) is being discussed in the public domain and the type of speaking invitations I am receiving is a growing interest from large financial market entities, who have not bought into the visceral, knee-jerk attacks from the populist academic type economists (Krugman, Summers, Rogoff, and all the rest that have jumped on their bandwagon).”

First of all, academic economists like Krugman, Summers, Rogoff, et tutti quanti are failed/fake scientists and cannot be taken seriously. Fighting these folks and mainstream economics as a whole delay only their burial at the Flat-Earth-Cemetery.#1

Mainstream economics is cargo cult science and the representative economist is not a scientist but a political agenda pusher. The pivotal issue of science is the truth/falsity of the theory in question, the pivotal issue of agenda-pushing is how effective the propaganda is and how the number of followers can be increased. Success is measured in likes and has no relation whatsoever to scientific content but depends alone on the political narrative.

MMT’s critique of mainstream economics is fully justified. The claim of MMTers that their approach is superior is justified. The reason is that MMT is macrofounded while mainstream economics is microfounded which is the lethal methodological defect. Unfortunately, from all this does NOT follow that MMT is scientifically true, i.e. materially/formally consistent, and it does NOT follow that MMT policy is, as claimed, for the benefit of WeThePeople.#2 MMT policy is clearly for the benefit of the Oligarchy. So, what holds for loudspeakers of the mainstream holds also for Bill Mitchell and other loudspeakers of MMT: economists are either stupid or corrupt or both.

There cannot be the slightest doubt that the policy of deficit-spending/money-creation benefits the Oligarchy because it increases macroeconomic profit according to the Profit Law which entails Public Deficit = Private Profit. Thus the Oligarchy’s financial wealth and public debt (currently $22 trillion) grow in lockstep.

Bill Mitchell’s core message is: “… we will learn how to understand how fiscal deficits impact on the non-government sector and expand the net financial assets in that sector and how fiscal surpluses do exactly the opposite.” What Bill Mitchell does not explain is that alone the financial assets of the Oligarchy are expanded and that WeThePeople are left with an expanding public debt that will eventually cause insoluble problems.#3

MMT is a communicative success among big money: “In September, I will be talking with some of the largest investment funds in Europe and Britain (and the Globe). I know some of my American MMT colleagues are doing similar presentations.”

This poses a slight problem because Bill Mitchell has to dispel the impression that he and other MMTers are in bed with the Oligarchy. How does he get around that?

“I think there is something to be said for people of influence being educated in a sound MMT understanding ― which is not to say I support the sort of influence they exert. However, on the other hand, I realise their motivation is not purely benign ― a thirst for knowledge etc. These entities are about profit making and will seek out anything that helps them achieve those goals. So for me, as an educator, the challenge is avoiding becoming another paid consultant in that process. I want them to understand our work but I don’t want to be part of their profit-making process. It is not an easy task. … But I see an advantage in fostering dissonance within the mainstream economics profession ― to expose the myths that are pumped out by the dominant paradigm in my profession, which undoubtedly leads to poor policy outcomes that damage the well-being of so many people.”

So, everyone can see that those mainstreamers are the bad guys and MMTers are the good guys: “We immediately perceive that the ideas that mainstream economics pump out that our governments are financially constrained are false and if this new awareness becomes the norm, then our democracies become enriched ― politicians have to defend their positions more transparently and their ideologies (who they want to transfer riches to) become more exposed and obvious.”

What is indeed obvious is that the MMT policy of deficit-spending/money-creation transfers riches to the Oligarchy and that the chief propagandist Bill Mitchell tells WeThePeople that this enriches democracy. That is after he has educated the intellectual slackers of Wall Street first: “An MMT understanding does not lead to conclusions that deficits from currency-issuing, national government do not matter. This is one of those popularised myths that the attackers are propagating because they think it will finish MMT off forever. The smartest operators in the financial markets are those who know otherwise. Only the less educated financial market players have bought the spin from the mainstream economists that ranges from deficits are typically not desirable to they should be avoided at all costs. Financial market operators should never be joining lobbies that proclaim the deficits are bad and should be avoided. Quite the contrary.”

The contrary is Public Deficit = Private Profit. Even the dullest Wall Streeter understands this equation.

Egmont Kakarot-Handtke

#1 For details of the big picture see cross-references Failed/Fake Scientists
#2 For the full-spectrum refutation of MMT see cross-references MMT
#3 How to pay for the war and to be bamboozled by economists

Related 'Dear idiots, MMTers are Wall Street’s agenda pushers' and 'Very busy these days: Wall Street’s agents' and 'Hype does not help: MMT is toast' and 'How MMT enlightens Washington' and 'MMT, Warren Mosler, and the little helpers from Wall Street and Academia' and 'Stephanie Kelton and the self-destructive stupidity of the super-rich' and 'Totally schizo ― MMT and policy' and 'Why the MMT benefactors of humanity never talk about profit' and 'Is MMT good for WeThePeople or for the Oligarchy?'