November 29, 2019

Economic backstabbing: Bill Mitchell hits again

Comment on Bill Mitchell on ‘Impending British Labour loss may reflect their ambiguous Brexit position’


The macroeconomic Profit Law implies with regard to the government sector Public Deficit = Private Profit. As a consequence, the MMT policy of deficit spending/money-creation ultimately benefits the Oligarchy and NOT WeThePeople. However, this is not obvious because it happens in an indirect manner via the price mechanism.#1 Running budget surpluses hits the ninety-nine-percenters directly by increasing unemployment and the one-percenters indirectly by reducing macroeconomic profit.

The political consequence is this: The one-percenters and their useful academic/ journalistic spokespersons should consistently argue FOR deficit spending and the ninety-nine-percenters and their academic/journalistic spokespersons should consistently argue AGAINST it. In the political debate, though, logical consistency is not the primary concern, but propagandistic success is. So we see representatives of the one-percenters arguing for budget-balancing and representatives of the ninety-nine-percenters arguing for deficit-spending.#2

MMTers claim to be the real Progressives and fighters for the interests of WeThePeople. The economic fact of the matter, though, is that the MMT policy of deficit-spending/money-creation is for the benefit of the Oligarchy.

One of the most aggressive agenda pushers is Bill Mitchell. In the run-up to the election, he first  denounced the Labour leadership as crypto-neoliberals for their Fiscal Credibility Rule, i.e. the commitment to balance the budget over the business cycle and their intention to reduce the public debt in the longer term.#3, #4 In their new Manifesto, Labour announces massive deficit spending on infrastructure. This is in line with MMT policy guidance but does not end Bill Mitchell’s fight against British Labour.

• “As I have noted many times in the past, there was always a problem with the statements that British Labour were making prior to the election in terms of its spending promises and maintaining that it would be also be bound by its Fiscal Credibility Rule. I was vilified by Labour apparatchiks a the related academic hacks for maintaining this position but as time has past it is obvious I was correct.”

• “Apparently the ‘Rule’ has been changed. You don’t change a ‘Rule’ that is seen to be workable. The point that have made often is that, by tying themselves into this neoliberal straitjacket, the British Labour Party limited the political space they would have to operate in.”

• “We have seen many times in history, how fortuitous fiscal interventions … are stopped in their tracks with damaging consequences, because of media and political pressure over the rising deficits, all because the public have been conditioned by these neoliberal fiscal rules to think the deficits signal an impending catastrophe. In the British case, the ‘Rule’ is unnecessary. It reflects an irrational paranoia among the Left in Britain about the relative strength of the financial markets vis-a-vis the legislative and regulative capacity of the elected government.”

In conclusion, the elected Labour leadership still does not satisfy the demands of the self-declared progressive academic Friends-of-the-People: “There is a lot to like about that Manifesto from a progressive perspective. However, in my mind, there were two unresolved tensions that I think damage the Party’s credibility. The first, is its, yes, continued embrace of neoliberal macroeconomic frames, epitomised by its so-called Fiscal Credibility Rule that has already had to be changed because so-called independent analysts agreed with my assessment that the manifesto and the ‘Rule’ were inconsistent.”

The economic fact of the matter is that public deficit-spending/money-creation is a free lunch program for the Oligarchy. The market economy is already for a long time on the life support of the State.#5 Profit is in the main produced by public deficits, financial wealth roughly equals public debt. The Oligarchy, in turn, uses the opulent free lunches to corrupt the State’s legislative, executive, judiciary institutions and ― not to forget ― academia.

The political world is upside down: the legitimate representatives of WeThePeople are smeared as crypto-neoliberals by fake Progressives who push the agenda of the Oligarchy.#6

Egmont Kakarot-Handtke

#1 Q: How are you going to pay for it? MMT: By stealth taxation!
#2 Links on Austerity
#3 Bill Mitchell’s pure MMT teachings for British Labour
#4 How MMT disgraces itself
#5 Keynes, Lerner, MMT, Trump, etc. and exploding profit
#6 How Randall Wray takes the piss out of the House Budget Committee

Related 'Swabian housewife vs Wall Street loan shark' and 'Is MMT Alt-Right? No, worse, it is fake science' and 'Bill Mitchell’s dishonorable discharge from the sciences' and 'MMT, voodoo, and dead horse beating' and 'Bill Mitchell ― Wall Street’s hitman keeps an eye on MMT defeatists' and 'Bill Mitchell’s pure MMT teachings for British Labour'.