December 19, 2019

Blowing smoke about bipartisan failure

Comment on Brian Romanchuk on ‘A Skeptics Guide To Mankiw’s Skeptic’s Guide To MMT’*


Brian Romanchuk summarizes: “I would paraphrase Mankiw’s criticism of MMT as follows: if we assume that neoclassical theory is correct, MMT is either incorrect (where it contradicts neoclassical theory) or trivial. This is an obviously true statement, but it begs the question: is neoclassical theory correct? As my earlier discussion noted, one of core topics of discussion of the MMT literature are critiques of neoclassical theory. We need to investigate whether those MMT critiques are out to lunch.”

NO, there is absolutely NO need for further investigations of neoclassical economics: “The moral of the story is simply this: it takes a new theory, and not just the destructive exposure of assumptions or the collection of new facts, to beat an old theory.” (Blaug)

Neoclassical economics is dead for 150+ years. Is MMT the valid new theory? Again NO, MMT, too, is refuted on all counts.#1 Therefore, the comparison of standard textbooks of both approaches, i.e. Neoclassics vs MMT, is an exercise in smoke blowing.#2-#4 More specifically, both approaches get the foundational macroeconomic balances equation wrong which proves that they are too stupid for elementary algebra.

Because the conceptual foundations are false the whole analytical superstructure is false and, as a result, the respective textbooks are scientifically worthless.#5-#11 Neither Neoclassical nor MMT policy guidance has sound scientific foundations. Neither mainstreamers nor MMTers have something worthwhile to say about how the monetary economy works.

Egmont Kakarot-Handtke

* Bond Economics
* Gregory Mankiw A Skeptic’s Guide to Modern Monetary Theory
#1 For the full-spectrum refutation of MMT see cross-references MMT
#2 Get it econ suckers: behavioral microfoundations ⇒ false, systemic macrofoundations ⇒ true
#3 Neoclassics and MMT ― much like pest and cholera
#4 Heterodoxy ― an axiomatic failure just like Orthodoxy
#5 To this day, economists have produced NOT ONE textbook that satisfies scientific standards
#6 Refuting MMT’s Macroeconomics Textbook
#7 The father of modern economics and his imbecile kids
#8 False on principle
#9 Economics textbooks ― tombstones at the Flat-Earth-Cemetery
#10 CORE: more lipstick on the dead economics pig
#11 Macroeconomics and the fake History of Economic Thought