January 30, 2020

Economics: Not a pretty story

Comment on Bill Mitchell on ‘Be careful of what parades as academic research’*

Blog-Reference and Blog-Reference

Bill Mitchell directs attention to ugly facts and top names: “Remember the 2010 film ― Inside Job ― which documented how my profession had become corrupted by the financial services sector into producing, allegedly, independent research reports extolling the virtues of deregulation etc and not admitting they were being paid for by the beneficiaries of the propaganda masquerading as research. It shows how corruption runs deep in the economics profession to accompany the incompetence that mainstream macroeconomists display. Well, I have been following an unfolding story about how Uber has decided to draw on that corrupt tendency for their own gains. It is not a pretty story.” and “I will leave it to you to check if you are interested. 1. Top names in the field ― Judd Cramer, Alan B. Krueger, Jonathan V. Hall, Peter Cohen, Robert Hahn, Steven Levitt, Robert Metcalfe, 2. Top ranked journals ― NBER Working Papers, American Economic Review.”

By pointing at an individual case of wrongdoing Bill Mitchell draws the attention away from (i) that economics as a WHOLE is a scientific fraud since the founding fathers, and (ii), that he is part of it.

The general public and the representative economist have NO proper understanding of what economics is all about. For a start, it is of utmost importance to distinguish between political and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.

A closer look at the history of economic thought shows that theoretical economics (= science) had been hijacked from the very beginning by the agenda pushers of political economics. The founding fathers were quite outspoken about their agenda: “That Political Economy is a science which teaches, or professes to teach, in what manner a nation may be made rich. This notion of what constitutes the science, is in some degree countenanced by the title and arrangement which Adam Smith gave to his invaluable work. A systematic treatise on Political Economy, he chose to call an Inquiry into the Nature and Causes of the Wealth of Nations; …” (J. S. Mill)

Political economics has produced NOTHING of scientific value in the last 200+ years. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism — are mutually contradictory, axiomatically false, and materially/formally inconsistent. Economics does NOT satisfy scientific standards to this day.#2

From this follows that economic policy guidance from Adam Smith/Karl Marx onward NEVER had sound scientific foundations. Left/center/right does NOT matter, ALL of economics is proto-scientific garbage, or in other words, political propaganda in a scientific bluff package.

To point at individual wrongdoers obscures the fact that economics is failure/fake/fraud from Econ 101 to textbooks to the peer-review process of journals to the EconNobel.#3

This holds also for MMT#4 and Bill Mitchell#5. MMT claims that deficit-spending/money-creation is for the benefit of WeThePeople and the solution of almost all problems between unemployment and the survival of humanity. This is not the case, MMT is provably false as economic theory and MMT policy is ultimately for the benefit of the Oligarchy. The observable distribution of financial wealth is the result mainly of public deficit-spending. MMTers are not scientists but agenda pushers.

Bill Mitchell claims: “In fact, as a life-long educator, I clearly form the view that most of the distasteful things we read or hear from others are the result of ignorance and a lack of education. These things are clearly manipulated for ideological and political purposes by others but at the root of the problem is a lack of education. Education is the path to a more enlightened, tolerant and inclusive society. That is the driving principle I have always operated on. Which is why the relatively recent trend on social media that is variously called ― Cancel culture or Call-out culture ― is disturbing to say the least.”

True, but entirely beside the point. Bill Mitchell is NOT a teacher but a manipulator of public opinion. He is NOT a progressive fighter for WeThePeople but an agenda pusher for the Oligarchy. Like his academic colleagues, Bill Mitchell lacks the defining characteristic of a scientist: “A genuine inquirer aims to find out the truth of some question, whatever the color of that truth. ... A pseudo-inquirer seeks to make a case for the truth of some proposition(s) determined in advance. There are two kinds of pseudo-inquirer, the sham and the fake. A sham reasoner is concerned, not to find out how things really are, but to make a case for some immovably-held preconceived conviction. A fake reasoner is concerned, not to find out how things really are, but to advance himself by making a case for some proposition to the truth-value of which he is indifferent.” (Haack)#6

For economics in general and MMT, in particular, there is NO future. It holds: “Scrap the lot and start again.” (Joan Robinson)

Egmont Kakarot-Handtke


* Billy Blog
#1 For details of the big picture see cross-references Failed/Fake Scientists
#2 Failed economics: The losers’ long list of lame excuses
#3 Links on the Economics Nobel
#4 For the full-spectrum refutation of MMT see cross-references MMT
#5 Bill Mitchell’s dishonorable discharge from the sciences
#6 Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion

Related 'Economics, MMT, and the corruption of science' and '“Inhumane stupidity” ― bad economic policy as inevitable consequence of false economic theory' and 'The problem with economics as a discipline' and 'Trust in science? Yes, but economics is NOT a science' and 'Econogenics: economists pose a hazard to their fellow citizens' and 'False economic theory makes bad economic policy'. For more details of the big picture see cross-references Political Economics/Stupidity/Corruption.

January 28, 2020

Economics, MMT, and the corruption of science

Comment on Bill Mitchell on ‘If it quacks!’*

Blog-Reference and Blog-Reference

The political fact of the matter is this: currently there is NO Democracy and there is NO Autocracy. The currently prevailing form of government has been called Oligarchy by the ancient Greeks.#1 The first problem of the Oligarchy is to keep up the appearances of democracy, that is, political measures should appear as the faithful execution of the will/best interest of WeThePeople. This applies in particular to economic policy. So, one important activity of the Oligarchy has always been to produce public opinion and populist pressure. Needless to emphasize that the term Oligarchy does not denote something homogenous and fixed but a temporary institutional arrangement. Neither does the term imply a moral valuation.

The economic fact of the matter is this: the market economy is already for a long time on the life support of the State. The economy runs on profits and macroeconomic profit is in the main produced by public deficits. The axiomatically correct macroeconomic Profit Law reads Q=Qm+Qn with Qm=Yd+(I−Sm)+(G−T)+(X−M). This Law tells one, among many other things, that Public Deficit G−T>0 = Private Profit Qm which means that the Oligarchy’s financial wealth and public debt grow in lockstep, or, in a formula: Financial Wealth of the Oligarchy = Public Debt of WeThePeople. The beauty of the situation is that people think that public debt is somebody else’s problem. This is true, of course, until it is no longer true, that is until the debt stops growing or goes into the reverse. The market economy lives literally on borrowed time.

The Oligarchy, in turn, uses the opulent deficit-produced free lunches to nudge the State’s legislative, executive, judiciary institutions in its favor. Much of the money goes into the production of public opinion. Without knowing the details, one can assume for a mature Oligarchy that key opinion producers like journalists, entertainers, priests/preachers/ gurus, writers, filmmakers, and academics are with few exceptions directly or indirectly sponsored/supported/controlled by the Oligarchy.

And here is the problem: in the political realm, anybody can talk any bullshit whatsoever, in the scientific realm this is NOT admitted. Science is committed to the growth of knowledge and scientific knowledge is well-defined by material and formal consistency. At least, this was the idea before science became politically weaponized. This happened in economics at an early stage. The founding fathers considered themselves as political economists which is to say as useful idiots for the (then-) Oligarchy.

“That Political Economy is a science which teaches, or professes to teach, in what manner a nation may be made rich. This notion of what constitutes the science, is in some degree countenanced by the title and arrangement which Adam Smith gave to his invaluable work. A systematic treatise on Political Economy, he chose to call an Inquiry into the Nature and Causes of the Wealth of Nations; and the topics are introduced in an order suitable to that view of the purpose of his book.” (J. S. Mill)

To this day, economics is at the proto-scientific level. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism, MMT — are mutually contradictory, axiomatically false, and materially/formally inconsistent. Economics does NOT satisfy scientific criteria. This would be no problem because under the license of free speech/ freedom of the press anything goes in the political realm. However, economists claim from Adam Smith/Karl Marx onward to the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” to do science. This is NOT the case, the representative economist is NOT a scientist but a political fraudster.

The actual case is MMT. Academic MMTers like Bill Mitchell and Stephanie Kelton are currently extremely busy to spread the gospel of deficit-spending/money-creation. This runs in perfect harmony with Mr. Trump’s policy.

The exact point where the fraud kicks in is when MMTers tell the general public that MMT is for the benefit of WeThePeople and that MMT helps to solve almost all problems between unemployment and the survival of humanity.

Bill Mitchell argues: “… the current challenges are different to a military threat but an existential threat no less and require urgent and significant response from the public sector. … The broader point is that the ‘means’… cannot be constructed in terms of financial aggregates. To do so is to construct the currency-issuing government as being financially-constrained in the same way a household is. A household has to earn income or borrow or run down prior savings or sell previously acquired assets (financial or otherwise) in order to spend. A currency-issuing government is not financially constrained and can purchase whatever is for sale in that currency including all idle labour.”

This is true in the same sense that a counterfeiter always has the ‘means’ to buy whatever he wants. However, from the fact that this is technically possible does NOT follow that it is good policy. Taken the economy as a whole, it is bad policy for WeThePeople and good policy for the Oligarchy. Bringing money into the economy at the demand side amounts to robbing WeThePeople.#2, #3

There is NO way around it: MMT policy is a political fraud and MMT academics are stupid/corrupt scientists. Science is built on the ethics of individual integrity and self-government of the scientific community. As MMT proves, economics is politically corrupted and the mechanisms of scientific self-government do not function properly.

MMT is false theory, MMT is false policy, MMTers are fake scientists and agenda pushers for the Oligarchy.#4 The rest of economics, though, is NOT any better.

Egmont Kakarot-Handtke


*   Billy Blog
#1 Wikipedia Oligarchy
#2 Criminals and the monetary order
#3 Q: How are you going to pay for it? MMT: By stealth taxation!
#4 MMT: How the Oligarchy communicates with WeThePeople

Related 'There is no truth in political economics' and 'Keynes, Lerner, MMT, Trump and exploding profit' and 'Another MMT shitshow' and 'Bill Mitchell, MMT, Progressives: economists as Oligarchy hacks' and 'Cryptoeconomics ― the best of Bill Mitchell’s spam folder' and 'Bill Mitchell cracks the spending whip over the Swabian Housewife' and 'MMT, Bill Mitchell, and the lack of basic scientific integrity' and 'MMT: academic snake oil for the people'. and 'Very busy these days: Wall Street’s agents' and 'The problem with economics as a discipline' and 'Trust in science? Yes, but economics is NOT a science' and 'Exploding the Household Fallacy' and 'Stephanie Kelton: “All deficits are good for someone” Yes, Someone=Oligarchy' and 'Mr. Wray goes to Washington' and 'Deficit cheerleaders ― the Oligarchy’s useful idiots' and 'How to spot economics trolls' and 'Show first your economic axioms or get out of the discussion' and 'Links on the Economics Nobel'.


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Philip Mirowski Money and the Unflappable Economist

January 26, 2020

The futile search for the “most useful idea in economics”

Comment on Sandwichman on ‘What is the Most Useful Idea in Economics?’ and ‘War, Peace and the End of Shorter Hours’.

Blog-Reference

“NPR’s Planet Money went to the 2020 American Economic Association conference in San Diego where they asked economists, ‘what is the most useful idea in economics?’ David Autor appears near the end of the episode to talk about the lump-of-labor fallacy. Almost exactly 87 years earlier, on January 18, 1933, Arthur Dahlberg appeared before a Senate subcommittee to give testimony on the thirty-hour work week bill. The lump-of-labor fallacy would be a useful idea indeed if it would show economists how little they have learned and how much they have forgotten in the intervening 87 years.”#1

For a summary, Sandwichman quotes Dahlberg: “The whole economic mechanism is so involved that we get lost in following the process.” and “… I tried to devise a technique by which I could more vividly present these economic interrelationships. I concluded the technique of the use of words for describing social process is inadequate. It is almost impossible to get agreement on what is happening, much misinterpretation over words. The memory forgets, and the best ones can not consider more than one aspect of the problem at a time.”

Indeed, that is why economists have not figured out in 200+ years how the economy works. Economists are still in the proto-scientific swamp where “nothing is clear and everything is possible” (Keynes) and they have NOTHING of scientific value to show for. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism, MMT — are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept profit wrong. The usefulness of economists consists NOT of any scientific achievement but their employability as useful political idiots.

This keeps economists occupied in decently paid jobs. Economists, in turn, keep their lump-of-labor intact by recycling brain-dead stuff ad infinitum.

Now, the fun is over. The Employment Law is given as a testable formula.#2 This puts an abrupt end to the conversation and makes scores of economists unemployed — including Sandwichman.


#1 To begin with, it is a naive idea to go to the ASSA in order to find out whether economists have produced anything useful or worthwhile. ASSA is a rally where economists get their communicative marching orders. See ASSA2020 has been a success ― sorta kinda.
#2 Go! ― test the Profit and Employment Law

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REPLY to Sandwichman on Jan 26

“Economics is the study of the economy, not the study of economists.” (Ricardo Reis)

So, it is absolutely irrelevant that you are a devout non-economist.

The question is how the actual economy works. If you know, tell it but do not recycle silly dialogues from the history of garbage economics.

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Switch of threads

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REPLY to Sandwichman on Feb 1

The time evolution of the most elementary economic system is given by the economic God Equation.#1

Because the equation consists of measurable variables it is testable in principle and therefore satisfies basic scientific requirements.

The equation fully replaces the Dahlberg/Goldberg depictions which can now be disposed of for good on the garbage dump.


#1 Wikimedia AXEC25a

January 24, 2020

Another MMT shitshow

Comment on ‘Mnuchin says US must cut spending and reduce the deficit: Recipe for guaranteed recession’

Blog-Reference

Tom Hickey posts: “Zero Hedge: Trump Says Middle-Class Tax Cut To Be Announced Within Three Months”

Mike Norman posts: “Mnuchin says the U.S. government must cut spending and reduce the deficit.”

The latter message triggers a mass Pavlovian reflex in the MMT troll yard (S400, Bob, Matt Franko, Ralph Musgrave, Andrew Anderson) and unanimous condemnation of Mnuchin.

Folks, calm yourself, Trump/Mnuchin are playing a little communicative joke with you. It is known as good cop/bad cop. Don’t be afraid, there will be MORE deficit-spending. After all, Public Deficit = Private Profit and Trump/Mnuchin are BOTH the tried and tested useful idiots of the Oligarchy.#1

Egmont Kakarot-Handtke


#1 Keynes, Lerner, MMT, Trump and exploding profit

Related 'Get it: Progressives don’t tax the rich' and 'Links on MMT-Progressives push Wall Street’s agenda' and 'MMT: For the record'. For the full-spectrum refutation of MMT see cross-references MMT.


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REPLY to Andrew Anderson on Jan 24

You say: “If fiat is NOT to be created by deficit spending for the general welfare then HOW shall fiat be created FAIRLY in your scheme? If you say an equal Citizen’s Dividend distributed by the Central Bank then I’ll agree.”

First of all, we are NOT in the like/dislike or agree/disagree opinion poll business but in the true/false business which is defined by material/formal consistency.

To bring money into the economy at the demand side is false because it has humongous distributional consequences for the present and the future. The proof has been given elsewhere. For example
► The right and the wrong way to bring money into the economy
► Criminals and the monetary order
► Nick Rowe’s soapbubbling about money.

Alternatively one can search for transaction money here.

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REPLY to Andrew Anderson on Jan 24

You say: “And when un-ethically financed automation has eliminated the need for almost all human labor, then what?”

You bring up an entirely different question in order to avoid the crucial conclusion. The takeaway point is: the MMT policy of deficit-spending/money-creation is the wrong way to bring money into the economy because macroeconomics tells us that public deficit-spending is a free lunch for the Oligarchy.

MMT policy is unethical, to begin with.

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REPLY to S400 on Jan 25

You say: “So what does the ethical policy look like? Are going to answer that or do as you always do ― avoid the question?”

I have answered the question long ago and have given the references above.

Obviously, you are unable to follow a link. Go back to troll school and take the advanced course.

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REPLY to Matt Franko on Jan 25

Above, you refer the audience to Wikipedia/Mathematical Maturity. This implies that you think of yourself to possess this qualification.

If so, it should not be a problem for you to tell the audience which of the two sectoral balances equations is true (i) (X−M)+(G−T)+(I−S)−(Q−Yd)=0 or (ii) (X−M)+(G−T)+(I−S)=0.

Of course, you are allowed to ask S400 for help or perhaps the brainies of the next kindergarten near you.

January 23, 2020

Get it: Progressives don’t tax the rich

Comment on Bill Mitchell on ‘Tax the rich to counter carbon emissions not to get their money’#1

Blog-Reference

Economics is NOT a science but agenda-pushing for the Oligarchy. Academic economists are NOT scientists but useful idiots. This is obvious for orthodox/mainstream folks like Paul Krugman who is on the payroll of The New York Times.#2 But it holds also for the heterodox/pluralistic folks who present themselves all over the social media as anti-oligarchic fighters for WeThePeople.

In order to verify this for MMT, in particular, it is sufficient to look at the recent speaking tours of Bill Mitchell and Stephanie Kelton.#3 MMTers do NOT what scientists are supposed to do but what propaganda agents are supposed to do.

MMTers push the Oligarchy’s agenda but can, of course, not say so openly. They present themselves as the good guys, as Progressives who hate and fight the evil of neoliberalism wherever it raises its head and they are among the front-runners of every social movement for the betterment and salvation of humanity.#4

It is pretty obvious that among MMT’s political duties is to try to capture and derail genuine grassroots movements.#5

Where MMT’s true colors become clearly visible is the question of taxation. All MMT’s policy guidance boils ultimately down to deficit-spending/money-creation. Proper economic analysis shows that deficit-spending/money-creation is ultimately to the advantage of the Oligarchy and to the disadvantage of WeThePeople.

The public deficit is in the elementary case defined as D≡G−T and it is equal to macroeconomic profit Q. Because of this, MMTers fight fiercely against budget balancers like Corbyn’s British Labour or the Swabian Housewife. A balanced budget, i.e. G=T, means zero macroeconomic profit.

MMTers argue that taxes are not a necessary prerequisite for spending because the government is the currency issuer. That is technically correct but does NOT economically justify deficit-spending/money-creation.#6 However small, there must be taxation because this is what gives the currency value in the MMT world. So T is always greater than zero.

Now, one would expect that, if taxation is necessary, a progressive MMTer would argue to tax the rich. This is NOT the case. MMTers argue consistently AGAINST taxing the rich’s income.#7 You cannot be more explicit than the MMT loudspeaker Bill Mitchell.

• “Tax the rich! That has become a misguided progressive Left mantra.”
• “That is one of many reasons [to tax the rich]. But you should never include among those reasons a need by government for their cash in order to facilitate spending. Any progressive who articulates that argument is just reiterating neoliberal frames.”
• “The answer is that we need to tax the rich more not because we want the government to get their money in order to spend more, but, rather, to stop the rich using it.”
• “To illustrate the confusion these groups elicit, this same group has signed up to another so-called progressive group and they advocate increasing taxes on higher income groups to pay for the services we deserve. Meanwhile, in another guise, they hold themselves out as promoting MMT.”

Taxing the rich has always been the instinctive central political plank of genuine anti-Oligarchic movements. Needless to emphasize that fake Progressives are strictly against it: “Any progressive who articulates that argument is just reiterating neoliberal frames.” This is the actual Orwellian newspeak of stupid/corrupt academic economists.#8

Egmont Kakarot-Handtke


#1 Billy Blog
#2 Links on Paul Krugman, proto-scientific impresario
#3 European and UK Teaching and Speaking Tour, February 2020 in #1. For more details enter Bill Mitchell/Stephanie Kelton in the search field of the AXEC Blogspot
#4 MMT: If you’ve got a problem, I don’t care what it is, let me help
#5 MMT: Corbynism is dead, British Labour is next
#6 Criminals and the monetary order
#7 MMT: Distribution is the drawback NOT Inflation
#8 Bill Mitchell, MMT, Progressives: economists as Oligarchy hacks

Related 'MMT and grassroots movements' and 'MMT: A Trojan Horse for Labour courtesy of the Oligarchy' and 'Bill Mitchell cracks the spending whip over the Swabian Housewife' and 'Is MMT good for WeThePeople or for the Oligarchy?' and 'How Bill Mitchell stalks Jeremy Corbyn' and 'Stephanie Kelton: “All deficits are good for someone” Yes, Someone=Oligarchy' and 'MMT: A Trojan Horse for Labour courtesy of the Oligarchy' and 'Mankiw vs Mitchell ― another clown show' and 'The problem with economics as a discipline'. For the full-spectrum refutation of MMT see cross-references MMT.

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Source: Billy Blog

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Source: Billy Blog

January 15, 2020

Bill Mitchell cracks the spending whip over the Swabian Housewife

Comment on Bill Mitchell on ‘The German government celebrates its record surplus while infrastructure collapses’*

Blog-Reference

Bill Mitchell’s political agenda has been and still is: destruction of the European Union, fighting budget balancers all over the world, boosting deficit-spending/money-creation all over the world, and telling the general public that all this is for the benefit of WeThePeople.

Bill Mitchell calls himself a Progressive but MMT policy does NOT benefit WeThePeople but the Oligarchy. This is because of the macroeconomic Profit Law which implies Public Deficit = Private Profit and Public Debt of WeThePeople = Financial Wealth of the Oligarchy. This implies that Austerity is bad for the Oligarchy and deficit-spending/money-creation is bad for WeThePeople.#1

Accordingly, Germany with her Black-Zero commitment is MMT’s arch-enemy.#2 Even more so, after Mr. Corbyn has been finished off in Britain.#3-#6

Bill Mitchell gives budget balancers the whip: “The interesting point, apart from the sheer idiocy of the German position, is that the way we think about these flows for Germany or any nation that uses a foreign currency is different to the way we would construct the situation for a currency-issuing government such as Australia or the UK. In both cases, a fiscal surplus means a net withdrawal of spending power by the government which squeezes the non-government sector for liquidity, and, once the transactions are completed causes non-government financial wealth to decline overall. But in the case of Germany, which uses the euro as a foreign currency, the surplus allows it to put the excess flow into bank accounts somewhere and increase its spending power in periods ahead. … The stock adjustments that accompany this result forces a reduction in net financial assets in the non-government sector and a reduction in debt-issuance, if the government is, unnecessarily, matching the deficits with debt sales.”

It is almost impossible to detect the economic fraud in this argument. In order to see it, one has to replace the term non-government sector with business sector/Oligarchy: “… a fiscal surplus means a net withdrawal of spending power by the government which squeezes the BUSINESS sector for liquidity, and, once the transactions are completed causes OLIGARCHY financial wealth to decline overall.” and “The stock adjustments that accompany this result forces a reduction in net financial assets in the BUSINESS sector and a reduction in debt-issuance …”

As an agent of the Oligarchy#7, Bill Mitchell cannot give Germany a pass but has to apply the defamation whip with the utmost rigor. This is pathetic theatrics because from the scientific standpoint Modern Monetary Theory is nothing but a load of proto-scientific garbage and MMT policy is a case for the application of RICO laws on academia.#8

With the reduction of the public debt, Germany has virtually eliminated the national/ international Oligarchy’s space for present/future financial suppression/blackmail. The Swabian Housewife has successfully outwitted Wall Street’s loan sharks.

Egmont Kakarot-Handtke


* Billy Blog
#1 Links on Austerity
#2 Swabian housewife vs Wall Street loan shark
#3 MMT: Corbynism is dead, British Labour is next
#4 Mission accomplished: Economists as useful idiots of the Oligarchy
#5 Economic backstabbing: Bill Mitchell hits again
#6 Is MMT Alt-Right? No, worse, it is fake science
#7 Bill Mitchell, MMT, Progressives: economists as Oligarchy hacks
#8 For the full-spectrum refutation of MMT see cross-references MMT

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REPLY to Ralph Musgrave on Jan 16

You say: “Bill Mitchell wants Germany to spend more on infrastructure …”

The decision about infrastructure-spending in Germany is the business of the Legitimate Sovereign of Germany. What Bill Mitchell wants is irrelevant.

All the more so as Bill Mitchell is known to be an incompetent scientist who applies in his recent textbook a sectoral balances equation that is provably false since Keynes.

So, Germany and the rest of the world wants Bill Mitchell/Stephanie Kelton/Warren Mosler/Dirk Ehnts/etcetera to learn elementary algebra before they go on their deficit-cheerleading tours and, most of all wants that Australia spends more on her poor educational infrastructure and — dream of all dreams — keeps her academic imbeciles in the country.

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REPLY to S400 on Jan 16

You say: “Bill has math degree.”

“Economics is the study of the economy, not the study of economists.” (Ricardo Reis)

So, your argument “Bill has math degree” is irrelevant for the point at issue. The point is that Bill and the other MMT academics are too stupid for the elementary algebra that underlies macroeconomics. Obviously, this applies also to you. For a mathematically competent person, it is not too hard to understand that the MMT sectoral balances equation is false after following through the proof.

My conclusion from your irrelevant personal information “Bill has math degree” is that he must have gotten it from Trump University.

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REPLY to Matt Franko on Jan 16

You say: “Egmont are you saying the surplus is good because it denies EUR to the “neoliberals!” Or “orligachy!” or wtf? Is that your basic point?”

The basic points are
  • MMT macroeconomics is algebraically false. Therefore the propaganda line Government Deficit = Non-Government Surplus is provably false.
  • Correct macro-accounting tells one that Public Deficit = Private Profit and as a consequence Financial Wealth of the Oligarchy = Public Debt of WeThePeople.
  • So, the MMT policy of deficit-spending/money-creation is for the benefit of the Oligarchy. The empirical proof is the actual distribution of income/financial wealth.
  • By consequence, the MMT claim that MMTers are fighting for the benefit of WeThePeople is a political fraud.
Either you don’t get it (= stupid) or you are part of the greatest financial fraud in modern times (= corrupt).

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REPLY to Matt Franko on Jan 17

You say: “Youre against ‘the oligarchy!’ (ie youre a conspiracy theorist like the rest of the morons here...)”

I use the term Oligarchy descriptively in the classical Greek sense as defined in Wikipedia.#1

Oligarchy is a term of Political Science. Because economics is dealing with the economy and NOT with politics, the ‘Oligarchy’ is of NO particular interest in the present context. To paraphrase: Economics is the study of the economy and NOT the study of economists and NOT the study of the Oligarchy.

A key concept for the study of the economy is profit. Now, it is a provable fact that Modern Monetary Theory gets profit wrong. Because MMT gets the foundational macroeconomic concepts wrong the whole analytical superstructure is scientifically worthless. As a consequence, MMT policy guidance has NO sound scientific foundations. From this follows that academic MMTers are out of science.

This raises the question of why they are busily touring the world and spreading provably false claims about the public deficit and the public debt and actively fighting against legitimate representatives of WeThePeople like Mr. Corbyn, for example.#2

Wikipedia continues with the description of present-day Oligarchy: “Simon Johnson wrote that ‘the reemergence of an American financial oligarchy is quite recent’, a structure which he delineated as being the ‘most advanced’ in the world. Jeffrey A. Winters wrote that ‘oligarchy and democracy operate within a single system, and American politics is a daily display of their interplay.’ The top 1% of the U.S. population by wealth in 2007 had a larger share of total income than at any time since 1928. In 2011, according to PolitiFact and others, the top 400 wealthiest Americans ‘have more wealth than half of all Americans combined.’”

This “financial oligarchy” is the intended or unintended product of the MMT policy of deficit-spending/money-creation. Everyone with basic mathematical competence can read this directly off the axiomatically correct macroeconomic Profit Law.

Whether the agenda-pushing of MMTers for the benefit of the Oligarchy is unintended or intended needs further research. This research is beyond the purview of economics. Economics is about how the economy works and NOT about how the Oligarchy works.

As a rule of thumb from history since the ancient Greeks, one can derive with a high probability the conclusion that almost all people who claim to fight for WeThePeople are actually agenda pushers for the Oligarchy. Because of the macroeconomic Profit Law, i.e. Public Deficit = Private Profit, this applies in any case to the academic MMT loudspeakers Bill Mitchell and Stephanie Kelton.


#1 Wikipedia “Some contemporary authors have characterized current conditions in the United States as oligarchic in nature.”
#2 MMT: Corbynism is dead, British Labour is next

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REPLY to Matt Franko on Jan 17

News for you directly from Zerohedge: “There is no hiding anymore, the United States has become an oligarch owned banana republic with nukes, …”

Public deficit-spending/money-creation is a free lunch program for the Oligarchy. The fact is that the market economy is already for a long time on the life support of the State. Profit is in the main produced by public deficits. The Oligarchy, in turn, uses the opulent free lunches to corrupt the State’s legislative, executive, judiciary institutions in its favor. This constitutes a positive feedback loop and this, in turn, explains the exponential deterioration of distribution.

MMT policy is instrumental in this vicious circle. MMT is no good for WeThePeople.

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REPLY to Ralph Musgrave on Jan 19

You say: “The truth is that when government spends on a new bridge or whatever, the ratio of money going to employers and employees is the same as for any other type of spending: i.e. a large majority goes to EMPLOYEES.”

Yes, this is common knowledge but absolutely irrelevant for the point at issue.

What you are doing is trivial micro, what has to be done is macro. In other words, you need the total picture.

The total picture tells one that the employees not only get income Yw but that they also spend C. And for the profit of the business sector as a whole Q only the BALANCE of the household sector counts, i.e. Q≡C−Yw, S≡Yw−C. Take notice that wage income Yw is a FLOW and that profit Q is a BALANCE. You should know the difference from Accounting 101.

With the government deficit/surplus included one has Q=(G−T)−S. This gives Public Deficit = Private Profit when the household sector is for a moment taken out of the picture, i.e. S=0. In this case, the BALANCE of the business sector is equal to the BALANCE of the government sector. The flow of wage income Yw is IMPLICIT in the balances.

The truth is that your comment proves your bottomless stupidity.

***
REPLY to Dr. Wintermute on Jan 21

You say: “Here’s news for you: there’s no such thing as ‘social justice’.”

Take notice that ‘social justice’ is a political concept. Now, there is the political realm and the scientific realm and both are disjunct. In the political realm, there is left/right, in the scientific realm there is true/false and NOTHING else.

“Economics is the study of the economy, not the study of economists.” (Ricardo Reis)

The sectoral balances equation describes the interdependencies of the macroeconomic balances. I have given the proof that the MMT balances equation is false. Because MMTers get the foundational macroeconomic relationship wrong the whole analytical superstructure of MMT is false. And from this follows that MMT policy guidance has NO sound scientific foundations. And from this follows that MMT is NOTHING more than political propaganda. And from this follows that MMT academics are NOT scientists but political fraudsters.

From the fact that this is not a big problem for you, I infer that you are as intellectually corrupt as the MMT academics.

Whoever thinks that my proof is false and can point to the exact spot is welcome. No valid refutation of the axiomatically correct balances equation#1 has been presented to this day.

Your comment is silent about how the monetary economy works. You do not even understand the point at issue but get lost in meta-communication about how to communicate with imbeciles. And this proves that you have NO idea of what science is all about.

You say: “Like Karl Marx and many other leftists you have a fetish for social equality.” Here’s news for you: Marx, too, got profit wrong and because of this Marxianism, too, is proto-scientific garbage — just like MMT and Walrasianism and Keynesianism and Austrianism and Orthodoxy and Heterodoxy and Pluralism and Hegel and Freud and the Analytische Sozialkritik.


#1 Wikimedia AXEC118d

January 14, 2020

Bill Mitchell, MMT, Progressives: economists as Oligarchy hacks

Comment on Bill Mitchell on ‘The Tories in Britain have a clear way forward ― thanks to the Labour Party hacks’*

Blog-Reference

Bill Mitchell summarizes the current situation in Britain: “Meanwhile, the Tories have an almost open field to finish the first stage of the Brexit process off, and, secure the ongoing support of the voters that abandoned Labour in the election. The Tories will have restored sovereignty to Britain and freed themselves from the restrictive, neoliberal environment of the European Union. Now don’t get me wrong, I have no truck for the Tories. And all along, I considered that Brexit would deliver great outcomes for Britain in the hands of the Labour party as long as they simultaneously abandoned their neoliberal obsession with fiscal rectitude, as expressed by their ridiculous Fiscal Credibility Rule.” and “That means he [Boris Johnson] will have to do abandon the Tory austerity bias and invest billions into the regions that have been torn apart by his parties obsession with fiscal surpluses. That might, for a while, provide some good news for Britain.”

So Labour has lost and it is their own fault because they clung stubbornly to their “ridiculous Fiscal Credibility Rule”. In sum: “Labour lost. They took bad advice and made stupid decisions that abandoned their loyal voters. So, it will be the Tories who have the opportunities to stimulate growth in a post-Brexit Britain and further damage the Labour Party’s electoral prospects.”

Bill Mitchell is rather happy with this outcome. After all, this is what he was working for under the cover of a Progressive for a long time.#1-#5 Before it becomes too obvious that he has always been a mole of the Oligarchy he reassures the audience: “Now don’t get me wrong, I have no truck for the Tories.”

No, nobody gets Bill Mitchell wrong. His political agenda has been and still is: destruction of the European Union, prevention of Corbynism, boosting deficit-spending/money-creation, and telling the world that all is for the benefit of WeThePeople.

However, there is no time to celebrate and relax. For the Oligarchy there is one big problem left and Bill Mitchell is expected to fix it.

“I have had several meetings in recent months with some of the largest investment managers in the world. These are the people who the Shadow Chancellor and his advisors are fearful of. They have been seeking me out to learn about Modern Monetary Theory (MMT) because they realise that by adhering to the views of the mainstream economists, they have been exposing their investors to losses and reduced returns. I never give investment advice. But I am happy to educate and move more people away from mainstream economics.”

Yes, OK, got it, Bill Mitchell is not a political agenda pusher but an academic educator. So, what is he telling his eager students?

“First, austerity around the world and a reliance on monetary policy has generated financial market outcomes that are unsustainable for financial investors. All around the world, interest rates and yields on assets are falling and we are now seeing negative interest rates on long-term bonds becoming the norm. The pension funds and insurance funds are also facing a major asset-liability mismatch as a result. And to resolve the mismatch, they are seeking to generate higher returns on their assets, which means they are taking on higher risk and exposing themselves to higher probabilities of insolvency in the face of any new crisis. It is an unsustainable position. And it is making life very difficult for the large investment funds who seek stable returns. What they are hankering over is an end to the neoliberal era of passive fiscal policy and monetary policy interventions that are driving yields into negative territory. They are getting on board the shift to fiscal dominance that the central bankers are demanding. They are becoming increasingly attracted to MMT because they can see that we have consistently articulated the case for fiscal dominance.”

At this point schizophrenia turns to scientific fraud. Apart from making it plain for the last naive MMT troll that he and the other progressive MMT academics are and have always been the useful idiots of the Oligarchy, Bill Mitchell gets economics again upside down.

Negative interest rates are the commonsensical outcome of the MMT policy of permanent deficit-spending/money-creation. The public deficit creates private profit which originally takes the form of deposits at the Central Bank. This money seeks low-risk interest income and turns to the bond market. This, in turn, continuously drives the interest rate down. This, in turn, annoys a significant fraction of the Oligarchy, i.e. the holders of the $23 trillion public debt. And this fraction now asks Bill Mitchell, the progressive fighter for WeThePeople, for his expertise.

Before anyone gets confused this is the straightforward economic fact of the matter. The macroeconomic Profit Law implies Public Deficit = Private Profit and as a consequence Financial Wealth of the Oligarchy = Public Debt of WeThePeople. Thus, MMT policy produces the extremely unequal distribution of income/wealth that eventually destroys both the economy and society. MMTers are NOT the benefactors of WeThePeople but the PR/Marketing/Sales-force of the Oligarchy or at least of a significant fraction.#6

Conclusion: The first thing to do is to throw the intellectually and politically corrupt Progressives/MMTers out of the scientific community. PricewaterhouseCooper will take them gladly on board.#7 After all, they have done a good hit job in Britain.

Egmont Kakarot-Handtke


* Billy Blog
#1 MMT: Corbynism is dead, British Labour is next
#2 Mission accomplished: Economists as useful idiots of the Oligarchy
#3 Economic backstabbing: Bill Mitchell hits again
#4 Bill Mitchell’s pure MMT teachings for British Labour
#5 Mr. Wray goes to Washington
#6 Dear idiots, MMTers are Wall Street’s agenda pushers
#7 Stephanie Kelton: “All deficits are good for someone” Yes, Someone=Oligarchy

***

Twitter Jan 14 That's unfair, Robert Skidelsky takes the credits in the House of Lords


Source: Twitter

January 13, 2020

Stephanie Kelton: “All deficits are good for someone” Yes, Someone=Oligarchy

Comment on Andrew Taylor on ‘“All deficits are good for someone”: Visiting economist shrugs off debt concerns’*

Blog-Reference

MMTers never let a crisis go to waste. For burning Australia, Stephanie Kelton has good news: “The good news appears to be that there is recognition that what matters is human outcomes and climate outcomes, not budgetary outcomes.” “She is in Australia for a series of events, including engagements with PricewaterhouseCooper in Sydney and Melbourne this week. Her book The Deficit Myth will be published this year.”

Clearly, Stephanie Kelton is on a promotion tour. What are her unique selling-propositions?

• “ … budget deficits do not matter in a country with its own currency unless they cause inflation …”
• “It’s normal and customary for governments to run deficits,”
• “The deficit is nothing more than the government’s financial contribution to some other part of the economy.”
• “… a Democrat president, if elected, should not work to eliminate the budget deficit, which stands at US$1 trillion.”
• “Keep it. There’s no evidence that the deficit is too big,” … The trillion-dollar deficit is perfectly fine and we could probably go higher.”

Stephanie Kelton is the most prominent cheerleader for deficit-spending/money-creation. Deficit-spending/money-creation is advertised as the solution to almost all problems from environmental catastrophes to the Green New Deal to unemployment to inequality to homelessness.#1

So, Stephanie Kelton is the good MMT-angel who fights for WeThePeople, right? Wrong!

As a matter of principle, all the goals Stephanie Kelton mentions can be achieved with a balanced budget. However, budget-balancing is anathema to MMTers.#2 They are hell-bent on deficit-spending/money-creation. Why? Because the macroeconomic Profit Law#3 implies Public Deficit = Private Profit and as a consequence Financial Wealth of the Oligarchy = Public Debt of WeThePeople. Thus, MMT policy produces the extremely unequal distribution of income/wealth that eventually destroys both the economy and society. MMTers are NOT the benefactors of WeThePeople but the PR/Marketing/Sales-force of the Oligarchy.

Worse. MMTers corrupt science. MMTers are academics and they camouflage their lethal mission with fake economics. At the core of their scientific fraud stands a misrepresentation of the foundational relationships of macroeconomics. From the MMT balances equation (I−S)+(G−T)+(X−M)=0 MMTers derive the slogan Government Deficit = Non-Government Surplus.#4, #5 The MMT equation is mathematically false, to begin with.

For the three sectors (business, household, government) of a closed economy the Profit Law boils down to Q=(G−T)−S and for two sectors (business, government) to Q=(G−T), that is, to Public Deficit (G−T) = Private Profit Q. And this tells everyone that MMT is a free-lunch program for the Oligarchy and that MMT is not only fake science but complicity in fraud of gigantic proportions.#6-#9

Egmont Kakarot-Handtke


* Sydney Morning Herald
Twitter 1 2 3
#1 MMT: If you’ve got a problem, I don’t care what it is, let me help
#2 A beginner’s guide to MMT
#3 Q=Qm+Qn with Qm=Yd+(I−Sm)+(G−T)+(X−M) which gives in simplified notation Q=(G−T)−S.
#4 Why MMTers permanently explode myths of public deficits
#5 MMT and the magical profit disappearance
#6 The Kelton-Fraud
#7 Stephanie Kelton’s legendary Plain-Sight-Ink-Trick
#8 MMT: How mathematical incompetence helps the Kelton-Fraud
#9 Criminals and the monetary order


Related 'How MMT enlightens Washington' and 'Stephanie Kelton and the self-destructive stupidity of the super-rich' and 'Stephanie and Noah ― economics at the intellectual zero lower bound' and 'Prophet Stephanie divines the seizure of the means of production of currency' and 'Deficit cheerleaders ― the Oligarchy’s useful idiots.

***
Twitter on Jan 12 Plain fraud: "Population doesn't owe it, it OWNS it"

Source: Twitter

Public Debt: Population owes it, Oligarchy owns it.

January 12, 2020

The problem with economics as a discipline

Comment on Lars Syll/Tom Hickey on ‘Economics — too important to be left to economists’*

Blog-Reference

Tom Hickey maintains: “The problem with economics as a discipline, and this generally includes all forms of economics including heterodox economics to some extent, is ‘economics.’ That is is to say, economists assume that economics is chiefly or exclusively about economic behavior when economic behavior is embedded in social and political behavior and includes the entire ‘human condition.’ The only ‘economist’ that really grasped this in depth was Karl Marx, and he was a philosopher coming from a Hegelian background rather than being an ‘economist’ in today’s terminology.”

This is a typical Hickey-hallucination. He overlooks that J. S Mill was quite explicit about economic methodology: “What is now commonly understood by the term ‘Political Economy’ is not the science of speculative politics, but a branch of that science. It does not treat of the whole of man’s nature as modified by the social state, nor of the whole conduct of man in society. It is concerned with him solely as a being who desires to possess wealth, and who is capable of judging of the comparative efficacy of means for obtaining that end. It predicts only such of the phenomena of the social state as take place in consequence of the pursuit of wealth. It makes entire abstraction of every other human passion or motive; except those which may be regarded as perpetually antagonizing principles to the desire of wealth, namely, aversion to labour, and desire of the present enjoyment of costly indulgences.” and “Not that any political economist was ever so absurd as to suppose that mankind are really thus constituted, but because this is the mode in which science must necessarily proceed.”

So, the triviality that economic behavior is embedded in the entire ‘human condition’ was certainly known to economists long before the philosopher Marx came along. On the other hand, the philosopher Marx never understood how the monetary economy works. Marx got profit and exploitation wrong and because of this the whole analytical superstructure of Marxianism has no sound scientific foundations.#1, #2 This does not matter for politics, though, because in the whole history of mankind politics NEVER depended on scientific insights but on beliefs of obvious socio-pathological quality. Obvious, for an emotionally detached clinical observer, that is.

The common methodological blunder of both J. S. Mill and Marx consisted of the rather commonsensical belief that economics is about human behavior, i.e. that economics is a social science. NO, economics is NOT a social science but a system science and the system is NOT the social system but the economic system.#3 It was Niklas Luhmann who put sociology on systemic foundations.#4 The economic system, on the other hand, is an ABSTRACT entity that is defined by the objective relationships of economic variables, e.g. employment, output, income, profit, saving, wealth, etcetera. Nobody can see or touch or smell ‘the economy’ or deduce its functioning by observing individual/social behavior.

The problem of economics is to this day that economists waffle about Human Nature/motives/behavior/action which is NOT their subject matter but have NO idea what profit, i.e. the foundational magnitude of their subject matter, is. Neither J. S. Mill nor Marx had any idea of the macroeconomic Profit Law. And things have not improved with Keynes, or MMT, or Lars Syll, or Tom Hickey.#5

The problem with economics as a discipline is that economics is NOT a science, and economists are NOT scientists but clowns/useful idiots/agenda-pushers in the political Circus Maximus. Most of them are directly or indirectly on the payroll of the Oligarchy. J. S. Mill was for the better part of his life an employee of the East India Company, Marx was sponsored by the Capitalist Engels. To present Marx as a philosopher, by the way, is a bit euphemistic. He was a journalist, which, in turn, is a euphemism for propagandist or, in modern parlance, troll.#6

Economics is fake science beginning with Econ 101 to textbooks to the peer-review process to methodology to the history of economic thought#7 to the EconNobel. Marxians have always been an integral part of the greatest scientific hoax in modern times.

Egmont Kakarot-Handtke


* Lars P. Syll Blog
#1 Marx and Marxists ― too stupid for the elementary algebra of profit
#2 Links on Karl Marx
#3 Cross-references NOT a Science of Behavior
#4 See on Amazon Social Systems
#5 Lars Syll, MMT, and the other failures of New Economic Thinking
#6 Marx started as editor-in-chief of the Rheinische Zeitung “ein von der preussischen Regierung gefördertes Unternehmen” [an enterprise sponsored by the Prussian government]. For more details see Waldner, Kindle edition, p. 45 ff. Later he wrote for the New York Tribune and other bourgeois newspapers.
#7 Macroeconomics and the fake History of Economic Thought

Related 'ASSA2020 has been a success ― sorta kinda' and 'Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion'.

***

REPLY to Matt Franko on Jan 13

You say: “They’re not clowns they are operating as typical Liberal Art trained people... ie Thesis + AntiThesis = Synthesized Thesis”

Education is a serious problem but not the most important one. The lack of scientific integrity is the primary problem of economics.#1, #2

There is no difference between Mainstream and Heterodoxy in this regard and MMT is no exception.#3 Economics is one large swamp.#4

To recall, economics is about the economy and NOT about economists. That academic economics is rotten is a problem for science policy and NOT for economics.

So let us do economics: which of the two balances equations is true (a) (I−S)+(G−T)+(X−M)=0 or (b) (I−S)+(G−T)+(X−M)−(Q−Yd)=0?

Who cannot answer the question is out of economics no matter what his formal education was.


#1 There is NO such thing as “smart, honest, honorable economists”
#2 Feynman Integrity, fake science, and the econoblogosphere
#3 Stephanie Kelton: “All deficits are good for someone” Yes, Someone=Oligarchy
#4 Getting out of the economics swamp

January 11, 2020

Lars Syll, MMT, and the other failures of New Economic Thinking

Comment on Lars Syll/Tom Hickey on ‘Does it — really — take a model to beat a model?’*

Blog-Reference and Blog-Reference

Lars Syll is in a trap. He is known as a sharp refuter of orthodox economics and one tends to think that if he knows what is wrong with Orthodoxy he would eventually come up with something better. This is NOT the case. During his whole career, Lars Syll never came up with any insights about how the actual economy works. He does not even acknowledge that this is his duty as a scientist and academic teacher.

“A critique yours truly sometimes encounters is that as long as I cannot come up with some own alternative model to the failing mainstream models, I shouldn’t expect people to pay attention. This is, however, to totally and utterly misunderstand the role of philosophy and methodology of economics!”

No, dear critics of Heterodoxy, Lars Syll does not suffer from the hubris to create a superior economic theory, he is merely a humble under-labourer like John Locke: “’tis Ambition enough to be employed as an Under-Labourer in clearing Ground a little, and removing some of the Rubbish, that lies in the way to Knowledge.”

How can anyone be so absurd as to think that the self-defined task of scientists is to contribute to the growth of scientific knowledge? In fact, it comes from methodologists, Lars Syll’s colleagues: “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)#1-#4

And this is the trap the under-labourer is in: he has no new theory. However, Lars Syll cannot admit failure and so he quotes Jo Michell approvingly: “It takes a model to beat a model has to be one of the stupider things, in a pretty crowded field, to come out of economics. … I don’t get it. If a model is demonstrably wrong, that should surely be sufficient for rejection. I’m thinking of bridge engineers: ‘look I know they keep falling down but I’m gonna keep building em like this until you come up with a better way, OK?’”

NO, dear methodological imbeciles, surely you can waste your own and everybody else’s time by endlessly repeating that neoclassical economics is rubbish, but take notice that this is known already for a long time and NOT any longer the key issue: “There is another alternative: to formulate a completely new research program and conceptual approach. As we have seen, this is often spoken of, but there is still no indication of what it might mean.” (Ingrao et al., 1990)

Here is the real crux of the matter: “... we may say that the ... omnipresence of a certain point of view is not a sign of excellence or an indication that the truth or part of the truth has at last been found. It is, rather, the indication of a failure of reason to find suitable alternatives ...” (Feyerabend)#5, #6

What gets entirely lost in the Syll/Michell smoke-blowing exercise is that Heterodoxy, too, is rubbish. Lars Syll is a proponent of Keynes and the Post-Keynesians including MMT. He has not realized to this day that Keynes messed up the Paradigm Shift from microfoundations to macrofoundations.#7 So, Lars Syll is NOT merely a humble under-labourer but an active participant in the scientific failure of economics.

Nobody believes in earnest that folks like Lars Syll, Tom Hickey, Jo Michell, Stephanie Kelton, Bill Mitchell, etcetera have any ambition to come up with a scientifically valid new economic theory/model.#8 What they have produced this far proves that they are stupid/corrupt under-labourers of the Oligarchy or, in the metaphor of John Locke “Rubbish, that lies in the way to Knowledge”.#9

Egmont Kakarot-Handtke


* Lars P. Syll Blog
#1 Caught in secular intellectual stagnation
#2 Unfit in all dimensions
#3 Throwing soap bubbles at time wasters
#4 Complexity, scientific incompetence, and the art of asking the right questions
#5 How Heterodoxy keeps the Naked-Emperor-Zombie alive
#6 Economics is a scientific zombie waiting to be put down
#7 Get it econ suckers: microfoundations = false, macrofoundations = true
#8 “The highest ambition an economist can entertain who believes in the scientific character of economics would be fulfilled as soon as he succeeded in constructing a simple model displaying all the essential features of the economic process by means of a reasonably small number of equations connecting a reasonably small number of variables. Work on this line is laying the foundations of the economics of the future …” (Schumpeter, 1946)
#9 Economists: scientists or political clowns?

January 8, 2020

ASSA2020 has been a success ― sorta kinda

Comment on Rudi Bachmann on ‘When you pay $6.20 for a Diet Pepsi. #ASSA2020 insanity.’

Own post, Twitter-Reference

Once a year economists flock to the #ASSA/#AEA gathering to have fun, to congratulate themselves with all kinds of prizes, to socialize and to network, and to get their communicative marching orders for the new year. ASSA/AEA is the Central Committee of the profession and defines what mainstream means, what the criteria for inclusion/ exclusion are, and, by implication, what the qualifications for leadership positions are. These have been the main messages:

The location is perfect




The kids are happy




And there is the great econ family





Economists are by definition above-average in all respects but there is, of course, room for improvement at all levels.







MMT is not accepted by the mainstream.




As always, economists are divided about what the subject matter of economics is. Some folks still maintain that economics is a social science.




Ricardo Reis is right. Economics is the study of the economy. The core problem of economics is never mentioned among economists, i.e. that economics is NOT a science to this day. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism, MMT — are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept profit wrong. Economics is a failed science or what Feynman called a  cargo cult science. What economists have achieved in 200+ years is the pluralism of provably false theories. Obviously, they have NO idea what science is all about: “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum) Economists do not have the true theory but many opinions. Because of this, their economic policy advice — left/center/right does NOT matter  — NEVER had sound scientific foundations.

This, of course, has never disturbed economists. Accordingly, the official takeaway consisted of vacuous policy guidance.




This was the implicit message of ASSA2020: Lawrence Summers* is still an accepted member and a highly visible representative of the American Economic Association. Needless to emphasize that the members of the econ family did not get the point. No surprise here, after all, the representative economist is too stupid for the elementary algebra that underlies macroeconomics. Luckily, a brain is the last thing clowns and political agenda pusher in the political Circus Maximus need. Economics is NOT a science,  economists are NOT scientists and the AEA is the proof.

Egmont Kakarot-Handtke


* Source Twitter