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’*


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 the 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 an 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