July 12, 2020

MMT ― a Wall Street myth

Comment on Chris Dillow on ‘The Deficit Myth: A Review’

Blog-Review and Blog-Reference and Blog-Reference

Chris Dillow’s main point of critique is “For me, Kelton is ― albeit very lucidly ― reinventing the wheel.”

This is, in fact, a spurious compliment because MMT is proto-scientific garbage and Stephanie Kelton is academic fraud.#1

MMT’s macroeconomics is provably false since Keynes, Kalecki, Lerner, etc. So, MMT policy guidance has no sound scientific foundations.

The macroeconomic Profit Law implies Public Deficit = Private Profit. This means that the greater part of the profit in the United States is actually produced by the state. The US economy hangs for a long time already on the state ventilator for its survival.

Among all that academic garbage, MMT has the right message for Wall Street. Who is MMT’s first apostle? Right, Warren Mossler, ex-Wall Street. But Stephanie Kelton is, without doubt, the more attractive sales-person. Economics has become part of the entertainment industry long ago and the casting is done in Hollywood where they know best what sells.

The rest is marketing/PR routine. Interviews, book, media hype, No 1 on the best-seller list, and then, of course, trolling in the social media. This is where Chris Dillow comes in “Dr Kelton explain these ideas wonderfully clearly, so I recommend this book to all non-economists interested in government finances.”

MMT is itself a myth. MMT policy is NOT for the benefit of WeThePeople. MMT is the issuance of counterfeit currency in the form of deficit spending/money creation for the benefit of the one-percenters. Because PublicDeficit = PrivateProfit, MMT is the biggest redistribution program ever. MMT is a political fraud.

“Chris Dillow is a Marxian economist,” says Tom Hickey at Mike Norman Economics. There are historians who claim that already Marx was on the payroll of the financial Oligarchy.

Egmont Kakarot-Handtke

#1 More details

Related 'Wikipedia, economics, scientific knowledge, or political agenda pushing?' and 'Your economics is refuted on all counts: here is the real thing' and 'Dear idiots, MMTers are Wall Street’s agenda pushers' and 'How MMT enlightens Washington' and 'Very busy these days: Wall Street’s agents' and 'Hype does not help: MMT is toast' and 'Mr. Wray goes to Washington' and '#PublicDeficitIsPrivateProfit #MMT #JustAnotherFraud' and 'Links on Liza N. Burby‘s ‘Cutting-Edge Economist Stephanie Kelton Delivers Presidential Lecture’' and 'MMT, Warren Mosler, and the little helpers from Wall Street and Academia' and 'Stephanie Kelton: MMT’s public farce' and 'Occasional Tweets No 201215: The mental collapse of MMT'.

COMMENT on aragon on Jul 14

You say “Every unit of currency gets a vote in economics, resulting in efficiency of the transfer of wealth to the top 0.01%.”

And how does this happen practically? This is due to the macroeconomic Profit Law which implies Public Deficit = Private Profit.#1 As a logical consequence, the public debt of WeThePeople is roughly equal to the financial assets of the one-percenters.

You are an economist, and this happens right before your eyes! And you don't see that the MMT policy of deficit spending/money creation is the biggest financial hoax of all times ($3.7 trillion)? And you do not wonder that the “Marxian economist” Chris Dillow applauds the Wall Street agenda pusher Stephanie Kelton? And all you can think of is this Anatole France kitsch?

#1 Profit

REPLY to aragon on Jul 15

You quote approvingly “It will be a very long time before the process of creative destruction unleashes fresh growth.”

It is pretty obvious that you have NO idea of how the monetary economy works.

The underlying problem is that the monetary economy (capitalism or communism does not matter) is NOT a self-optimizing equilibrium system but will eventually break down.#1

The Profit Law#3 Qm≡I−Sm tells one that macroeconomic profit is positive in a growing economy as long as the business sector’s investment is greater than the household sector’s saving. If this fails, macroeconomic profit turns into loss and the economy breaks down. This must eventually happen, what is unknown is the exact date.#2

However, there is a way to postpone the breakdown. The Profit Law including the state sector reads Qm≡(I−Sm)+(G−T), that is, the second component of macroeconomic profit is the state sector’s deficit. It holds Public Deficit = Private Profit.

This tells one that the greater part of profit in the United States is actually produced by the state. The US economy hangs for a long time already on the state ventilator for its survival.

The MMT policy of deficit spending/money creation is ultimately a means of postponing the breakdown of the US economy. From a political standpoint, the COVID pandemic provides a good rationale to mute the budget-balancers (Kelton ukase on Twitter: Learn MMT ― shout down the critics) and to blow the deficit up to hitherto unknown proportions.

The volume of the deficit and the popularity of MMT#4 is a good metric for the acceleration of the breakdown.#5 This breakdown has nothing at all to do with creative destruction, it is destructive destruction. And it is very improbable that it “unleashes fresh growth” somewhere in the future.

If you intend to learn economics I recommend the new textbook Sovereign Economics.#6

#1 Major Defects of the Market Economy
#2 Mathematical Proof of the Breakdown of Capitalism
#3 Wikimedia
#4 Keynes, Lerner, MMT, Trump, etc. and exploding profit
#5 Criminals and the monetary order
#6 Amazon.de or BoD