March 30, 2021

Occasional Tweets: The dumb economist ― a jack of all trades

 

For more about Noah Smith see AXECquery.
For more about economics imperialism see AXECquery.

March 29, 2021

Occasional Tweets: Applause trolls and agenda pushers

 

March 28, 2021

Occasional Tweets: Most MMTers are cretinous #EconBlockers

 

For more on #EconBlocker see AXECquery.

Occasional Tweets: The page where Stephanie Kelton gets macroeconomics wrong

 



The bucket debate: arguments of the winning side

#MMT
#BadScienceBadPolicyBadPeople
#LearnEconomics

2 buckets ⇒ household sector, business sector
3 buckets ⇒ household, business, government
4 buckets ⇒ household, business, government, rest of the world
MMT fake bucket ⇒ “non-government sector”, government sector

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#MMT
#BadScienceBadPolicyBadPeople

You ask "Have you read the book?" Obviously, you have not realized that in my last Tweet there is a screenshot of p. 104 of Deficit Myth attached that proves the Kelton fraud.

You are even too stupid for an MMT troll.

***

#MMT
#BadScienceBadPolicyBadPeople

The fact is that you have NOT recognized the page where Stephanie Kelton performs the MMT fraud on the open stage. So either you don't have read the book or you are too stupid for the elementary math that underlies #MacroEconomics – just like the rest of the MMT troll brigade.


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#MMT
#BadScienceBadPolicyBadPeople


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#MMT
#BadScienceBadPolicyBadPeople

MMT does NOT grow "more popular", it is only pushed harder. Stephanie Kelton and the other #MMTers are NOT serious academics but useful political idiots.


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#MMT
#BadScienceBadPolicyBadPeople

The trade balance is the 4th bucket as I pointed out ( ⇒ household, business, government, rest of the world). Stephanie Kelton made the 2nd bucket (= business sector) disappear and with it #Profit.


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The 3-sector #ProfitLaw Q≡(I−S)+(G−T)+Yd implies #PublicDeficitIsPrivateProfit. More #DeficitSpendingMoneyCreation will produce the biggest #ProfitExplosion ever.

MMT works just fine (for the Oligarchy)

***

#HowMMTservesTheOligarchy

There is NO “private sector” only the business sector (balance profit/loss) and the household sector (balance saving/dissaving). The 4-sector #ProfitLaw reads Q≡(I−S)+(G−T)+(X−M)+Yd and implies #PublicDeficitIsPrivateProfit. See


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#MMT
#FakeScience
#MMTers
#StupidOrCorruptOrBoth

***

For more on Stephanie Kelton see AXECquery.

March 27, 2021

Occasional Tweets: How to view public debt ― good for the Oligarchy, bad for WeThePeople

 

MMTers ― the new deceivers of WeThePeople
MMT claims that deficit-spending/money-creation is for the benefit of WeThePeople yet ultimately is NOT. Academic MMTers are NOT scientists but political agenda-pushers.

For more on WeThePeople see AXECquery.

March 26, 2021

Occasional Tweets: From proto-scientific garbage to true macrofoundations

 

Economists are not scientists but clowns and useful idiots in the political Circus Maximus.
For more on Paul Krugman see AXECquery.
For more on Noah Smith see AXECquery.
For more on macrofoundations see AXECquery.

March 25, 2021

Occasional Tweets: The plain MMT fraud

 

For more about sectoral balances see AXECquery.

For the whole thread see Twitter.

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Wikimedia AXEC118d

March 24, 2021

March 23, 2021

Occasional Tweets: The activist is no scientist, the scientist is no activist

 

 

Economics / Marxianism

The age-old problem with economists is that they are strong on opinion but weak on knowledge and that they suffer from mental incontinence, that is, the unstoppable urge to blather about any issue between heaven and earth, that is, from crime, addiction, psychology, sociology, philosophy, religion, literature, ethics to their heroic fight for the welfare/freedom/survival of humanity. Fact is, though, that economists have to this day NO idea of how the economy works. Their policy guidance NEVER has had sound scientific foundations. Marxians are NO exception.


For more on Marx see AXECquery

March 22, 2021

Occasional Tweets: Economics ― for 200+ years just storytelling and mythmaking

 

For more on storytelling see AXECquery.
For more on narrative see AXECquery.

March 21, 2021

Occasional Tweets: What? A whole new age of economic fraud?

 

Occasional Tweets: Proof of the non-existence of scientific standards

 

March 20, 2021

Occasional Tweets: MMT's latest attempt of fair-is-foul-and-foul-is-fair

 

For more on communication see AXECquery.

March 19, 2021

Occasional Tweets: The MMT propaganda runs hot

 

 Stephanie Kelton

Macroeconomics ― still dead after 80+ years

Comment on Mason/Cochrane on ‘The American Rescue Plan as Economic Theory and Back to the 60s’


How can you know that both Mason's and Cochrane's macroeconomics is proto-scientific garbage? Search for the term profit and you will come up with nothing. So, both economists are doing economics without ever mentioning the foundational concept of economics. That is like doing physics without ever mentioning the concept of energy.

For this reason alone one can forget the whole discussion. Keynes messed up macroeconomics 80+ years ago because he was too stupid for elementary algebra.#1, #2 But economists have not realized anything to this very day.

The 3-sector macroeconomic Profit Law Q≡(G−T)+(I−S)+Yd implies Public Deficit = Private Profit. Therefore, the current policy of massive deficit-spending/money-creation will result in a profit explosion (the other factors taken out of the picture for the moment).

What unfolds before our eyes is that the Oligarchy pulls off the biggest redistribution of income/wealth in recent history. Deficit-spending/money-creation pushes up macroeconomic profit. So, private financial wealth grows in lockstep with public debt. WeThePeople owes the debt and is taxed for the interest payments to the Oligarchy in all eternity. The debt, to be sure, is rolled over and grows permanently. The rest happens beyond the time horizon.

Mason/Cochrane agree on: ‘what we need now is new textbooks and theories.’ It does not occur to them that we need to get rid, first of all, of scientifically incompetent economists.

Egmont Kakarot-Handtke



Related: Kevin Hoover, The Struggle for the Soul of Economics, SSRN, in particular, the exit:
"In the end, saving the soul of economics comes down to three things:
1) Humility;
2) Vigorous criticism in the search for truth;
3) In the words of Charles Sanders Peirce, following “The First Rule of Reason” “which itself deserves to be inscribed on every wall of the city of philosophy: Do not block the way of inquiry.” [Peirce 1931, para. 135]"

For more about macroeconomics see AXECquery.
For more about macrofoundations see AXECquery.

***

Wikimedia AXEC121i

March 18, 2021

Occasional Tweets: There are NO good MMT people

 


For more on MMT see AXECquery.

March 17, 2021

Bill Mitchell says that economists are fake scientists ― true, but MMTers are NOT different

Comment on Bill Mitchell on ‘Why economists kept getting the policies right!’


Bill Mitchell gives an inside report of academic economics: “But if you have been inside the profession all your life, as I have, then you get a pretty good feel for what is going on. And it is not what the rest of you think.”

“Economists are not fellow travellers ‘on a mission from god to do god’s work’ …” … “They are part of the capitalist establishment designed to safeguard capital and its profits and keep the working class in its place so that challenges are confined to disputes about wages and conditions around the margin, but, never question the basis of the system ― the ownership of the material means of production and the capacity of those unequal ownership relations to extract surplus value as profits from forcing workers to work longer than they have to to produce their (social) subsistence.” … “the development of neoclassical economics, from which the modern day Monetarism and New Keynesian economics emerged was no accident ― no scientific event.”

True, since the founding fathers, economists were not so much scientists as political agenda pushers: “Economists were hired by industrialists to come up with a body of work that made capitalism appear fair. It was in the second half of the C19th when Marxist thought was spreading among workers and the intellectual class and manifesting into social and political instability as evidenced by the ― Revolutions of 1848 ― and later, the ― 1871 Paris Commune ― among other uprisings.”

And he concludes: “Economists were part of that conspiracy to obfuscate the inner workings of capitalism. And it has been that way ever since.”

Except …

“Me, I was an aberration. A black sheep. That got through this system because my mathematics and mathematical statistics was first-rate and I could jump their hoops with ease.”

And now it turns out that Bill Mitchell and the MMTers got it right: “The author notes how everyone is jumping on the big deficits bandwagon now and no-one is talking much about the public debt issue any more.”#1

This is true, MMT has now become official doctrine.#2, #3, #4

While Bill Mitchell asserts that economists have always been “… part of the capitalist establishment designed to safeguard capital and its profits …” he tries to make the impression that he and MMTers and Progressives are different.

This is NOT the case.

The 3-sector macroeconomic Profit Law Q≡(G−T)+(I−S)+Yd implies Public Deficit = Private Profit. So, the MMT policy of deficit-spending/money-creation is a free lunch for the Oligarchy. Private financial wealth grows in lockstep with public debt. For public debt holds: #OligarchyOwnsIt and #WeThePeopleOwesIt. Public debt as interest cash cow produces perpetual income for the Oligarchy that is taxed from WeThePeople.#5

COV19 is a godsend for the Oligarchy: more deficit-spending/money-creation produces a profit explosion. Best of all, it can be propagandized as a benefit for WeThePeople. Fact is, though, that in real terms, WeThePeople pay for the economic relief package through stealth taxation.

If anything, Bill Mitchell/MMTers/Progressives are “part of the capitalist establishment”.#6, #7 Like the rest of economists from Adam Smith onward, economists are NOT on a “mission from god to do god’s work”. Economics is failed/fake science. Economists are NOT scientists but clowns and useful idiots in the political Circus Maximus. MMTers are NO exception.

Egmont Kakarot-Handtke


#5 Twitter, CRFB.org Mar 17, 2021, Federal Government Spending On Interest Payments

For more on stealth taxation see AXECquery.

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REPLY to Matt Franko on Mar 17

The deficiency of MMTers in literal language is that they are too stupid for the elementary algebra that underlies macroeconomics: Proof of MMT's inconsistency.

***

REPLY to Matt Franko on Mar 18

I said that MMTers (the social media trolls, the academics in general, and Bill Mitchell, in particular) are too stupid for the elementary algebra that underlies macroeconomics and that the MMT sectoral balances equation is provably false. Every MMTer can check the proof.#1-#4

You argue: “Bill is well trained in Mathematics....”

If so, he knows that science is about material/formal consistency and proof. So, he should be able to understand the proof of the inconsistency of the foundational MMT sectoral balances equation. And, as an academic, he should know that science defines itself by the high standards of scientific ethics.

According to these standards, he is obliged to check the proof of the inconsistency of MMT as soon as it comes to his notice and to either point to the exact location of where the proof is faulty or to openly confirm the refutation of MMT so that others are no longer misled.

Neither Bill Mitchell nor any other MMTer has done the right thing to this day. MMTers have disqualified themselves and therefore have to be expelled with shame and disgrace from the scientific community.#5


#5 Wikimedia Fire Economists


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REPLY to Peter Pan on Mar 18

You ask: “Bill has never addressed your critique on his blog?”

Obviously, you still do not understand how economics works although Bill Mitchell has given you a clear description. Economics does not work according to the principles of science. And this is long known: “In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” (Morgenstern, 1941)

Economists violate scientific standards from Adam Smith/Karl Marx onward and this is why Walrasianism, Keynesianism, Marxianism, Austrianism, and other long-refuted proto-scientific garbage is still around.#1 What we have is the pluralism of false theories.

Bill Mitchell knows this but claims that MMT is different. That is NOT the case. MMT is refuted but MMTers push it “as if nothing had happened”. Academic economics is politically corrupted and MMT is an integral part of it.#2



***
REPLY to Dean on Mar 22

Answers/continuing links to your 3 questions.

1 Capitalists' consumption
Profit follows from the Profit Law. It can be distributed or not. So one gets distributed profit Yd as a part of total income Y=Yw+Yd. Distributed profit, in turn, splits into consumption expenditures and saving of “capitalists”. See section 7 of Essentials of Constructive Heterodoxy: Profit.

2 Cash
You assume “cash on hand to begin with”. In a fiat money system, things start with zero cash. Money is created ex nihilo by the central bank for the financing of the wage bill.

3 Investments
You say “investments create fixed capital” and “Investments only create profits because of a time lag between borrowing and repaying”. For the exact relationship of investment expenditures and profits see Squaring the Investment Cycle.

***
NOTE on Barkley Rosser on Mar 31

You take toilet paper shortages in Venezuela as proof that they are “corrupt and incompetent”. These two keywords bring us immediately to the current state of economics.

Bill Mitchell gives an inside report of academic economics:#1 “But if you have been inside the profession all your life, as I have, then you get a pretty good feel for what is going on. And it is not what the rest of you think.”

“Economists are not fellow travellers ‘on a mission from god to do god’s work’ …” … “They are part of the capitalist establishment designed to safeguard capital and its profits and keep the working class in its place so that challenges are confined to disputes about wages and conditions around the margin, but, never question the basis of the system ― the ownership of the material means of production and the capacity of those unequal ownership relations to extract surplus value as profits from forcing workers to work longer than they have to to produce their (social) subsistence.” … “the development of neoclassical economics, from which the modern day Monetarism and New Keynesian economics emerged was no accident ― no scientific event.”

True, since the founding fathers, economists were not so much scientists as political agenda pushers and disinfotainment clowns in the political Circus Maximus.#2

The temporary shutdown of the Suez Canal may trigger physical toilet paper shortages in Western markets. Due to the superiority of Capitalism over Saint-Simonianism, though, this does not affect the production of intellectual toilet paper in US academia.#3



March 15, 2021

Occasional Tweets: Proof of MMT's inconsistency

 

Proof

The foundational MMT sectoral balances equation is false. Because the macroeconomic foundations are false, the whole approach is scientifically worthless. So, MMT policy guidance has no valid scientific foundations. See first of all section Provably False/MMT in Wikipedia, economics, scientific knowledge, or political agenda pushing?

Further Aspects

March 13, 2021

Putting the Quantity Theory of inflation to rest

Comment on Blair Fix on ‘Energizing exchange: Learning from econophysics’ mistakes’


Macroeconomics is provably false since Keynes.#1 The correct macrofoundations are given with this set of axioms: (A0) The objectively given and most elementary configuration of the economy consists of the household and the business sector which in turn consists initially of one giant fully integrated firm. (A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L, (A2) O=RL output O is equal to productivity R times working hours L, (A3) Ec=PX consumption expenditure Ec is equal to price P times quantity bought/sold X.

Under the conditions of market-clearing X=O and budget-balancing Ec=Yw in each period the price as dependent variable is given by P=W/R, i.e. the market-clearing price is equal to unit wage costs. This is the most elementary form of the macroeconomic Law of Supply and Demand. For the graphical representation see Wikimedia AXEC31a


The macroeconomic price is determined by the wage rate W, which takes the role of the nominal numéraire, and the productivity R. The quantity of money is NOT among the price determinants.

Monetary profit for the economy as a whole is defined as Qm≡Ec−Yw and monetary saving as Sm≡Yw−Ec. It always holds that the sectoral balances add up to zero, i.e. Qm+Sm=0. In other words, the business sector’s deficit=loss equals the household sector’s surplus=saving and vice versa, the business sector’s surplus=profit equals the household sector’s deficit=dissaving. This is the most elementary form of the macroeconomic Profit Law. Under the condition of budget-balancing Ec=Yw, monetary profit is zero.

What is needed next is two things (i) a Central Bank which creates money on its balance sheet in the form of deposits, and (ii), a legal system that declares the Central Bank’s deposits as legal tender. These conditions define a fiat money system without commercial banks as intermediaries.

Deposit money is needed by the business sector to pay the workers who receive the wage income Yw  per period. The need is only temporary because the business sector gets the money back if the workers fully spend their income, i.e. if Ec=Yw.

Overdrafts are needed by the household sector for consumption expenditures if the households want to spend before they get their wage income. This time sequence is no problem for the Central Bank because the temporary overdrafts vanish with wage payments.

For the case of a balanced budget C=Yw, the idealized transaction sequence of deposits/overdrafts of the household sector at the Central Bank over the course of one period is shown on Wikimedia AXEC98

The household sector’s deposits/overdrafts are zero at the beginning and end of the period. The business sector’s transaction pattern is the exact mirror image. Money, that is, deposits at the Central Bank, is continually created and destroyed during the period under consideration. There is NO such thing as a fixed quantity of money. The central bank plays an accommodative role and simply supports the autonomous market transactions between the household and the business sector.

From this follows the average stock of transaction money as M=κYw, with κ determined by the transaction pattern. In other words, the average stock of money M is determined by the autonomous transactions of the household and business sector and created out of nothing by the Central Bank. The economy never runs out of money.

The transaction equation reads M=κYw=κEc=κPRL in the case of budget balancing and market clearing, and this yields the commonplace correlation between the average stock of money M and price P for a given employment level L and productivity R, except for the fact that M is the dependent variable. If P doubles, M doubles, and P doubles if W doubles with the real variables L and R fixed.

Inflation ensues under the conditions of market clearing and budget-balancing if the wage rate rises faster than the productivity and deflation ensues in the opposite case. Under the condition of L and R constant, one always gets the commonplace correlation between the average stock of money M and price P with the causality running from P to M.

For the general case, the elementary macroeconomic price formula states P=ρEW/R with ρE≡Ec/Yw. ρE>1 represents deficit-spending and this implies that a period deficit produces a one-off price hike. So, if ρE=1 in the initial period and ρE=2 in the next period then the price doubles.

The transaction equation reads for the general case M=κ sup {Yw, Ec} or M=κ sup {1, ρE}Yw and this means that if Ec is greater than Yw then Ec determines the quantity of transaction money. So, if Ec doubles, i.e. ρE=2, then M doubles. In this case, the old Quantity Theory correlation between P and M reappears.

However, this does NOT lead to inflation as a process over multiple periods. If ρE=2 again in the next period, then the price P remains at the elevated level but does not rise further. So, the continuous deficit spending of the household sector does NOT cause inflation. (Only successive increases of the expenditure ratio ρlead to successive price hikes.)

However, the average stock of transaction money increases continuously.#2 The transaction pattern in the case of continuous dissaving is shown on Wikimedia AXEC99

As a mirror image, the deposits of the business sector at the Central Bank increase continuously because the profit of the business sector is equal to the dissaving/deficit-spending of the household sector. So, the average quantity of money in the system increases continuously but the price remains stable at the elevated level for a given ρE. There is NO proportionality between M and P and this means that the commonplace Quantity Theory is refuted.

Egmont Kakarot-Handtke



Additional link: Michael D. Bordo and Mickey D. Levy, Do Enlarged Fiscal Deficits Cause inflation: The Historical Record

Occasional Tweets: Economists are too stupid for elementary logic ― the final proof

 

For details of the big picture see cross-references Refutation of I=S and cross-references Math/Mathiness  and Ch. 13, The indelible scientific disgrace of economics, in Sovereign Economics.

March 12, 2021

Occasional Tweets: Economists are NOT scientists

 


The truly scientific attitude has always been missing

The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism, MMT — are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept of profit wrong. Economics has NEVER been a science. Since the founding fathers, it has been a smokescreen for political agenda-pushing. The “Bank of Sweden Prize in Economic Sciences” is a fraud.



For more on fraud see AXECquery.

March 11, 2021

Occasional Tweets: Meet the MMT free-lunch pushers

 

March 10, 2021

Occasional Tweets: Not so smart, those MMT agenda pushers

 
 
For more about MMT as a lens see AXECquery.

March 9, 2021

Occasional Tweets: Very busy, those Wall Street propaganda folks

 

MMT has zero scientific content. It is pure propaganda.
For more on Stephanie Kelton see AXECquery.
For more on Warren Mosler see AXECquery.
For more on Bill Mitchell see AXECquery.

March 7, 2021

Occasional Tweets: Another agenda pusher for the Oligarchy

 


For more on Nick Hanauer see AXECquery.
For more on deficit spending see AXECquery.

March 6, 2021

Occasional Tweets: Economists don't understand Capitalism

 


For details about Anwar Shaikh see AXECquery.
For more on sectoral balances see AXECquery.
For more on capitalism see AXECquery.
See also Ch. 13, The indelible scientific disgrace of economics, in Sovereign Economics

March 4, 2021

March 3, 2021

Going beyond the pluralism of idiotism

Comment on Andri Stahel on 'The ideological function of economic theories and models'*


The question, Is economics a science? has a simple answer: NO. Walrasianism, Keynesianism, Marxianism, Austrianism, MMT are mutually contradictory, axiomatically false, and materially/formally inconsistent.

Economics is failed/fake science for 200+ years. Economists are too stupid for the elementary algebra that underlies macroeconomics.#1 Therefore, the whole analytical superstructure is scientifically worthless. Economic policy guidance never has had sound scientific foundations. Economists, though, do not understand the proof of their own inconsistency. So, they are stuck in the swamp of the pluralism of provably false theories.

What is needed is a Paradigm Shift.#2

Because the representative economist is not a scientist but a retarded agenda pusher in the political Circus Maximus he has no idea what a Paradigm Shift is all about. By consequence, there is no alternative than to leave all this intellectual dead weight behind in the swamp in order to gain some scientific height.

It is time now, that those who say that economics is not science and those who say it is science but have nothing to show for have to be expelled from the sciences.

To start with MMTers is in the given conditions certainly a good idea.#3

Egmont Kakarot-Handtke



For more about pluralism see AXECquery.

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Wikimedia AXEC106m


Occasional Tweets: Very busy ― the MMT troll brigade in action