The three dumbest MMT arguments

Comment on Lars Syll on ‘It’s not the debt we need to fix, stupid! It’s our thinking.’

Blog-Reference and Blog-Reference

1. “Can a government go bankrupt? No. You cannot be indebted to yourself.”

The 3-sector Profit Law Q≡(G−T)+(I−S)+Yd implies Public Deficit = Private 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 for an indefinite time. The upper limit for the public debt ― which is in class terms the debt of the working class to the capitalist class ― is given by the interest burden in relation to wage income.#1

2. “Can a central bank go bankrupt? No. A central bank in a monetary sovereign country can always ‘print’ more money.”

Yes, the central bank creates money out of nothing at any time and any amount. There is no technical problem. The economic problem is whether the central bank finances the wage bill of the business sector or whether it finances the government’s direct or indirect purchase of current output. In the latter case, the central bank acts like a counterfeiter who helps the government to redistribute output among WeThePeople.#2

3. “Do taxpayers have to repay government debts? No, at least not as long the debt is incurred in a country’s own currency.”

Public debt can be rolled over for an indefinite time. And for this time it is the interest cash cow of the Oligarchy. However, pushing debt beyond the time horizon does not mean that it vanishes. Central bank money is a specific form of an IOU, i.e. the liability side of the central bank's balance sheet (= money) is equal to the amount of short- or long-term debt on the credit side.#3 It is the defining property of debt that it has eventually to be repaid. So yes, the grandchildren of WeThePeople have to repay the public debt to the grandchildren of the Oligarchy.#3, #4

With deficit-spending/money-creation, i.e. a growing public debt, actual problems are not really solved but merely shifted beyond the time horizon. Ultimately, this is to the advantage of the Oligarchy and to the disadvantage of WeThePeople.

Whether they know it or not does not matter: MMTers in general and Lars Syll, in particular, are just the useful idiots of the Oligarchy.#5 Academic economics is provably false, that is, scientifically worthless.

Egmont Kakarot-Handtke

#1 From the debt economy to the gift economy: how America is brainwashed to love budget deficits

#2 MMT, money creation, stealth taxation, and redistribution

#3 The ultimate ― analytical ― origin of money

#4 How to pay for the war and to be bamboozled by economists

#5 Criminals and the monetary order

For the full-spectrum refutation of MMT see cross-references MMT.

For more about Lars Syll see AXECquery.

MMT has been conclusively refuted and MMTers can do NOTHING about it

Comment on James Galbraith on ‘Who’s Afraid of MMT?’*

Blog-Reference and Blog-Reference and Blog-Reference

James Galbraith summarizes: “What, then, is MMT? Contrary to the claims of King and Rajan, it is not a policy slogan. Rather, it is a body of theory in Keynes’s monetary tradition, which includes such eminent thinkers as the American economist Hyman Minsky and Wynne Godley of the UK Treasury and the University of Cambridge. MMT describes how ‘modern’ governments and central banks actually work, and how changes in their balance sheets are mirrored by changes in the balance sheets of the public ― an application of double-entry bookkeeping to economic thought. Thus, as Kelton writes in the plainest English, the deficit of the government is the surplus of the private sector, and vice versa.”

Yes, indeed that's MMT in a nutshell and the last sentence is provably false because MMTers are too stupid for the elementary algebra that underlies macroeconomic accounting. Neither the followers of Stephanie Kelton et al. nor the critics of MMT ever spotted the blunder in the formal foundations that invalidates the whole approach.

So MMT is scientifically worthless and can be unceremoniously buried at the Flat-Earth-Cemetery. Politically, though, MMT still has some use-value for fooling WeThePeople. As a consequence, only stupid/corrupt agenda pushers defend or criticize MMT. No scientist wastes time with this proto-scientific garbage.

For those who want to check the refutation in greater detail, here are the relevant references

• ad Keynes: Wikipedia, economics, scientific knowledge, or political agenda pushing? Section Provably false/Keynes
• ad Kelton: The page where Stephanie Kelton gets macroeconomics wrong
• ad Mitchell: Proving Bill Mitchell wrong ― burying MMT for good
• ad Mitchell: MMT is dead: An unfriendly critique of Bill Mitchell
• ad Mosler: MMT: The one deadly error/fraud of Warren Mosler
• ad Keen: MMT: fraudsters united
• ad Wray: MMT: Agenda-pushing and money-making for the Oligarchy
• ad Godley: Do economists finally wake up from their methodological delirium?
• ad Kalecki: MMT: How mathematical incompetence helps the Kelton-Fraud
• ad Minsky: Profit is the key
• ad Textbook: Refuting MMT’s Macroeconomics Textbook
• Where MMT got macro wrong
• MMT-Refutation for Dummies
• Quick MMT 101 refutation
• MMT refuted in three easy steps
• Refutation of MMT: All proofs and arguments you ever need
• For details of the big picture, see cross-references MMT
• MMT is refuted ― end of story.

Egmont Kakarot-Handtke

* B&FT Online

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#PointOfProof

#EconBlocker

Let's bury economics now

Comment on Lars Syll on ‘Michael Woodford on models’

Blog-Reference and Blog-Reference Aug 14

Lars Syll argues against Michael Woodford: “This is — sad to say — a rather typical view among mainstream economists today. Defending the use of unrealistic and unsubstantiated models with the argument that models make it ‘easy for others to see what assumptions have been relied upon, and hence to challenge them’ is rather far-fetched.”

Yes, “unrealistic and unsubstantiated models” are indefensible. Yes, mainstream economics is proto-scientific garbage. Yes, mainstreamer are in the “story-telling business”.#1

Yes, yes, yes. All this is known for 150+ years. Yes, economics is failed/fake science. Yes, economists are stupid or corrupt or both. Yes, this applies in equal measure to Orthodoxy and Heterodoxy. It applies to economics in general and to Lars Syll, in particular.#2

The most important thing to realize is that there are theoretical economics and political economics. Theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years. Economic policy NEVER has had sound scientific foundations.

Both orthodox and heterodox economists are NOT scientists but clowns and useful idiots in the political Circus Maximus.#3, #4

The representative economist does not understand to this day what science is all about. So, here are eleven plain facts about ‘economic sciences’

1. Science manifests itself in the form of the true theory. 2. Truth is well-defined by material and formal consistency. 3. Logical consistency is secured by applying the axiomatic-deductive method and material consistency is secured by applying state-of-the-art testing. 4. The true theory/model is the humanly best mental representation of reality. 5. “When the premises are certain, true, and primary, and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.” (Aristotle, 300 BC)  6. The main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept of profit wrong. 7. Because the foundations are false the analytical superstructure is false. 8. Economists are too stupid for elementary algebra. 9. Both orthodox and heterodox economics is failed/fake science. 10. Economic policy has no sound scientific foundations. 11. The EconNobel for ‘economic sciences’ is a fraud.

And this is the cause of the mess: economists have since the founding fathers consistently violated the separation of science and politics. In hashtags

#LawOfTheExcludedMiddle

#TheScientistIsNoActivist

#TheActivistIsNoScientist

#PoliticsCorruptsScience.

All this is known and needs no repetition. The consequence is: Economics and economists go directly to the Flat-Earth-Cemetery.

What next? Craig thinks he has a brilliant idea: “Paradigms, especially extremely relevant and urgently needed new paradigms are everything.” Yes, this is also known for a long time: “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)

Except that the Paradigm Shift from provably false Walrasian microfoundations and provably false Keynesian macrofoundations to true macrofoundations is an accomplished fact.#5

And now, Lars Syll and all the other agenda-pushers/activists lead your own funeral cortege!

Egmont Kakarot-Handtke

#1 The economist as storyteller (II)

#2 Lars Syll is refuted on all counts. See blog query for details

#3 The tragedy of economics: stupid/corrupt economists

#4 Economics: The greatest scientific fraud in modern times

#5 Sovereign Economics BoD

Related 'Separation of politics and economics'.

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AXEC136g

The tragedy of economics: stupid/corrupt economists

Comment on Lars P. Syll/Tom Hickey on ‘On war and economics’

Blog-Reference and Blog-Reference

Lars Syll argues: “Models may help us think through problems. But we should never forget that the formalism we use in our models is not self-evidently transportable to a largely unknown and uncertain reality. The tragedy with mainstream economic theory — and the ‘theorists’ that Clausewitz criticised — is that it thinks that the logic and mathematics used are sufficient for dealing with our real-world problems.”

The tragedy with Lars Syll is that he still thinks that mainstream economics is science. Time to take notice that economics is NOT science and never has been. Economics is proto-scientific garbage for 200+ years. Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, Pluralism are mutually contradictory, axiomatically false, and materially/formally inconsistent. Economics is cargo cult science.

What Lars Syll sells as his grand methodological insight is a truism among genuine scientists and well-known among methodologists: “We are very far from being able to predict, even in physics, the precise results of a concrete situation, such as a thunderstorm, or a fire.” (Popper) Or a war, for that matter.

And, guess what, already J. S. Mill was well aware of the methodological situation: “Since, therefore, it is vain to hope that truth can be arrived at, either in Political Economy or in any other department of the social science, while we look at the facts in the concrete, clothed in all the complexity with which nature has surrounded them, and endeavour to elicit a general law by a process of induction from a comparison of details; there remains no other method than the à priori one, or that of ‘abstract speculation’.”

This means nothing more than that figuring out how the economy works requires a certain amount of abstraction. And here is exactly the point where economists in their bottomless methodological incompetence failed. Their blunder is known as Fallacy of Insufficient Abstraction.

The philosopher Tom Hickey hallucinates about science: “Science works quite well and consistently in dealing with physical matters, and fairly well in dealing with biological matters — other than psychology. But the record is not so good with social matters.”

The record is not so good with social matters because so-called social scientists are NOT scientists but stupid/corrupt political agenda pushers. Economists are even too stupid for the elementary algebra that underlies macroeconomics. The fact of the matter is, that economists do not know to this day what profit — the foundational concept of their subject matter — is.#3

To cover the scientific failure of economics with ontological and epistemological wish wash is the personal disgrace of Lars Syll and Tom Hickey within the general scientific disgrace of economics.#4

Egmont Kakarot-Handtke

#1 Scientists do NOT predict the future

#2 Shocking: methodology is a tricky business

#3 Wikipedia, economics, scientific knowledge, or political agenda pushing?

#4 Economics is a disgrace ― now more than ever

Related 'Failed economics: The losers’ long list of lame excuses' and 'Macroeconomics: Economists are too stupid for science' and 'Your economics is refuted on all counts: here is the real thing'. For details of the big picture see cross-references Failed/Fake Scientists

Bye, bye economic philosophers

Comment on Lars Syll/Tom Hickey on ‘The capital controversy’

Blog-Reference and Blog-Reference

What the Cambridge Capital Controversy has proven is that both orthodox and heterodox economists are NOT scientists but brain-dead political agenda pushers.#1

With regard to the CCC, Tom Hickey maintains: “From the perspective of a philosopher, this is a good illustration of why philosophy of economics and philosophy of science, which focus on clarification of concepts, is foundational to the discipline.”

Sort of, but the brute fact of the matter is that neither economists nor philosophers have clarified the foundational economic concept of profit.

Because of this, economics is a scientific failure. Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, and Pluralism are mutually contradictory, axiomatically false, and materially/ formally inconsistent.#3

Not only the representative economist has proven to be scientifically incompetent ― actually, too stupid for elementary algebra ― but also the self-styled philosophers of science.#4, #5

It is a remarkable fact that the champions of scientific methodology never stumbled upon the plain fact that profit is ill-defined, except perhaps for Mirowski: “... one of the most convoluted and muddled areas in economic theory: the theory of profit.”

So, as economics currently goes down the scientific toilet let us by no means forget the philosophers of science.

Egmont Kakarot-Handtke

#1 The CCC ― a monument of economists’ utter scientific incompetence

#2 Wikipedia, economics, scientific knowledge, or political agenda pushing?

#3 Your economics is refuted on all counts: here is the real thing

#4 How incompetent are economic methodologists? Very!

#5 Economics, philosophy, and the crapification of science

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REPLY to Matt Franko on Sep 3

You say: “It’s not foundational to Economics its foundational to Accounting.”

There is microeconomic accounting and macroeconomic accounting. Macroeconomic profit is foundational to economics because economics is about how the economy works.#1

To think one can understand the economy by studying the mom-and-pop store is known as the Fallacy of Composition. It is a bit like trying to understand the universe by studying a molehill in the backyard.

#1 Profit

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REPLY to Matt Franko on Sep 3

You say: “It [accounting] has been ignored (espec.in macro) with a few exceptions (Lerner, Minsky, Godley, Lavoie, Bezemer, and Keen, among a very few others). ”

Accounting is elementary algebra, however, economists don't get it to this day. MMTers are no exception. Here is the proof

Wikipedia, economics, scientific knowledge, or political agenda pushing?

Yes, economists incl. MMTers and philosophers of science fail the intelligence test already at the entry level.

MMT Basics

Comment on Lars Syll on ‘MMT basics’

Blog-Reference and Blog-Reference on Jul 8

• The counterfeiter never runs out of money.
• The counterfeiter never stops stealing stuff from the rest of society.
• The counterfeiter increases the profit of the business sector with his additional demand.
• The counterfeiter says that he is good for the economy and employment.
• When the economy breaks down, the counterfeiter increases deficit spending/ money creation.
• The counterfeiter 'solves' any problem from unemployment to pandemics to global warming with deficit spending/money creation.
• The counterfeiter continuously increases the public debt but says that it does not matter.
• The counterfeiter is a criminal but never gets caught because he games the fiat money system from within.#1, #2, #3
• The counterfeiter gets valuable PR support from academia, in particular from the MMT fake science trolls.#4

Egmont Kakarot-Handtke


#1 Criminals and the monetary order
#2 MMT sucks
#3 Cross-references MMT
#4 The sectoral balances obfuscation: stupidity or corruption?

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AXEC152

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 into 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: behavioral microfoundations ⇒ false, systemic 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?

Trust in science? Yes, but economics is NOT a science

Links on Lars Syll on ‘Public trust in economists’*

Blog-Reference and Blog-Reference and Blog-Reference on Dec 13

When things get serious, there is NO In-God-We-Trust. Everybody trusts in science even religious people who reject science as too rational, incomprehensible, abstract, limited, or emotionally unsatisfactory. Every time priests of whatever denomination#1 board an aircraft or undergo surgery they practically admit that they trust more in science than in their particular faith.

It is quite natural#2 and unavoidable that sooner or later science look-alikes appear that exploit the prestige/authority of science. This is pretty much like counterfeiters who exploit the difference between the purchasing value of money and the material value of the money token. Fake is profitable.

Look-alike scientists produce cargo cult science: “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.” The general public cannot recognize the difference between science and cargo-cult science.

Economics is a cargo cult science. More precisely, there are political economics 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.

The fact is that (i) theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers), and (ii), political economics has produced NOTHING of scientific value in the last 200+ years. Economics started as Political Economy and never got above the proto-scientific level.

As a result, economics does NOT deserve the trust that science has rightfully earned for over 2300+ years. On the contrary. Economists are NOT scientists but agenda pushers and they deserve all the contempt for cheaters, clowns, confused confusers, and useful idiots in the political Circus Maximus.#3-#16

Egmont Kakarot-Handtke


* Lars P. Syll Blog
#1 Wikipedia Priest
#2 Wikipedia Mimicry
#3 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#4 Economics and scientific foolishness
#5 Economics: The greatest scientific fraud in modern times
#6 Macroeconomics: Economists are too stupid for science
#7 There is NO such thing as “smart, honest, honorable economists”
#8 Economics: ‘a tale told by an idiot ... signifying nothing’
#9 There is NO such thing as an economic expert
#10 Economists cannot do the simple math of profit — better keep them out of politics
#11 Economics as storytelling and entertainment for the masses
#12 Trust in economics as a science?
#13 Lars Syll ― a particularly stupid/corrupt fake scientist
#14 Cryptoeconomics ― the best of Lars Syll’s spam folder
#15 Feynman Integrity, fake science, and the econblogosphere
#16 The economist as storyteller

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Source: Lars P. Syll Blog

New Economic Thinking ― the definitive results

Links on Lars Syll on ‘Rethinking economics in Copenhagen’

Blog-Reference

From the standpoint of science, economics is a heap of proto-scientific garbage. Both Orthodoxy and traditional Heterodoxy are outside of science, both are political agenda-pushing in the cloak of science. Because of this, economics needs a Paradigm Shift. This is long known: “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)

Rethinking Economics or New Economic Thinking means performing what is called a Paradigm Shift in methodology. New Economic Thinking does NOT mean to push a new political agenda or to put lipstick on the dead pig. Economists have NO idea what a Paradigm Shift is all about.

► Feeble thinkers, feeble rethinkers: the perennial misery of economics
► This is New Economic Thinking? Give me a break!
► When non-thinkers rethink
► How Keynesians, Lernerians, MMTers make the oligarchy great
► Throw them out! Orthodox and heterodox economists are unfit for science
► Funny folks in the big omnibus
► Ending the pluralism of provably false economic theories with the long-overdue Paradigm Shift
► Rethinking macro
► Rethinking deficit-spending
► Rethinking Distribution
► Rethinking the Phillips Curve (II)
► Rethinking the multiplier
► Macroeconomics: Economists are too stupid for science
► The economist as storyteller

► First Lecture in New Economic Thinking
► From false micro to true macro: the new economic Paradigm
► 10 steps to leave cargo cult economics behind for good

► Your economics is refuted on all counts: here is the real thing
► For more details of the big picture see cross-references New Economic Thinking

Egmont Kakarot-Handtke


Related 'Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion' and 'CORE: more lipstick on the dead economics pig' and 'ASSA2020 has been a success ― sorta kinda. For details of the big picture see cross-references Paradigm Shift and  cross-references Axiomatization.

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Twitter Dec 2 New economic thinkers are just as stupid/corrupt as old economic thinkers

How Randall Wray takes the piss out of the House Budget Committee

Comment on New Economic Perspectives on ‘Wray Appearing Before Congress’

Blog-Reference and Blog-Reference (Link) and Blog-Reference on Nov 21 and Blog-Reference on Nov 22

In Section 5. Sectoral balances of his testimonial Randall Wray states: “One of the concepts that Modern Money Theory economists use to elucidate the impact of budget deficits on the economy is the sectoral balance identity developed by Wynne Godley (1996). At the level of the economy as a whole, aggregate spending is identically equal to aggregate income ― every dollar spent is received as income. It is useful to divide the economy into three sectors: government (national, state, and local), domestic private (households and firms), and foreign (rest of the world). If one sector spends more than its income (deficit), at least one other must spend less than its income (surplus) to maintain the aggregate identity that total spending equals total income. The balances (income minus expenditure) of the three sectors have to add up to zero since we are adding up all the income in the economy and subtracting all the spending, which are equal by identity. We can then write the aggregate identity as: government balance + domestic private balance + foreign balance = 0. For the US, the government balance taken as a whole is usually negative (government spending is greater than its revenue ― mostly taxes), the domestic private balance is usually positive (approximated as saving is greater than investment ), and the foreign sector balance is positive (the rest of the world has a surplus in relation to the US since our current account balance is a deficit). Figure 7 shows the US sectoral balances, with each sector’s balance presented as a percent of GDP.”#1

The scientific blunder is in the sentence “At the level of the economy as a whole, aggregate spending is identically equal to aggregate income ― every dollar spent is received as income.”

This leads to the false MMT sectoral balances equation (I−S)+(G−T)+(X−M)=0. The true balances equation reads (I−S)+(G−T)+(X−M)−(Q−Yd)=0.#2-#5

Because the foundational macroeconomic relationship is ill-defined the whole analytical superstructure of MMT is false. The testimonial of Randall Wray is scientifically worthless.#6

Worse, MMT either ignores or deliberately hides the distributional consequences of the policy of deficit-spending/money-creation: “Although MMT has a set of policy prescriptions to achieve full employment and price stability, what I have discussed here is largely descriptive. MMT allows us to look at the economy through a different lens. While economists and policymakers may advocate for reducing government deficits and debt, MMT cautions that what we might be reducing is economic growth, as well as the private sector’s surpluses and net financial wealth.”

For “the private sector” read “the Oligarchy”. The MMT policy of deficit-spending/money-creation = growing public debt is to the advantage of the Oligarchy and to the disadvantage of WeThePeople ― not only in the present but even more so in the future.#7

Egmont Kakarot-Handtke


#1 Levy Economics Institute Publications
#2 Dear idiots, government deficits do NOT fund private savings
#3 Rectification of MMT macro accounting
#4 Down with idiocy!
#5 The sectoral balances obfuscation: stupidity or corruption?
#6 The state of MMT? Stone-dead!
#7 Gosh! the One Percent have gotten $21 trillion richer: Links on Distribution

Related 'Mr. Wray goes to Washington'

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Figure 7 or How the profit rabbit vanishes in the MMT top hat: the household sector and the business sector are merged into the Domestic Private Sector. For more examples see Down with idiocy! See also Stephanie Kelton’s legendary Plain-Sight-Ink-Trick. The crucial point is that there are four sectors (household, business, government, and rest of the world) with saving as the balance of the household sector and profit as the balance of the business sector. By merging the household and the business sector and reducing the four sectors to three macroeconomic profit vanishes. This blunder/fraud invalidates the whole of MMT. MMT policy guidance has NO valid scientific foundations. Needless to emphasize that the House Budget Committee does NOT understand what Figure 7 says but is very impressed by the PowerPoint competence of its economic experts.

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REPLY to Mike Norman on Nov 21

You say: “He [Randall Wray] sat there silently as Representative Ralph Norman of South Carolina repeated a laundry list of completely inapplicable and grossly ignorant characterizations of U.S. debt and government finance.”

To be fair, Randall Wray was invited to give his MMT expert testimony and not to fight other participants. Therefore, his testimony has to be judged on its own merits.

True, what the others presented was garbage. But nobody ever expected anything else given the scientific incompetence and the substandard IQ in economics.

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Twitter Nov 24

Source: Twitter

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AXEC143d: Macroeconomic Profit Law (with increasing complexity) and Balances Equation

     

Links on Paul Krugman, proto-scientific impresario

Comment on Lars Syll on ‘Paul Krugman ― finally ― admits he was wrong!’

Blog-Reference and Blog-Reference and Blog-Reference on Oct 25

Paul Krugman has always been a clown and useful idiot in the political Circus Maximus. But Lars Syll has NOT been one iota better. Both, Krugmanian Orthodoxy and Syllian Heterodoxy are proto-scientific garbage.

► Krugman and the scientific implosion of economics
► Krugman is not an economist
► Paul the Menace
► Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It
► Forget Krugman, forget Keynes, forget economists
► Profit and Distribution Theory is false for 200+ years
► Hooray! The formalization issue is finally settled
► Economics: a comedy of errors full of intrigue and aberration
► Paul’s and Stephanie’s economic delirium talk
► The stupidity of Heterodoxy is the life insurance of Orthodoxy

► What is dead certain in an uncertain world: economists’ abysmal incompetence

► Enough! Economists, retire now!

► Just another wreck
► Scrap the EconNobel


Egmont Kakarot-Handtke


Related 'Lars Syll, fake scientist' and 'Economics: A science without scientists' and 'Economists, stupid or corrupt or both?' and 'Yes, economists are really that stupid' and 'How economists became the scientific laughing stock' and 'What is economics? (I)' and 'What is economics? (II)'

For more on Paul Krugman see AXECquery.

For more on Lars Syll see AXECquery.

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#PointOfProof

Oct 24

before

after

after

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Twitter/X Jan 22, 2024 Four years later

Twitter/X Mar 3, 2024

MMT undermines democracy

Comment on Lars Syll on ‘Everything you want to know about MMT’

Blog-Reference and Blog-Reference

Lars Syll maintains: “One of the positive contributions of MMT, especially from a european point of view, is that it makes it transparently clear why the euro-experiment has been such a monumental disaster.” and “The problems ― created to a large extent by the euro ― may not only endanger our economies, but also our democracy itself.”

This is actually NOT the case for the simple reason that MMT is a scientifically failed approach just like Walrasianism, Keynesianism, Marxianism, Austrianism.#1, #2 The major approaches are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit ― the foundational concept of the subject matter ― wrong. More specifically, the foundational MMT sectoral balances equation (I−S)+(G−T)+(X−M)=0 is provably false. The most important balance ― the profit of the business sector ― is missing. It is pretty obvious that a defective economic theory cannot explain anything.

Lars Syll is an incompetent scientist who has not realized that macroeconomics is ill-defined from Keynes onward to MMT. More specifically, he is too stupid to understand the elementary mathematics that underlies macroeconomics.#3

The macroeconomic Profit Law entails Public Deficit = Private Profit which means that the Oligarchy’s financial wealth and public debt grow in lockstep. The very characteristic of late Capitalism is that the so-called free-market economy is on the full life support of the state. Profit is in the main produced by the government through deficit-spending/money-creation. The Oligarchy, in turn, uses the opulent free lunches to corrupt what remains of the state’s legislative, executive, and judiciary institutions.

Clearly, the MMT policy of permanent deficit-spending/money-creation benefits the Oligarchy and not WeThePeople.#4 Lars Syll’s assertion that MMT is good for both economy and democracy is a continuation of economists’ long tradition of political fraud.#5

Egmont Kakarot-Handtke


#1 MMT: fundamentally false
#2 For the full-spectrum refutation of MMT see cross-references MMT
#3 Lars Syll ― a particularly stupid/corrupt fake scientist
#4 Is MMT good for WeThePeople or for the Oligarchy?
#5 You know you are in the political Circus Maximus when economists talk about Democracy/Liberty/Freedom

Related 'Trump and MMT: Make profits great again' and 'The real trouble with Capitalism: stupid/corrupt economists' and 'MMT: A new myth for WeThePeople' and 'Economists betray WeThePeople'.

Lars Syll ― a particularly stupid/corrupt fake scientist

Comment on Lars Syll/Imad Moosa on ‘Econometrics ― a con art with no relevance whatsoever to real world economics’

Blog-Reference

A closer look at the history of economic thought reveals that there are TWO economixes: political economics 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.

The historical fact is that theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years: Walrasianism, Keynesianism, Marxianism, Austrianism, MMT are mutually contradictory, axiomatically false, and materially/formally inconsistent. Political economists are NOT scientists but clowns/useful idiots in the political Circus Maximus.#1, #2, #3

Economics claims to be science and, by consequence, the economist has to uphold scientific standards. Scientific standards are well-defined since antiquity: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant)

Scientific knowledge is embodied in the true theory. The true theory is the humanly best mental representation of reality. This defines the economist’s task: “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)

This translates into the methodological basics: logical consistency is secured by applying the axiomatic-deductive method and empirical consistency is secured by applying state-of-art econometric testing.

So, there are the hard rocks of true or false and there is the vast swamp between them. The swamp is where stupid/corrupt political economists thrive since Adam Smith/Karl Marx. Swampiness is what Popper called an immunizing stratagem because: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman)#4 It is, therefore, quite understandable that the political economist is mainly occupied with producing a methodological smoke screen which consists of vague concepts, anything-goes, pluralism of false theories, alleged complexity, ontological uncertainty, unreliable data, the faux humility of ‘I know that I know nothing’, and the post-modern replacement of true theory by storytelling.#5

The stupid/corrupt political agenda pushers try to defend the swamp where “nothing is clear and everything is possible” (Keynes) by arguing that the axiomatic-deductive method and state-of-art testing does not work in economics and by denouncing the adherence to the scientific method as “physics envy” and by intimating that physics is just as crappy as the so-called social sciences, i.e. “physics too is really about arbitrary and fickle social consensus”. (R. S. Mitchell)

The popular swampie arguments are

• “Economics is a social science where the behaviour of decision makers is not governed purely by economic considerations but also by social and psychological factors, which are not amenable to econometric testing. This is why no economic theory holds everywhere all the time.” (Moosa)

• “And just as Moosa, Keynes certainly did not misunderstand the crucial issues at stake in his critique of econometrics. Quite the contrary. He knew them all too well ― and was not satisfied with the validity and philosophical underpinnings of the assumptions made for applying its methods.” (Syll)

• “Tinbergen’s model assumes that all relevant factors are measurable. Keynes questions if it is possible to adequately quantify and measure things like expectations and political and psychological factors. And more than anything, he questioned ― both on epistemological and ontological grounds ― that it was always and everywhere possible to measure real-world uncertainty with the help of probabilistic risk measures.” (Syll)

• “In his critique of Tinbergen, Keynes points us to the fundamental logical, epistemological and ontological problems of applying statistical methods to a basically unpredictable, uncertain, complex, unstable, interdependent, and ever-changing social reality.” (Syll)

The lethal blunders of Lars Syll/Imad Moosa are: (i) economics is NOT a social science but a systems science, and (ii), Keynes was a political agenda pusher and cannot by any stretch of the imagination be taken seriously as a scientist.#6

Keynes famously stated in the General Theory: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63) This two-liner is conceptually and logically defective because Keynes never came to grips with profit. “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)

Let this sink in, the economist Keynes NEVER understood profit, i.e. the fundamental concept of economics. Because he was too stupid for the elementary mathematics that underlies macroeconomics the whole of Keynesian theory and methodology is proto-scientific garbage. Instead of I=S, Q≡I−S is true with Q as macroeconomic profit (formal summary on Wikimedia AXEC143d).

So, Keynes got it wrong 80+ years ago but Lars Syll/Imad Moosa have not figured it out to this day and instead blather about methodology. That’s how the swampies of political economics have been for 200+ years now: stupid or corrupt or both. Lars Syll is both.#7

All political economists have to be expelled from the sciences. This applies also to Lars Syll’s Sweden where fake scientists/political agenda pushers are to this day rewarded with the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”. What a farce: economists are the swampies that have in 200+ years not figured out what profit is. Neither Orthodoxy nor traditional Heterodoxy has any scientific content.

Egmont Kakarot-Handtke


#1 Economics: failure, fake, fraud
#2 Economics: A science without scientists
#3 Economics: The greatest scientific hoax in modern times
#4 Getting out of the economics swamp
#5 The economist as storyteller
#6 Marshall and the Cambridge School of plain economic gibberish
#7 For the full-spectrum refutation of Lars Syll see the label zLPS on AXEC

Related 'How to spot economics trolls' and 'How incompetent are economic methodologists? Very!' and 'Economics: Math is NOT the problem, scientific incompetence is'. For details of the big picture see cross-references Political Economics/Stupidity/Corruption and cross-references Methodology and cross-references Math/Mathiness.

For more about Lars Syll see AXECquery.

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#PointOfProof

Jul 14

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Twitter Mar 18, 2021

The only thing we can learn from economic models is what proto-scientific garbage looks like

Comment on Lars Syll on ‘What can we learn from economic models?’

Blog-Reference

Economists in general and Lars Syll, in particular, are in a desperate struggle with scientific methodology: “Some economic methodologists have lately been arguing that economic models may well be considered ‘minimal models’ that portray ‘credible worlds’ without having to care about things like similarity, isomorphism, simplified representationality or resemblance to the real world. These models are said to resemble ‘realistic novels’ that portray ‘possible worlds’. And sure: economists constructing and working with that kind of models learn things about what might happen in those ‘possible worlds’. But is that really the stuff real science is made of? I think not.” and “Science has to be something more than just more or less realistic ‘story-telling’ or ‘explanatory fictionalism’. One has to provide decisive empirical evidence that what can be inferred in a model also helps us to uncover what actually goes on in the real world.”

Science consists of two essential elements: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant) Logical consistency is secured by applying the axiomatic-deductive method and empirical consistency is secured by applying state-of-art testing. Or, as Aristotle put it pack in 400 BC: “When the premises are certain, true, and primary, and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.”

So, it is well-known for a long time what scientific methodology is except among economists. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit ― the foundational concept of the subject matter ― wrong.

Of all imbeciles that open their mouths in economics, methodologists are the worst. They have consistently failed to spot elementary methodological blunders.#1 Economics is bad science but the economic methodology is even worse. This applies to Orthodoxy and Heterodoxy.#2, #3, #4, #5

Lars Syll’s critique is trivially true: “As long as one doesn’t come up with credible export warrants to real-world target systems and show how those models ― often building on idealizations with known to be false assumptions ― enhance our understanding or explanations about the real world, well, then they are just nothing more than just novels.” However, the heterodox methodologist Lars Syll NEVER came up with something better which, in turn, is acceptable because he is only a self-declared humble Humean Under-Labourer who is satisfied with “clearing Ground a little, and removing some of the Rubbish, that lies in the way to Knowledge.”

This is a bit unambitious because the premises of Orthodoxy are obviously idiotic. The hardcore propositions of microeconomics are given: “HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub)

It is pretty obvious that this (verbalized) axiom set consists of multiple NONENTITIES and does NOT satisfy Aristotle’s criteria, viz. “certain, true, and primary”. Von Neumann identified the Walrasian approach as given with HC1 to HC5 as petitio principii, that is, as methodologically unacceptable. (TOG p. 15)#6 Keynes tried to replace microfoundations with macrofoundations, however, Keynesian macrofoundations are also materially/formally inconsistent.

So, what can we learn from economic models? All models that contain a NONENTITY are a priori false. In practical terms: as soon as one of the axioms HC1 to HC5 appears in an economics paper it can be thrown into the wastebasket. The same applies to all macroeconomic models that contain I=S. What we learn is that the greater part of peer-reviewed models that appear in flagship journals and in textbooks#7 is proto-scientific garbage and that both orthodox and heterodox economists have to be expelled from the sciences because of proven incompetence. Economists themselves are the “Rubbish, that lies in the way to Knowledge”.

Egmont Kakarot-Handtke


#1 How incompetent are economic methodologists? Very!
#2 Still in the proto-scientific wood
#3 The economist as storyteller
#4 Are economics professors really that incompetent? Yes!
#5 How to spot economics trolls
#6 The Palgrave Dictionary ― a comprehensive collection of False-Hero Memorials
#7 To this day*, economists have produced NOT ONE textbook that satisfies scientific standards

Related 'False models and true incompetence' and 'All models are false because all economists are stupid' and 'The Ur-Blunder of economics and its rectification' and 'From Keynes’ fatal blunder to the true economic model' and 'Infantile model bricolage, or, How many economists can dance on a non-existing pinpoint?' and 'Summary on ‘Musings on Whether We Consciously Know More or Less than What Is in Our Models…’' and 'Neoclassical growth theory: modeling gone nuts' and 'Failed economics: The losers’ long list of lame excuses' and 'From the pluralism of false models to the true economic theory' and 'Yes, orthodox economics is poor science, but can Heterodoxy raise hope?' and 'The canonical macroeconomic model'. For details of the big picture see cross-references Methodology.

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#PointOfProof

Jul 7

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How incompetent are economic methodologists? Very!

Comment on Nancy Cartwright/Lars Syll on ‘The logic of economic models’

Blog-Reference and Blog-Reference

Economics is a failed science. 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. This raises the question where the methodologists were all the time? Did they not see what went wrong? Did they not spot the methodological blunders? And did they never have any idea how to fix matters?

No, economic methodologists are an integral part of the failure. What holds for the representative economist holds also for the representative methodologist: both have no idea what science is all about. From the Classicals onward, both the first tier economists and the second tier methodologists simply tried to emulate the triumphant sciences: “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.” (Feynman)#1, #2, #3

Accordingly, the failure of economics and the triumph of science was always explained with the unfair advantages of the latter. Basically, the same argument is repeated for 200+ years now.

• “There is a property common to almost all the moral sciences, and by which they are distinguished from many of the physical; this is, that it is seldom in our power to make experiments in them. In chemistry and natural philosophy, we can not only observe what happens under all the combinations of circumstances which nature brings together, but we may also try an indefinite number of new combinations. This we can seldom do in ethical, and scarcely ever in political science. … We therefore study nature under circumstances of great disadvantage in these sciences; being confined to the limited number of experiments which take place (if we may so speak) of their own accord, without any preparation or management of ours; in circumstances, moreover, of great complexity, and never perfectly known to us; and with the far greater part of the processes concealed from our observation.” (J. S. Mill, 1874)

• “Years ago I heard Mr. Cobden say at a League Meeting that ‘Political Economy was the highest study of the human mind, for that the physical sciences required by no means so hard an effort’.” (Bagehot)

• “Human psychology is not available for inductive study, because of the differences between individual minds, the immense multitude of the influencing circumstances, the practical difficulty of experiment upon human beings.” (Viner)

• Economists have taken physics as the model for science. Physicists use two basic tools: laboratory experiments and mathematics. But as laboratory experiments have a very limited application in economics, this leaves mathematics as the main tool for economists to try to mimic physics. So, economists hugely borrowed the mathematical instruments used by physicists. They did it to such an extent that, for instance, for the philosopher of science Alexander Rosenberg, economics is not an empirical science at all; for him, it is a branch of applied mathematics.” (Beker)

• “Direct empirical evidence on individual behavior is difficult ― some would say impossible ― to come by. But what little we know from experiments by psychologists like Daniel Kahneman and Amos Tversky and others does not suggest that homo sapiens behaves like homo economicus ... It is remarkable how little impact this evidence has had on modern economics.” (Blinder)

• “Economics is a strange sort of discipline. The booby traps I mentioned often make it sound as it is all just a matter of opinion. That is not so. Economics is not a Science with a capital S. It lacks the experimental method as a way of testing hypotheses. . . . There are always differences of opinion at the cutting edge of a science, . . . . But they last longer in economics . . . and there are reasons for that. As already mentioned, rival theories cannot be put to an experimental test.” (Solow)

• “One of the limitations with economics is the restricted possibility to perform experiments, forcing it to mainly rely on observational studies for knowledge of real-world economies. But still ― the idea of performing laboratory experiments holds a firm grip of our wish to discover (causal) relationships between economic ‘variables.’ If we only could isolate and manipulate variables in controlled environments, we would probably find ourselves in a situation where we with greater ‘rigour’ and ‘precision’ could describe, predict, or explain economic happenings in terms of ‘structural’ causes, ‘parameter’ values of relevant variables, and economic ‘laws’.” (Nancy Cartwright)

All these excuses are trivially true, of course, and good enough for not-so-smart economics students but do not hold methodological water. The fact is that the failure of economics is due to the scientific incompetence of economists. Here is the proof that economists AND methodologists like Nancy Cartwright are too stupid for the elementary mathematics that underlies macroeconomics.

Keynes famously stated in the General Theory: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)

This syllogism is conceptually and logically defective because Keynes NEVER came to grips with profit: “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)

Let this sink in, the economist Keynes NEVER understood profit, i.e. the fundamental concept of economics. So, Keynes’ I=S is false and by consequence the multiplier and all I=S/IS-LM models. Instead, Q≡I−S is true with Q as macroeconomic profit.#4, #5, #6

So, Keynes got it wrong 80+ years ago, yet neither Keynesians nor Post-Keynesians nor New Keynesians nor Anti-Keynesians nor methodologists nor Nany Cartwright nor Lars Syll spotted the logical inconsistency in Keynes’ macrofoundations to this day.#7

The complete macroeconomic Profit Law is given as Q≡Yd+(I−S)+(G−T)+(X−M). It consists of variables that are measurable with the precision of two decimal places and it is testable at any time.

What Nancy Cartwright and Lars Syll tell their academic and non-academic audiences about methodology is provably false. The problem of economics is NOT that the subject matter is of insurmountable difficulty but that economists are either scientifically incompetent or politically corrupt or both.

Egmont Kakarot-Handtke


#1 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#2 Social science is NOT a science but a sitcom
#3 Economics: The chief demerit is inconsistency
#4 Are economics professors really that incompetent? Yes!
#5 Controlled demolition of MMT ― an exercise in elementary logic
#6 The canonical macroeconomic model
#7 Macroeconomics: Economists are too stupid for science

Related 'Economists and their silly excuses' and 'Axiomatized NONENTITIES and the failure of methodologists' and 'Shocking: methodology is a tricky business' and 'Methodology 101, economic filibuster, and the mother of all excuses' and 'Economic recommendations out of the swamp between true and false' and 'Failed economics: The losers’ long list of lame excuses' and 'Did economics fail? No! Yes, and everybody knows it!' and 'Heterodoxy’s scientific self-burial' and 'When substandard thinkers dabble in science it is called economics' and 'Economics, methodology, morals ― a creepy freak-show' and 'The inexorable Paradigm Shift in economics'. For details of the big picture see cross-references Methodology.

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#PointOfProof

Jul 2

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