Occasional X: Clueless economists / Employment (XD)

“According to Modern Monetary Theory (MMT) it is possible to use expansive monetary policy - money creation by the central bank (i.e. the Federal Reserve) - to finance large fiscal deficits that will ensure full employment and good jobs for everyone, …” (Sebastian Edwards, Hoover Institution) Employment theory has been wrong since the Founding Fathers. MMT is no exception. The axiomatically correct macroeconomic Employment Law (⇓ AXEC62d) tells one how ― in the elementary case ― the employment L depends ― under the analytical condition of product market clearing ― on ρE and ρF. The factor cost ratio ρF is composed of the wage rate W, the inverse productivity R, and the inverse price P. The ratio ρE depends on (public/private) deficit-spending/money-creation. The Law consists of measurable variables and is testable if generalized. The macroeconomic price mechanism is embodied in ρF. An increasing price P means falling employment L, and an increasing wage rate means increasing employment. A falling price increases employment. A rising price decreases employment. The closer ρF is to 1, the higher employment is. This is contrary to the microeconomic microbrain logic. So, what happens politically? Deficit-spending/ money-creation, i.e., ρE>1, increases employment L, but only if ρF remains constant. If the price P increases simultaneously, ρF decreases, and employment goes down. As a limiting case, both effects cancel each other out. Employment stays the same; only macroeconomic profit increases. The State's deficit spending appears to be ineffective. The government sector is not alone; the business sector as a whole can make employment what it wants if it can somehow be made to act coordinated. The weakening of the government sector and the strengthening of the business sector is the aim of Neoliberalism. The Employment Law says that Neoliberalism makes ρE=1 and ρF smaller, and as a result, employment L will shrink. “The four experiments studied in this paper ended up badly, with runaway inflation, huge currency devaluations, and precipitous real wage declines.” (Hoover Institution) Inflation is a coordinated policy of the business sector; it does not happen spontaneously. All negative effects on employment and the real wage are the result of business sector policy. For more on the axiomatically correct employment theory, see Cross-references: Employment https://t.co/RfA1hj72qQ

— AXEC (@EgmontHandtke) November 2, 2026

Occasional X: Clueless economists / Employment (XXXIX)

“No. Keynes noted that downward wage rigidity was not the problem of unemployment. Income effect:lower wage lowers consumption and so profit. MPL is not the marginal revenue, marginal sale is and that falls with lower w. In a wage-led economy Un may rise with lower wages.” (Eric Tymoigne) Employment theory has been wrong since the Founding Fathers. Keynes was no exception. For details, see Keynes’ Employment Function and the Gratuitous Phillips Curve Disaster https://t.co/GQLh697Omw The axiomatically correct macroeconomic Employment Law (⇓ AXEC62d) tells one how ― in the elementary case ― the employment L depends ― under the condition of product market clearing ― on ρE and ρF. The factor cost ratio ρF is composed of wage rate W, the inverse productivity R, and price P. The ratio ρE depends on (public/private) deficit-spending/money-creation, i.e., deficit-spending ρE>1 is Keynes's pseudo-revolutionary idea; ρE=1 means budget-balancing. The Law consists of measurable variables and is testable if generalized. The macroeconomic price mechanism is embodied in ρF. An increasing price P means falling employment L, and an increasing wage rate means increasing employment. A falling price increases employment. A rising price decreases employment. The closer ρF is to 1, the higher is employment. This is contrary to the microeconomic microbrain logic. For more on the axiomatically correct employment theory, see Cross-references: Employment https://t.co/RfA1hj72qQ

— AXEC (@EgmontHandtke) October 28, 2026

Occasional X: The foul spirit of political economics (CDX)

“Unfortunately, neither laudable intentions nor widespread support can alter one simple fact: although minimum wage laws can set wages, they cannot guarantee jobs.” (Linda Gorman, quoted by Foundation for Economic Education) Linda Gorman does not realize that microeconomic effects do not generalize. This is the Fallacy of Composition. The axiomatically correct macroeconomic Employment Law (⇓ AXEC62d) tells one how ― in the elementary case ― the employment L depends ― under the condition of product market clearing ― on ρE and ρF. The factor cost ratio ρF is composed of wage rate W, the inverse productivity R, and price P. The ratio ρE depends on (public/private) deficit-spending/money-creation, i.e., deficit-spending ρE>1 is Keynes's pseudo-revolutionary idea; ρE=1 means budget-balancing. The Law consists of measurable variables and is testable if generalized. The macroeconomic price mechanism is embodied in ρF. An increasing price P means falling employment L, and an increasing wage rate means increasing employment. A falling price increases employment. A rising price decreases employment. The closer ρF is to 1, the higher is employment. This is contrary to the microeconomic Austrian microbrain logic. For more on the correct employment theory, see Cross-references: Employment https://t.co/RfA1hj72qQ Foundation for Economic Education is an inexhaustible source of proto-scientific garbage.

— AXEC (@EgmontHandtke) October 27, 2026

Occasional X: The foul spirit of political economics (CDXI)

“British pedophile John Maynard Keynes made one genuinely useful observation: in a severe deflationary panic, when businesses freeze and nobody spends, government can sometimes break the paralysis. … Keynes identified that rigid nominal wages meant unemployment rather than wage cuts when demand fell. But he built a catastrophically wrong policy architecture on top of it.” (Handre) First, denunciation is not refutation. This is political agenda pushing, not science. Neither Austrians nor Keynesians got employment theory right. Scientific incompetence was what they always had in common. For the scientifically and polemically valid refutation of Keynesianism, see Cross-references: Keynesianism https://t.co/ZoIDUg46Lg The axiomatically correct macroeconomic Employment Law (⇓ AXEC62d) tells one how ― in the elementary case ― the employment L depends ― under the condition of product market clearing ― on ρE and ρF. The factor cost ratio ρF is composed of wage rate W, the inverse productivity R, and price P. The ratio ρE depends on (public/private) deficit-spending/money-creation, i.e., deficit-spending ρE>1 is Keynes's pseudo-revolutionary idea; ρE=1 means budget-balancing. The Law consists of measurable variables and is testable if generalized. The macroeconomic price mechanism is embodied in ρF. An increasing price P means falling employment L, and an increasing wage rate means increasing employment. A falling price increases employment. A rising price decreases employment. The closer ρF is to 1, the higher is employment. This is contrary to the microeconomic Austrian microbrain logic. Austrian always claimed that the price mechanism (which is embodied in ρF) works automatically towards full employment and ρE>1, i.e., deficit-spending/money-creation is ultimately toxic. Keynes claimed that the price mechanism ρF fails because of stickiness and that therefore ρE>1 must do the heavy lifting. Both Austrianism and Keynesianism are axiomatically false. It is high time that both Austrians and Keynesians go down the scientific drain. For more on the correct employment theory, see Cross-references: Employment https://t.co/RfA1hj72qQ

— AXEC (@EgmontHandtke) October 26, 2026

Occasional X: The foul spirit of political economics (CCCLXXIX)

“That's where the jokes come from about how if you gather 5 economists, there are 6 opinions, and 2 of them are Keynes's. …The most important lesson from Keynes was to change one's mind when the times change. Being a free trader or protectionist, fiscally contractionary or expansionary, depends on the circumstances. Today we are overrun by dogmatists with universal and timeless truths.” (Matías Vernengo) Keynes, too, misunderstood the concept of profit because he was too stupid for elementary algebra. Consequently, he botched the long-overdue Paradigm Shift from microfoundations to macrofoundations. This initial blunder means that the entire field of economics (both micro and macro) is proto-scientific garbage. As a result, economics has never been more than silly blather for a low-IQ audience. After-Keynesians never realized the scientific blunder; their incompetence is represented by Matías Vernengo. However, criticism does not lead to progress but to the swamp where 'nothing is clear, and everything is possible.' (Keynes). Only the Paradigm Shift leads from the swamp of opinions (doxa) to scientific knowledge (episteme). The axiomatically correct macroeconomic Employment Law ⇓ tells one how ― in the elementary case ― the employment L depends ― under the condition of product market clearing ― on ρE and ρF. The factor cost ratio ρF is composed of the wage rate W, the inverse productivity R, and the price P. The ratio ρE depends on (public/private) deficit-spending/money-creation. The Law consists of measurable variables and is testable if generalized. The macroeconomic price mechanism is embodied in ρF. An increasing price P means falling employment L, and an increasing wage rate means increasing employment. A falling price increases employment. A rising price decreases employment. The closer ρF is to 1, the higher is employment. The Austrians claimed that the price mechanism (which is embodied in ρF) works automatically towards full employment, and ρE>1, i.e., deficit-spending/money-creation is ultimately toxic. Keynes claimed that the price mechanism fails because of stickiness and that therefore ρE>1 must do the heavy lifting. Say's Law formally means ρE=1; Effective Demand means ρE>1. The latter is necessary if the price system ρF does not automatically produce full employment. The 'universal and timeless truth' is that both Austrianism and Keynesianism are axiomatically false. It is high time that both go down the scientific drain. For more on the correct employment theory, see Cross-references: Employment https://t.co/RfA1hj72qQ

— AXEC (@EgmontHandtke) October 11, 2026

Occasional X: Clueless economists / Employment (XXXVIII)

 

“A few days ago, I responded to florianederer on James Buchanan and his minimum wage take by pointing out an earlier paper of Buchanan in the AER. I re-read it with more details and I think its fun. Its core question is simple: what happens when inputs with different opportunity… pic.twitter.com/6qqKV5UohC

— AXEC (@EgmontHandtke) September 28, 2026

Occasional X: How it works (DIII)

“Marx explained the basic contradiction over 150 years ago. Competition compels each capitalist to raise productivity and cheapen commodities because doing so increases relative surplus-value and gives them an advantage over competitors.” (Dohaciel Ygzgzot)

This is the problem… pic.twitter.com/pRePIrVMRd

— AXEC (@EgmontHandtke) August 17, 2026

Occasional X: Clueless economists / Employment (XXXVII)

“Hayek and Keynes are remembered as fierce intellectual rivals. What’s less known is that the two were actually friends who held each other in high regard.” (Hayek Quotes)

Neither Hayek nor Keynes got employment theory right. Scientific incompetence was what they had in common.… pic.twitter.com/YYG7YLRhKx

— AXEC (@EgmontHandtke) August 11, 2026

Occasional X: How it works (CDXCVII)

“Nobody will dare to stop inflation because to discontinue inflation will inevitably cause extensive unemployment. So assuming inflation stops it will quickly be resumed.” (Friedrich Hayek)

That's wrong. Friedrich Hayek never understood profit and, by logical consequence, how… pic.twitter.com/x8MXqOC0EX

— AXEC (@EgmontHandtke) August 1, 2026

Related 'Cross-references: Employment/Phillips Curve'

Occasional X: How it works (CDXCV)

 

“Two economists published a mathematical proof that AI will destroy the economy. It’s called 'The AI Layoff Trap' and it exposes a devastating economic contradiction that every CEO can see coming, and none of them can stop.” (How to Prompt)

Actually, this is the old problem of a… pic.twitter.com/LpVeB5NCXJ

— AXEC (@EgmontHandtke) July 29, 2026

Occasional X: Clueless economists / Employment (XXXVI)

“Sticky wages in most contemporary models assume that all workers belong to a union that has a labor monopoly and charges above market clearing wage. Reality, not many unions, and more worry about employer market power. Unreality of NK model assumptions at some point sticks in… pic.twitter.com/nSosg74tEM

— AXEC (@EgmontHandtke) June 26, 2026

Occasional X: Clueless economists / Employment (XXXV)

 

“Raising the minimum wage doesn't make workers more productive, but rather, it just makes them more expensive.” (infineo)

There is no behavioral relationship between the minimum wage and productivity. The employment theory has been false since Adam Smith.

Economics claims to be… pic.twitter.com/yaGH7r9myw

— AXEC (@EgmontHandtke) June 26, 2026

Occasional X: Clueless economists / Employment (XXXIV)

“What's wrong?” (Shahin Ashkiani)

The representative economist is wrong.

Economics claims to be Science but is NOT. The major approaches and their derivatives are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit wrong. Because… pic.twitter.com/wq1AnJkszM

— AXEC (@EgmontHandtke) June 16, 2026

Occasional X: Clueless economists / Employment (XXXIII)

“The 1970s obliterated the most cherished myth in mainstream economics: the Phillips Curve trade-off between unemployment and inflation. When stagflation hit America with double-digit inflation alongside soaring unemployment, Keynesian economists scrambled like cockroaches when… pic.twitter.com/d2EcTYKrtE

— AXEC (@EgmontHandtke) June 8, 2026

Occasional X: Clueless economists / Science (CCCXXXVII)

“If an idea sounds compassionate but ignores incentives and basic market realities, it’s not an economic principle, it’s an emotional reaction dressed up as policy. That’s why left policies like minimum wage or rent controls, contradicting basic economics, just make things… pic.twitter.com/ltDKJtQZWP

— AXEC (@EgmontHandtke) June 6, 2026

For more about the Totem of the Micro, see AXECquery. 

Related 'Bang — the representative economist and supply-demand-equilibrium are dead'.

Occasional X: How it works (CDLXXX)

“Musk warns: 'The entire existing economic system is on the verge of collapse, and no force can stop it.” (Trader)

True.

“Because artificial intelligence and robotics are not creating growth — they are destroying the 'scarcity framework' upon which economics is based.”

Not…

— AXEC (@EgmontHandtke) June 1, 2026

Occasional X: Clueless economists / Employment (XXXII)

“Mises: wages cannot be set by institutions. They are a market phenomenon.” (Fabian Wintersberger)

von Mises was a common-sense microeconomist who did not understand what profit is, and consequently, how the economic system works. He will be finally buried in the darkest corner… pic.twitter.com/4YMHzF0svS

— AXEC (@EgmontHandtke) May 11, 2026

Occasional X: Clueless economists / Employment (XXXI)

“Classical-Marxian model in my Heterodox Macro course at The University of Tulsa. Its four closures come from different theoretical traditions: Marxian fixed real wage, Golden Age fixed wage share, labor-reserve constant unemployment, and Sraffian/financial exogenous profit… pic.twitter.com/fiiXGADOhW

— AXEC (@EgmontHandtke) April 25, 2026

Occasional X: Clueless economists / Employment (XXX)

 

“Everyone’s debating unemployment, but few are talking about the policies causing it.” (Foundation for Economic Education)

The dependency of the real variable employment is given by the axiomatically correct macroeconomic Employment Law ⇓, which tells one how ― in the…

— AXEC (@EgmontHandtke) April 20, 2026

Related 'Schumpeter and the essence of profit' 

Occasional X: Clueless economists / Employment (XXIX)

 

“The macro question is whether the real/inflation adjusted deficit remains high enough to offset savings desires. Unemployment is the evidence.” (Warren Mosler)

Half true.

The dependency of the real variable employment is given by the axiomatically correct macroeconomic… pic.twitter.com/Xb7I6W1U9z

— AXEC (@EgmontHandtke) April 14, 2026

“My statement is true by identity.” (Warren Mosler)

No. Your macroeconomics is provably false. Therefore, your Employment Theory is false. The same holds for your Theory of Money.

MMT: The one deadly error/fraud of Warren Moslerhttps://t.co/wKI0WoOYzm

— AXEC (@EgmontHandtke) April 14, 2026