What is MMT? (III) ― Rectifying Bill Mitchell

Comment on Bill Mitchell on ‘Booming growth in Britain (Brexit?) but child poverty rises (austerity)’

Blog-Reference and Blog-Reference

“Social media is, of course, awash with Modern Monetary Theory (MMT) and a host of different characters have made it a goal to become MMT proponents, which is a good thing in some respects.”

It is pretty obvious that “MMT proponents” on social media and elsewhere are overwhelmingly agenda-pushers/applause-trolls/useful idiots/sales-reps and #EconBlockers.#1, #2, #3

“MMT is an economic framework for understanding how the macroeconomy works and the role of the currency-issuer in the monetary economy.”

MMT got macrofoundations wrong. Because of this, the whole analytical superstructure is scientifically worthless.#4

“But MMT is not a ‘movement’, nor, is it a progressive agenda.”

MMTers present themselves as Real Progressives when it suits them, e.g. when they fight UK Labour. Actually, MMT is a movement of and for the Oligarchy.#5, #6, #7

“I keep reading things like ‘MMT advocates taxing the rich’. It doesn’t.”

No, MMT advocates deficit-spending/money-creation which is (because of the 3-sector Profit Law Q≡(G−T)+(I−S)+Yd) to the advantage of the Oligarchy and to the disadvantage of WeThePeople.#8, #9

Egmont Kakarot-Handtke

#1 Economics, communication, disinformation

#2 Economists ― the Oligarchy's agenda pushers

#3 Links on MMTers push Wall Street’s agenda

#4 The unassailable formal refutation of MMT

#5 How Bill Mitchell stalks Jeremy Corbyn

#6 MMT: Corbynism is dead, British Labour is next

#7 Mission accomplished: Economists as useful idiots of the Oligarchy

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

#9 MMT pushes the Oligarchy's agenda ― and they push MMT

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Twitter Jul 30

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Bill Mitchell

• Deceiving WeThePeople ― the case of MMT/Bill Mitchell
• Bill Mitchell says that economists are fake scientists ― true, but MMTers are NOT different
• Proving Bill Mitchell wrong ― burying MMT for good
• Bill Mitchell cracks the spending whip over the Swabian housewife
• Bill Mitchell, MMT, Progressives: economists as Oligarchy hacks
• Mainstream vs MMT ― another clown show
• Economic backstabbing: Bill Mitchell hits again
• Bill Mitchell’s pure MMT teachings for British Labour
• Bill Mitchell’s dishonorable discharge from the sciences
• Bill Mitchell ― Wall Street’s hitman keeps an eye on MMT defeatists
• MMT, Bill Mitchell, and the lack of basic scientific integrity
• How Bill Mitchell stalks Jeremy Corbyn
• MMT is dead: An unfriendly critique of Bill Mitchell
• Bill Mitchell, MMT’s fake scientist
• Cryptoeconomics ― the best of Bill Mitchell’s spam folder
• The final implosion of MMT

Cryptoeconomics ― the best of Bill Mitchell’s spam folder

Comment on Bill Mitchell on ‘Planning public works ― history has a lot to say if we listen properly’

Blog-Reference

MMT is a failed approach. Therefore, there is absolutely no use to follow the discussion between what Bill Mitchell calls mainstream and progressives. Both sides lack sound scientific foundations, that is, the true theory. MMTers have to this day not realized that their foundational premises/balances equations are provably false.#1

To this day, in their research and communication, economists in general and MMTers, in particular, are not guided by the principles of Science but by the principles of Circus Maximus. As a consequence, in the econblogosphere, the best stuff is hidden in the spam folders, and what is openly recycled ad nauseam is soft soap, blather, gossip, propaganda, disinformation, and proto-scientific garbage.

It is long known that economists routinely violate scientific standards and simply suppress/ ignore refutation: “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)

It is at anybody’s guess to what extent the econblogosphere is corrupted. The problem, of course, is that spam folders are invisible to the general public. Private censorship is built into the blogging software and works without any traces.

Occasionally, there are exceptions. For those who appreciate the privilege of casting a glance into  Bill Mitchell’s spam folder, here is a sample of posts he suppressed over the last twelve months.

• Full employment through the price mechanism
• MMT and the promotion of Wall Street's idea of social policy
• Everything you know about MMT is wrong
• MMT, fake science
• MMT: another case of inverted economics
• Economics: a hereditary mental disease with scientific incompetence as father and political fraud as mother
• Forget Friedman, forget Keynes
• Macrofounded labor market theory
• Economics is NOT about Human Nature but the economic system
• Where MMT got macro wrong
• Rectification and generalization of MMT
• Economics as poultry entrails reading
• Rethinking MMT

Needless to emphasize that Bill Mitchell’s billy blog represents not more than the tiny tip of the iceberg. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, and materially/formally inconsistent. As a result, almost all of the econblogosphere consists of fake news, attention management, brown-nosing, wrestling exercises, buddy back-scratching, PR, slander, and cheerleading. MMT is NO exception, it is political agenda pushing with a scientific content of zero.

Egmont Kakarot-Handtke


#1 For the full-spectrum refutation of MMT see cross-references MMT

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NOTE on Bill Mitchell’s ‘Oh poor Britain ― overrun by chlorinated chickens, hapless without the EU’ on Feb 1

Bill Mitchell argues “A rising fiscal deficit is neither good nor bad. It all depends on the saving and spending desires of the non-government sector and the state of capacity utilisation. A rising deficit associated with a growing economy and full employment with stable prices is to be desired.”

The MMT swindle lies in the word “non-government sector”. There is NO such thing as the “non-government sector”, there are TWO sectors, the business- and the household sector. And the business sector does NOT save. Saving/dissaving is the balance of the household sector, profit/loss is the balance of the business sector. The word profit, though, does not appear once in Bill Mitchell’s analysis. Why? Because it holds Public Deficit = Private Profit which means that Bill Mitchell does not really care about poor Britain but about the wellness of the one-percenters.

For more on the essential flaws of MMT’s profit and employment theory see

• Down with idiocy!
• Full employment through the price mechanism
• Cryptoeconomics ― the best of Bill Mitchell’s spam folder

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#PointOfProof

Bill Mitchell, MMT, Progressives: economists as Oligarchy hacks

Comment on Bill Mitchell on ‘The Tories in Britain have a clear way forward ― thanks to the Labour Party hacks’*

Blog-Reference

Bill Mitchell summarizes the current situation in Britain: “Meanwhile, the Tories have an almost open field to finish the first stage of the Brexit process off, and, secure the ongoing support of the voters that abandoned Labour in the election. The Tories will have restored sovereignty to Britain and freed themselves from the restrictive, neoliberal environment of the European Union. Now don’t get me wrong, I have no truck for the Tories. And all along, I considered that Brexit would deliver great outcomes for Britain in the hands of the Labour party as long as they simultaneously abandoned their neoliberal obsession with fiscal rectitude, as expressed by their ridiculous Fiscal Credibility Rule.” and “That means he [Boris Johnson] will have to do abandon the Tory austerity bias and invest billions into the regions that have been torn apart by his parties obsession with fiscal surpluses. That might, for a while, provide some good news for Britain.”

So Labour has lost and it is their own fault because they clung stubbornly to their “ridiculous Fiscal Credibility Rule”. In sum: “Labour lost. They took bad advice and made stupid decisions that abandoned their loyal voters. So, it will be the Tories who have the opportunities to stimulate growth in a post-Brexit Britain and further damage the Labour Party’s electoral prospects.”

Bill Mitchell is rather happy with this outcome. After all, this is what he was working for under the cover of a Progressive for a long time.#1-#5 Before it becomes too obvious that he has always been a mole of the Oligarchy he reassures the audience: “Now don’t get me wrong, I have no truck for the Tories.”

No, nobody gets Bill Mitchell wrong. His political agenda has been and still is the destruction of the European Union, prevention of Corbynism, boosting deficit-spending/money-creation, and telling the world that all is for the benefit of WeThePeople.

However, there is no time to celebrate and relax. For the Oligarchy there is one big problem left and Bill Mitchell is expected to fix it.

“I have had several meetings in recent months with some of the largest investment managers in the world. These are the people who the Shadow Chancellor and his advisors are fearful of. They have been seeking me out to learn about Modern Monetary Theory (MMT) because they realise that by adhering to the views of the mainstream economists, they have been exposing their investors to losses and reduced returns. I never give investment advice. But I am happy to educate and move more people away from mainstream economics.”

Yes, OK, got it, Bill Mitchell is not a political agenda pusher but an academic educator. So, what is he telling his eager students?

“First, austerity around the world and a reliance on monetary policy has generated financial market outcomes that are unsustainable for financial investors. All around the world, interest rates and yields on assets are falling and we are now seeing negative interest rates on long-term bonds becoming the norm. The pension funds and insurance funds are also facing a major asset-liability mismatch as a result. And to resolve the mismatch, they are seeking to generate higher returns on their assets, which means they are taking on higher risk and exposing themselves to higher probabilities of insolvency in the face of any new crisis. It is an unsustainable position. And it is making life very difficult for the large investment funds who seek stable returns. What they are hankering over is an end to the neoliberal era of passive fiscal policy and monetary policy interventions that are driving yields into negative territory. They are getting on board the shift to fiscal dominance that the central bankers are demanding. They are becoming increasingly attracted to MMT because they can see that we have consistently articulated the case for fiscal dominance.”

At this point, schizophrenia turns to scientific fraud. Apart from making it plain for the last naive MMT troll that he and the other progressive MMT academics are and have always been the useful idiots of the Oligarchy, Bill Mitchell gets economics again upside down.

Negative interest rates are the commonsensical outcome of the MMT policy of permanent deficit-spending/money-creation. The public deficit creates private profit which originally takes the form of deposits at the Central Bank. This money seeks low-risk interest income and turns to the bond market. This, in turn, continuously drives the interest rate down. This, in turn, annoys a significant fraction of the Oligarchy, i.e. the holders of the $23 trillion public debt. And this fraction now asks Bill Mitchell, the progressive fighter for WeThePeople, for his expertise.

Before anyone gets confused this is the straightforward economic fact of the matter. The macroeconomic Profit Law implies Public Deficit = Private Profit and as a consequence Financial Wealth of the Oligarchy = Public Debt of WeThePeople. Thus, MMT policy produces an extremely unequal distribution of income/wealth that eventually destroys both the economy and society. MMTers are NOT the benefactors of WeThePeople but the PR/Marketing/Sales-force of the Oligarchy or at least of a significant fraction.#6

Conclusion: The first thing to do is to throw the intellectually and politically corrupt Progressives/MMTers out of the scientific community. PricewaterhouseCooper will take them gladly on board.#7 After all, they have done a good hit job in Britain.

Egmont Kakarot-Handtke


* Billy Blog
#1 MMT: Corbynism is dead, British Labour is next
#2 Mission accomplished: Economists as useful idiots of the Oligarchy
#3 Economic backstabbing: Bill Mitchell hits again
#4 Bill Mitchell’s pure MMT teachings for British Labour
#5 Mr. Wray goes to Washington
#6 Dear idiots, MMTers are Wall Street’s agenda pushers
#7 Stephanie Kelton: “All deficits are good for someone” Yes, Someone=Oligarchy

***

Twitter Jan 14 That's unfair, Robert Skidelsky takes the credits in the House of Lords

MMT: Corbynism is dead, British Labour is next

Comment on Bill Mitchell on ‘An evolving 6-point plan for British Labour’*

Blog-Reference and Blog-Reference

MMT policy boils down to deficit-spending/money-creation. According to the macroeconomic Profit Law, it holds Public Deficit = Private Profit. #1 So, MMT policy is for the benefit of the Oligarchy. The natural enemy of the Oligarchy is WeThePeople and all institutions that promote their interests. The logical thing to do for MMTers is to weaken or destroy these institutions. In the case of British Labour, this means to drive a wedge between members/voters and the party’s leadership. This is what Bill Mitchell as academic loudspeaker of MMT, has done with considerable intensity for a long time. #2, #3

Bill Mitchell’s method has not been very subtle but consisted in the main of presenting himself as a true Progressive and smearing the Labour leadership as closet neoliberals who torture the working class with Austerity. #4, #5

Whether Bill Mitchell’s interference in UK affairs had any effect on the anti-Corbyn coup is open to anybody’s guess; what is remarkable is that the agent of the Oligarchy is not yet finished with undermining British Labour.

The Corbynism corpse not yet cold, Bill Mitchell comes forward with the 6-point plan for a Labour Party that suits the Oligarchy:

“3. Sack/ignore all the advisors who advocated neoliberal fiscal rules as being clever. They were stupid and unworkable and the fact that the Labour Party changed the Rule in the weeks before the election when the IFS pointed out that they were incompatible with the Manifesto, a view I had presented when the Rule first came out, is testament to that.

4. Maintain the progressive Manifesto without the neoliberal frames and structures. #6

5. Begin this 5-year period of isolation by mounting a massive education campaign to allow British voters to truly understand the capacities of the currency-issuing government, which will make it much easier to disabuse arguments that start with ‘How will we pay for it?’. In that sense, I advise the British Labour Party to commission a series of workshops on Modern Monetary Theory (MMT), starting February when I will next be in the UK.”

Note that MMT is (i) refuted on all counts, (ii) scientifically worthless, (iii) against the interest of WeThePeople, (iv) for the benefit of the Oligarchy, and (v), that Bill Mitchell as an Australian academic has neither any scientific nor any political legitimacy to interfere with what is exclusively the business of the Legitimate Sovereign of the UK. #7

Note further that economics is NOT a science and economists are NOT scientists, but for 200+ years now, the useful idiots of the Oligarchy.

Egmont Kakarot-Handtke


* Billy Blog
#1 Q≡Yd+(I−S)+(G−T)+(X−M) ⇒ Q≡G−T Legend: Q overall monetary profit, G−T>0 public deficit.
#2 Mission accomplished: Economists as useful idiots of the Oligarchy
#3 How Bill Mitchell stalks Jeremy Corbyn
#4 MMT Progressives: The knife in the back of WeThePeople
#5 MMTers are false Progressives and false Friends-of-the-People
#6 MMT: The communicative war on budget-balancers
#7 MMTers are false Progressives and false Friends-of-the-People

Related 'Bill Mitchell’s pure MMT teachings for British Labour' and 'Totally schizo ― MMT and policy' and 'Economic backstabbing: Bill Mitchell hits again' and 'Very busy these days: Wall Street’s agents' and 'MMT: A Trojan Horse for Labour courtesy of the Oligarchy' and 'MMT’s true program' and 'Thinking about economic policy for future PM Corbyn'. For details of the big picture, see cross-references MMT and cross-references Political Economics/Stupidity/Corruption.

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Billy Blog Dec 19

Billy Blog Nov 26, 2020, British Labour remains unelectable

Source: Twitter

Twitter May 7, 2021

Twitter May 12, 2021

Twitter Aug 18, 2021 Finished off by business consulting

Twitter Jan 4, 2023

Twitter/X Jul 5, 2024 Five years later

Twitter/X Oct 30, 2025  Financial background

MMT, Bill Mitchell, and the lack of basic scientific integrity

Comment on Bill Mitchell on ‘MMT is just plain old bad economics ― Part 3 = MMT is just plain good economics ― Part 3’

Blog-Reference

The key point for understanding economics is that there are TWO economixes: political and theoretical economics. The main differences are: (i) The objective of political economics is to successfully push an agenda, the objective 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.

Theoretical economics (= science) had been hijacked from the very beginning by the agenda pushers of political economics. Economic debate is, since the founding fathers, characterized by rhetorically switching between political and scientific arguments. In this shuffle, science got entirely lost. After 200+ years, economics is still at the proto-scientific level. To this day, economists are NOT scientists but only useful political idiots.

Bill Mitchell is a case in point. He is one of the academic representatives of MMT. He claims

• that neoclassical = mainstream economics is proto-scientific garbage (true),
• that MMT monetary theory is superior to neoclassical theory (true),
• that MMT is a scientifically true theory, i.e. materially and formally consistent (false),
• that MMT policy guidance is progressive, i.e. promotes the cause of the ninety-nine-percenters (false),
• that most of the critique of MMT, especially mainstream critique, is way beside the point (true),
• that MMT is not political agenda-pushing but a scientific tool, i.e. a lens for analyzing how the monetary economy works (false),
• that his blog is only “an extension of [his] role as an educator” (false),
• that on his blog, Bill Mitchell has extensively refuted all scientific and political arguments against MMT (half-true). The proof that MMT is a distributional catastrophe#1 has NEVER been refuted.

The fact of the matter is that MMT is scientifically untenable and politically biased against the ninety-nine-percenters. The social appearances of MMT are a deception of the general public.

Against critique, Bill Mitchell answers with rhetoric (neoliberal framing, attention-seeking smart-guys, misrepresentation, a Twitter storm of lies) and holds up his academic credentials: “One of the things that an academic is trained to do and required to do before entering public debate is to make sure they have read the relevant literature. We are not paid to be attention-seeking, social media heroes who tweet our heads off by making stuff up. We have a responsibility to the public to speak with authority and knowledge.”

Here is the benchmark for academics: “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)

MMT falls short of the scientific mark. MMTers do NOT have the true theory and they violate scientific standards on a daily basis. Bill Mitchell is an agenda pusher, he promotes the cause of the one-percenters, and he falsely claims to speak with scientific “authority and knowledge”.#2 Bill Mitchell does NOT even know what profit is and this is disqualifying for all academic MMTers.#3

MMT’s economic policy guidance has NO sound scientific foundations. MMT is in NO position to criticize the Labour leadership on scientific grounds. MMT is plain academic fraud.

Egmont Kakarot-Handtke


#1 Keynes, Lerner, MMT, Trump and exploding profit
#2 Cryptoeconomics ― the best of Bill Mitchell’s spam folder
#3 For the full-spectrum refutation of MMT see cross-references MMT

Related 'How Bill Mitchell stalks Jeremy Corbyn'.

MMT: Academic snake oil for the people

Comment on Bill Mitchell on ‘The ‘tax the rich’ call bestows unwarranted importance on them’

Blog-Reference and Blog-Reference

MMT is a selection of trite slogans that have NO scientific support of any sort.

MMT’s key message for the people is: “A consequence of the fiat system is that governments that issue their own currencies no longer have to ‘fund’ their spending.” (Mitchell)

True, the government can replace taxation and in addition increase spending at any time for any purpose by deficit-spending/money-creation. This has two effects:

• The household sector = ninety-nine-percenters is taxed in real terms by an almost imperceptible price hike (NOT inflation). Open taxation turns into stealth taxation, and in real terms, NOTHING changes.
• Because Public Deficit = Private Profit, the one-percenters enjoy an immediate profit boost. In addition, part or all of the increased public debt can become a long-term source of interest income depending on whether and how the public debt is consolidated.

The replacement of taxation by deficit spending clearly benefits the one-percenters. The benefit is proportionally greater if the income tax is progressive. To replace progressive taxation with deficit spending is the non-plus-ultra of inverse redistribution.

So, from the standpoint of simple self-interest, the one-percenters and their useful academic/journalistic spokespersons should consistently argue FOR deficit spending, and the ninety-nine-percenters and their academic/journalistic spokespersons should consistently argue AGAINST it. This, of course, does not happen in the political realm.

MMTers as champions of deficit spending for the people are in effect agenda pushers for the one-percenters, no matter what they are saying or what they are thinking of themselves.

Bill Mitchell, for example, argues elsewhere: “A rising fiscal deficit is neither good nor bad. It all depends on the saving and spending desires of the non-government sector and the state of capacity utilisation. A rising deficit associated with a growing economy and full employment with stable prices is to be desired.”#1

Bill Mitchell’s mistake/error/fraud lies in the word “non-government sector”. There is NO such thing as the “non-government sector”, there are TWO sectors, the business, and the household sector. And the business sector does NOT save. Saving/dissaving is the balance of the household sector, profit/loss is the balance of the business sector. The word profit, though, does not appear once in Bill Mitchell’s analysis. That is too bad because the macroeconomic Profit Law says Public Deficit = Private Profit which means that Bill Mitchell and his academic colleagues ― wittingly or unwittingly does not matter ― argue on behalf of the one-percenters.#2

Whether MMTers are in a state of self-delusion or know full well what they are doing is anybody’s guess. Objectively, all of MMT is provably false proto-scientific garbage.#3

Bill Mitchell is politically consistent. He not only promotes deficit spending but also downplays the idea of taxing the rich and closing their tax havens: “Do we need the rich’s money?” "No".

No, because “we”, the ninety-nine percenters, pay for the social goodies that MMTers promise “us” through stealth taxation and transfer the newly printed money, which we do not need, via deficit spending and increased profits directly into “their” tax havens.

No, “we” do not need the rich’s money. The rich need it and Bill Mitchell and the MMTers are pushing their agenda in academia, in the econblogosphere, and in social media.#4

Egmont Kakarot-Handtke


#1 billy blog “Oh poor Britain …”
#2 Down with idiocy!
#3 For the full-spectrum refutation of MMT see cross-references MMT
#4 Are MMTers stupid or corrupt or both?

Related 'Deficits matter for distribution' 'MMT, money creation, stealth taxation, and redistribution' and 'Full employment through the price mechanism' and 'MMT: miscommunication, mistakes, misdirection' and 'Forget Keynes' and 'MMTers are NOT Friends-of-the-People' and 'Cryptoeconomics ― the best of Bill Mitchell’s spam folder'.

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Twitter Feb 2 (Don't) Tax the rich

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 “The time for pussy-footing with new taxes to extract a little more from the rich is yesterday’s news. There is no time for that. This is the time to create money for change.” (Richard Murphy)

Bill Mitchell’s pure MMT teachings for British Labour

Comment on Bill Mitchell on ‘Invoking neoliberal framing and language is a failing progressive strategy (British Labour)’*

Blog-Reference and Blog-Reference

Bill Mitchell claims to be a Progressive. In this capacity he fights British Labour: “I have never supported so-called ‘progressive’ parties that choose, for ‘political’ purposes, to lie to the electorates by adopting neoliberal framing and language as a way of minimising any difficulties that might arise, initially, from the dissonance that accompanies exposure to the truth, after years of believing in lies.”

At some point, Bill Mitchell tells the world, he has realized that British Labour plays a con game: “Over the years it’s been clear to me that we live in a fictional world when it comes to economic matters. … Which tells you that he [Paul Mason] either doesn’t understand what MMT is about (ignorance) or deliberately deceives his audience (fraud).”

To make the matter short here, it is Bill Mitchell and his MMTers who are the fraudsters.#1, #2

Proper economic analysis shows beyond any doubt that the MMT policy of deficit-spending/money-creation is to the advantage of the Oligarchy and to the disadvantage of WeThePeople. The macroeconomic Profit Law entails Public Deficit = Private Profit and this entails that financial wealth is roughly equal to the public debt. In the fictional world of economics, the fictional Progressives are the real agenda pushers/useful idiots of the Oligarchy.

This should be pretty obvious, Bill Mitchell argues vehemently against budget-balancing and taxing the rich and tells Labour that they are stuck in neoliberal thinking.

• “This is the classic ‘soft’ mainstream macroeconomics that assumes the government is financially constrained and is thus not dissimilar to a household. It is ‘soft’ because, unlike the hard mainstream positions, it allows for deficits (‘funded’ by debt) to occur in a non-government downturn but proposes them to be offset by surpluses in an upturn, irrespective of the overall saving position of the non-government sector.”#3
• “The incomes of the rich are therefore essential to provide the capacity for the government to fund the provision of services to health care and welfare.”
• None of this framing or language is what I would call ‘progressive’.

According to MMT, budget-balancing is unexcusable but taxing the rich is of the devil: “It is false to claim that it is virtuous to ‘tax the rich’ in order to fund essential health and welfare services. This is one of the worst frames that the progressives now deploy.”

Obviously, the whole MMT thing is a shell game with the word progressive.#4

Political take-away for British Labour: MMT is bad science, MMT is bad policy, MMTers are bad people. Bill Mitchell’s MMT teachings for British Labour are a gaslighting exercise.

Egmont Kakarot-Handtke


* Billy Blog
#1 For the full-spectrum refutation of MMT see cross-references MMT
#2 MMT Progressives: The knife in the back of WeThePeople
#3 Exploding the Household Fallacy
#4 Mr. Wray goes to Washington

Related 'The sectoral balances obfuscation: stupidity or corruption?' and 'A beginner’s guide to MMT' and 'How Bill Mitchell stalks Jeremy Corbyn'.

Proving Bill Mitchell wrong ― burying MMT for good

Comment on Bill Mitchell on ‘The income-expenditure relationship in macroeconomics ― graphic treatment’*

Blog-Reference and Blog-Reference

Bill Mitchell introduces his macroeconomic approach: “Over the last several months by way of advancing Modern Monetary Theory (MMT) education initiatives, we have been involved in development a MOOC, i.e. Modern Monetary Theory: Economics for the 21st Century.” and “As part of the planning I have been thinking of simplified frameworks for teaching rather complicated concepts and relationships.”

In his course material, Bill Mitchell deals with nominal flows only; real flows and connecting variables like wage rate, price, and productivity are left out of the picture. This ends up in a lethal mistake that invalidates the whole of MMT.

Here is the proof.

The elementary production-consumption economy is defined with this set of macroeconomic axioms: (A0) 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 the dependent variable is given by P=W/R. The elementary production-consumption economy is shown on AXEC31a.#1

This graph is a bit more complex, but with regard to nominal flows, absolutely identical with Bill Mitchell's graph, which simply says Yw=Ec.#2

So the starting point of the analysis of nominal flows is identical.

For the time being, real balances are excluded, i.e., it holds X=O. The condition of budget balancing, i.e., Ec=Yw, is now skipped. The resulting monetary saving/dissaving of the household sector is defined as S≡Yw−Ec. The monetary profit/loss of the business sector is defined as Q≡Ec−Yw. So, the balances of the two sectors are complementary, i.e., Q≡−S. In other words, the balances add up to zero, just as they are supposed to do according to the rules of accounting.

The mirror image of household sector saving S is business sector loss −Q. The mirror image of household sector dissaving −S is business sector profit Q. So, Q≡−S is the elementary version of the macroeconomic Profit Law.

Macroeconomic profit, though, is entirely missing in Bill Mitchell's presentation of the income-expenditure relationships. Now, any presentation of the elementary economic system that does not contain the foundational economic variable profit is scientifically worthless. From the fact that the conceptual foundations of macroeconomics are provably false follows that the whole analytic superstructure of MMT is false.#3-#6 This is all one needs to know about Bill Mitchell and MMT.

Egmont Kakarot-Handtke

* Billy Blog

#1 Graphic AXEC31a

#2 Income-expenditure flows

#3 The GDP-death-blow for the economics profession

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

⇒ Section Provably False/MMT

#5 Controlled demolition of MMT ― an exercise in elementary logic

#6 Refuting MMT’s Macroeconomics Textbook

Related 'Debunking MMT’s hallucinatory income-expenditure model' and 'Economics, MMT, and the capture of science by the political mob' and 'Refutation of MMT: All proofs and arguments you ever need'.

For more about Bill Mitchell, see AXECquery.

For more about proof, see AXECquery.about

For more about sectoral balances, see AXECquery.

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

For an extended discussion about defective MMT macrofoundations with Peter Cooper, see AXECquery.

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AXEC118d

MMT and the staying power of stupidity/corruption

Comment on Bill Mitchell on ‘MMT and Power ― Part 2’*

Blog-Reference

MMT's sectoral balances equation has been refuted #1-#3 but Bill Mitchell stubbornly repeats the foundational blunder. This, of course, is long known as unscientific behavior: “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)

In the section Description and Theory, Bill Mitchell states: “Another example of the ‘description’ story is that MMT is just about accounting relationships ― for example, deriving sectoral balances from the National Accounting framework and then concluding that a government deficit (surplus) must equal the non-government surplus (deficit).

In part, MMT certainly exploits accounting consistency to assemble an analytical framework This is part of the stock-flow tradition in heterodox economics that ensures consistency between flows of things and the stocks they flow into, period to period. …

So the statement: the Government deficit (surplus) equals the non-government surplus (deficit) dollar-for-dollar is a truism and must be true.”

Not at all, it is only true for the scientifically incompetent. MMT gets even the most elementary economic truism wrong. It all depends on what MMTers put in their “non-government” top hat.

Axiomatically correct macroeconomics says for the 2- and 3-sector economy:

• Q≡−S i.e. profit of the business sector Q is trivially equal to dissaving/deficit-spending of the household sector −S, and loss of the business sector −Q is trivially equal to saving of the household sector S. The balances add up to zero, that is the accounting truism for the most elementary case.
• Q≡(G−T) i.e. profit of the business sector Q is trivially equal to the budget deficit of the government sector T−G<0.
• Q≡(G−T)−S is the general case, i.e. profit of the business sector Q is trivially equal to the combined deficit of the household and government sector. In other words: the profit of the business sector equals the combined deficit of the non-business sector and vice versa, the loss of the business sector equals the combined surplus of the non-business sector.

The “non-government” sector is an MMT construct that makes profit disappear. Isn't it a bit strange that Bill Mitchell applies in his post the foundational sociological concept of power but not the foundational economic concept of profit?#4 Except in this summarizing complaint: “I have seen many social media attacks on our work that claims that we are just part of the establishment and want to shore up profits.”#5

Yes, indeed. That's what MMT is all about. It is trivially true that the macroeconomic Profit Law implies Public Deficit = Private Profit. MMTers introduce the redundant non-government sector in order to hide macroeconomic profit from WeThePeople. The remarkable fact is that the rest of academic economics does not realize anything.

If there is a scientific hell, Bill Mitchell and his MMTers will spend an eternity there for political fraud.#6 The rest of academic economics will be there for negligence/complicity.

Egmont Kakarot-Handtke

* Bill Mitchell's blog

#1 The unassailable formal refutation of MMT

#2 Proving Bill Mitchell wrong ― burying MMT for good

#3 The page where Stephanie Kelton gets macroeconomics wrong

#4 Profit: The most powerful formula of economics

#5 Deficit cheerleaders ― the Oligarchy’s useful idiots

#6 Mission accomplished: Economists as useful idiots of the Oligarchy

Related 'Political fraud and the silence of academia'. For details of the big picture see cross-references MMT.

For more about Bill Mitchell see AXECquery.

Very busy these days: Wall Street’s agents

Comment on Kaivey on ‘Presidential Lecture Series: Stephanie Kelton’

Blog-Reference

Matt Franko cites Bill Mitchell: “I mean by that, that while MMT provides a clear lens for viewing the system, to advance specific policy platforms, one has impose a value system (an ideology) onto that understanding.” and resumes “They are not politically neutral... they are Democrat/Labour allied....”

NO!

MMT is NOT a clear scientific lens but an obscure political smoke-screen. Science tells everyone that Public Deficit = Private Profit, and this follows straight from the TRUE sectoral balances equation (X−M)+(G−T)+(I−S)−(Q−Yd)=0, which compares to the FALSE MMT balances equation (X−M)+(G−T)+(I−S)=0, which obviously LACKS/HIDES macroeconomic profit.

The scientific content of MMT is ZERO. Looking at the economy through the MMT lens is as enlightening as looking through the toilet seat.

Of course, MMT is NOT politically neutral. Just the opposite. MMT is plain political agenda pushing, and it is NOT for the cause of WeThePeople but against it. MMT is an attempt to capture genuine grassroots movements in the US and the UK. Under the banner of Progressives, MMTers pretend to overtake the traditional Left and to be the true Friends-of-the-People. #1…#7

Bill Mitchell resumed his recent meeting with John McDonnell in London: “I said that the social democratic parties had let the progressive side of politics down in recent years and that it was good to see this oppositional left capacity coming back into British politics to give people an effective choice.”

Isn’t it a bit curious that an academic from Australia tours around the world and lectures the Labour Party? It is NOT curious if one sees Bill Mitchell and Stephanie Kelton as fake scientists and agents of Wall Street.

Bloomberg hypes Warren Mosler as a “hedge fund guy Lefties can love” and Tom Hickey sells MMT on this blog as modern Marxism. This is more than naive because Alternative History has, in the meantime, arrived at a conclusion that “Karl Marx is, and always was, a double agent working for bankers and industrialists.” #8

Economics has finally gotten rid of 200+ years of political BS. The scientific and historical fact of the matter is: deficit-spending/money-creation is and has always been a program for the self-alimentation of the Oligarchy. #9

Bill Mitchell reports: “JMD [John McDonnell, British Labour's Shadow Chancellor] began the meeting by asking me ‘What are we getting right?’” My guess is that Bill Mitchell told him that British Labour still has some way to go to meet Wall Street’s strategic goals.

Egmont Kakarot-Handtke


#1 MMT: agenda-pushing and money-making for the Oligarchy
#2 MMT and the promotion of Wall Street's idea of social policy
#3 MMT, Warren Mosler, and the little helpers from Wall Street and Academia
#4 The Kelton-Fraud
#5 MMT, Bill Mitchell, and the lack of basic scientific integrity
#6 MMTers are NOT Friends-of-the-People
#7 For the full-spectrum refutation, see cross-references MMT
#8 Reddit
#9 MMT = proto-scientific garbage + deception of the 99-percenters

Related 'Mission impossible: economists join WeThePeople' and 'Dean Baker: progressive agenda pusher for the Oligarchy' and 'MMT = Modern Monetary Trash' and 'Smart! How to make people fund their brain-washing' and 'Good news for the one-percenters' and 'Both Mainstreamer and MMTer are either stupid or corrupt or both' and 'Forget mainstream economics, scrap MMT, move on to the new paradigm' and 'Both mainstream economics and MMT are axiomatically false' and 'MMT and the single most stupid physicist' and 'MMT: How the Oligarchy communicates with WeThePeople' and 'Why the British Labour Party should NOT adopt MMT' and 'MMT-Progressives: stupid or corrupt or both?' and 'How Bill Mitchell stalks Jeremy Corbyn' and 'Links on Liza N. Burby‘s ‘Cutting-Edge Economist Stephanie Kelton Delivers Presidential Lecture’' and 'The page where Stephanie Kelton gets macroeconomics wrong' and 'MMT and the overall political corruption of economics.'

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REPLY to Matt Franco, Andrew Anderson, Ralph Musgrave on Oct 22

Lest the crucial point gets lost: Stephanie Kelton, Bill Mitchell, and the other MMT loudspeakers push ― intentionally or unintentionally doesn’t matter ― the agenda of Wall Street #1 and you are ― intentionally or unintentionally doesn’t matter ― obscuring this fact with your waffling about the Job Guarantee. Therefore, you are ― intentionally or unintentionally doesn’t matter ― complicit in political fraud.


#1 For details of the big picture, see cross-references MMT

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Twitter Aug 1, 2020

Twitter Oct 10, 2022

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!’

Blog-Reference

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

#1 Look, how they jump on the deficit/profit bandwagon

#2 MMT ― now official doctrine

#3 Links on Austerity

#4 Keynes, Lerner, MMT, Trump, Biden, and exploding profit

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

#6 Deficit cheerleaders ― the Oligarchy’s useful idiots

#7 Economists are NOT scientists

For more about 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.

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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 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

#1 Wikipedia, economics, scientific knowledge, or political agenda pushing? ⇒ Section Provably False/MMT

#2 Proving Bill Mitchell wrong ― burying MMT for good

#3 Modern Moronomic Theory

#4 Proof of MMT's inconsistency

#5 AXEC144f 

Related 'MMT-Refutation for Dummies'.

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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

#1 The history of economic thought is the history of scientific failure

#2 Political fraud and the silence of academia

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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.

How money emerges out of nothing ― the functional account

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.

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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

#1 Why economists kept getting the policies right!

#2 Economists are NOT scientists

#3 Macroeconomics ― still dead after 80+ years

How Bill Mitchell stalks Jeremy Corbyn

Comment on Bill Mitchell on ‘MMT is just plain old bad economics ― Part 2’

Blog-Reference

The general public has no proper understanding of what economics is all about. Therefore, the first thing to do is to distinguish between political and theoretical economics. The main differences are: (i) The objective of political economics is to successfully push an agenda, and the objective 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.

Theoretical economics had been hijacked from the very beginning by the agenda pushers of political economics. Political economics has produced NOTHING of scientific value in the last 200+ years. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism, MMT — are mutually contradictory and materially/formally inconsistent. Economics is a failed science. Most people have the impression that economics is, roughly speaking, a fight between the pro-capitalist/anti-communist side against the pro-communist/anti-capitalist side.

This impression is confirmed on all channels of public communication, and this shows that the agenda pushers have taken over economics and have weaponized economic theory. Since Adam Smith/Karl Marx, economic policy guidance has NEVER had sound scientific foundations. To this day, economists are not competent scientists who are committed to scientific truth but stupid and corrupt storytellers/agenda pushers.

How does MMT fit into this scheme?

• MMT claims that neoclassical = mainstream economics is garbage. That is provably true.

• MMTers claim, in particular, that their monetary theory is superior. That is correct, especially in comparison to mainstream economics.

• MMT claims to be politically progressive, that is, to promote the cause of the ninety-nine-percenters.

• This seems to imply that MMTers and the Labour Party harmonize with regard to economic policy. This, though, is NOT the case.

• In a speech, John McDonnell, the Shadow Chancellor, said: “Austerity is not an economic necessity, it’s a political choice … We will tackle the deficit fairly and we can do it … Labour’s plan to balance the books will be aggressive … Where money needs to be raised, it will be raised from fairer, more progressive taxation.”

• To call austerity a political choice is characteristic of MMT terminology; however, this does NOT satisfy Bill Mitchell: “So in this framing, the Labour Party was signalling that it would continue to construct the macroeconomic debate within the standard neoliberal (mainstream economics) framework. The language and concepts of that flawed approach would be retained.”

• According to Bill Mitchell, the Labour Party’s economic program hides “the fact that the proponents do not want governments to do what we elect them to do ― that is, advance general welfare.”

• This smacks of treason but is merely incompetence of the current leadership: “In my view, it would be a better strategy, … to spend time reframing the debate away from the neoliberal obsession with deficits and public debt, and, instead, elevating progressive goals of full employment, environmental sustainability, equity etc to the centre stage.”

• “But then the Shadow Chancellor would need to get some better advice.”

• And here Bill Mitchell jumps in: “As I explained … the only appropriate deficit target is whatever is required to ensure the overall savings desires of the non-government sector are achieved at a full-employment level of output.”

• Expressed in a formula, Public Deficit should be equal to Private Saving. What Bill Mitchell in his scientific incompetence/corruption does NOT know/does NOT WANT to know is that the macroeconomic Profit Law clearly states: Public Deficit = Private Profit. #1

• Since “Private Saving” is supposed to be positive most of the time, Bill Mitchell is arguing for permanent deficit-spending/money-creation and a steadily growing public debt.

• What is absolutely unacceptable for Bill Mitchell is that the Labour Party intends to “balance the books” with “more progressive taxation.”

• MMT is for social policy, but only for a social policy that is NOT funded by taxes, and NOT by a reduction of military spending, but predominantly by deficit-spending/money-creation, which amounts to stealth taxation of the ninety-nine percenters.

So, what MMT is all about is stealing the social image from the Labour Party, undermining the current leadership, and substituting Labour’s economic policy with a program that exactly fits the requirements of Wall Street/City of London. #2, #3

Egmont Kakarot-Handtke


#1 MMT and the magical profit disappearance
#2 Political economics: Who hijacks British Labour?
#3 MMTers are NOT Friends-of-the-People

Related 'The Kelton-Fraud' and 'Richard Murphy: the MMT fraudster dressed up as realist' and 'The Magic Money Tree is real ― too bad that the magic is fraud' and 'Links on Austerity' and 'Dear idiots, government deficits do NOT fund private savings' and 'MMT, Bill Mitchell, and the lack of basic scientific integrity' and 'The economist as useful political idiot'. For the full-spectrum refutation of MMT, see cross-references MMT.

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REPLY to Calgacus on Aug 15

You say: “The idea that spending not funded by taxes necessarily amounts to stealth taxation is very neoclassical, commodity theory thinking.”

Axiomatically correct macroeconomics leads to the provable conclusion that deficit-spending/money creation has two certain effects: (i) the ninety-nine-percenters are taxed in real terms, #1; (ii) the business sector’s profit increases because the Profit Law states Public Deficit = Private Profit. #2

MMT policy has massive negative effects on distribution.#3 The claim that MMT is progressive is laughable.#4

Scientifically, MMT is garbage, and politically, it is Wall Street’s attempt to hijack and neutralize genuine social movements.

MMTers are scientifically incompetent and politically corrupt. MMT is refuted on all counts.#5


#1 MMT, money creation, stealth taxation, and redistribution
#2 The Magic Money Tree is real ― too bad that the magic is fraud
#3 Keynes, Lerner, MMT, Trump and exploding profit
#4 MMTers are NOT Friends-of-the-People
#5 For the full-spectrum refutation of MMT, see cross-references MMT

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