Like the old joke goes, I’ve got ‘good news’ and bad news…which would you like first?
Too bad, you’re getting the ‘good news’ first. The good news is we aren’t bankrupt after all! (I’ll hit you with the ‘bad news’ after the commentary.)
I worked with several MMTers [Modern Monetary Theorists] after the financial crisis, especially Auerback, and met with plenty of scoffs, despite the fact that the renowned Galbraith was a key adherent. When I published a piece on the deficit in the Huffington Post which featured the insights of several MMTers, I received more mail than I've ever gotten on a single article -- most of it hostile (See: The Deficit: Nine Myths We Can't Afford). The majority of the liberals and 'progressives' I spoke to about MMT could not begin to consider an approach than upturned so much of what they knew to be "true" about the economy -- despite the fact that much of that "truth" had been handed to them by neoliberals.
Establishment types told me the theory was "too out there" and "too controversial." But to me, "out there" and "controversial" was just what we needed to shake up a field that was mired in dangerous mythology and flawed thinking. Gradually, MMTers became part of a vibrant economic conversation on the websites bold enough to publish their work (New Deal 2.0, a blog I founded in 2009, was at one time such a venue). Recently, I've been proud to introduce Auerback to a new and receptive audience at AlterNet. Coming soon: economist Stephanie Kelton of UMKC will be explaining the theory in a feature article for AlterNet.
In the mean time, here's a look at what people are saying.
From the Washington Post:
"In contrast to “deficit hawks” who want spending cuts and revenue increases now in order to temper the deficit, and “deficit doves” who want to hold off on austerity measures until the economy has recovered, Galbraith is a deficit owl. Owls certainly don’t think we need to balance the budget soon. Indeed, they don’t concede we need to balance it at all. Owls see government spending that leads to deficits as integral to economic growth, even in good times.
The ‘bad news’ good citizen is something I have been ranting about for years, we are SERIOUSLY ‘mismanaged’!
Not to let the MMT’ ers off the hook so easily. Balancing the books still ‘matters’
It is generally ‘true’ that ‘deficits don’t matter’ EXCEPT when they indicate the mal-distribution of funds at the expense of the larger economy!
The ‘bumper crop’ of billionaires generated by the totally fictional stock markets is just such an indicator!
My only ‘gripe’ with Modern Monetary Theory is it omits the single most critical feature money has always lacked… ‘intangibility’.
In this respect I will back track a bit and remind you that despite what the corporate owned media says, we haven’t been suffering a ‘monetary crisis’. The crisis (as always) has been a ‘legal’ one (compounded by an abysmal failure to prosecute!)
But wait, good citizen, the criminals haven’t stopped!
This economy is over-regulated, intended to insulate insiders from competition and deeply resistant to change. Though Germany’s chancellor, Angela Merkel, often harangues countries like Spain, Italy and Greece to become more competitive, the German economy features some of the same flaws that they do, including protected professions and zoning laws that favor existing businesses over new ones.
“Germany has what I would call a dual economy,” said Andreas Wörgötter, a senior economist at the Organization for Economic Cooperation and Development in Paris.
“On one side, we have this very dynamic, innovative, competitive and refreshingly unsubsidized export sector,” he said. “On the other side, there is a much less glamorous services sector which depends on barriers to entry, subsidies and not developing and reaching out for new activities.”
And they won’t stop until there are only a handful of companies and those few control 99% of the market share…which is to (correctly) point out that ’capitalism’ is NOT about ’competition’ or choice, it is about grabbing as much market share as you can, any way you can…and if you destroy the global economy in the process…tough!
Capitalism ever and always results in Monopoly.
But you knew that…just like you’ve always known that ALL money is funny, especially gold!
But (like most of us) you play the hand you’re dealt.
I’d opine that most of us got a pretty shitty deal (although the ones who want us dead don’t think it was shitty enough!) but not to fear, they’re working on it.
And what are they working on? They’re working on giving your kids an even shittier deal than you got!
This is why history is full of ‘revolutions’ ( followed closely by largely undocumented ‘counter-revolutions’) It’s like the Rats among us know they have to let us win a few if they want to keep milking the system (with impunity) like they always have!
Thus A Simple Plan (which is Rat Proof!) although it could fail if ‘mis-managed’ badly enough and failure at the top is endemic…it even happens to the Rats!
(How fucking sad is it good citizen that coups among rats usually tend to clean things up for a while just like honest revolutions do?)
Sadly, the ‘grace period’ is often seriously short-lived (like don’t blink or you’ll miss it short!)
Which is why a change in leadership is NEVER enough. Methodology must ‘evolve’ too!
Then there’s the ‘vigilance thing’…ironically the rats are always on top of disturbances/challenges to their rule (and the most successful ones deal brutally with dissent.)
But you can’t let a little thing like difficulty stop you.
(Hell, these days you eat a pound of ‘difficult’ before breakfast!)
Thanks for letting me inside your head,
Gegner
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