MMT: overcoming the political divide.

And another one! Its also a flamebait. Tut tut. Let's try one more time to shift you away from trying to derail the thread. Given QE has illustrated how macroeconomic policy has been ideologically stunted by the likes of monetarism, what macroeconomic approach do you think successfully challenges MMT?

I fear the chances of you answering tend to zero...

 

All I can suggest is that you get a dictionary and look up "communism."

No; like the UBI idea I was responding to, that is also a specific policy proposal advocated by some MMT proponents, but it is not an inherent part of MMT. The employment guarantee is especially ill-advised, as, just like a higher minimum wage, it would merely increase the rents landowners charge for permission to access the opportunity. Moreover, AI (and not much later, SAI) means that a smaller and smaller portion of the population is going to be employable in any capacity at all: the minimum IQ needed to be a better decision maker than a computer is going to keep rising. We need to get used to the idea of people being consumers but not necessarily producers. UBI is a step in the right direction, but the first step should be restoration of the equal individual right to liberty that privilege -- especially landowning -- has removed.

 

We're paying interest on that 23 Trillion. Right now that's around $500 billion dollars, but that's a figure that we really don't have much control over. If interest rates shoot up, that 500 billion could shoot up in just a few months. It cost money to borrow, and we don't have control over that cost.

It seems like you've picked a country: Chile. Well I for one hope they do it, because I think it will be a great object lesson.

 

You are correct; zero, as your question's purpose is to throw the the discussion away from MMT, as you've been trying to do for this entire thread. Your reason? As near as I can tell, you are only interested in one topic, your hatred of monetarism, so all roads must lead to that, which is why you won't start a thread on it, because you are attempting to troll other threads.

 

Yes, but you said you wanted a balanced budget bill amendment for future budgets, so the debt obligation problem would still remain ("with no control over it").

MMT offers a way out. ​

It costs us (private citizens) money to borrow. OTOH, sovereign governments are NOT subject to this constraint, but to the available resource constraint.

It's likely the particular import/export profile of a given country would determine the practicality of MMT treasury/reserve bank operations, at least until the whole world ditches the obsolete neoliberal monetarist orthodoxy.

 

Do I really have to consult the dictionary? You said "share the money equally between all citizens".

(Note: in normal times, other than this pandemic):

The founders of MMT (Mitchell and Mosler) claim that the JG is the basis of MMT, because the above-poverty JG wage is the minimum wage in the economy and hence acts as a price anchor, thereby maintaining an effective inflation control. [If private sector wages rise too much, then government will deal with this overheating economy by increasing taxes or regulation, which will reduce private sector activity and result in workers moving to the JG wage (as an alternative to unemployment as a method of wage and price control).

Dealt with above. In a genuine full employment economy - with above poverty minimum wage - with a mixture of public and private housing - and adequate public transport - your concerns around rent exploitation cease to be applicable.

See above. Social and environmental care roles will always need to be filled, though of course hours of paid work can be drastically reduced as work sharing and automation proceeds apace.

 

More content free flamebait. I used monetarism, itself based on a corruption of Keynesianism, to demonstrate how macro conservatism is derived such that the opportunities from MMT are not explored. I have also directly critiqued MMT, demonstrating that- despite the gains- it doesn't go far enough. I have repeatedly asked for your own critique of MMT, using an alternative macro school of thought to offer coherent argument. You have repeatedly dodged. You have repeatedly tried to derail the thread with flamebait.

I will insist on content. Please refer to a macro school of thought that can rebuke the MMT approach. Content please. No more dodge.

 

Do you think Ellen Brown with her crusade for public banking offers a better solution than MMT? (she looks at 'capitalism with 'Chinese characteristics'....the Chinese system seems better at lifting a greater % of the population out of poverty than the American system, over the last 4 decades).

https://ellenbrown.com/2019/06/14/the-american-dream-is-alive-and-well-in-china/

"China’s central bank is directing credit into the local economy because it doesn’t trust the private financial market to allocate credit where local markets need it. True to its name, the People’s Bank of China seems actually to be a people’s bank, geared to serving the economy and the public rather than just the banks themselves".

[Also explored in the article: comparative standards of living:

"… 90% of families in the country own their home, giving China one of the highest home ownership rates in the world. What’s more is that 80% of these homes are owned outright, without mortgages or any other liens. On top of this, north of 20% of urban households own more than one home".
……….
Due to their communist legacy, what Chinese buyers get for their money is not actually ownership in perpetuity but a long-term leasehold, and the quality of the construction may be poor. But the question posed here is, how can Chinese families afford the price tag for these homes, in a country where the average income is only one-seventh that in the United States?
…….
"And therein lies a major difference between Chinese and American family wealth: In China, the cost of living is significantly lower. The Chinese government subsidizes not only its industries but its families—with educational, medical and transportation subsidies" .

etc.

 

Localised investment banks do make sense. We know that market failure is the norm in finance. Does the academic sector hold some sway here? Can an approach based on offering funds according to a notion of social return provide for a shift away from the unsustainability of growth through speculation and consumerism?

I'm not a fan of relying on lessons from authoritarian China mind you. Can't we just compare across continental Europe and how Anglo Saxon Capitalism fails to secure sufficient long term investment?

 

Yes:

See?

Which is clearly false, as the recipients of that wage will be spending their income in the private economy.

Increasing taxes = removing more money from the economy. If private production (supply) decreases while JG money (demand) increases, prices will rise.

False. As long as there is any privately owned land, the owner will charge full market value for permission to access economic opportunity -- and if there isn't, that's a bigger and more important reform than anything MMT offers.

Why bother guaranteeing "jobs" that only exist to satisfy an increasingly obsolete notion of what it means to be a good citizen?

 

No. You forgot the JG wages are less than the private sector wages they are replacing ( to stop over-heating). Therefore demand decreases (while no-one falls into poverty). The production of essentials is not affected by this process.

Pass. The crusade for elimination of private ownership of land is one thing, and of houses is another thing.

We will see soon enough what economists need to present to governments, to avoid environmental and social collapse as a result of this pandemic.

[ After Chile, Lebanon is back in the news. Ordinary citizens saying they are ready to die, since the system is starving their children].

Well as I say, there is a lot of 'caring' work that will need to be done, other than by robots. So for the present, a JG seems a just solution, to eliminate poverty. I don't think society is at the stage yet where an above poverty UBI can offered, its a possibility for the future.

Meantime, how are we going to exit this pandemic? Back to business as usual?

People are loving the blue skies in Delhi, and I heard a woman in Los Angeles saying her asthmatic husband is finding the air easier to breathe than ever before. That means we have to stop burning filthy fossil fuels REGARDLESS of the CO2- AGW issue.

And that means the BIS has to buy the entire fossil industry and fund the transition to a clean green economy, using the BIS's unlimited currency issuing capacity.

 

Yes, the article notes that the Chinese government subsidizes many important areas of the economy, including education and R&D .

Well obviously the Chinese system achieves that outcome, eg, the most extensive highspeed rail system in the world, helping to reduce the inefficiencies of private travel.

The EU does have it problems, eg, it's response to this pandemic is pathetic cf Britain, Australia and the US that have budgeted for rescue packages of c 10% I think. Italy may well decide to reclaim its currency sovereignty if Brussels (following rules instituted by the wealthy northern EU nations (ie Germany) is going to keep behaving as it is.

MMT does allow for partial government control of the "invisible hand" market, and most of the parasitic financial industry casino would cease to exist, since the government itself would be a major source of finance creation. Thats why I think your concerns that MMT wouldn't go far enough in the direction of social reform are misplaced.

 

Not my point. I was referring to how research funding operates. Part of that is determining social return. I think there is more of an insight with that (particularly in determining how local investment banks should operate) than referring to authoritarianism within China.

China is ultimately trying to sort out structural problems created by rapid industrialisation. Trade imbalances developed. The US consumes too much, China saves too much. It is developing its own consumer culture. I don't see anything innately positive in that. While we can refer to specific aspects such as investment in green economies, there is nothing innately sustainable about China's approach.

The EU is ultimately a neoliberal organisation. Thats the irony of right wing Brexit. Britain has reduced its bargaining power and will find it more difficult to exploit the 'poor south'. Indeed, its ripe for the picking in a free trade agreement with the US.

If this was purely about the finance industry then why refer to MMT? Why not simply transform according to Islamic Finance?

The key here is the invisible hand. Whilst you could turn around and rightly mention that Adam Smith only mentioned it a handful times, the invisible hand directs us to what is required. It is true that the macroeconomy matters. It is also true that, free of wanton conservatism, properly conducted investment can be delivered. However, unless capital-labour conflict is dealt with, we will always be essentially pishing in the wind.

 

But meanwhile Lil Mike is laughing at both of us.

I had hoped this bad boy covid 19 virus would force a shut down our neoliberal economies (without anyone actually starving*) long enough to cause a collapse of said neoliberal monetarism, as 'debt' from government rescue packages spiralled put of control.

(* as they are now in Lebanon, a systemic failure).

In that case, MMT would have offered the ONLY solution to keep the essential part of the economy alive.

Even half-decent worker-capital arrangements with 'invisible hand' direction, which you propose, would not work in a shuttered non-essential economy (ie essentials only).

 

First, we know that neoliberalism runs deep. Crikey, big business has even convinced right wingers that they're pursuing liberty (when they're really only supporting government coercion in delivering extreme inequality).

Second, worker ownership would automatically ensure the essential economy goes in hyperdrive. Take PPE. Market fundamentalism in the UK has generated disastrous outcome. Despite being a major world producer of the material used for gown production, our medical staff are often forced to use bin bags. This reflects the government's total focus on answers through big business (encouraged through the blurring of the public and private sectors). This wouldnt happen in market socialism. There would be immediate production, with funding provided by investment bank.

 

Sounds more like an issue of NHS funding to me. And dare I say, immigration that has overstretched the system. (More people, more gowns)

 

Naff all to do with funding. It is to do with planning and the outcome of pandering to big business. And its quite frankly ignorant to refer to immigration when so many immigrants are working, and dying, in the NHS.

Take your right wing hate elsewhere.

 

bah! Because the socialist system can't afford to pay what it would cost to hire native Britons to man their own healthcare.

It's a whole pyramid scheme that's going to come tumbling down some day.

Btw, they have NO allegiance to the UK, and if they're risking their life, they're just doing it for the money. (Still better than back in their own countries) It would be the odd one out of them who's doing it for loyalty to country, or actual care about the English.
So you can quit your yapping about them dying and disingenuous appeal to emotion.

 

Agreed.

"the essential economy"...which only employs (say) 50% of the workforce.

That's my point. Only MMT can support the entire workforce of an economy, through a pandemic-enforced shut-down.

And as for private investment banks, their charters would need to be totally different to the casino enabling parasites on the real economy that we have today (eg Goldman Sachs doing "god's work".... )

 

I don't think anyone sensible can deny the importance of macro intervention. We also are certainly seeing a difference in outcome according to government conservatism (e.g. focus on protecting big business in neoliberalism). But it still remains valid: without changing microeconomic ownership, we are missing opportunity. To suggest otherwise would pitch MMT as the pal of the status quo. Just as Keynesianism was repurposed by the orthodox, MMT would become about avoiding radicalism.

 

No, YOU forgot that the JG wage is also paid to people who didn't have any private sector wages.

Kinda my point. Houses have to be produced by labor. Land was already there, ready to use, with no help from the owner or any previous owner.

I certainly do not expect modern mainstream neoclassical economists -- i.e., capitalism's PR firm -- to offer any credible solutions. They are too committed to tonguing the nether parts of the privileged. Nor will Marxist/socialist economists offer anything but their failed nostrum of confiscating the rightful earnings of the most productive. The cancerous Marxist rot at the core of both ideologies -- refusal to know the difference between the factory owner and the privilege owner, especially the landowner -- guarantees they will continue to lie to rationalize stealing and killing in the name of their false and evil beliefs.

Oh, really? What about when robots are better at it than people, as well as cheaper? So many people -- including economists, who are supposed to know better -- are sleep-walking even as the AI end-times are clearly in sight, like the Japanese tsunami victims going through the earthquake response instruction manual instead of running for high ground.

It's not just. It demands people give their labor to government in return for the purchasing power they need, when government ALREADY OWES THEM just compensation for their rights to liberty, which GOVERNMENT FORCIBLY REMOVED and gave to the privileged, especially landowners, as their private property.

The limit is political -- i.e., moral, intellectual and philosophical -- not economic or physical. The capitalist and socialist idiots who won't give up their false and evil beliefs are going to kill a lot of innocent people with their dishonesty, ignorance, stupidity, dishonesty, cowardice, laziness, stubbornness and dishonesty.

But CO2 is not a pollutant. It would have to increase by an order of magnitude before people would even notice it. By all means, use better technology to stop emissions of actual toxic pollutants like soot, NOx, SO2, etc. But anti-fossil-fuel hysteria is not going to help.

 

They did have poverty level (subsistence) welfare support which enabled them to buy food and (mostly) stay off the streets; and were cluttering up the correctional system and hospital sector (from demoralisation related depression and other poverty related illnesses) which create their own (resource destructive) demand spending in the economy.

Yes well I won't argue over this, as long as I can live in my own house mortgage free.

Yes, well you know I don't accept your doctrine of "the most productive" as the determinant of the individual's prosperity or poverty - so I am more on Marx's side in that that regard ("from each according to his ability"), though I differ from Marx with "to each according to his need". That's where the publicly funded JG, alongside personal-profit driven competitive private enterprise, comes in, while recognising incentive and reward for effort as determinants of human behaviour.

Won't argue with you, on that point. Get back to me when robots CAN do those things.

And yet you are happy to let people who "are not productive" fall by the wayside.

See above. "From each according to his ability", ie, an honest day's work, with basic prosperity guaranteed, which is the sign of a MORAL government/society, given the vast productive capacity of today's economy.

I'm sure currency-issuing sovereignty is a more easily applicable factor for enabling effective governance, than arrangements for land ownership alone, though the latter is obviously consequential. (Apparently 90% of Chinese 'own' their own houses - as a lifetime lease from the government - which can be bought and sold like title deeds in the West).

Why did you write that? I said "regardless of the CO2-AGW issue".

That woman in Los Angeles doesn't agree with you. The ICE vehicle makers are tapped out regarding pollution control technology. And in India the costs of cleaning up coal-fired generation are prohibitive.

Meanwhile:

https://reneweconomy.com.au/solar-w...t-energy-options-just-about-everywhere-95748/

Solar, wind and battery storage now cheapest energy options just about everywhere

But of course the existing old coal-powered plants are cheaper to keep going until they breakdown, which could be years away.

Hence the need for continued government subsidies to roll out green technology until it is cheaper than keeping the old coal clunkers alive.

And if in fact the climate scientists are correct, the BIS will indeed have to buy the entire fossil industry (using it's unlimited currency issuing capacity).

 

That's because the means-tested welfare system is designed to put them under relentless stress by blaming them for the injustice inflicted on them by the system of privilege, and punishing them by clawing back benefits if they try to better themselves. Means-tested welfare systems are a moral gulag. That doesn't alter the fact that paying erstwhile welfare recipients a living wage will increase their purchasing power.

The only way to make that happen is to remove the subsidy that makes the land so valuable.

You are with Marx, and thus against justice, prosperity, and economic efficiency. OK.

<sigh> Really? That's like rejecting development of communication satellites to replace undersea communication cables by saying, "Get back to me when satellites CAN do those things."

The whole problem is that people can't change as fast as technology. It takes years or even decades to train people for many jobs, which means we had better anticipate by years or decades the technological developments that will make those jobs obsolete.

No. Everyone -- every resident citizen -- should rightly get just compensation for the removal of their rights to liberty by privilege. In almost all cases, that will give them sufficient free, secure access to economic opportunity to make a decent life for themselves. The few percent who are not able to do so need help, not money.

No. It is not moral to make people work for what they are already owed. Nor is it moral to take from people in proportion as they contribute to the wealth of the community.

Right: elimination of the banksters' debt money system has to come first.

They have unfortunately blown a land bubble based on the growing and unsustainable subsidization of those leases, and are going to pay for it.

Then she's wrong. CO2 is not her husband's problem.

Which is why almost all the noxious emissions are from older vehicles, especially diesel trucks, that don't use those technologies.

Only because they have to keep shoveling trillions into landowners' pockets in return for nothing. Clean air makes urban land more valuable. Why should that value be given to landowners in return for nothing?

 

Marx was a grand-daddy of property rights analysis. Part of that is understanding the labour market and the right to receive the value of your labour. JG, in contrast, is a slip in the pish of NAIRU.

 

No, Marx erased the analysis of property rights that classical economics had achieved. Classical economists like Smith, Ricardo and Mill were at least able to tell the difference between owning land and owning a factory, which Marx's "analysis" could not.

Which Marx also misapprehended, in part by embracing the Labor Theory of Value.