Monday, June 20, 2011

Austrian School versus MMT

Austrian School advocate Robin Koerner attacks MMT in an article written for the Huffington Post.



"First of all, the system described by MMT, while real, is obviously utterly unconstitutional. Second, (as the MMTers admit), the supply of money in the private sector remains critically important as inflation is the monster that must not be unleashed (and the Austrians know all about that). Third, everyone other than the government still use fiat money in creating the economic dynamics of the nation in a way that the Austrians best understand. And fourth, and perhaps most importantly, government cannot merely spend money into the private sector without choosing where and how to spend it. And any such choice removes spending power from private citizens and redistributes it just as surely as in the days when the likes of Hayek and von Mises, two of the greatest thinkers in Austrian economics, were doing their best work. Put simply, while MMT offers extraordinary insights into aggregates, no economic decision ever affects only an aggregate".

45 comments:

AP Lerner said...

From the article:

"First of all, the system described by MMT, while real, is obviously utterly unconstitutional."

Huh? Why is it Austrian economists and arm chair Austrian economists always feel like they can get away with 'we are right, you are wrong' and then hold up the Constitution as proof? When will they realize they do not have a monopoly on liberty and freedom?

Also from the article:

"If MMT is even close to correct in its description of the world, then the government is completely unconstrained"

Again, the best response I can come up with is, 'huh'?

Tom Hickey said...

Here we go again. :)

"If MMT is even close to correct in its description of the world, then the government is completely unconstrained"

Tah Dah (trumpet flourish)

Actually, I am surprised that he is surprised at this. This is the standard objection of sound money folks to fiat.

beowulf said...

First of all, the system described by MMT, while real, is obviously utterly unconstitutional.

So he concedes MMT's reality but declares it unconstitutional? I guess that's progress (especially since there's no legal precedent for that position). :o)

Anonymous said...

It's actually a fairly good summary of MMT. It's his critique that is unintelligible.

Tom Hickey said...

My comment at Huff PO:

MMT provides an operational description of the current system in countries that are the monopoly providers of a non-conver­tible floating rate currency, like the US federal government but not US states. The US, UK, Canada, Japan, and Australia are currency issuers, but not nations that joined the European Monetary Union. They are similar to US states in that they are currency users. MMT draws implications for how a government­'s currency monopoly can be used in formulating economic policy.

MMT is neither liberal or conservati­ve. It based on an operational description of the present monetary system, and different MMT economists have put forward different policy prescriptions. For a summary of MMT and references­, see www.mmtwik­i.org. There is also a Wikipedia article under "Chartalis­m."

Mr. Koerner claims that MMT is "obviously unconstitutional," but provides no grounds. There are lawyers involved with MMT, and none of them has any concern with MMT's constitutional basis. He also raises the inflation question, which MMT answers in detail. To his third point, Mr. Koerner does not seem to realize that all transactions in the economy not involving barter are finally settled using either bank reserves or cash, which only the government (consolida­ting the Treasury and central bank) can issue. Fourth, since Mr. Koerner is British, he may not know how the fiscal process works in the US. Expenditure and taxation is authorized through the legislativ­e branch subject to presidenti­al veto iaw the US Constitution. All expenditure and taxation is a political decision.

money4nothingchicks4free said...

This guy is doing a huge promotion for MMT. It sounds better from him than from Warren or any MMTer because he is not MMTer and he disagrees with nothing really.
Mainstream doesn't buy his unregulated free market ideology.
Things have been really going well for MMT lately. Pretty soon if you are a mainstreamer, you won't have a chance not to have opinion about It if asked. It cannot be ignored and It's not an ideology like Austrian Economics is.

Crake said...

Exploring the implications of his argument shows he is arguing with himself in my opinion.

First look at his comment, “And any such choice removes spending power from private citizens and redistributes it”. To me that agreement must entertain the premise that the spending is crowding out other demand, no? An argument that government spending is crowding out demand would imply it does not change total aggregate demand (just the compositions within aggregate demand.) If it does not change aggregate demand (and I assume definitely not change supply since I am sure he believes the government does not create anything), that would imply it is inflation-neutral, right? Yet, his second argument is “the supply of money in the private sector remains critically important as inflation is the monster that must not be unleashed” which indicates he feels MMT prescriptions would be inflationary. Therefore, logically, he is arguing with himself by in one instance, stating something that would imply it is inflation neutral, then in another instances stating it would be inflationary.

Matt Franko said...

great comments here all...

I'll just point out that the blind Michelle Bachmann played the "Constitutional" card in the quote in the Hudson Article that Tom linked to over the weekend. This "contitutional" issue seems to be their place of "refuge" for now.

Resp,

PS Tom you are ON FIRE man! Great stuff thanks.

Matt Franko said...

AP,

"First of all, the system described by MMT, while real, is obviously utterly nconstitutional."

What is this guy saying..that we run an unconstitutional system now?
Whaaaaat??

Michelle Bachmann thinks that appropriations bills are unconstitutional if you read her quote in the Hudson article.

these people are literally "off their rockers", it's like they are losing control of their minds... I'm starting to feel sorry for them now... (ok not too much ;)

Resp,

Tom Hickey said...

Crake: "To me that agreement must entertain the premise that the spending is crowding out other demand, no?"

Not necessarily. I didn't take it that way, He talks about taxation creating a need for the private sector to obtain it, thereby allowing the government to transfer public resources to public use. That is exactly the MMT description of what happens.

The Austrian objection is that there are no "public goods," so this involves redistribution of resources from private to public. They think this is unconstitutional, as far as I understand them.

Septeus7 said...

The reason the Constitution says "Congress shall have the power to borrow money on the credit the United States" was because they wanted central government to be a monetary sovereign where United States debt could always be paid by the federal government itself and the reason for the limitation on the state against emitting bills of credits and taking anything other than gold and silver as payment for taxes was that our founders didn't wanted stated issued or private money to compete against the Federal twintopt.

Libertarians think that constitution forbids government fiat but in fact it establishes it and outlaws states and private currency trying to co-opt federal twintopt. The constitution also forbids a federal debt default as folks have mentioned here and it also forbids Free Trade agreements as it says the Congress shall the power to levy duties and tariffs. The founders wouldn't have given congress a power if they didn't for the congress to use it and thus the constitution requires that a tariff policy be in place and that any agreement or even treaty which removes the congress's ability to legislate on tariff policies as per WTO rules is unconstitutional and invalid.

The entire purpose of the Constitution was to centralization and increase the power of the central government and make the United States not only a monetary sovereign but also a trade policy sovereign. Libertarianism is Anti-American and reflects the ideas of the Confederate constitution and 19th British "free trade" imperialism.

(there's still more, I can't stop!)

Septeus7 said...

(Final Part of the Rant)

The Austrian and Libertarian ideas are entirely anti-republican in the classical sense and are an plutocratic attack on there very idea of the modern sovereign nation state democratic republic.

As Michael Hudson says, the goal of the elites is to undo the Enlightenment and return us medieval private feudal estates as debt slaves to private creditors along with imposing a culture of religious intolerance, anti-scientific and anti-technological ideologies, ethnic strife and racial bigotry.

As such, Austrian Libertarian can make no claims about the being the American tradition of political economy as they have historically only existed to attack our republican institutions i.e our public institutions, services, and assets (which they can't wait to sell off right now).

The real American economic tradition is one economic nationalists aka Alexander Hamilton, Friedrich List,and Henry Carey, aka the American School see http://en.wikipedia.org/wiki/American_School_%28economics%29

The original American School was gradually replaced by the American Institutionalism (Veblen, Simon aka Evolutionary Economics) who merged with what is now called the Post Keynesian Institutionalism aka James K. Galbraith.

The real American economics is Post-Keynesian Institutionalism not Austrianism.

I find it odd that Australians like Bill Mitchell and Steve Keen are much closer in their economic thinking to the American founders than all the crazies in Washington, the economics profession, the MSM, and all the flag wavers acting like 19th century British Imperialist right down to impossible wars in Afghanistan and everywhere else.

(I'm done, I had to get that off my chest because I'm so tried of these so called superpatriot libertarians)

Matt Franko said...

Septeus,

do you think Hamilton is often slandered today, his real approach which I think you are on to here often presented in a revisionist fashion?

I think he had to be right on top of what you are saying here.

Do you agree with much of what William Hogeland writes about hamilton at Roosevelt Institutes ND2.0?

Link_http://www.newdeal20.org/author/william-hogeland/

Resp,

Danny said...

The fact that, yes, a lousy driver has the potential to crash the car they are driving has nothing to do with the physics and mechanics of how the car itself operates and moves from point A to point B. What it does tell you is that it is imperative that you find a driver who knows what they're doing.

I know a great car guy named Warren Mosler who might be of service behind the wheel.

schwapj said...

It would appear that Septeus has no clue what a libertarian is, or at least not the libertarians I know. And his/her knowledge of the Constitution--well, knowledge doesn't even belong in that sentence. I suppose he/she will claim to be a U.S. history professor, but then when we find out it's at U.C. Davis or some other commie hangout, it will all be irrelevant.

Mario said...

interesting indeed. Again like Robert Murphy's article...he explains it all so wonderfully and then just completely fails to reveal any flaws or inaccuracies. LOL

I posted on the Huff-Po as well. He states as his fourth point:

"government cannot merely spend money into the private sector without choosing where and how to spend it. And any such choice removes spending power from private citizens and redistributes it"

(first off it doesn't "remove spending power" for private citizens at all) but more importantly he fails to realize that cutting taxes is analogous to increasing spending and we can cut taxes to essentially effect everyone in the economy and no need to worry about "redistribution" or any "central planning" nonsense objections since the people just have more of their own money and the government has less. That's the funny thing b/c Austrians LOVE cutting taxes...they just can't justify it in their economic paradigm...only in their political paradigm...and in such a way that would create hyper-inflation no less (aka ban all taxes)...all the while they rail against hyper-inflation and the Fed!!! LOL it really is a circus out there boys and girls!!! LOL

Mike Norman a few months ago said he wanted this blog to be one of the front runners in economics and MMT...well I think we're definitely heading in that direction and this huff-po article is clearly proof of that. Nice stuff indeed.

MamMoTh said...

Mario: more importantly he fails to realize that cutting taxes is analogous to increasing spending

No, it's not. Stephanie Kelton made the same mistake recently, and this is one of the valid critiques of the Austrians towards MMTers, that they just focus on nominal aggregates.

Increasing government spending crowds out real resources, whilst cutting taxes does not.

This was a very interesting articles, the author definitely did his homework in understanding MMT position on fiat currencies.

Mario said...

@Mammoth

interesting...and only makes my point even stronger it seems to me b/c it is one more reason why Austrians would prefer cutting taxes to government spending. That's my main point...cutting taxes accomplishes the same thing that government spending does (sans resource usage) and this author seems to want to label MMT as only pro-government spending. It's just not like that as far as I can see. MMT is simply offering options to accomplish various goals; we can decide which one we want and how to get there. None-the-less it is a good distinction to make in regards to resources. That's what Bill Mitchell always stresses, "As long as we have the real resources available..."

Thanks for that

MamMoTh said...

@Mario I don't see the author presenting MMT as pro-government spending. He just focuses on the MMT descriptive part of fiat currencies without going into any of its policy proposals.

I am not really familiar with the Austrian school, nor with any differences within it there might be.

But they actually oppose government spending because of its usage of real resources which they consider a distortive transfer of purchasing power from one group to another.

And they are right. I think only Warren Mosler stressed that this is not a bug, but a feature of government spending in order to achieve public purpose, a concept that Austrians oppose.

Mario said...

I think you're right about the author's intentions.

Yes it is true that when the government spends it does take away resources that could be used by the private sector, however the private sector does get compensated for those purchases. I don't think many businesses that have the government as their client are too upset about those resources being used up...in fact they want the government to come back and buy more (enter lobbyist). They make sales on the government and that adds to nfa for the private sector. You already know this but I think it balances the exchange for resources don't you? I mean do you know of the private sector unable to obtain any resources which the government has purchased? I can't think of any.

Tom Hickey said...

"Increasing government spending crowds out real resources, whilst cutting taxes does not."

Not necessarily, unless government competes for real resources with the private sector.

The way MMT puts is that government expenditure moves real resources from the private sector to the public sector. While it is possible for government to compete with the private sector for real resources, it does not happen when government employs idle resources.

Does government compete with the private sector in military spending to build military equipment? The equipment is produced by private firms, although the materials are transferred to public use and the product does not enter the domestic market. So it is certainly possible that some crowding out could occur in the case of scarce materials.

MamMoTh said...

All government spending is distortive. And even more so, Austrians point out, since the government is not revenue constrained and hence not subject to market forces, which makes it all more easy for governments to fall prey to lobbyist of any kind.

And when government spending crowds
out private spending, the private sector must pay higher prices than it would otherwise.

Since those aspects of government spending cannot be denied, the question is how they can be minimized in order to achieve public purpose if such a purpose exists.

MamMoTh said...

@Tom, there is always some crowding out. Production of military equipment crowds out engineers, technicians, and lobbyist from other activities.
So the question is really how much crowding out there is, and if it's worth it.

There might be a good case for government spending in infrastructure at the moment due to the collapse in housing but I don't know how straightforward it is to shift idle resources from the housing sector to the infrastructure sector.

Tom Hickey said...

Idle resources includes unemployment people that the private sector does not have willingness to hire. A JG crowds out nothing.

Government does not necessarily crowd out the private sector by competing for resources when it offers lower prices. According to Warren, government should set the price floor and let the private sector bid in excess of that.

This happens in Medicare, for instance. The government sets the floor price. Doctors can accept the Medicare assignment or not. It's their choice. IF they forgo it, they forgo many patients at the lower end of the wealth scale. Supposedly, the doctors that are in greatest demand ("the best doctors") will not accept the assignment and serve the upper end of the wealth scale.

MamMoTh said...

In the real world government usually overpays for everything.

Austrians would say that even idle resources can be crowded out!

I can't see what the purpose of a JG that only hires labour and no other resources could be. In any case, putting money in someone's hands, when he spends it it will crowd out someone else's spending.
So, technically, there is always some crowding out.

Tom Hickey said...

"In the real world government usually overpays for everything."

I just gave a huge example where it does not. Evidence for your side?

"Austrians would say that even idle resources can be crowded out! "

I love those arguments from authority.

"In any case, putting money in someone's hands, when he spends it it will crowd out someone else's spending."

When the economy is unable to recover due to demand deficiency?

AP Lerner said...

"But they actually oppose government spending because of its usage of real resources which they consider a distortive transfer of purchasing power from one group to another."

This is accomplished via tax cuts as well, but you'll never hear an Austrian economist admit that.

Austrian rigidity and lack of basic understanding of accounting has given me many a headache

Crake said...

On crowding out, if presented with an output gap, I accept the assumption the risk of crowding out would be lower the wider the gap. Disagree? Therefore, it is an immaterial argument the higher the gap.
Also, I have reviewed a few Austrian sites and every one of them harps on the inefficiencies and poor planning of government spending because it does not have a profit/loss check. Yet I see no arguments, on their sites, of private sector doing the same thing. And since the private sector is much larger than our government sector, and since both are run by humans, I suspect there are more cases or wasteful spending in the private sector.

For example, I recall a large one in the late 1990/early 2000s. Enron and many of the other merchant energy companies were building peak power plants around the nation. Enron envisioned valuing each project as a call option on power (with the strike price equal to the variable cost to fire the power.) The plants would sit idle if power prices were below that “strike” and would be operational if above. Enron crunched numbers and decided that the nation could support X plants. Well Dynegy did the same thing. So did Calpine. So did my company, El Paso. So did Williams, etc. etc. Then there was a glut of the peak plants and all those companies left with increased debt. This and other similar thinking was the downfall of Enron and that entire industry. Yet I have never seen an Austrian site harp on that, while ill make the point again, every one of their sites, that I have viewed, harp on government wasteful spending. So how does corporate wastefulness fit into their economic cost calculation?

MamMoTh said...

I just gave a huge example where it does not.

Maybe but not necessarily. There is no evidence the floor is not too high for those doctors that accept Medicare patients.

Evidence for your side?

Too many to mention here. Check out mises.org or those comments Strawberry Picker used to leave at Warren's site.

What is the price of a librarian if there are no private libraries? What is the price of a congressman?

MamMoTh said...

Crake: So how does corporate wastefulness fit into their economic cost calculation?

Something along the lines, companies go bankrupt unless bailed out by the government, government inflates.

Tom Hickey said...

" So how does corporate wastefulness fit into their economic cost calculation?"

According to the theory, private companies fail due to malinvestment, whereas government cannot fail due to taxing power.

Tom Hickey said...

"Maybe but not necessarily. There is no evidence the floor is not too high for those doctors that accept Medicare patients."

What would count as evidence?

"Too many to mention here. Check out mises.org or those comments Strawberry Picker used to leave at Warren's site."

Right, make me do your work.

"What is the price of a librarian if there are no private libraries? "

Do your really think that there could be private libraries that would support the capital investment and that it would actually become a competitive field enough field to attract private investment?

"What is the price of a congressman?"

Well established. About 5 grand will get you what you want. Maybe less in an election year when things are tight.

Mario said...

personally I challenge the whole notion of a "distorted market" through government spending in the first place. Austrians seem to live in an idealized bubble that doesn't actually exist and frankly has never existed in any civilized society...it seems for some reason we always end up back with Robinson Crusoe and his pet monkey on an island again!?!? LOL I see very precious little that is so sacred about this "undistorted market" to encourage me to attempt to base any standards of achievement upon it. LOL

Since when do we compare all "norms" from the vantage point of a completely private market? How do we do this? How do we know it is valuable in the first place? And how we even know what it looks like and measure against it? As far as I can see, such a market cannot exist unless in a barter world since currency MUST be issued from the top-down, which necessitates an issuing party, aka a government, and as soon as that happens you literally do not have a pristine private market according to Austrians. This point marks the "normative" level as Tom might say between Austrians and MMT-ers as far as I can tell.

I see no need to even engage in a discussion with anyone who wants to base it on attempting to "achieve" a private market standard that has never existed and cannot be measured. By that same il-logic MMT-ers should be attempting to prove Austrians wrong b/c their system distorts a pure centrally planned market. Frankly both markets are equally absurd to attempt or even consider attempting to achieve, let alone standardize and measure against. The entire line of "reasoning" is chasing after a carrot in front of a donkey and all of it turns out to be a mirage anyway! LOL

We live in a mixed market where balance is the real goal for a truly STABLE economy. So far, I like the tools that MMT provides us with to achieve that stability. I find Austrians are more fixated on achieving a state of purity rather than a state of functionality. The government is a market participant and always will be otherwise by definition it would not exist and we'd have no government...we'd be a band of gypsies (now I love Jimi Hendrix and the Grateful Dead but I love social peace even more than Voodoo Child and that's saying a lot coming from me!!). LOL

I can't think of anything that is over-priced due to government involvement. Hypothetical statements like, "who knows how much CHEAPER military spending and Medicare would be" are completely fallacious and hold absolutely zero validity. They are the equivalent of two elementary school kids arguing on the school bus saying, "I know you are but what am I?" LOL By the same token I could say, "who knows how much MORE expensive they would be." Either way we'd still be with where we are today. However, I can definitely tell you a number of areas in our economy that the PRIVATE SECTOR have over-priced...for example healthcare and real estate come to mind. Heck the very concept of a bubble comes completely out of the private sector...government has nothing to do with it...in fact many times it is government regulation that prevents bubbles (glass-steagall, margins on futures, stock exchanges, etc.). Not only this but Austrians all seem to believe that this "government" exists on some far away island totally separate from the "non-government" land...when in reality every single person in the government is the exact same person in the private sector that the Austrians love to rave about!!! They are the same people "pricing" ipods and cars and consulting services, etc. in this pristine land of the private market. As far as I can tell, the logic of Austrians is sparse and anemic to say the least.

Mario said...

Usually this topic is not pretty and usually for the participants it is very emotional...personally I see it all as a red herring and a more effective distraction than anything else. We're not going to get an ideal utopian "private market" where the government doesn't spend...it's impossible and it's frankly dangerous. Why don't we get to the balance and to the stability and wealth and productivity of our economy instead? Government as consumer is not the issue here at all. The issue is where it has always been...proper regulation, proper fiscal adjustments, more educated voters, and a political process that is not hijacked by contributions (the government could set a standardized dollar amount budget for each candidate's campaign to make it equal and fair for all parties for example).

Anonymous said...

Wow! These folks are really on their heels. About damn time.

Mario said...

Something along the lines, companies go bankrupt unless bailed out by the government, government inflates.

no mammoth that doesn't explain corporate wastefulness...it explains why corporations that are wasteful still thrive today. Just b/c the government bails out a company, does not mean that the private sector is more or less effective. And not only this, not all corporate wastefulness results in a bailout or a bankruptcy but instead wage suppression, poverty, pollution, destruction, crowding out of competition, etc., etc. How do you explain such inefficiencies in the private sector? The concept of the boom/bust is healthy and I agree with you, but it's also very traumatic for a nation...we need to find stability and balance. You're answer here shifts the focus away from the original argument and line of thinking.

I understand the Austrian thinking, which I frankly agree with, that letting failures fail and successes succeed is healthy for an economy...much like a garden that lets dead things die and vital ones live...great all good.

So here's an idea for us all about how Austrians and MMT-ers could unite on a policy idea:

Austrians believe (and MMT-ers agree) that the bailouts are bad and that the government supporting a dead company is also bad. Great MMT-ers largely if not wholly agree on those points so let's not do that anymore. We all agree on that front. ;)

MMT-ers see that government has the ways and means to support public purpose, full employment, and private nfa in a stable economy...bankruptcies and or boom/bust cycles are not stable but they can be healthy...so what if Austrians agreed that the government could support the economy in its downturns (but NOT through bailouts) and contain the economy during its booms? And not only this but maybe the government can even support those unfortunate individuals that lost everything in their company's bankruptcy and illegal accounting practices by simply providing a universal pension for everyone and health care too? This smooths out the unnecessary rough spots that the innocent people in our economy that just work hard to make a living have to go through during these boom/busts. We don't all need to suffer for the deeds of a few...only those that are responsible need to suffer.

Could that work for people? The boom/bust cycles still would be around and healthy for us all and keep the markets accountable but the PEOPLE that are just people trying to get by in the world are protected and supported while the top dogs can walk away with their tails between their legs. Yeah?

Isn't it about time for America to grow up a bit and start "settling down" and taking care of itself and its people? We don't need to be the ambitious 20 year old anymore out to save and change the world...we might be the slightly more sober, worldly-wise, but still energized 30 year old. Just a thought ;)

MamMoTh said...

Mario, I don't think you understand the Austrian thinking (nor do I more than superficially).

To start with they don't believe in public purpose, so they see any government involvement in the economy as wasteful.

They sort of have an axiom that says only individuals know how to better allocate scarce resources according to their own preferences. And their corollary is that government allocates them worse than individuals.

In a way they might be right. It is summed up in the opening of the article: free-marketeers believe that one dollar one vote is the optimal way to allocate resources, as opposed to the one person one vote which should be the basis of advancing public purpose in a democratic way.

I think we all agree that a company that fails should fail in a capitalistic system. The problem is when systemic failures across the economy happen.

They have their Austrian Business Cycle Theory to explain the boom and bust business cycle which always blames the government (either fiat currency, interest rates, or fractional reserve banking). I find it intriguing although probably flawed...

Here's an example of Austrian analysis:
http://www.auburn.edu/~garriro/a1abc.htm

Although completely different from MMT, it's interesting that they highlight that the problem is that low interest rates increase investment and decrease savings. Which is similar to net savings becoming negative which is what MMT focuses in.

Mario said...

yeah I know Mammoth and yeah I agree it's a little cooky for my brain (and that's saying something knowing my brain!!!)...I still dream though that it's possible for Austrians to divorce themselves from their puritan ways and strike a balance with the world they live in!!! LOL

I guess you could say I am a man of the faith in that respect. ;)

That is interesting about low interest rates...however I thought MMT is in favor of a 0% rate? Warren has that line of thinking where higher rates just cause higher prices and lower rates hurt savers and therefore the de-levaraging process. I don't know the details but I think that's the gist of it.

MamMoTh said...

In that case they would no longer be Austrians... Of course there are people like Edward Harrison who instead of being a dogmatic defender of one school of thought takes elements from any of them he finds useful. And that can be really interesting.

The Austrian analysis in that page is based on the loanable funds market that MMT says it does not apply. And I know Warren advocates for a 0% interest rate. That's the part of MMT I am not really convinced about.

I would love to find an Austrian version of Warren Mosler, someone who can briefly explain the theory and is ready to engage in a fruitful discussion...

Mario said...

In that case they would no longer be Austrians

haha that may be true!! LOL

takes elements from any of them he finds useful.

yes agreed! I like independent thinking...I thought I read somewhere that sparks genius and innovation! LOL

I would love to find an Austrian version of Warren Mosler

for sure man...I am not holding my breath though...that may be asking alot of any economic school of thought these days.

cheers

Septeus7 said...

Quote from Matt: Septeus,

do you think Hamilton is often slandered today, his real approach which I think you are on to here often presented in a revisionist fashion?

Hamilton's approach has been subject to lies from the very beginning of the Republic but one simply has to look at the history of what happen when the critics of Hamilton were put in charge during Andrew Jackson's administration.


Quote: "Do you agree with much of what William Hogeland writes about hamilton at Roosevelt Institutes ND2.0?

Hogeland's article is correct pointing out that Progressive Liberal's often mistake lumping Thomas Jefferson and Andrew Jackson into the tradition of digirists and humanists such as Lincoln and FDR but it unfortunately assumes that the populist tendency was somehow not manipulated at the time. He fails to mention that the claims against Hamilton on the bond issue come from Aaron Burr who was a traitor working for the British and died in England while living with that loathsome oligarchial philosopher Jeremy Bentham. Aaron Burr help set of the Bank of Manhattan (now J.P Morgan Chase) which became the basis for today's Wall St. Banks and the New York political machine which has always been Tory with connection to the City of London Banks.

It was the Aaron Burr and his network who set these so-called populist networks Koch Bros style. I suggest you you about the "Western Conspiracy" or the Burr Conspiracy and see how the people Burr was leading became the "so-called" populist leaders behind Jackson and plantation South.

I would suspect that Pete Peterson Foundation is pushing the old line anti-federalist attacks on Hamilton through the co-opted Roosevelt Institute because he's part of the J.P. Morgan Chase/Wall St. group of traitors.

Peter said...

If the govt deficit spends it can activate idle labor and resources and there is no crowding out. But to give value to the currency being spent, we need the govt to tax. The taxed amount that is spent reallocates real resources from the private sector to the government.

If the cost of thus induced inefficiency is smaller than the gain from full employment (provided the govt is doing its job, and none of them are at the moment), it makes sense to have the government around.

Vilhelmo said...

Blogger Tom Hickey said...
"MMT provides an operational description of the current system in countries that are the monopoly providers of a non-conver­tible floating rate currency"

I disagree slightly.
I assert that MMT provides a framework to analyze ALL monetary systems.

Vilhelmo said...

MamMoTh said...
"To start with they don't believe in public purpose, so they see any government involvement in the economy as wasteful."

I don't think you understand the implications of what you are saying.

It means no private property, no contract enforcement, no regulation, no corporations, partnerships, etc, no patents & copy rights, no bankruptcy,
no public police, no public fire department, no public ambulance service, no public roads, no taxes, no government spending period.

Is this what you advocate?

Tom Hickey said...

Blogger Tom Hickey said...
"MMT provides an operational description of the current system in countries that are the monopoly providers of a non-conver­tible floating rate currency"

I disagree slightly.
I assert that MMT provides a framework to analyze ALL monetary systems.


Yes, that is true.

My intent was that most MMT writing is about clarifying the current system and its potential, whereas most economics POV's are based on the previous fixed rate convertible system, or just confused about monetary economics altogether.