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MMT's job guarantee: oasis or mirage?

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Cross posted from Pruning Shears.

I've gotten some pushback from Monday's piece on MMT and plan to address the criticisms in some upcoming posts. Next week I hope to get to inflation and taxes. For now I'd like to cover something I didn't even mention in the post but that popped up almost immediately in the comments: a job guarantee.

MMT, at least as advertised to liberals, postulates a job guarantee. One of my problems with MMT is the way various proponents' wish lists get conflated with the theory. Stripped to its barest essence, MMT is the theory that:1

governments with the power to issue their own currency are always solvent, and can afford to buy anything for sale in their domestic unit of account even though they may face inflationary and political constraints

There are no policy prescriptions contained in that, or even implied. One may apply that theory in different ways, but the thing itself requires nothing. The case for the job guarantee is a moral one, not something intrinsic to the theory itself.

Randy Wray makes the moral case with his analogy between disease and unemployment. He spends an entire post describing how MMT can accommodate a job guarantee. Yet he also concedes that "some other advocates of MMT do not accept the human rights angle" (oof), and concludes:

Can you separate the MMT explanation of the cause of unemployment from the policy to cure it? Yes.

Should you? Of course not.

In other words, MMT does not require a job guarantee, but it would be unjust to omit one. Of course, that also means that the prospect for one under MMT would be contingent on the policymakers charged with implementation sharing Wray's sense of justice. That's hardly an economic imperative demanded by the theory.

The problem right now is not that we lack the tools or economic model to address unemployment. The Federal Reserve ought to be terribly concerned. The problem is that no one in Washington actually is - not enough to act decisively, anyway.

MMT would (theoretically) transfer currency creation from the Fed to Congress or the president, which I suppose would make monetary policy marginally more responsive to public sentiment. It would hardly be a revolution, though. Who among our current elected leaders do MMTers see treating the problem of unemployment with the urgency of a national disease? What we need is for our representatives to have a different estimation of what equity demands, not a new theory of currency.

MMTers also envision a wildly optimistic outcome for the job guarantee. It certainly sounds wonderful, and MMTers are content to let everyone believe in a full employment worker's paradise if MMT is implemented. That's the Utopian version. How about a dystopian one? Instead of hoping for the best why not consider a less cheerful outcome?

Let's just imagine for a moment that Washington is willing to listen to MMTers and consider adopting MMT. What will you need to do in order to get policymakers to sign on? Lawmakers would need to be sold on, or more crudely bribed to accept, the concept. I think we all know cutting taxes on the rich is a perennial favorite in the capitol. So liberal MMTers concede on tax cuts in order to get a job guarantee. Fair trade off, right? And if aggregate demand becomes an issue down the road we'll just deal with it then.

So great, slash income taxes and you plebes can have your precious job guarantee. And as part of the job guarantee legislation we'll just go ahead and zero out the minimum wage since MMT obviates it. But hey, victory! We've got a job guarantee! Now, how to implement it. Pavlina R. Tcherneva and L. Randall Wray have some thoughts:

the actual hiring of most of the workers would be highly decentralized, and undertaken by not-for-profit community organizations, and state and local governments.

OK then. How could we expect that to work out based on recent history?

  1. Federal government block grants job guarantee money to states.
  2. States cut income taxes.
  3. States divert portion of money to rainy day funds that require Noah's Ark levels of rain to tap into.
  4. States use rest of remaining money to "partner" with contractors who are charged with creating jobs.
  5. Contractors extract rent.
  6. Contractors design half assed program that employs entirely inadequate numbers with the kind of punitive, angry, pinch-faced resentment that state social programs are famous for.
  7. With no minimum wage, those who are (inexplicably!) unable to find a job under the job guarantee will just have to accept whatever best offer they can find elsewhere.
  8. Where's my fucking pony?

Oh, and one more thing. Before long it turns out, who could have known, that aggregate demand has become an issue. Guess we'll have to raise some revenue. Ladies and gentlemen, allow me to introduce you to the Fair Tax. Problem solved!

One would hope MMT's leading lights would have favored a simpler model that has actually been successful:

  1. Federal government employs people, pays them.

Why opt instead for a circuitous route that is so ripe for fraud and abuse? It won't work as promised and only discredit the very idea of a job guarantee. That can't be any MMTer's preferred outcome, right?

And as with unemployment, why not make the ethical argument directly instead of routing it through a value-neutral vessel like MMT, then hoping for the best? Hammer away at the moral urgency of the situation and say we'll work out the details later. The people who oppose policy like a job guarantee do not do so because they haven't been introduced to a sufficiently persuasive economic model. They do so because they are ideologically opposed to federal social programs, and if you take away their current argument ("because no money") they will just substitute it with the next handiest one ("because inflation"). But that's not a legitimate problem, you say? No it isn't. Neither is insolvency. Has that deterred them so far?

There is nothing, absolutely nothing, in MMT that requires a sense of public purpose. Inculcating that is the work of democracy, not economics. Harnessing that project to a monetary theory will only cede its direction, sooner rather than later, to those who value money first among all things.


NOTES

1. Yes, Wikipedia. New Economic Perspectives is touted as one of, if not the go-to source for MMT. If you go there wondering "hey what is this MMT thing anyway?" you can buy the brochure, buy the book (MMTers definitely practice their "show me the money" ethos) or start wandering through the maze of hyperlinks in the primer looking for a concise description. And MMTers are confounded that their work is considered inaccessible.
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Submitted by lambert on

Here we go. Because the fun stuff is always in the notes, isn't it?

1. Yes, Wikipedia. New Economic Perspectives is touted as one of, if not the go-to source for MMT. If you go there wondering "hey what is this MMT thing anyway?" you can buy the brochure, buy the book (MMTers definitely practice their "show me the money" ethos) or start wandering through the maze of hyperlinks in the primer looking for a concise description. And MMTers are confounded that their work is considered inaccessible.

True, Wikipedia is ideal for the casual reader, but what catches my eye is this little bit of snark:

you can buy the brochure, buy the book (MMTers definitely practice their "show me the money" ethos?

Dear Lord. What's dan's problem here? That books aren't always free? That professors have decided that the royal road to riches leads through publishing? Worse, though, is that one MMter,lletsgetitdone, had been publishing tirelessly on MMT for years at Corrente and other blogs, for free. Hardly a "show me the money" ethos (quoted by dan although, oddly, or not, without sourcing). So -- just to prevent any issues with artful wording -- dan seems to regard such an ethos with disdain. If so, I should like to know whether (a) dan simply doesn't read the platform that has supported his work for so long more than casually, and so missed let's work, or whether (b he will retract his smear.

NOTE To be fair, let's MMT book on Amazon is costs of all of $2.99. The audacity.

UPDATE Naturally, I went and checked the nefarious brochure at NEP. It's a premium for a contribution to the cost of running the site, like an NPR mug. This is no different from fundraising by Arthur Silber, or Corrente, among many other blogs, despite Dan's little well poisoning effort.

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Submitted by danps on

My problem with the NEP site is that it doesn't give newcomers any simple way to get up to speed. That's different from the fundraisers here or elsewhere - it's essentially a price of admission.

If there was a really good, easy to read page about what the thing is - and I'm sorry, but that primer page is a mess - that was tagged with "like what you've seen so far? Support us!" then we'd be talking about an NPR fundraiser. You've sampled the goods, won't you make more of this goodness possible? That's not how the NEP site comes across to me. Your mileage varies, obviously.

Our mileage varies on the nature of a smear as well. In my book, saying it's not kosher for NEP to charge admission is pretty damn far from one.

Submitted by lambert on

Je repete:

If so, I should like to know whether (a) dan simply doesn't read the platform that has supported his work for so long more than casually, and so missed let's work, or whether (b he will retract his smear.

For reading comprehension -- I did think it was obvious -- this is the smear:

(MMTers definitely practice their "show me the money" ethos)

I would like to dan to explain how the work letsgetidone has done, tirelessly, for free, fits into a "show me the money" ethos.

I would also like to know how the price of letsgetitdone's book fits into that ethos.

I would also like to know how professor's publishing books that are not free fits into that ethos. Surely dan does not believe that academic publishing is the royal road to riches?

Finally, I would like to know the source of the quote on the "show me the money" ethos. Presumably, dan put in the quote because he got it somewhere. Where? Link, please.

On the single "show me the money" point that dan chooses to answer: The brochure. He writes:

My problem with the NEP site is that it doesn't give newcomers any simple way to get up to speed. That's different from the fundraisers here or elsewhere - it's essentially a price of admission.

Dan needs to make up his mind. He needs to decide whether he's (a) a good faith critic, or (b) somebody who has already made up his mind that MMT is "snake oil" (his word) and wishes to (again his words) "discredit" it. He can't have it both ways. Personally, I think nothing will satisfy him, so it's useless to invest the time. More precisely, it's useful in general to simplify, which is an on-going effort by MMTers, but not useful in this particular case. (The petitio elenchi, in this case, being that material to meet the "simple" straw man -- see below -- does not exist.)

Submitted by lambert on

... it's a smear:

MMTers definitely practice their "show me the money" ethos

into a smear, since dan puts "show me the money" into the context of an MMT site taking contributions. The well-known phrase is from Jerry Macguire, where the Cuba Gooding character is most definitely in it for the money.

Since I'm an MMTer, that smears me, so it's a suicide request, which I should have granted days ago, were it not for my connectivity issues and travel. It also smears letsgetitdone. Finally, it's also logically absurd, for reasons I give above. It's not hard to see why dan dislikes answering my comments.

DCblogger's picture
Submitted by DCblogger on

MMT describes the world as it is. As Warren Mosler points out, if you went to the IRS office and paid your taxes in cash, they would thank you and then put the money in a shredder. Because to them it is just a symbol. If you went to the District of Columbia Bureau of Taxation and paid your taxes in cash, they would thank you, keep the cash, and depsosit it in a bank at the close of business that day. That is not the ideal, that is the current system. What MMT suggests is that this valuable resource be put in service of the public. Instead of Quantitative easy we fund a job guarantee, clean up the environment, set up a first class health care system (which would actually be cheaper than what we are doing) and so on. The power to print money currently exists, it is currently being used to bail out banker, MMT suggests that it be put in service of the public.

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Submitted by Rangoon78 on

As I read Dan's list of things that can go wrong with a jobs guarantee, (and contemplate the good that could be done if our capitalist overlords could be convinced to loosen the screws a little by assuring them that, through MMT, their stream of income would continue to flow unabated,) I am reminded that I fucking HATE capitalism. But, maybe MMT is a gateway drug to Marxism…

food for thought:

…a sovereign currency issuer, who faces no financial constraint, only resource and political constraints, need not spend on the basis of private profit considerations, nor be dictated to by private markets. This makes a mixed economy, in which some activity is for private profit and some is not, potentially sustainable. Equally, it makes the complete elimination of production for private profit potentially sustainable.
http://heteconomist.com/reform-or-revolution-mmt-or-marx/

Submitted by lambert on

.... for a reason. And I like the "gateway drug" metaphor.

NOTE In the 12-Point Platform I make it quite clear I'm not a revolutionary. I think the 20th C has a lot to say about revolutions and revolutionaries, and one thing is that it's always possible to make things worse. I would but myself more in a "radical reform" bag. That's why in the 12 Reforms I support co-ops as a parallel structure. Let's tilt the playing field their way and see how they do. Similarly, if the JG ends up funding a Federal Writer's Project forever, would that be such a bad thing?

nihil obstet's picture
Submitted by nihil obstet on

and there are people who don't. I'm in the second alternative, so I'll give you a third for your title: mirage or oasis or quagmire.

When I first read Mosler's posts, I found them enlightening as a way to think about money. And I believe it is important to push the understanding of money, just as I think David Graeber's insights on debt are important to understand. But then the rhapsodic embrace of MMT began. I was puzzled by the enthusiasm for thinking a mass democratic movement would emerge from a very complicated mental construct. Since I find economics a hell of a lot like theology, I tend not to follow the academic differences between writers. I'll use terms like Marxist or Keynesian to indicate an approach, not to say that the Prophet has spoken and I believe every verse. It's similar to how I might say that I believe in a Copernican universe rather than a Ptolemaic one, even though I know that Copernicus believed in perfectly circular planetary orbits. So I was willing to use the term MMT to refer to an emphasis on the workings of fiat money, and I was generally willing to say, "I agree with MMT theory, but I think it's a distraction as a required plank in a political program I'd like to support." And then I read the discussions of MMT here and over at Naked Capitalism. And the discussions turned me into one of what Lambert labels "whacky MMT h8terz".

The discussions here have persuaded me that MMT is to political policy what the ACA is to health care policy: it promises good things that would not be available in the absence of any change and would almost certainly deliver good things to some people who should have them. The price is the deeper entrenchment of a system that needs change.

The arguments for and against MMT seem the same as the arguments for and against the ACA during those battles: the system we have now is the way we make resources available to people, but it fails to include all people. Therefore, we will create a way to bring all people into the system. In ACA, the system is private health insurance. In MMT, it's paid employment, with emphasis on private sector jobs. As letsgetitdone put it in the comment section on Lambert's post at NC, "People don’t have to take a JG job. They can rely on the same safety net they do now. There can even be a Basic Income Guarantee (BIG), for those who can’t work or who don’t want to, as long as there’s a substantial gap between the living wage of the JG and the BIG." The substantial gap will serve as a driver into the employment market. Furthermore, the jobs created under the Jobs Guarantee will have health care and retirement benefits. I want a national health service and a Basic Income that will provide retirement benefits better than those currently provided under Social Security. (Who was it who said that the Civil War was fought over whether it's more profitable to own people or to rent them? I think it's time to move beyond rental.)

And how will the Jobs Guarantee be carried out? Think Obamacare in which all kinds of variables need to be considered and applicants matched up with available or created jobs. Same level of complexity in Jobs Guarantee.

If you're unemployed in today's society, a Jobs Guarantee would be a fabulous benefit. So, I might add, is health insurance if you have a pre-existing condition or can't afford premiums. I wholeheartedly support a system where anyone can walk into the Post Office and sign up for a job with benefits at a living wage, but I think efforts to match people with the right job as a long-time solution is enormously problematic.

The Obamacare proponents argued that the ACA was the best that could be done and failure to support it left tens of millions of people without health care. If I remember correctly, the majority of people on this blog found these arguments by major self-identified liberal bloggers not convincing. If I remember correctly, there was a lot of the camel's-nose-in-the-tent imagery at places like Digby's. Get the ACA now, and then people will demand a real health care system. I remember Lambert fighting what I think was the good fight against the "entrench a bad system because it helps some people." I find the same arguments here in favor of entrenching a bad system because it's the best that can be done, and it will lead people to demand a real democratic economic system.

I also find the argumentation techniques used here against us whacky MMT h8terz very reminiscent of the argumentation techniques used against Lambert at the pro-Obamacare sites. But maybe the expectations have changed. Maybe now when we see analysis that says the Obama administration wants to gut the VA, it will be supported by a quotation from the Obama administration announcing that it wants to gut the VA. Otherwise, the analytic statement is unsupported bullshit. Not to me, of course, but that's just my sloppy analysis.

I wandered off topic there, so back to the quagmire. The Jobs Guarantee described in the posts and comments in recent days here will be of a complexity familiar to us from the 1000+ page ACA. It will take years to implement. There will be problems, so to get it right, there'll need to be tweaks. More years. Lots of liberal energy consumed that could have gone to the issues of how to provide access to resources in a world where productivity means that firms don't need as many employees and where people can participate in building civic infrastructure without having to live on less than a living income.

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Submitted by danps on

When I first read Mosler's posts, I found them enlightening as a way to think about money. And I believe it is important to push the understanding of money

In other words, treat Modern Monetary Theory as a monetary theory.

Thanks much for the comments here and at my previous MMT post. I've enjoyed reading your thoughts.

Submitted by lambert on

Er:

Lots of liberal energy consumed that could have gone to the issues of how to provide access to resources in a world where productivity means that firms don't need as many employees and where people can participate in building civic infrastructure without having to live on less than a living income.

And the simpler way to do this than a JG + a BIG would be.... What? Another way of putting this is that I don't see why your objections to the JG don't apply to any government program whatever.

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Submitted by tjfxh on

MMT describes the existing monetary system, as well as others that no longer exist or are possible, in terms of operations, including possibilities and constraints, that delimit a policy space. The choices regarding how to use a policy space are political choices involving not only economic policy but policy in general.

Different political factions disagree over how to use policy space, but some factions incorrectly understand what the policy space is based on operational reality. MMT illumines that by showing that affordability is not constraint. Rather the economic constraint is availability of real resources, which in turn has an impact on inflation if effective demand for goods exceeds output capacity.

MMT adds many overlooked points to policy analysis that shows a way to resolve the trifecta of growth, employment and price stability, which most economists assume cannot be resolved without division into targets and tools.

Most policy advisers assume that owing to the Phillips curve, targeting inflation requires using unemployment as a tool, hence under NAIRU and a Taylor rule, "full employment" is defined in terms of a "natural rate" that corresponds in the model to the "natural rate of interest." The result is a permanent cohort of unemployed that act as a buffer stock relieving wage pressure, which most conventional economists see as the chief factor leading to inflationary pressure.

In addition to showing how fiscal policy operates in terms of the sectoral balance approach and functional finance, MMT shows how to create a buffer stock of employed with an employer of last resort program that achieves full employment in the sense that everyone willing and able to work has a job offer. And it does this while also controlling for inflation. Growth takes care of itself in a full employment economy owing to effective demand corresponding to optimal output, thereby smoothing the business cycle. This reduces or eliminates the huge inefficiency (wasted resources) associated with a permanent buffer stock of unemployed.

Basically, MMT shows how to take advantage of existing policy space to achieve political objectives economically. This policy space applies to everyone, left, right and center. Progressives would be well advised to understand the potential of the policy space available.

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Submitted by tjfxh on

I was setting the record straight about the position of MMT as an operational description that delimits policy space. MMT is also a part of macroeconomics POV in the fiscalist versus monetarist debate. Based on this MMT illumine various policy options and some MMT economists have also taken policy positions. Virtually all MMT economists advocate a job guarantee as the way to achieve full employment with price stability.

Randy Wray, Bill Mitchell and Pavlina Tcherneva are all experts in employment economics and have written about it extensively. Any critique of the MMT JG that doesn't take this work into account overlooks a significant body of work.

First, they have documented the huge social, political and economic costs of permanent unemployment, as well as a tightly argued case for how a MMT JG is capable of addressing that without necessarily resulting in inflationary pressure, as the mainstream assumes actual full employment would. Secondly, they have made proposals about how to implement the program practically using federal funding and local administration.

You assert, "The problem right now is not that we lack the tools or economic model to address unemployment." That is not completely the case. There is no competing economic model within the existing system that show how to achieve actual full employment without inflation. Without actual full employment, wasted resources will continue and these resources are chiefly human resources, with all the deprivation and suffering that involves in addition to lost opportunity that cannot be recaptured later.

You further assert that MMT's approach to policy is a exclusively moral one. I happen to disagree on that and hold that it is also an economic one based on increasing efficiency and reducing wasted resources. However, I also hold that the moral case is stronger and overriding.

Most of what you are discussing is not economic theory but rather economic policy, which is political as well as economic. Economic policy has both an economic rationale that is highly plausible based on theory and empirics, and also a normative, prescriptive, and "moral" component. Factions disagree over both the economic rationale and the policy prescriptions. This is what politics is about.

In theory, all factions make their best case and in a democracy, the people decide through their representatives. We all know that this is most BS given the existing power structure, but fixing that is a legal and political issue rather than an economic one.

Then there is strategy and tactics for implementing the policy. You claim that MMT strategy and tactics are either non-existent, impractical, ineffective or not well thought out. Well, that is not the job of economists. Their job is to show what is possible theoretically, doable practically, and that available policy options exists to solve major social, political and economic issues like employment and price stability, something that keeps politicians awake at night, since these are priorities for voters.

It's the job of political activists to get representatives that understand the problem and solution elected and to keep them on track if elected. That's a matter of political strategy and tactics that economists have no special insight into, so it's beside the point to accuse them of not doing so.

People like Lambert and Joe Firestone are quite capable of this and are doing it here and elsewhere.

MMT can be criticized for working within the existing system when it is the system that needs to be changed. I agree with that. However, it's a whole lot more likely that change will come from within the system than from a replacement or overhaul. While I think that is what it will take, I ale think it worth attempting to get the level of change possible in the existing system, which is a lot more feasible.

Submitted by lambert on

.... and the answer, tjfxh. Amplifying:

You assert, "The problem right now is not that we lack the tools or economic model to address unemployment." That is not completely the case. There is no competing economic model within the existing system that show how to achieve actual full employment without inflation. Without actual full employment, wasted resources will continue and these resources are chiefly human resources, with all the deprivation and suffering that involves in addition to lost opportunity that cannot be recaptured later.

Both productive and humane. Hard to beat.

Alexa's picture
Submitted by Alexa on

are the tens of millions of Americans in "Deep Poverty."

In their case, all the JG's in the world probably wouldn't matter. See Urban Institute excerpt below:

. . . deep poverty: living on less than $6,000 a year, or raising a child alone on roughly $7,600. More than 20 million adults and children in the United States get by on that or less. . . .

Many don’t get very far, hovering around the deep poverty threshold without ever earning enough to escape poverty altogether.

It’s not just the result of a bad year or a job loss from which they can recover; the deeply poor are more likely to stay poor—a troubling distinction that sets them apart from other poor people.

This is deep and persistent poverty: a chronic state characterized by multiple, serious challenges—including addiction, homelessness, disabilities, and chronic illness—that can stand in the way of work. It’s a place where families can get stuck, generation after generation, without enough help from the safety net to move up and out.

It is beyond naive to think that all chronically poor adults, even if they wanted to, could "snap to it," and be able to become fully productive participants in the workforce, overnight.

Implementing a "BIG" first "might" ensure that [unlike the ACA] the chronically poor would not fall into the cracks.

After all, just look at how the ACA has worked out for millions of Americans (including us) who once had decent (actually excellent) health insurance benefits, just to see our premiums begin to soar as our benefits began to erode, as soon as the ink was dry on the legislation.

Plus, I've been watching in horror during the Democrats present "reign," as more and more "Commissions" have been formed in order to mandate more "defined contribution programs" [to replace the New Deal social insurance programs].

Examples are the long term care insurance panel (ongoing), and the retirement planning commission (ongoing). Not to mention the Commission to overhaul military pay, health insurance, and retirement benefits.

So, at this point, we are less, not more inclined to want the Government to have a hand in "reforming" anything.

Period.

Submitted by lambert on

Alexa writes:

It is beyond naive to think that all chronically poor adults, even if they wanted to, could "snap to it," and be able to become fully productive participants in the workforce, overnight.

The JG provides a job for everyone who wants one. I don't see that as necessarily implying that somebody who wanted a job would be fully productive. (Certainly, however, the millions of permanently disemployed would welcome one.)

Let me answer your point by asking another: Isn't giving them a job a humane alternative? I'm thinking here of the homeless during Occupy, many of whom were so pleased to have useful work to do at last.

Submitted by lambert on

Alexa writes:

Implementing a "BIG" first "might" ensure that [unlike the ACA] the chronically poor would not fall into the cracks.

First, I support combining a JG with an income guarantee, as the 12-Point Platform work shows (which is one reason I'm so baffled by dan's sudden access of flamage; it's not as if we haven't discussed these issues before, and it's not as if letsgetitdone and others haven't been posting on it). I support the income guarantee because I think that housework ought to be paid for, and to cover the case Van Gogh, say.

Second, I don't see why the chronically poor ever have to "fall through the cracks." I honestly don't see why programs can't be designed to work for this population, as any other.

After all, just look at how the ACA has worked out for millions of Americans (including us) who once had decent (actually excellent) health insurance benefits, just to see our premiums begin to soar as our benefits began to erode, as soon as the ink was dry on the legislation.

Plus, I've been watching in horror during the Democrats present "reign," as more and more "Commissions" have been formed in order to mandate more "defined contribution programs" [to replace the New Deal social insurance programs].

I'm not sure I understand this. First, the JG is more like a New Deal program than anything you'll encounter from the Democrats; it's like the WPA on steroids. Second, if this is a generalized "mistrust of government" argument, I think the kind of politics we need to push should seek to restore trust in government, and one part of that is setting expectations what we want the government to do.

Submitted by Ben Johannson on

danp,

Of course, that also means that the prospect for one under MMT. . .

You appear to still labor under a false impression. There is no "Under MMT"; it is not a government, ideology or economic system waiting to be imposed by the hand of Wray the Hammer. This monetary system has existed in one form or another since 1933 which makes the JG a Congressional spending authorization.

danps's picture
Submitted by danps on

I thought the context was clear enough: I was referring to the New Deal 2 version of Modern Monetary Theory ("'public purpose' is core to MMT").

Maybe I should have written: "MMT does not require a job guarantee, but it would be unjust to omit one. Of course, that also means that the prospect for one under New Deal 2 MMT" etc. My apologies for the confusion.

I would like to add, though, that this is another example of the ever-shifting characterization of MMT by its proponents. I've gotten enormous pushback here for claiming that Modern Monetary Theory is a monetary theory, period. No, public purpose is core to it. OK then. But when I write about Modern Monetary Theory as characterized by its proponents - not explicitly writing public purpose but implying it - I'm laboring under a false impression, there is no Under MMT, it isn't a government, ideology or economic system, etc.

And it includes an income guarantee except when it doesn't and so on. I think Modern Monetary Theory is snake oil and would like to see liberals run screaming from it. Seems like a roach motel for those who fancy themselves too savvy to ever enter one of the crudely designed ones set out by the legacy parties.

Thanks for your contribution to that effort, by the way. Alexa has been in these threads, as far as I can tell as a somewhat neutral observer just getting her head wrapped around the subject, and you respond to her sincere and well-stated reservation by taking a dump on her with that idiot "Luke Skywalker" snark. (But don't accuse MMTer's of elitism!)

At this point I think the best way to discredit Modern Monetary Theory might be to just step back and allow its proponents to interact with the unwashed masses.

Submitted by lambert on

... that I'm not only travelling but have horrible connectivity problems.

Submitted by lambert on

Another really excellent way to poison the well by propagating the "elitist" meme that I thought had been shot down based on evidence. Oh well, back to the Augean stables once again, hopefully if I can get a good connection on the bus.

Oh, and shot through with bad faith top to bottom. #justsaying.

Submitted by lambert on

Here is another excellent example (I'm making a collection) of poisoning the well. I like to see rhetorical devices used well, if not necessarily to good purpose.

Thanks for your contribution to that effort, by the way.

(This irony.)

Alexa has been in these threads, as far as I can tell as a somewhat neutral observer just getting her head wrapped around the subject, ....

Grammatically, this can only mean that dan believes himself to be a neutral observer, but that can't be, given the rest of his commentary.

... and you respond to her sincere and well-stated reservation

Now, with "sincere," dan is the mindreader, so apparently Ben's mindreading is OK, if what's sauce for the goose is sauce for the gander.

... by taking a dump on her ...

Actually, on her comment; old-timers will remember me saying, often, that "your argument is not you," so here we have an assault on the commenting and moderation of Corrente itself.

....with that idiot [sic]"Luke Skywalker" snark. (But don't accuse MMTer's of elitism!)

Bzzt! Bzzzt Bzzt! Dan seems to think that snark is practiced only by elitists, and that a mention of Luke Skywalker is a mark of elitism. Gee, that's odd!

At this point I think the best way to discredit Modern Monetary Theory might be to just step back and allow its proponents to interact with the unwashed masses.

And as I point out above, "unwashed masses" reinforces the "elitist" Big Lie MMT h8terz push. That's the poisoning the well. Dear Lord.

* * *

Fun as dissecting Dan's tactics may be, however, they don't really tick me off all that much.

What really frosts me here is the way dan is saying, in essence, "Let's you and them fight."

I've had plenty of flame wars in my time, some here at Corrente, but I'm hard pressed to recall an example where commenter D sought to intensify conflict between commenters B and C, instead of (say) suggesting that Ben back off and make his point without attributing motive. Wouldn't that be better for the blog? And if MMT really is snake oil, then let Ben hang himself, right? But no.

Frankly, this behavior is unheard of to me that I never evolved a rule against setting Correntians at each other's throats. Live and learn, I guess!

One envisions.... Well, one envisions a troll sitting under a bridge, chuckling and laughing.

danps's picture
Submitted by danps on

Re: "propagating the 'elitist' meme" and (in later comment) "I should add that this 'elitist' thing is really starting to scare me."

My characterization of Alexa's comment was based on my interpretation of her tone. That's something we all do, all the time. I know you have persuaded yourself that you have some sort of scientific method to determine if someone is being a troll or acting in bad faith, but that's a judgment call. There are indicators for things like insincerity: mockery, cynicism, heavy irony, etc. The more I see those things in a comment, the more likely I am to suspect insincerity.

Likewise, if I don't see those things - if the writing seems fairly straightforward and respectful, as I understand "respectful" - I'll interpret it as sincere. That's how I've taken Alexa's comments, and Rainbow Girl's as well. I interpreted their comments as being sincere attempts to understand the issue. Ben, on the other hand, presents himself as an expert (or extremely knowledgeable) on Modern Monetary Theory. When an authority on an issue belittles a novice, it comes across to me (interpretation!) as elitism.

Perhaps Alexa and Rainbow Girl got that impression not because I infiltrated their brains ("poisoning the well," "Let's you and them fight") but because they interpreted it the same way and arrived at the same conclusion. Perhaps if the charge of elitism really is starting to scare you, you'd have better luck addressing it by examining how MMTers interact with others - not hunting down the dastardly well poisoners.

Grammatically, this can only mean that dan believes himself to be a neutral observer, but that can't be, given the rest of his commentary.

Meant like this: "Alexa has been in these threads as a somewhat neutral observer (as far as I can tell)," i.e. to the best of my ability to interpret, an activity which we can see is sometimes contentious. I interpret her comments as sincere, lambert says that means I claim to be a mind reader.

Re: "your argument is not you," I'd say both "It is generally not a good idea to claim you have exceeded Luke Skywalker's mind-reading abilities" and "that idiot [yes, sic] 'Luke Skywalker' snark" are both criticisms of arguments, not people. Not sure how that adds up to (insert Jon Lovitz' "Master Thespian" voice) an assault on the commenting and moderation of Corrente itself.

More drama. I answered your "smear" smear in my initial response, and your refusal to retract your smear that I smeared is very smeary. I demand satisfaction, sir!

No, seriously. Here's how I interpret it. Smear:

The greedy, corrupt, frauds at NEP never tire of trying to chisel every last nickel they can out of their well-intentioned visitors.

Not a smear:

(MMTers definitely practice their "show me the money" ethos)

You interpret it differently. Fine. But it's silly to act like I didn't respond. I think the context (presentation of NEP site to newcomers) is pretty clear, though I understand how it's useful to you to expand that to include the entire publishing industry. I won't suggest doing so is shot through with bad faith, though, because interpretation can be a tricky thing.

This is just plain weird:

I've had plenty of flame wars in my time, some here at Corrente, but I'm hard pressed to recall an example where commenter D sought to intensify conflict between commenters B and C, instead of (say) suggesting that Ben back off and make his point without attributing motive.

That's what I did. I responded to Ben and basically said, quit being a dick. I didn't know there was a specific "attributing motive" incantation that had to be chanted to satisfy the requirement. But I did, as you recommend, suggest he back off.

Re "He can't have it both ways," I don't think I've presented myself as a "good faith critic" (whatever that is). My posts on it have been critical at a pretty fundamental level. I think I'm open to persuasion, but look at the comments to this post. You weighed in immediately with a criticism of a footnote - literally, a footnote - and the thread went pretty quickly down the rabbit hole.

"Personally, I think nothing will satisfy him, so it's useless to invest the time."

The actual body of the post - the horrible outcomes that would likely (in the contemporary US) accompany a job guarantee, carried out as recommended by at least some Modern Monetary Theory advocates - still awaits first comment. A minimal investment, I'd say. Probably wasn't even worthy of dignifying with a response, eh?

Rainbow Girl's picture
Submitted by Rainbow Girl on

There was no well-poisoning involved in my finally, in desperation, writing the word "elitist." This act derived directly from my time consuming and diligent efforts to read the debates playing out in the threads and attempting individually to understand the statements penned here by Firestone, Johannson and Lambert.

I've experienced the same lack of real engagement with the substance, which seems to keep shapeshifting every time you ask a question that is felt by the defenders of "MMT" (whatever that is, at this point, frankly) to highlight a contradiction within one writer's post or the opinions, interpretations or analogies (eg "tool" "plumbing" "agnostic" "value based").

I finally lost it and uttered "elitist" because of "KCN" TM. Come on guys -- we've been hammering at how jargon-infested language in economics has been part and parcel of the obfuscation agenda behind the pseudo-science morass of "economics." And now we have MMT riding in on what it trumpets as a Transparency Train, with MEGOs and indigestibles such as "Knowledge Claim Networks." Really? How about (1) ideas, (2) principles, (3) concepts, (4) premises?

KCN falls in the same category as the pseudo-technical meaningless MBA jargon that is often (and rightly) satirized on this very blog.

Oh, and accusing those of us who have used the term "elitist" as being (in essence) No Nothings - well that's lame and threadbare, because you have a fairly long record of posts by me and others being accused of "elitism" demonstrating a certain level of ability to grasp stuff that's kinda compliated.

I read Marx in college -- only Volume I of Das Kapital. I read the whole thing. It was crystal clear. Even the new coinages and "constructs." So don't pull that "you anti-MMT'rs just can't handle our rarefied complex amazing stuff."

Again, these MMT individuals -- since apparently there's "no MMT" -- claim to want to popularize "MMT" (in its various, dissimilar, unconnected interpretive iterations depending on which MMT-er is talking or writing) -- my question (unanswered to date) remains: who exactly are you trying to address and educate? Policy wonks who thrive on pseudo neologisims to distinguish themselves in a crowded field? MBAs? The Power Point Network?

It's like chasing ghosts, trying to engage in honest and sincere Q&A with the various faces/pens of MMT -- who seem to be fighting amongst each other to define what MMT is. And you expect the rest of us, who are trained in cutting through verbal BS and taking on "thought systems" to accept any "Knowledge Claim" that is being put forth?

Using a postcard was a good idea. Unfortunately the content remains MEGO and impenetrable. There's plain English ways to say what you guys are saying -- as for instance given by Dan, Nihil, Hugh, and others, who have jumped in (at their great risk).

One reason I enjoy Lambert's writing and this blog is his ability to write concretely and sharply about "big ideas or issues," and to bring them down to earth where humans are trying to navigate the horrors of late-stage Kleptocracy while looking for programs and language to upend this monstrosity of a society.

With MMT, Lambert, you seem to abandon that great gift you have, and you fall into a pattern of doing rhetoric analysis on people's sincere posts instead of addressing the substance. (I know, I know - you probably have a riposte about "style/rhetorical devices and content being tied up together," bla bla. That doesn't cut it either.)

Joe Firestone. You obviously devote enormous time and energy to developing a subject that you are passionate about. Unfortunately your use of the English language does not lend itself to communicating persuasively, clearly or directly because it is full of too-long sentences and dead jargon. I'm sure there's a fix for that, and in the process of de-mystifying your own writing style you might even get some clarity about what you are thinking.

Over and Way Out.

Alexa's picture
Submitted by Alexa on

maybe MMT "theories" aren't elitist--but who can tell?

RG is 100% correct--much of the jargon and explanations employed by some MMT proponents/experts are so convoluted that it would be practically impossible for a lay person to not come away from a discussion feeling this way.

Heck, I'm grateful that there are some "regular-talking" commenters like RG, Danps, Nihil Obstet, Dan Kervick (NC), and Hugh. And while I acknowledge that I may not be the brightest tool in the shed on economic matters, I can say with certainty that it is a rarity that I can hear a well-reasoned and spoken argument, and not have a clue what is being said.

Sorry--but I don't believe that it is entirely my fault, either.

And I think (and this is not meant in a mean-spirited way) that it might be time "to go back to the proverbial drawing board" to devise a less oblique manner or methodology for explaining this theory--starting with coming to agreement on more of the central aspects or facets of this theory (or system).

That is, if you guys truly have an interest in persuading 'the masses' of the legitimacy and benefits of your theory/system.

Bottom line, I'm thankful that there are a few "plain speakers" left who are willing to try to translate these conversations for the rest of us.

Off my soapbox now, and back to streaming "Colombo" on Netflix . . .

;-)

Alexa's picture
Submitted by Alexa on

I realize that it is probably a much more difficult task than I can imagine, to condense and put into "lay language" the MMT Theory. But I have one constructive suggestion to offer, if I may.

Having been one who's been very confused (at times) by the massive amounts of material put forth in answer to commenters' questions or remarks, I'd like to suggest that a point "somewhere in between" the very lengthy explanations, and the very brief postcard, might be a good fit.

I appreciate the effort to reduce MMT to a postcard. And I'm sure that it can be a valuable tool.

But truthfully, even someone like myself (who at times complains about the complexity and verbosity of explanations) would probably need to have a bit more information than that, in order to make an informed opinion about MMT.

And, if one has a product to sell, marketing is everything.

I think that it would be a good thing if a happy medium could be struck--giving 'lay people' enough information so that they can understand MMT (and therefore are not distrustful of the concept), but not so much information that they are totally overwhelmed by it.

How to arrive at this place, I admit that I haven't a clue. But I believe that finding this happy medium is the key to successfully conveying the theory, and achieving the stated goals (as I understand them).

Submitted by lambert on

To be clear, Alexa, I didn't mean to say that you were poisoning the well (which has a technical meaning).

To your individual points:

KCN falls in the same category as the pseudo-technical meaningless MBA jargon that is often (and rightly) satirized on this very blog.

No, it doesn't. I know I am about to make an argument from authority, but (a) I have an MBA, so I know that language, and (b) a couple of careers ago, when I was a hot shot consultant, I was in a field closely allied to knowledge management, and hence to KCN, so I know that language. I am equipped to recognize bullshit in both areas, and lets' is not bullshitting. Now, it's not necessarily appropriate to the blogosphere, but it's good faith material all the same; that's why I translated it into the plumbing metaphor.

As for this paragraph:

With MMT, Lambert, you seem to abandon that great gift you have, and you fall into a pattern of doing rhetoric analysis on people's sincere posts instead of addressing the substance. (I know, I know - you probably have a riposte about "style/rhetorical devices and content being tied up together," bla bla. That doesn't cut it either.)

First, since you don't explain why what doesn't cut it doesn't cut it, I can't know, and can't adjust my behavior. Is that fair?

Second, style and content are tied together. See this version of the Gettysburg address (it's very funny and also short) if you don't believe me. The Romans called this dulce et utile. This has not changed.

Third, you yourself are making a rhetorical argument. That's exactly what "There's plain English ways to say what you guys are saying" is, a rhetorical argument. So how come I don't get to do what you do?

Fourth, as I've just said elsewhere, my mother always said: "Do what only you can do." There are others who know the material better than I do, so I let them take the lead in the areas of their expertise. But they aren't the ones to moderate the blog; only I can do that. (I might also add that I'm under enormous personal pressure for other reasons, I've been losing an hour or so a day to connectivity problems, and I've been travelling, all the more reason for me to delegate where I can.)

Fifth, leaving substance to the final paragraph, I really see no sociological difference between MMTers (and MMT) and, for example, Keynsians (and Keynsianism). Both are "thought collectives" where there are key texts, scholarly controversies, vehement disagreements, personal foibles, the evolution of opinions, and tactical adjustments to the issues of the day. No difference. And yet Keynsians seems simple, even if it isn't. I think that's more a matter of the media and scholars having worked out how to present the ideas in a simple way, which takes a lot of time and effort. (And wouldn't it be nice if what's simple were always true? True as plumbing is true, not as higher truths are true, I hasten to add.)*

Yet the controversy on this blog begins with the claim that MMT is a cult (central dogma, religious texts, priestly obscurantism, mysterious higher power, incense and costumes -- OK, I lied about the incense and costumes) and has gradually mutated, although at no loss of volume, to the current claims that MMT has no central dogma and everybody disagrees about what it is, including the formerly dogmatic priests. Clearly those views are incompatible, are they not? Is it any wonder that the dogs beaten with these sticks occasionally become a little irritable?

Anyhow, I don't plan to drop the topic; I haven't written much directly on it because, as I say, there are others more expert than I on the subject matter although not, er, as expert in rhetoric and style. Since MMT provides solutions for full employment without inflation, and methods to pay for concrete material benefits in the 12-Point platform while at the same time poking the neo-liberals with the big sharp stick both on austerity and "We're running out of money," you will continue to hear about it from me. Whatever I can do to prevent your eyes from glazing over, I will. Did you notice, by the way, that 53% of the American people support the Jobs Guarantee proposal the MMTers make?

UDPATE * I read Kapital too, and though the big ideas were clear to me, the details weren't. (I'm also not writing a post saying "Marxism is teh suxx0r" on the basis of "casual reading" and a quote from Wikipedia; nor, thankfully did you or are you.) However, everything that people have said about lack of clarity and morass and all the rest of it could surely be said about Marxism, too, as well as Marxists. I really think that whole line of argument is a double standard and a straw man. If you're asking for clarity of exposition, I'm all for it. But that's not how any of this feels to me. It feels like eighteen million ways of saying STFU, and all for ideas that so far as I can tell, everybody to the right of the anarchists ought to be screaming with joy about because of the reforms they enable.

And talk dan's indictment of MMT that it can be used for ill ends! Look what happened with Marxism! Or, for that matter, Keynsianism under Hitler!

Submitted by lambert on

Dan writes:

I know you have persuaded yourself that you have some sort of scientific method to determine if someone is being a troll or acting in bad faith, but that's a judgment call.

Really? How does dan "know" I've "persauded myself"? Mind-reading again?

Second, Dan's claim is simply false. I make no claim of a "scientific method." The moderation rules are there for any reader to see, and a link to them is mailed to every account that's approved.

The rules are a good deal more precise and easy to follow than those on many other blogs, some of which don't post rules at all.

The rules are there so that the factors that go into making judgment calls are visible to all readers and commenters. Since language, on a blog, is all we have to go on to determine bad faith, I look at people's language with as much precision as I can. Here too, Dan tries to poison the well, with talk of Internet Debating Clubs, and other heavy ironies.

Submitted by lambert on

Dan responded to Ben this way:

Thanks [Ben] for your contribution to that effort, by the way. Alexa has been in these threads, as far as I can tell as a somewhat neutral observer just getting her head wrapped around the subject, and you respond to her sincere and well-stated reservation by taking a dump on her with that idiot "Luke Skywalker" snark. (But don't accuse MMTer's of elitism!)

At this point I think the best way to discredit Modern Monetary Theory might be to just step back and allow its proponents to interact with the unwashed masses.

I reacted:

I'm hard pressed to recall an example where commenter D sought to intensify conflict between commenters B and C, instead of (say) suggesting that Ben back off and make his point without attributing motive.

Dan responds:

That's what I did. I responded to Ben and basically said, quit being a dick. I didn't know there was a specific "attributing motive" incantation that had to be chanted to satisfy the requirement. But I did, as you recommend, suggest he back off.

Dear Lord. Incantation?! Surely it's not beyond Dan's fertile wit to write, simply as a matter of the basic online interaction we do every day, something like:

What's Luke Skywalker got to do with anything?

instead of:

...taking a dump on her...

So, the thread evolves and now we have this from Ben:

Alex and Rainbow: my social empathy is learned and can lapse under certain conditions, as they did during my original comments. They were not intended in any way to be derisive to you, to mock you or to offend you. I gathered something very different from your comments than you intended to communicate; from my perspective at the time I judged my responses appropriate but can now see how they might be interpreted otherwise by a normal person, which I am not.

Frankly, I have to say I think my close-reading verbal skills helped me suss out the situation pretty well.

But then, I'm a moderator, and I have to think of the blog as a whole, as opposed to kicking people in the stones who turn out to be defenseless.

So who took the dump on who, and who's the dick?

UPDATE So, readers will see that I took on the assignment of "examining how MMTers interact with others."

Submitted by Ben Johannson on

It is beyond naive to think that all chronically poor adults, even if they wanted to, could "snap to it," and be able to become fully productive participants in the workforce, overnight.

It is generally not a good idea to claim you have exceeded Luke Skywalker's mind-reading abilities.

So, at this point, we are less, not more inclined to want the Government to have a hand in "reforming" anything.

Altering an existing institution is reform. Adding an entirely new one which fundamentally changes how things are done is revolutionary. Note also that your argument is identical to what conservatives have been saying for the last 300 years.

Alexa's picture
Submitted by Alexa on

you've misinterpreted my inferences.

If anything, I would be considered far to the left of the typical so-called "progressive" blogger.

When I address the chronically poor--especially those who are live in deep, entrenched poverty--it is because I understand the many barriers to employment this cohort would face (no fault of their own, BTW).

And this is the reason that I consider a BIG to be the most feasible policy, if policymakers are sincere in their desire to not 'leave anyone behind.'

In no way were my words intended as a slight.

I've been accused of a lot of things--but being a "conservative" is certainly not one of them.

;-)

It is true that I don't want the Democratic Party to lead the way to reform, anymore than the Republican Party, since they are almost indistinguishable on fiscal policy. (never mind the Kabuki)

When corporatist establishment Democrats decide to quit leading the charge "to strike a Grand Bargain," beginning the process of dismantling what's left of the New Deal programs, maybe I'll consider listening to their "reforms."

But not until then.

Submitted by Ben Johannson on

You want a BIG to force Democrats to demonstrate their moral purity. Well then I would suggest not wasting your time as they have none.

Just to be clear: you propose spurring effective demand and simultaneously reducing national output to help the poor. Do you plan on revenue offsets or no? Have you considered the consequences, particularly on the elderly?

Alexa's picture
Submitted by Alexa on

You say:

"You want a BIG to force Democrats to demonstrate their moral purity."

Sounds like YOU'RE getting a bit into "Luke Sykwalker" territory, eh?

;-)

Seriously, I tried to be honest and direct, but civil and conciliatory in my previous reply to you.

But since you continue to be rude, I have no further comment.

Submitted by lambert on

I think that it surely must have been possible to make the economic point without attributing motives; I see why Alexa reacted as she did.

And you also see how you handed dan a club to beat you with! Not cool!

Now, I understand why you would get ticked; dealing with trolls and bad faith commenters is frustrating, dispiriting, and brings anger with it. But Corrente is curated and moderated; there is very little bad faith commentary that goes on here, certainly not from Alexa. So have a heart and back off.

Rainbow Girl's picture
Submitted by Rainbow Girl on

Given the tenor of your remarks (that's elevating them quite a bit) to Alexa, a regular and intelligent and savvy contributor to this blog, one wonders whether in all of your rarefied experience as an intellectual and theoretician you have ever come across that field known as being a nice person. In that field, you won't be taught about "sectoral balances" and "buffers" (in the form of human beings who labor for a living) or "Knowledge Claim Networks" (KCM) TM or offers to give everyone who wants one a crappy job at $8.00 (wow!). But you might learn something about being just a polite and courteous human being.

These are qualities that on a daily basis do more to further humane human relations and eventually perhaps change that works than your supercilious, incomprehensible, jargon-choked blather.

Try them out some time. You might be pleasantly surprised.

Also, do you realize from reading the MMT-related threads on this blog (and no, I'm not citing or linking to them because you should just go and read them) that there is no "MMT" except as it exists in the eye of the beholder (or MMT "expert") -- see, e.g., Joe Firestone's admission that the "public purpose MMT" thing is nothing but any individual MMT expert's interpretation of the vast opus of MMT by its myriad authors and subscribers.

Did you also note that your basic assertion that MMT is simply a politically agnostic tool does not really square with your own claim that there's some public purpose embedded in MMT? And that Firestone disagrees with you on that? Even though Lambert agrees with you onr that? You have to admit this is all a bit swooshy for a discipline that considers itself academically rigorous. No?

But really the most important point is that the way you addressed Alexa was totally not cool.

And this is my last post on anything relating to this MMT morass.

Alexa's picture
Submitted by Alexa on

Whoa--how eloquently stated, RG.

Thank you. I much appreciate your (overly) generous words.

Of course, it's really not about me.

It's about the ability--or lack thereof--of bloggers in a community with varied and disparate backgrounds, being able to engage in civil and productive discourse.

Especially, when the topic is as convoluted as MMT.

BTW, "morass" might just be the understatement of the year.

;-)

Submitted by lambert on

And one might ask oneself where the morass originates. Try the postcard post and see if it helps. It's designed to be simpler, show the benefits, put things in the New Deal context, etc. (I'm a bit scattered on all these threads because, as I keep saying, of horrible connectivity problems with my router at home, and also the fact that my Mac doesn't necessarily wake up when I lift the lid, so every time I do that I think it's died, and also travel. Hopefully I will have a good connection on the bus home tomorrow. Better than when I actually reach home, snarl.)

letsgetitdone's picture
Submitted by letsgetitdone on

Hi RG,

Also, do you realize from reading the MMT-related threads on this blog (and no, I'm not citing or linking to them because you should just go and read them) that there is no "MMT" except as it exists in the eye of the beholder (or MMT "expert") -- see, e.g., Joe Firestone's admission that the "public purpose MMT" thing is nothing but any individual MMT expert's interpretation of the vast opus of MMT by its myriad authors and subscribers.

That wasn't "an admission" on my part. MMT "experts" may differ somewhat on what the dimensions of "public purpose" are and on how they should be weighted, but I think that most of us do share a list of dimensions we think are important, and I gave a construction of that list in the KCN Post, and revised it later in this one. Btw, I also explained why I thought MMT was a holistic Knowledge Claim Network with normative as well as descriptive components here.

Next,

Did you also note that your basic assertion that MMT is simply a politically agnostic tool does not really square with your own claim that there's some public purpose embedded in MMT? And that Firestone disagrees with you on that? Even though Lambert agrees with you onr that? You have to admit this is all a bit swooshy for a discipline that considers itself academically rigorous. No?

What's in MMT is a matter of fact, in the sense that the texts are there and they tell us what is in MMT as a body thought that is more or less widely shared by practitioners. I don't think there's anything "swooshy" about that. The views of an individual MMT adherent may be "swooshy", especially when it comes to his/her views about the epistemological aspects of MMT. But that doesn't mean that what the MMT text content says is "swooshy." Actually, it's no more, and in my view a good deal less "swooshy" than neo-classical economics which openly denies its very plain and reprehensensible randian value commitments.

Rainbow Girl's picture
Submitted by Rainbow Girl on

The question was about the juxtaposition of Johannsen's statement: "MMT politically agnostic" and your claim (and that of your KCN TM) that an interpretation of MMT (by you) argues that MMT is not politically agnostic because it inherently (again, according to your interpretation) implies "public purpose." (And this is not even getting into the morass of what's "public purpose" in the multi-faceted MMT corpus.)

See, this is why the frustration. Your post goes off into a defensive tangent. You don't deal with the question, which is clear.

Look at your words "more or less," "I think," the distinction (inscrutable to me) between an "individual MMT adherent's" possibly swooshy views (especially on "epistemological aspects" - geez, is there another word for this? clue: yes there is) versus the "MMT text content." Huh? This huh is not a challenge to your intelligence or your theory, but to an incomprehensible sentence that's apparently trying to make a distinction. I'm not a turnip that fell of a truck - and this is blowing smoke. Sorry.

Submitted by lambert on

"defensive" is a real conversation stopper, exactly because there's no answer to it. (That was one of dan's well poisoning tactics in IIRC his first post; I have to make a list of them, and there are rather a lot.) Because how does one answer it?

"Stop being so defensive!"

"I'm not being defensive!"

And I'm not beating my wife, either, if you see what I mean.

* * *

On public purpose, see this comment from tjfxh:

Different political factions disagree over how to use policy space, but some factions [neo-liberals] iincorrectly understand what the policy space is based on operational reality. MMT illumines that by showing that affordability is not constraint. Rather the economic constraint is availability of real resources, which in turn has an impact on inflation if effective demand for goods exceeds output capacity.

To me, "the economic constraint is availability of real resources" translate to "reality has a liberal bias." Ask yourself who yammers that we're running out of money? The Republicans. And who meekly assents? The Democrats. Remember that tunnel under the Hudson that Christie didn't want to build because the money wasn't there? Well, do we have the "real resources" to build the tunnel? Sure we do. So, MMT says we can. (That's "progress" even in Ben's narrow sense of a better understanding of the world.)

Basically, MMT shows how to take advantage of existing policy space to achieve political objectives economically. This policy space applies to everyone, left, right and center. Progressives [whatever that means!] would be well advised to understand the potential of the policy space available.

Which nobody else will!

Submitted by lambert on

Here's the definition of the word:

[N]etworks of statements about the way the world is, works, ought to be, will be in the future, and how knowledge of it can be developed -- for research and policy emerge.

Concretely, a good plumber has a knowledge network* -- about pipes, and the science (yes, science) of how water flows. See the intro to MMT on a Postcard for an example.

I should add that this "elitist" thing is really starting to scare me. I am biased, because I come from an academic family, but if you put the charge of "elitist" into another context -- say, climate science, where Republicans throw that charge against scientists -- you'll see it translates into an attitude that I wouldn't expect a liberal or a progressive to take. It's not good to study? It's not good to learn? (Or, in the case of lets, it's not good to share a lifetime's expertise? Would we call a nurse an elitist if they shared their knowledge? Even if we had to good read up on some of the terms?)

NOTE A "network" in the sense that "If A then B," A is connected to B. Now imagine a bunch of "if A then B's" all wired together. That's the network.

letsgetitdone's picture
Submitted by letsgetitdone on

But I did want to say that in my two long replies to Dan's first post I stated what I think were some clear views on the central importance of public purpose in MMT and also asserted that MMT is a theory with both descriptive and normative elements, and I named some of the dimensions of public purpose found in the MMT literature pointing out that some of them did connect to the Job Guarantee and support its place as part of the MMT core.

I don't think that my reasoning there has yet been addressed by dan ps in a satisfactory way, except for his stating that we have a difference of opinion of what the core of MMT is about and he views it as wholly descriptive. Of course, I indicated earlier that he can view it any way he wants, but that is whether opinion or my view was more acceptable would be determined by what the community of those reading and writing MMT thought about the content of the MMT literature. That said, I still maintain that since his own reading of MMT is "casual" and mine is not, the likelihood is that my interpretation of what's in MMT is correct and not his. Unless he can refute what I say with quotations from the literature.

I'm afraid I still don't see those quotations in this post, but I what I do see, instead is Dan's repeating the assertions in his first post without any further development. For example, Dan says that MMT boils down to:

governments with the power to issue their own currency are always solvent, and can afford to buy anything for sale in their domestic unit of account even though they may face inflationary and political constraints

I indicated in my comments on his last post, that this isn't correct and explained why in detail, and here Dan is just repeating himself without the slightest effort even to acknowledge, much less confront, what I had to say. I'm afraid I think that this doesn't advance the discussion at all, unless he hopes to win the argument through mere repetition of what he originally said, in hopes that people won't go back to the original posts to re-read my criticisms of his view.

In any event, I urge people to return to that post and see if I am not right in my claim that Dan has added nothing new here, and that his charges against MMT are based on a narrow construction of it that others and most MMTers in particular do not share.

Submitted by lambert on

If you think of other schools of economic thought, like Keynianism, like classical economics, or like Marxism, you'll see that even though they've been in existence for years, they aren't all that "simple" to explain. You'll also see that practioners in all these schools don't always agree in every detail, and sometimes have differences of opinion, sometimes major. That doesn't vitiate them as economic schools.

What neo-liberalism has that makes it seem simple is the support of the political class, and blowhards going on TV honing the talking points, for years. In fact, as any blogger knows, honing talking points takes an immense amount of labor. MMT is too young to have had that history. The clarity of expression will come with time.

Alexa's picture
Submitted by Alexa on

who needed Dan or RG to tell me that I should have been insulted by some of the remarks directed toward me.

(Said jokingly, not angrily or defensively--OK?)

Actually, I simply want to clarify that I didn't feel manipulated by Dan, or anyone else, into arriving at that conclusion.

;-)

Now, when I see the letters "MMT," I only want to run away screaming, LOL!

Seriously, expert commenters and proponents of MMT, or any cause for that matter, are not likely to win points with 'lay people' by condescendingly deriding them--the very people that they ostensibly hope to persuade.

(Which is not intended to imply that all employ this method.)

I think Dan's and RG's remarks were very salient. Dan's clearly were narrow, RG's somewhat broader.

On a positive note, I will attempt to take RG's sage words under advisement:

. . . you might learn something about being just a polite and courteous human being.

These are qualities that on a daily basis do more to further humane human relations and eventually perhaps change . .

Submitted by lambert on

Quoting Dan once again:

At this point I think the best way to discredit Modern Monetary Theory might be to just step back and allow its proponents to interact with the unwashed masses.

Which is, again, classic poisoning the well; discredit the ideas by discrediting the proponents (and gleefullly handing them the rope to hang themselves; I know, I've done it!) And while Alexa did write:

(Which is not intended to imply that all employ this method.)

One hopes she meant only to allude to a comment later apologized for.

Submitted by Ben Johannson on

I don't comprehend how people can be offended or hurt in the comments section of a blog but I don't need to. I have been informed that feelings were hurt by something I wrote, therefore I apologize to Alexandra and Rainbow Girl.

mellon's picture
Submitted by mellon on

Nothing short of a massive change in how we do things, (requiring a substantial investment in our people's futures) is going to create good jobs for unskilled people again. We can't turn back the clock.

Its better to just pay many people to learn, take classes, read, study, whatever, do something constructive with their time, with no strings attached except that it should be constructive.

And define that broadly. Uh, but, oops, TRADE AGREEMENTS would bar many public jobs programs, with infrastructure, green jobs, etc. (Their war on local sourcing.)

All banned by the new FTAs.

Maybe one in ten will probably start a new business or something.

But, the old era of high employment won't return barring some literal miracle, it wont happen massive change in America - and the world.

We need to invest in lifelong learning and infrastructure to support new business creation.

The alternative, an America that looks more and more like a huge ghetto of debt and despair, without much hope

Rainbow Girl's picture
Submitted by Rainbow Girl on

Thanks Mellon for highlighting what may be the ultimate non-value-based obstacle to this "job guarantee" idea(s).

For myself, I'm not too keen on the MMT job guarantee since I learned that one of its proponents thinks paying 8 bucks an hour is jake (and "public purpose" to boot).(*) Seattle just voted a minimum $15/hr wage law - are the MMT "job guarantee" people going to raise their proposed wage "floor" accordingly?

(*) I learned this by following instructions and clicking on links leading to "MMT literature". Forget who the author was. Could have been Kelton but I'm not sure to be honest.

Submitted by lambert on

... that's Mosler's position. (Surprise! MMTers, as is 100% normal for any economic school of thought, disagree on policy sometimes.) It's not the view of most MMTers, and it's certainly not lets's view. (In fact, a small faction led by Cullen Roche broke away and formed their own school, essentially because they felt unemployment is character-building.) And speaking of lets, here, I'd be grateful if sentences like:

[A]re the MMT "job guarantee" people going to raise their proposed wage "floor" accordingly?

could be a little more nuanced, perhaps on the order of:

[A]re the MMT "job guarantee" people going to raise their proposed wage "floor" accordingly? (Lets may have written on this, but I can't find the link.)

It's OK to say that lets' material is dense, but there's no gotcha here. Rather, lets' has addressed the question, in good faith and with a good heart, on the very blog you're reading now. We don't want the unemployed to suffer, so why would you imagine we haven't addressed this? (Links on request, it's late.)

Finally, even an $8.00 wage does serve a public purpose, so Mosler is correct. First, an $8.00 an hour job for anyone who wants one is more humane than no job. Even with unemployment insurance, which runs out, joblessness is a stressor. (In the postcard post, you'll see that people preferred a JG in real life, not just a poll.) Second, the JG is an automatic stabilizer; when the economy goes sour, the JG pumps in money. Automatic stabilizers have public purpose, because they take the edge of downturns.

mellon's picture
Submitted by mellon on

Trade deals are pushing to eliminate the restrictions on natural gas exporting which could mean heating, cooking gas, hot water, etc. costs (all natural gas related costs) in the USA could go up a LOT..

http://iatp.org/blog/201405/no-green-jobs-for-you-secret-eu-us-trade-agr...

The TTIP negotiations in secret have been leaked and they want to vastly increase fracking and export most of that additional natural gas to other countries (They say Europe but the price is as much as 4 times higher than the US in Asia, and the WTO rules say they have to sell to the highest bidder, I am pretty sure)

The US wants to become a big LNG exporter so the oil industry can take advantage of the high prices. (prices in Europe and Asia especially are high now, japan is 5 times higher than the US)

http://action.sierraclub.org/site/DocServer/Analysis_of_EU_Energy_Propos...

http://www.huffingtonpost.com/2014/05/19/trade-fracking_n_5340420.html

Because of the FTAs "investor-state" clause once they built a LNG dock or other facility the US's commitment seems like it could become irreversible forever.

Does that mean no more cheap natural gas for Americans? It seems like it easily could.

Wages will have to go up or people wont be able to stay where heating costs are high.


House values could fall in many areas because of that extra heating cost.

http://www.foeeurope.org/sites/default/files/publications/foee_ttip-isds...

http://ecowatch.com/2014/03/06/ttip-fracking-u-s-europe/

Submitted by lambert on

... that explained what the US should so vis a vis this FTAs, what would it be?

Then I'll look at the 12 Reforms that support the 12 Point platform and add that in.

If "Sovereignty" were in there, that might be good. People like that word, and it is what's at stake, no?

mellon's picture
Submitted by mellon on

we should get rid of investor-state entitlements for corporations- absolutely this must be dumped because its a theft of the whole world's future.and put maximum 5 year limit

on all terms, also, they should never be able to have any kind of standstill clause. Also, they should not be able to overrule any national laws.

Did you know about the TTIP natural gas/fracking/drilling/export deal that could increase your cost to heat your Maine house to global average rates? (LOTS more than it is now)

http://action.sierraclub.org/site/DocServer/Analysis_of_EU_Energy_Propos...

http://www.foeeurope.org/sites/default/files/publications/foee_ttip-isds...

http://iatp.org/blog/201405/no-green-jobs-for-you-secret-eu-us-trade-agr...

https://www.citizen.org/documents/tafta-procurement-factsheet.pdf

http://www.iatp.org/blog/201405/what-goes-around-comes-around-us-trade-a...

mellon's picture
Submitted by mellon on

Once they are signed they basically get an entitlement to the conditions that existed then, forever. They have a chilling effect on key policies, like in our case, healthcare. Slovakia shows what I mean, basically you see both there, the first one, the 2006 ban on profits over a certain amount (like ACA) ran into the standstill clause, the second ruling said that if they started single payer THEN the insurer could THEN sue them for expropriation. THAT is the investor-state -

Submitted by lambert on

... part of investor entitlements?

I'm after a single sentence to describe how to dismantle this structure, that generalizes to all the multilateral and bilateral agreements. I don't especially how it's done.

Maybe another way of saying this is:

National courts trump international trade tribunals.

That would put a stake in the heart of the worst of it; at least a measure of democratic control would return.

mellon's picture
Submitted by mellon on

For example, on Slovakia, they decided that the insurer did not have the right to sue Slovakia until after "their market" (serfs?) were "expropriated". The Slovaks made it clear that they had given up on the 2006 single payer law because they lost the first suit (2012?) about their not being able to limit profits once the agreement had been signed. (Similar clauses in the ACA will get struck down too in the next administration or even sooner)

So basically that was upholding the standstill clauses prohibition on any new regulatory activity that effected their bottom line.

So, unrelated, what do you think about the TTIP fracking /export thing?

Have you looked at how much higher natural gas is elsewhere?

Heating and electricity costs will probably double or triple, at least.

joebhed's picture
Submitted by joebhed on

""Get rid of all investor-state entitlements for corporations ""
Sorry, Lambert.
More MMT Myopia.
Is there any greater state-entitlement than than that to the bank-corporations that have privilege, with profit thereon, to create and issue ALL of what serves as the nation's money? And to collect compount interest thereon forever.
Did I say forever.
I meant, in perpetuity.
And to thereby, from that profit-making privilege, control the political parties and process that robs the nation of economic democracy, especially that 'progressive economic democracy envisioned by Minsky?
THAT the MMT theory is based upon the bankers' school view of a money system is in tension with public purpose money.
I hear this debt-contract, financial asset based money system ain't so bad, and maybe worth saving.....from the MMT side.
But, there being a REAL public money option(monopoly issuer of the currency, and all that) leaves a lot of us scratching our heads that an obviously progressive cadre of both leaders and followers of MMT cannot get beyond Randy Wray's momentous discovery of the bankers' school lie that the nature of money is debt.
Debt-based money is a state-sponsored entitlement to the Wall Street bankers.
End both of them, and get to work on our vision.
For the Money System Common.

Submitted by Ben Johannson on

After discussing this with a few others I now understand why some were offended by comments I made in this thread.

Alex and Rainbow: my social empathy is learned and can lapse under certain conditions, as they did during my original comments. They were not intended in any way to be derisive to you, to mock you or to offend you. I gathered something very different from your comments than you intended to communicate; from my perspective at the time I judged my responses appropriate but can now see how they might be interpreted otherwise by a normal person, which I am not. I apologize for any hurt this has caused and will endeavour to avoid that particular mistake again.