It is Wednesday so just a few things to report and discuss. I have noted in recent weeks an upsurge in the Twitter noise about Modern Monetary Theory (MMT) and various statements along the lines that MMT economists are male chauvinists, mindlessly attack other heterodox economists because we are a religious cult, that we thrive on conflict, that only the US has a sovereign government and more. Quite amazing stuff. And these attacks are coming mostly from the so-called heterodox side of the economics debate although not exclusively. It is quite an interesting exercise to try to understand the motivations that are driving this social media behaviour. Things that would never be said face-to-face are unleashed with regularity these days. There appears to be a sort of self-reinforcing ‘echo chamber’ that this squad operate within and it seems to lead to all sorts of bravado that would be absent in face-to-face communication. None of the attacks seem to have any substance or foundation. They just reflect an insecurity with the way that MMT is creating awareness and challenging progressives to be progressive. And, they just make the Tweeters look stupid. I thought I would document some of the recent trail of nonsense to let you know what is going on in case you haven’t been following it. It is a very interesting sociological phenomena.
One of the themes that has emerged in the discussions of the British Labour Party Fiscal Credibility Rule (which should be renamed the Fiscal Incredulous Rule) is when is the right time for a political party to show leadership and start educating the public on new ideas. The Modern Monetary Theory (MMT) project has been, in part, about educating people even if our ideas have been strongly resisted by the mainstream. The mainstream (New Keynesian) paradigm in economics is degenerative (meaning it has little empirical validation) and eventually it will fade into historical obscurity. For many of us that cannot come quickly enough. The defenders of the Rule argue that progressive politicians have to tread carefully or else the amorphous financial markets will turn on them and destroy their initiatives. The problem is that by kowtowing to the City or Wall Street, the progressive political forces become captured and redundant. Witness the electoral demise of social democratic parties over the last several decades. The conditions are ripe (see below) for a courageous head-on attack on these financial market elites and educate the public so that they allow elected governments to legislate for all rather than serving the interests of the elites, which has become the norm over the last several decades. The problem is that progressive political forces are also taking advice from mainstream economists who use the tools of neoliberalism. The upshot is that progressive political leadership is absent but desperately required.
Today’s blog post is about sleep and reading. I am travelling from London to Sydney today via Hong Kong so I will not write anything more than a few lines. I will be back in writing mode on Tuesday I should think. For the next 24 hours I have a lot of reading to do. I also provide some advice for those who pack running shoes when travelling.
Only a short blog post today as I am travelling for a fair part of the day on my way from New York City to Dublin for my next speaking engagement. Tomorrow’s blog post will cover some reflections on the 3-day Modern Monetary Theory (MMT) conference that finished yesterday in New York. There are several things I thought about the event, some of which I will share in public, the others, in private, with the organisers. But, today’s post, is a brief reflection on the latest crisis that is about to engulf the Eurozone. I am referring to the announcement by the Italian government that it will target a fiscal deficit of 2.4 per cent of GDP. The elites are up in arms. I hope that Italy holds its nerve.
There will be no blog post today other than what follows. I am travelling to the US for The Second International Conference of Modern Monetary Theory in New York. I hope to see a lot of you there. From there I will be heading to Ireland, then London, then Lisbon, then London, then Frankfurt (and environs) for a sequence of speaking commitments. A full itinerary of public events is below. The quiz will still be available tomorrow but this is it until Monday, whence I will report on the MMT Conference (probably).
It is Wednesday and so just some snippets. I have written about the behavioural impacts that studying mainstream economics, particularly the microeconomics component can have on students as they progress through their studies. I have observed sort of nice young people entering first-year and by later years, become arrogant, self-opinionated and delusional jerks. This phenomenon is particularly prominent if they go onto to do postgraduate level studies. It is well documented. The way mainstream economics is taught builds on anti-social attitudes that might already be present in students who choose to undertake this sort of training. The curriculum matters a lot. In that context, our next macroeconomics textbook (see below) will, in my view, actively work against any predisposition towards selfishness and against altruism, while still providing students with a first-class, technical education in how the monetary system operates.
It is Wednesday and only a short blog post. I am also ailing with the flu and my head hurts. As I noted in Monday’s blog post – The conservative polity is fracturing – an opportunity for the Left (August 27, 2108) – Australia now has a new prime minister, the former Treasurer. His elevation has been celebrated as a victory for the ‘moderates’, given that his main contender, the guy who attempted the coup in the first place and succeeded in getting rid of the incumbent PM, was rather obviously extreme right in his views. Some are saying we have been saved by the fact that he didn’t succeed. But to call the new PM ‘moderate’ is to lose all sense of meaning to our language. He is a dangerous neoliberal ideologue who has inflicted untold pain on many people as he has made his way to the top.
It is Wednesday and so a short blog. I am working on a number of things at present but getting the material sorted for my next book with Thomas Fazi is a priority at the moment. My snippet today though is about a study that has just come out in the American Political Science Review – Bias in Perceptions of Public Opinion among Political Elites – by two US academics. The title is indicative. They explore what they argue is a disjuncture between what the politicians think voters want and what the voters actually want. This lack of congruence is also biased towards right-wing views. So, the politicians “believed that much more of the public in their constituencies preferred conservative policies than actually did”. They trace this bias to biases in the way the politicians get their information. The takeaway is that the progressive side of the debate has to be more active in framing distinctive messages and using multiple ways and avenues to communicate those messages to the candidates seeking election and the politicians that have been elected. And it must refrain from using conservative frames which advisors think neutralise difficult concepts etc. I think this sort of research provides some hope. I will be writing more about this in the weeks to come. And after that listen to some really classic minimalism from the C19th, which you might suspect on listening is very contemporary such was the genius of the composer.
It is Wednesday and so a shorter blog post today while I spend more time writing other things. But there was one issue that was raised in the comments in the last week following my blog post – Build it in Britain is just sensible logic (July 26, 2018) – that I thought warranted attention. The government is not a household is a core Modern Monetary Theory (MMT) proposition because it separates the currency issuer from the currency user and allows us to appreciate the constraints that each has on its spending capacities. In the case of a household, there are both real and financial resource constraints which limit its spending and necessitate strategies being put in place to facilitate that spending (getting income, running down savings, borrowing, selling assets). In the case of a currency-issuing government the only constraints beyond the political are the available real resource that are for sale in that currency. Beyond that, the government sector thus assumes broad responsibilities as the currency issuer, which are not necessarily borne by individual consumers. Its objectives are different. Which brings trade into the picture. Another core MMT proposition is that imports are a benefit and exports are a cost. So why would I support Jeremy Corbyn’s Build it in Britain policy, which is really an import competing strategy? Simple, the government is not a household.
Today is Wednesday and only a few observations today as I want more time to write other things. Last night, I gave a talk at a Politics-in-the-Pub event in Newcastle, which is a monthly gathering held at a local hotel and attracts an audience of around 80 people or thereabouts. These are people who purport to be active politically and progressive in bent. The topic was Universal Basic Income and Automation, although it was really a general discussion of UBI, and, with my appearance, a comparison with the Job Guarantee. It was a revealing evening really because the discussion indicated that major policy issues are debated in public and among progressive people without the provenance of ideas being understood or how things fit together in a system. Quite dispiriting really. So I thought I would explore the appeal – I just want to do my art, which was one statement last night in support of a UBI.