4 ms·

Warren* Mosler, one of yhe founders of Modern Monetary Theory. Lead author was Phil Armstrong, and he did a great discussiom of the paper on the MMT podcast.

by bfdm 4y ago

astrange 4y ago
Rather, he is Modern Monetary Theory. MMT doesn't have an actual theory of the economy; it uses the standard model and just has a different vibe. So it's just whatever he and Stephanie Kelton feel like saying at the time. The most notable different policy prescription (job guarantee) is odd because it's originally a right-wing program they just decided is left-wing.
- citizen_friend 4y ago
  Just because they don't completely redefine economic models from the start doesn't mean MMT isn't a theory. They clearly have different ideas about how policy should be implemented and what will happen. Their description of how government issued currency, coercion, and tax act as a tool to capture services from the economy (as opposed to filling up a treasury for the government to spend) is extremely underrated in mainstream economics. > right-wing program they just decided is left-wing. Why would MMT be limited to traditionally left/right boundaries?
  - astrange 4y ago
    > Just because they don't completely redefine economic models from the start doesn't mean MMT isn't a theory. Yes it does, it makes it not an economic theory but a political one. > Their description of how government issued currency, coercion, and tax act as a tool to capture services from the economy (as opposed to filling up a treasury for the government to spend) is extremely underrated in mainstream economics. It is Abba Lerner's functional finance and it essentially only applies to the US federal government, as noone else is big enough. But they also like to extend it to "banks don't lend out deposits", which isn't true. And the idea that you can raise taxes to control inflation doesn't appear to be true either. > Why would MMT be limited to traditionally left/right boundaries? Cuz they're only trying to sell it to left-wing politicians.
- bfdm 4y ago
  There are many more economists building on MMT than just them, at many institutions globally. Describing the job guarantee/transition job as equivalent to "workfare" reveals a fundamental misunderstanding of the JG. Two ways in which it differs significantly (but not the only ways): 1/ it pays a living wage / socially inclusive wage, unlike most current (un)employment insurance programs 2/ it is non-coercive. You have the promise of that job, not a mandate to perform it. Other social programs remain available for those unable for for a variety of reasons.
  - astrange 4y ago
    > 1/ it pays a living wage / socially inclusive wage, unlike most current (un)employment insurance programs No, it pays minimum wage. (Mosler calls it "non-disruptive wage" because it's not enough to compete with other jobs.) The trick is the marketing just assumes minimum wage will be raised, so they quote that number instead. And of course it never gets raised and you can never be promoted. > 2/ it is non-coercive. You have the promise of that job, not a mandate to perform it. Other social programs remain available for those unable for for a variety of reasons. It's coercive to regular workers because their boss can fire them at any point, safe in the knowledge they'll get a minimum wage job the next day.

Warren* Mosler, one of yhe founders of Modern Monetary Theory. Lead author was Phil Armstrong, and he did a great discussiom of the paper on the MMT podcast.

by bfdm 4y ago

Warren* Mosler, one of yhe founders of Modern Monetary Theory. Lead author was Phil Armstrong, and he did a great discussiom of the paper on the MMT podcast.

astrange 4y ago

Rather, he is Modern Monetary Theory. MMT doesn't have an actual theory of the economy; it uses the standard model and just has a different vibe. So it's just whatever he and Stephanie Kelton feel like saying at the time. The most notable different policy prescription (job guarantee) is odd because it's originally a right-wing program they just decided is left-wing.

citizen_friend 4y ago
Just because they don't completely redefine economic models from the start doesn't mean MMT isn't a theory. They clearly have different ideas about how policy should be implemented and what will happen. Their description of how government issued currency, coercion, and tax act as a tool to capture services from the economy (as opposed to filling up a treasury for the government to spend) is extremely underrated in mainstream economics. > right-wing program they just decided is left-wing. Why would MMT be limited to traditionally left/right boundaries?
- astrange 4y ago
  > Just because they don't completely redefine economic models from the start doesn't mean MMT isn't a theory. Yes it does, it makes it not an economic theory but a political one. > Their description of how government issued currency, coercion, and tax act as a tool to capture services from the economy (as opposed to filling up a treasury for the government to spend) is extremely underrated in mainstream economics. It is Abba Lerner's functional finance and it essentially only applies to the US federal government, as noone else is big enough. But they also like to extend it to "banks don't lend out deposits", which isn't true. And the idea that you can raise taxes to control inflation doesn't appear to be true either. > Why would MMT be limited to traditionally left/right boundaries? Cuz they're only trying to sell it to left-wing politicians.
bfdm 4y ago
There are many more economists building on MMT than just them, at many institutions globally. Describing the job guarantee/transition job as equivalent to "workfare" reveals a fundamental misunderstanding of the JG. Two ways in which it differs significantly (but not the only ways): 1/ it pays a living wage / socially inclusive wage, unlike most current (un)employment insurance programs 2/ it is non-coercive. You have the promise of that job, not a mandate to perform it. Other social programs remain available for those unable for for a variety of reasons.
- astrange 4y ago
  > 1/ it pays a living wage / socially inclusive wage, unlike most current (un)employment insurance programs No, it pays minimum wage. (Mosler calls it "non-disruptive wage" because it's not enough to compete with other jobs.) The trick is the marketing just assumes minimum wage will be raised, so they quote that number instead. And of course it never gets raised and you can never be promoted. > 2/ it is non-coercive. You have the promise of that job, not a mandate to perform it. Other social programs remain available for those unable for for a variety of reasons. It's coercive to regular workers because their boss can fire them at any point, safe in the knowledge they'll get a minimum wage job the next day.