Yes, Sam, I’ve heard Bill’s discussions with Alan Kohler. Subsequent to Alan learning of the monetary operations of a free floating fiat currency from Bill, and appreciating the lie of the government monetarily operating as per a household budget, he’s been unwilling to challenge the orthodoxy in any public way. I think Alan’s wary of being subject to a pile-on and losing neoclassical theological friends. In addition, as you know, he asserts that politicians shouldn’t know or otherwise they’ll go spending mad - I say that’s nonsense. I’m completely on your side about the truth needing to be out but no matter how much substantive online information I have emailed to politicians, especially the Independents, the Greens and Treasurer, RBA plus others, there’s zero reaction. Probably don’t get past the gatekeepers. Just to get them to stop saying taxpayers’ money and use public money has been impossible so far.
A latest interchange between Bill and Alan https://www.youtube.com/watch?v=vNfN3NX5KF8 from 39:33 you may find interesting. Alan says that he’s chastened at 44:00 after Bill’s explanation as to why the lie should be exposed but his subsequent writings show no change. I’ve berated Alan via email on a number of occasions before and after that last discussion. I’m appalled by Alan’s inability to tell it as it is.
It does seem that folks like us who are science/engineering trained have no/little problem in getting MMT. However, those who aren’t seem to have been so indoctrinated in their way of thinking of government as operating a “household budget” that they can’t deal with something like the clear logic of fiat money creation. And then to take the next step as to what that might mean could be done via an infinite money supply with a finite resources supply. The first time I read https://moslereconomics.com/wp-content/uploads/2020/11/Seven-Deadly-Innocent-Frauds-of-Warren-Mosler.pdf it made complete sense to me.
I agree that Bill and his JG does blur the line (prescriptive not descriptive).
The older generation like me seems like a lost cause and I hope its younger people like you, Sam, who aren’t so locked in to a way of thinking that can help blow this all up. Just imagine the ego hit to learn that, being trained and indoctrinated as a neoclassical economist, your whole professional life has been a fraud. The damage that so-called economists, when combined with capitalism, have done to the prospect of the continuity of life somewhat as we know it on our finite planet is unforgivable.
Have you decided where you stand with respect to descriptive MMT? Understand that prescriptive MMT is something different as it includes a values/ideological overlay of choices upon the fiat monetary operating system of descriptive MMT.
Many understanders of MMT, and most of its rejectors, are loose with language and adopt the shorthand “MMT says this” and “MMT says that” when they are actually referring to someone’s political/ideological preference in combination with an MMT understanding of fiat monetary operations (which are merely that of double entry bookkeeping).
I note that you have had some discussions with Matt Grudnoff of TAI who, together with Richard Denniss and Greg Jericho of that think tank, has been well exposed to the double entry bookkeeping of keeping monetary score which defines descriptive MMT. However, TAI economists refuse to call out the falsity of the fiat money narrative of the mainstream and go hell for leather arguing for government to prescribe the demanding of taxes from the rich BEFORE proceeding with spending on the precariat and most in need Australians to raise them up. This is never going to happen. Keeping on doing the same thing and expecting a different result is a definition of insanity.
It is only by spending to raise people up first that the wider society will be able to see and feel the benefits that will lay the groundwork for going after the top end of town (to tax them to reduce their power and influence) by confirming that we don’t need the money of the wealthy in order to have and do good things for the metaphorical 99% ahead of the 1%. A course followed by the TAI requires overcoming the vested interests before spending while the correct procedure shows that this can be done in spite of them.
A cost to live crisis is here and now in our country but you’ld never know listening to the politicians.
In this discussion, I interpret Bill as suggesting that MMT should only be discussed in the descriptive sense - as a "lens" that we can use to understand how the economy actually works. Bill definitely seems in favour of building policy on the basis of descriptive MMT but at least with Kohler he was emphatic that MMT was a "lens" and not a set of prescriptive policies.
Of course, his own work on the Job Guarantee seems to blur this line, but I haven't spent enough time digging into it all. From what I know at this point I'm inclined to think that Bill wouldn't be a fan of the term "prescriptive MMT" – and beyond Bill and Stephanie Kelton's work I haven't explored MMT very far.
The conversation with Kohler is fascinating to me because even when Alan grants that MMT is an accurate description of the economy, he concludes that it doesn't matter anyway, because the myth of a federal budget constrained by taxes is the only thing keeping the political class from going on a reckless spending binge.
I disagree.
I think deliberate misinformation is a terrible basis for any political discussion. At best it ensures we spend all our time arguing about things that don't matter and fail to invest our resources solving the real problems throttling our economy and wellbeing. At worst it undermines core tenets of representative democracy. Why ask people to vote for a lie?
I want to hear economic debates about the financial constraints that Bill describes – connected to understanding and building the productive capacity of the economy – rather than the broken analogy of a household budget.
If the descriptive model of MMT is accurate – and so far I think it is – then MMT offers a chance to build policies which are more effective and less arbitrary. How can Australia or any country pass up that opportunity?
Yes, Sam, I’ve heard Bill’s discussions with Alan Kohler. Subsequent to Alan learning of the monetary operations of a free floating fiat currency from Bill, and appreciating the lie of the government monetarily operating as per a household budget, he’s been unwilling to challenge the orthodoxy in any public way. I think Alan’s wary of being subject to a pile-on and losing neoclassical theological friends. In addition, as you know, he asserts that politicians shouldn’t know or otherwise they’ll go spending mad - I say that’s nonsense. I’m completely on your side about the truth needing to be out but no matter how much substantive online information I have emailed to politicians, especially the Independents, the Greens and Treasurer, RBA plus others, there’s zero reaction. Probably don’t get past the gatekeepers. Just to get them to stop saying taxpayers’ money and use public money has been impossible so far.
A latest interchange between Bill and Alan https://www.youtube.com/watch?v=vNfN3NX5KF8 from 39:33 you may find interesting. Alan says that he’s chastened at 44:00 after Bill’s explanation as to why the lie should be exposed but his subsequent writings show no change. I’ve berated Alan via email on a number of occasions before and after that last discussion. I’m appalled by Alan’s inability to tell it as it is.
It does seem that folks like us who are science/engineering trained have no/little problem in getting MMT. However, those who aren’t seem to have been so indoctrinated in their way of thinking of government as operating a “household budget” that they can’t deal with something like the clear logic of fiat money creation. And then to take the next step as to what that might mean could be done via an infinite money supply with a finite resources supply. The first time I read https://moslereconomics.com/wp-content/uploads/2020/11/Seven-Deadly-Innocent-Frauds-of-Warren-Mosler.pdf it made complete sense to me.
I agree that Bill and his JG does blur the line (prescriptive not descriptive).
MMT is really an outgrowth of chartalism, the credit theory of money, functional finance https://en.wikipedia.org/wiki/Functional_finance and the sectoral balances work of Wynne Godley https://en.wikipedia.org/wiki/Wynne_Godley. See https://en.wikipedia.org/wiki/Modern_monetary_theory.
The older generation like me seems like a lost cause and I hope its younger people like you, Sam, who aren’t so locked in to a way of thinking that can help blow this all up. Just imagine the ego hit to learn that, being trained and indoctrinated as a neoclassical economist, your whole professional life has been a fraud. The damage that so-called economists, when combined with capitalism, have done to the prospect of the continuity of life somewhat as we know it on our finite planet is unforgivable.
A good discussion with Bill Mitchell, Sam.
Have you decided where you stand with respect to descriptive MMT? Understand that prescriptive MMT is something different as it includes a values/ideological overlay of choices upon the fiat monetary operating system of descriptive MMT.
Many understanders of MMT, and most of its rejectors, are loose with language and adopt the shorthand “MMT says this” and “MMT says that” when they are actually referring to someone’s political/ideological preference in combination with an MMT understanding of fiat monetary operations (which are merely that of double entry bookkeeping).
I note that you have had some discussions with Matt Grudnoff of TAI who, together with Richard Denniss and Greg Jericho of that think tank, has been well exposed to the double entry bookkeeping of keeping monetary score which defines descriptive MMT. However, TAI economists refuse to call out the falsity of the fiat money narrative of the mainstream and go hell for leather arguing for government to prescribe the demanding of taxes from the rich BEFORE proceeding with spending on the precariat and most in need Australians to raise them up. This is never going to happen. Keeping on doing the same thing and expecting a different result is a definition of insanity.
It is only by spending to raise people up first that the wider society will be able to see and feel the benefits that will lay the groundwork for going after the top end of town (to tax them to reduce their power and influence) by confirming that we don’t need the money of the wealthy in order to have and do good things for the metaphorical 99% ahead of the 1%. A course followed by the TAI requires overcoming the vested interests before spending while the correct procedure shows that this can be done in spite of them.
A cost to live crisis is here and now in our country but you’ld never know listening to the politicians.
Thanks Fred
Thanks for the comment, Fred. The question of prescriptive vs. descriptive MMT reminds me of an discussion between Bill Mitchell and Alan Kohler:
https://billmitchell.org/blog/?p=44603
https://billmitchell.org/blog/?p=44547
In this discussion, I interpret Bill as suggesting that MMT should only be discussed in the descriptive sense - as a "lens" that we can use to understand how the economy actually works. Bill definitely seems in favour of building policy on the basis of descriptive MMT but at least with Kohler he was emphatic that MMT was a "lens" and not a set of prescriptive policies.
Of course, his own work on the Job Guarantee seems to blur this line, but I haven't spent enough time digging into it all. From what I know at this point I'm inclined to think that Bill wouldn't be a fan of the term "prescriptive MMT" – and beyond Bill and Stephanie Kelton's work I haven't explored MMT very far.
The conversation with Kohler is fascinating to me because even when Alan grants that MMT is an accurate description of the economy, he concludes that it doesn't matter anyway, because the myth of a federal budget constrained by taxes is the only thing keeping the political class from going on a reckless spending binge.
I disagree.
I think deliberate misinformation is a terrible basis for any political discussion. At best it ensures we spend all our time arguing about things that don't matter and fail to invest our resources solving the real problems throttling our economy and wellbeing. At worst it undermines core tenets of representative democracy. Why ask people to vote for a lie?
I want to hear economic debates about the financial constraints that Bill describes – connected to understanding and building the productive capacity of the economy – rather than the broken analogy of a household budget.
If the descriptive model of MMT is accurate – and so far I think it is – then MMT offers a chance to build policies which are more effective and less arbitrary. How can Australia or any country pass up that opportunity?