Could Modern Monetary Theory (MMT) Actually Save Us?

Well, I know that Chris feels there is a pox on both their houses, and certainly when it comes to both party machines (Dem & Rep), I’m right there with him. They both appear corrupt in very similar ways, although the Dems have gone through some astonishing transitions of late; cozying up to the CIA and the FBI? My goodness. Things sure have changed since the 60s and 70s, haven’t they?
I find Trump a fascinating figure. Perhaps this is because of my love of political science. He makes a very interesting case study. He crushed the well-heeled cartel-controlled Republican opponents during the primary, and then crushed his bankster-and-DOD-controlled Democratic opponent in the general even through she outspent him 3:1.
His opponents spent the first two years trying to say he won only because of RUSSIA (just silly; google threw more votes to HRC than Russia ever did to Trump), and when that didn’t work, now they’re trying desperately to turn something somewhat tacky into an Impeachable Offense. Presidents do 5 tacky things before breakfast. How many are impeached? And if that’s true, why are they targeting Trump?
If we use Rules for Rulers as our guide, Trump’s Keys to Power (the ones that let him govern: “an Army, and someone to run it, Taxes, and someone to collect it, Laws, and someone to enforce them”) don’t like him at all. They are trying to get him tossed out of power. Right now its the State Department and elements within CIA. Before, it was FBI.
Trump’s primary problem: he didn’t come into power with a Court. It was just him, his family, and a few others (Flynn: gone, Bannon: gone). And many of the things he said on the campaign trail - the stuff that got him elected - threatened the entrenched bureaucracy. And he’s still saying this stuff. If you want me to make a list of sacred bureaucratic oxen he has gored - and continues to gore - I’d be happy to do so.
So without a Court, he has found it difficult to actually govern.
The only power he has comes from those lower-middle class workers who have been abandoned by literally everyone else. And they get to vote just once every 4 years.
If he had been more standard and “gone along” with the desires of the bureaucracy, he would be having none of his current problems. That’s what I claim anyway. My evidence? What was the reaction from literally everyone when he launched missiles at Syria? Do you remember?
As for - did the “others” mean what they say? Who knows. But the others didn’t have enough money to make it into office on their own, and they followed Rules for Rulers perfectly. They threw their voters under the bus in order to keep their Court happy. So - no impeachment.
Last point. Trump has been very educational for me in demonstrating just how captured the media is, just how much influence the Intel and FBI agencies have over domestic affairs, and just how difficult it is for a President when they have policies that run counter to the current consensus.
“Why do we even have NATO anyway?”
“Why do we care about the Ukraine?”
“Why do we have to keep troops in Syria?”
“Why must we go to war with Iran over a drone?”
“Why must we keep sending jobs to China?”
“Why must we allow China to keep stealing our IP?”
I didn’t hear anyone asking these questions before Trump. Heck, I’ve been around for a while, I’m fairly aware, and I never actually thought to question NATO. Why do we have NATO again, what with the FSU having died literally 30 years ago?
Again. I think its just fascinating. But maybe that’s just me! :slight_smile:

I used to be more into dogma. But then it was run over. Karma -> dogma. Ha ha.
I used to be a Republican. Then I was a Democrat. Now? I find myself without a Party.
“Our constitution will endure, while those in government are temporary actors.”
Indeed. We have an election every 4 years. That’s how you replace Presidents. It is what I say to all my facebook friends who want Trump impeached yesterday. “How about you just vote for someone else in 2020 in the usual way?”
All the stupid cheap shots the Republicans used to take at Obama playing golf - I see my Democratic friends saying about Trump.
As a class we have so much more in common - healthcare as the most basic interest - that we all really shouldn’t fight at all.
But “they” can’t possibly let left and right work together. Together we’d put an end to their harvesting operation, and that just wouldn’t do.

I switched over to the Green Party back when Obama tried to force through the Trans Pacific Partnership. These days the Rs and Ds are equally disgusting. Trump is doing his best to destroy what environmental protections are left while Clinton would have openly bragged about doing her Libya routine in Venezuela and Bolivia. At least Trump is a little more subtle about it.
Winning the election is purely a definition. Clinton did get 3 million more votes than Trump. So if a win was defined as it is in the other industrial countries we would have been stuck with the other “shit hole.”
What would be fun is if “Russian agent” Tulsi Gabbard switched over to the Green Party. I think she would get votes from both sides of this massively corrupt system. She would have a snowball’s chance in hell of winning since the “Black Box Voting” machine would be put into hyper drive if her impact was significant.

Yup, I agree. Definitely an interesting case study.
Thanks for a good response.

Couldn’t a Kickstarter-type system provide seed money? If someone has an idea for a business, couldn’t they present their idea to the public, stating the capital requirements to get it off the ground. Then, when enough people have contributed to achieve the goal, the initiators can start the business. The contributors don’t receive a share of ownership or future profits, but rather an amount equivalent to their contribution of the product or service that the new business provides.
Isn’t this a system that is already in place and successful? I think it’s currently usually used for cool things that excite people like movies and games, but it could also work for, say, a manufacturer of paper clips or something similarly mundane, right?

These days the Rs and Ds are equally disgusting. Trump is doing his best to destroy what environmental protections are left while Clinton would have openly bragged about doing her Libya routine in Venezuela and Bolivia. At least Trump is a little more subtle about it.
Yeah, right there with you. Trump sux at environment. (And HRC would definitely have done her appalling, CIA-supporting giggle of glee at Bolivia. And why we hector poor Venezuela - I guess its oil, but it seems really lame to me). And yet I am torn: Ban fracking? Instant 10mbpd deficit in global oil production. Can you even imagine what that does to the global economy? My goodness. $200 oil at a minimum. I mean, maybe its the right thing, but - the biggest killer of people is poverty. Then again, maybe fracking just enables our deep state (John Bolton) Iran/Venezuela policies, so maybe fracking should be stopped after all. Just as an example.
Winning the election is purely a definition. Clinton did get 3 million more votes than Trump. So if a win was defined as it is in the other industrial countries we would have been stuck with the other “shit hole.”
Yes, that's true. But Trump's counter to this is that he played the game as it was laid out. The US has an electoral college. Those were the rules. As a result, he deliberately targeted swing states, playing the electoral college election game. HRC didn't. She lost. Had the rules of the game been different, Trump says he would have played it differently. The man got himself elected with at-best a B-team campaign staff, a 1:3 deficit in money, against the best that the media and the Deep State could throw at him. Might he have won the popular vote on his own, had that been his target? HRC was a hopelessly corrupt Status Quo candidate when voters were looking for Change. And she...targeted the popular vote in an Electoral College election structure. Genius At Work.

I did not get past this paragraph in the OP (by C H Smith):
“MMT advocates claim that since MMT generates goods and services, it won’t generate inflation. But as noted earlier, rebuilding a bridge doesn’t actually create any new goods and services, or increase productivity: it generates wages and consumes materials and energy. Since it doesn’t generate more consumable goods and services, the expansion of wages and demand for materials will drive prices higher.”
Yes, over time it DOES create new goods and services, massive amounts of them. That’s what infrastructure is for, and that is why it must be repaired. No one of course can predict the exact moment that an old bridge will collapse, and let us pray that we are not such morons as to try. We have to repair or replace the old bridges, and old everything else, in order to “generate more consumable goods and services” over the next 50, 100, 150 years (relevant time scales for infrastructure).
Further, though perhaps not true in the case of bridges, much infrastructure renewal will be replacement of old, highly-inefficient stuff with new much more-efficient stuff which reduces demand for energy/materials. A stellar example is the onrushing electrification of transport, which will dramatically reduce energy requirements (remember “peak oil”?), while dramatically reducing machined materials requirements, while dramatically reducing air pollution (large health/medical impacts), and so on. Concurrent with that will be the self-driving phenomenon, which will dramatically reduce the total vehicle fleet size (vast savings of everything!), while dramatically reducing urban real estate pressure (need for parking lots reduced by ~80%), and numerous other benefits. There are other examples, but those should suffice.
Point is: the more aggressively we pursue these transformations (perhaps with MMT-informed capital spending), the sooner we will realize these vast benefits, which will be DEflationary in nature. Even the MMT advocates, I fear, have not foreseen the profoundly deflationary impact of upcoming technological transformations; or to put it another way, you might say that the MMT advocates are more right than they now know. Most of them are still afraid – irrationally – of inflation! They, like so many others, seem to be caught up in fighting the last war, but general inflation has not been an issue since the early 1980s.

MMT advocates are more right than they now know. Most of them are still afraid — irrationally — of inflation! They, like so many others, seem to be caught up in fighting the last war, but general inflation has not been an issue since the early 1980s.
    Alan, Yeah no general inflation problem since the early eighties...unless you count the costs of eating, living, a roof over your head, medical care, education, transportation,insurance etc even tents and tarps cost more when you want to set up house under the freeway overpass. Your analysis on this topic seems like its blinded by idealogy. Both Socialisim and tecnophilia which is ironic as your vaunted 'deflationary' technology /automation etc is decimating the proletariat even more than the disappearing middle class, itself being eviscerated by unfettered currency debasement and finacialization made possible by limitless printing unhindered by any tangible constraints. MMT doesn't even pass the most basic common sense logic.   mm      

Is Amazon inflationary or deflationary? and why.

Can someone please explain how a company like Schwab can offer trading of stocks without a brokerage commission? It seems they have stopped charging a commission on stock trades.
It’s like they are offering stock trading as a loss leader just to get more currency into their “store.”
How is Schwab earning the cash flow to fund their stock trading business?
Are they getting free money elsewhere?

Maybe they’re front running their clients or selling access to their clients’ trades to high frequency trading algorithm companies who do it.


Thanks for your response.
That’s right, “no general inflation problem since the early eighties”. Inflation has been running in low single digits the entire time.
“Unless you count the costs of eating”: funny, but I recently found a grocery receipt (bookmark in an old book) from 1988 – almost a third of a century ago. It was interesting reading. Prices of most stuff have doubled since then. A few items were higher, and a few items, surprisingly, about the same. At inflation of a few % per year, one expects doubling every 20 years or so.
“Living”: what does this mean?
“a roof over your head, medical care, education”: those are indeed the three sectors that have seen BIG price increases, no question. But in each case, there are specific sectoral reasons for the price increases, and they are not part of a general inflation. Understand what I mean? Not all price increases reflect or are part of a general inflation. If the price of the cotton I use to make T-shirts suddenly doubles because of crop failure or what have you, and my price for T-shirts thus doubles, that does not indicate inflation. It is just a price increase down to some specific cause, unrelated to general pricing. In the case of education, for example, it was not inflation, but rather enormous growth of a thick layer of new (high-pay) administration, that caused most of the big price increase. That layer of administration could be cut out, with a return to much lower tuition, and that would not reflect a lessening of inflation, but simply a reduction in costs. And so it is in other sectors. Though it is also true that the low single-digit yearly inflation that has been going on adds to the foregoing, modestly.
Other than those three areas – which are admittedly important – prices in general have risen slowly, with individual items or sectors either rising modestly, or stagnating, or in a few cases dropping (a lot!). I’m paying currently under $2.50/gal for gas, about the same as 20 years ago, give or take. The laptop computer of sufficient power for which I paid ~$2000 in 1993 is now ~$200 or less. Clothing is about the same, for some things cheaper. And so on.
“Your vaunted ‘deflationary’ technology /automation etc is decimating the proletariat even more than the disappearing middle class”
Technology and automation are not the problem. Neoliberalism is, and has been for decades. Let’s put the blame where it belongs. The Luddites wanted to blame the machines; they were wrong. It was the economic system that was the problem, not the machines. The machines are good, relieving us all from tons of toil; wealth-creation on a vast scale. What’s bad is the economic system that funnels all the wealth thus created to the TOP; i.e. that steals the wealth from its rightful owners, US.
“Itself being eviscerated by unfettered currency debasement and financialization made possible by limitless printing unhindered by any tangible constraints.”
Look at a chart of the U.S. dollar index over the last 40 years. It has had its ups and downs, but how has it been “debased”? Remember that during this time, countless trillions of dollars were created – “limitless printing unhindered by any tangible constraints”. Where’s the debasement?
Further, the idea that the proletariat and middle class are being “eviscerated” by money-printing is… weird. The prevailing economic wind, since ~1980, has been of monetarism – policy informed by fear of inflation and “limitless printing unhindered by any tangible constraints”. The Fed is charged with “fighting inflation” and that phrase is used countless times; contrast with the phrase “fighting deflation” which is used maybe 5% as often. The obsession with inflation prevailed, amazingly, in the very midst of the GFC, during critical months when the very LAST thing that should have concerned anyone (or even occurred to anyone) was inflation! And yet it is a matter of record that the Fed was wringing hands about inflation EVEN THEN!
This inflation-obsessed monetarism is sometimes called “sado-monetarism” because of the pain it inflicts on vast segments of the population: the pain of stagnant wages, frozen minimum wage, destroyed unions, slashed social spending, “the end of welfare as we know it”, stagnant Social Security benefits, cuts to social services of all kinds, and on and on.
I would suggest that it be called “schizo-monetarism”, since the fear of inflation and the denunciations of “limitless printing” suddenly vanish when it comes time to print limitless money for the military-industrial-security complex, for tax cuts for the rich, and other favored enterprises or exercises. Kinda schizophrenic, eh? Bigtime money-printing is bad bad bad! – except when it’s not.
Bottom line, though: all of this austerian clucking about “limitless printing” and “currency debasement” is straight out of the Republican/right playbook, and has a long nasty pedigree that is distinctly oligarchic and elitist, pro-war, pro-1%, anti-worker, anti-human and even anti-planet. Austerity sucks for the common people, and it is even fatal (literally!), and it is totally unnecessary, since the productive powers of humankind are now so vast that everyone can easily be supplied with at least the essentials, and probably a lot more than the essentials. EASILY. It is only the greed and meanness of the austerian types that prevents this.
I hereby suggest to you that each of the following phrases is part of a concerted, well-funded and fundamentally evil austerian propaganda effort – an effort that has been quite successful in installing these memes in millions of minds, and inducing people to mindlessly repeat them. These are toxic lies that an evil cabal of austerian oligarchs and plutocrats WANT you to think, and repeat to others:

  • “worthless fiat toilet paper”
  • “limitless printing”
  • “created out of thin air”
  • “currency debasement”
  • “unfunded liabilities”
  • “U.S. is bankrupt”
  • “unpayable debt”
  • “deficit spending out of control”
  • “Social Security is a ponzi scheme”
  • etc., etc.; there are more, but that’s a good start.
    “MMT doesn’t even pass the most basic common sense logic.”
    You are correct. It doesn’t. Because the “common sense logic” in question refers to household-level analysis, like a family budget. But national economies are not like household “economies”.
    It is a fallacy of composition: the idea that if something holds true for one individual, or small group (like a household), then it must also apply to a large group, like a nation. Not so. That’s a fallacy. And MMT explains in detail why it is fallacious, why those two entities are non-comparable. I urge you to look into it.
    See also my reply to Mark BC, re the gold standard, but generally relevant to your “limitless printing / tangible constraints” concerns:
    … Would that you read several of the articles I linked there.

Do race tracks charge for placing a bet (I really don’t know) ? Entonces, ¿cómo hacen dinero?
Corum’s Law: “Because, gentlemen, this is the rule. A sucker has to get screwed.” Corum ran the Kentucky Derby on this premise for years, and the game was good for all of Louisville. No sucker ever wept.