OK, Now I Get Modern Monetary Theory (MMT)
it's a grift
OK, I admit it; Up to now I didn’t really get what MMT was trying to do. The idea of not worrying about deficits is all very well in a crisis, but not as permanent policy. Hello Argentina.
But then I read “The Modern Monetary Theory Meltdown” by Con Chapman, and he told me who the goddess of MMT is.
The issues of “health care, infrastructure, education,” and “climate change” could all be solved — according to Stephanie Kelton, author of The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy — with one weird trick, as they say on the internet; stop focusing on federal budget deficits.
If you go to Amazon, the blurb of The Deficit Myth says:
Stephanie Kelton's brilliant exploration of modern monetary theory (MMT) dramatically changes our understanding of how we can best deal with crucial issues ranging from poverty and inequality to creating jobs, expanding health care coverage, climate change, and building resilient infrastructure…
MMT redefines how to responsibly use our resources so that we can maximize our potential as a society.
Now, the point of monetary policy is that it enables the government to seize a vast amount of resources. And the only thing that makes sense is to fight a war. That’s why the Dutch invented central banking in their war of independence against the Spanish, to enable them to seize private resources for a season so they could wage war against the Spanish.
But you’d better win your war. Because when you lose, Germany, it means hyperinflation — after World War I and World War II. And both times, the Germans had to call in the economists and create a new currency. Not good.
Note, that any time you have hyperinflation, the little guy loses out, and speculators make a fortune: as in “The Jews.”
May I say right here that if you want to print money for your war, you’d better get the war over soon. Printing money, issuing debt, essentially diverts money and resources from ordinary day-to-day activity into the rulers’ war. It cannot go on forever, because it takes resources from productive and beneficial uses and essentially blows the money up in guns and bombs and devastation.
So what MMT is proposing to do is take money out of the ordinary economy to use on ruling-class projects. Yes, but we are already doing that.
Poverty. Oh yeah. The War on Poverty. We’ve been fighting that war for 60 years. And you really think that spending more trillions of dollars will help? And I say that we have made things worse.
Inequality. What you are really saying is give me more money and I will change the world.
Health care. You really think that spending more money on health care is going to improve lives? When we already spend over a trillion dollars a year on government health care?
Climate Change. Let’s say that climate change is a real problem. But you really think that governments spending trillions of dollars will solve it? And what if you are wrong? What then? Will all you professors give the money back to ordinary Americans?
Resilient Infrastructure. What is that supposed to mean? I can’t imagine it means anything other than projects that educated liberals think are really important, as in EVs, charging stations, light rail, 15-minute cities. But suppose you are wrong, and the money turns out to have gone on useless projects that don’t benefit anyone except well-connected corporations?
See, all this assumes that we already know what will work. And the whole point of the market economy — not to mention life — is that we don’t know what will work. So we have this concept called start-ups and private equity. People with good ideas go to rich people to get money for their idea. Usually their brilliant idea fails to succeed, and the rich people lose money. But sometimes the idea works and the rich people make out like bandits: Standard Oil, US Steel, Autos, IBM, Microsoft, Apple, Google, Amazon.
The point is that we don’t know what will work. Not until afterwords.
And do you know the people most likely to be wrong about the future? Politicians, activists, professors, government grantees. What MMT advocates are saying is: give us a blank check and we will save the world.
No. The best outcome is that you MMT guys win a world war, and… Yeah, just what is the benefit of winning a world war?
The fact is that human society, human life, is all about millions of people coordinating their actions in the hope that it will all turn out for the best.
Used to be that humans did this on a small scale, in what I call the Life World, people coordinating their lives with people they know and/or are related to; they established a reputation for honesty around the village. But now we live in a more abstract world, Market World, where people coordinate their actions with prices and borrowing and lending, and trust is measured in things like credit ratings.
What the MMT enthusiasts are calling for is to expand War World, ,where all the decisions are made by politically powerful people, and the people are drafted into battalions and armies to work the will of their rulers — for a Better World, of course.
Guess what, MMTers. Usually politically powerful people are good at doing things that benefit themselves, but not so good at doing things that benefit other people.