advertisement


Labour Leader: Keir Starmer VII

ks.234 said:
No, not quite right. The Magic Money Tree is a recent invention created as part of the narrative aimed at cutting public services. Public services were minimal prior the the Industrial Revolution, so that narrative was not necessary.

It is true that ‘classical economics’ of Adam Smith included a need to balance the books, but then currency was pegged to the value of gold and silver and later pegged to the dollar which was in turn pegged to gold so might have held a certain truth.

Classic economics came to an end with the Wall Street Crash and followed by Keynesian Liberalism that directed government spending toward public works and public services.

Keynesianism was immediately attacked, particularly the New Deal in the US by people like Milton Friedman who believed that any government spending was a “slippery slope to totalitarianism”, and that an economy could only work properly and control inflation by the the means of privatisation, deregulation and cuts to public services. It also stated that a ‘natural’ rate of unemployment was necessary to tackle inflation.

Friedman’s neoliberalism was tried out in Chile by forcibly removing a democratically elected leader and replacing him with General Pinochet. Similar incursions happened in much of the rest of Latin America.

Neoliberalism’s big breakthrough came with Regan and Thatcher where the narrative of ‘sound money’, ‘responsible government’ and ‘there is no alternative’ underpinned the rapid and sustained decline of our public services, the rise of unemployment and the driving down of the value of wages.

However, since Nixon came off the gold standard, and our currency was not pegged to another currency and we did not have massive loans to be paid back in dollars, the narrative of the Magic Money Tree was no longer true. Many currency speculators recognised this and when the financial markets were deregulated, such speculators were able to manipulate that knowledge to make a lot of money. Many MMT economists came from making a lot of money in the market, but slowly came to realise more explicitly that tax does not fund government spending*. The observation that tax does not fund government spending undoes the entire narrative that supports neoliberal economics.

Neoliberalism is a proven failure, even on it’s own terms it has failed to control inflation, but on wider more moral terms it has failed to provide its people with anything other than economic insecurity and declining living standards. Yet the narrative that supports it is still going strong.

If Adam Smith was capitalism v1.0, Keynes was capitalism 2.0 and neoliberalism is capitalism v3.0, we desperately need v4.0. But we won’t get there until we recognise the bugs in the old system and write some new software.

*While the observations of MMT economists have only been around for a couple of decades, as long ago as 1946, Beardsley Ruml of the New York Federal Reserve said that the idea of “taxes for revenue are obsolete”
Click to expand...
Can you give an example of a country using MMT as their economic model?
 
Enfield boy said:
Meanwhile
https://skwawkbox.org/2022/07/30/ex...er-proves-harpin-libelled-audrey-white-again/
Click to expand...
The article might be a bit confusing for people not following this story.

The key point is that Lee Harpin, a right-wing journalist (and a proven liar) claimed that Audrey White had been expelled from the Labour Party before she herself had been notified of this fact.

So either Harpin lied about the expulsion when he made the claim or - more likely, in my view - information about White's expulsion was leaked to him by someone in the Labour Party. The latter scenario is a serious breach of data protection law. It is also a continuation of the hyper-partisan weaponisation of the disciplinary process that the Forde report recently and rightly condemned.

However you look at it, the Labour Party is a corrupt cesspit.
 
ks.234 said:
Yes, the UK!

MMT is just an observation that tax does not fund our government spending. And tax clearly does not fund our government spending
Click to expand...
Thanks for your reply.
I have to admit that that was my thought too.
I’ll keep reading.
 
doctorf said:
Can you give an example of a country using MMT as their economic model?
Click to expand...
This question has been answered umpteen times. It's the wrong question. The operational realities of the money/banking system is already as MMT describes it. The politically driven policy is the problem. The better question is: why are the economies very far away from the logical conclusions are MMT failing so badly?
 
Brian said:
In straightforward terms I consider someone supportive of neoliberalism as supporting free markets, they believe ‘the market will work it out’, they want to deregulate pretty much everything and shrink the state. They wish to privatise pretty much everything and cut public services to the bone. The current tory party, ideology, for example. No doubt I’m wrong, but that’s it in a nutshell for me. That should explain why I think it’s unpleasant as well...

I admit I didn’t start reading about neoliberalism until the tory govt of 2010 and austerity, so you got me there, I haven’t been aware of this for decades but I’ve certainly heard of it before you appeared.
Click to expand...
So the political version with a nod to 'free market' fundamentalism. This is the normal discussion around it. The one I have been having is not simply that. It is about the fundamental machinery leading to WHY that position is taken. Why a government (and population) is led to believe that it must rely on market fundamentalism, the misunderstanding of money flows; why it's thought privatisation should be carried out; what economic premises the idea of shrinking the state is based upon and why it is fundamentally wrong.

I've been involved with economics since long before 2010 and I assure you that these questions were never fully understood. Some here have said they 'knew', but this is not what the economics literature even from the New Keynsians bears out. There have always been parts of theory, but never a fully coherent view. It is only the last 20 years or so that the debt-issue mechanism was fully investigated and properly explained. Pick up any widely-circulated economics text from the 80s to now and you'll see that they do not deal with this.
As much as you keep repeating that 'you've heard of it' the fact remains that aside from Ks, practically everyone here when I started posting (and practically anywhere you go on the web or real life) was/or still is repeating the false debt narrative and has a problematic understanding of core concepts like 'deficit' and taxation. One stuck firmly in the neoliberal framework, even if they dislike the 'effects' of monetarism-cum-neoliberalism.
Brian said:
As for your earlier question, I informed the individual the UK is in massive debt on our national credit card and it is imperative public services be cut in order to pay it off. We can’t leave this debt for our kids, after all. :rolleyes: When it comes to whom do we actually owe this money, obviously it is owed to Darth Vader.
Click to expand...
That's more believable than not. If you want to tell me that in 2010 you didn't think the UK was 'in debt' you're not being truthful. It was the overwhelming narrative from bank analysts, to pop economists to the public.
Joe Hutch said:
I haven't read the whole thread that Brian linked to above, but in it matthewr several times makes the point that the Bank of England can create as much money as it wants to. But there may be (probably are) nuances that I'm missing.
Click to expand...
The knowledge that the CB can create money at will has never been unknown. It's the reason the Friedmans of the world went on a crusade of money supply control mechanisms and built up the money scarcity narrative. To think that what is discussed now is just some superficial 'squabbling' reference to known central banking operations is entirely mistaken. So when I read this post from matthewr, which you referenced above, and replied to it, it was to rein-in the rather nonchalant sentence in that post stating:
-- All the confusing "Wow, dude, just wait till you hear how money really works!" stuff is just exploiting the semantic confusion that dogs this area. You can dive into this endless squabbling if that is your thing although I would suggest there are many better ways to occupy yourself.
Click to expand...
No, it's not that. It's the presentation of things, in a coherent fashion, which no-one was talking about because they did not know about them. More of that 'we knew' talk, when the 'we knew' people make fundamental errors. If they knew, they weren't saying much about it despite apparently already knowing what a few dozen economists were busy researching and formulating over 3 decades. It's merely after-the-fact formulating. If you or anyone here can find me, aside from Ks's posts any single instance of prior discussion on these issues:
  • NAIRU unemployment inflation buffer
  • Bond sales as reserve drain mechanism/as asset swap to control spending competition as tax alternative
  • 'Governmnet debt' as an accounting presentation of national wealth rather than national penury
  • Tax flow and spending flow as parallel rather than cause-effect flows
  • Sectoral balances
  • The concept of the tax liability as currency acceptance driver (as opposed to taxation's second role as credit cancellation)
I will interested to know about them.
 
doctorf said:
Thanks for your reply.
I have to admit that that was my thought too.
I’ll keep reading.
Click to expand...
Beware of reading from the internet, much of it is anti MMT and proceeds from, “MMT says x, therefore y”, but in most cases MMT doesn’t say x, and false presumptions lead to false conclusions.

The fact of the matter is that MMT “says” very little except the primary observation “tax does not fund spending”. There are a lot of conclusions to draw from that observation, such as proper funding of the NHS and saving the planet are easily affordable. There are other conclusions that are a bit more difficult to follow such as the role of the bond market in so-called “borrowing”, but it is not necessary to grasp them in order to think about the implications of the primary observation.

The only other thing that MMT “says” is that a Job Guarantee or proper full employment would be a much more effective buffer stock against inflation than our current ideology that says that unemployment should be used as a buffer stock, but again, leave that till later.

GIMMS is a good place to start, easy to read and non technical. If you feel up to a book, try The Deficit Myth by Stephanie Kelton, she is an economics professor who advised Bernie Sanders but the book is easy to read and logical. It doesn’t have numbers and equations.
 
Le Baron said:
So the political version with a nod to 'free market' fundamentalism. This is the normal discussion around it. The one I have been having is not simply that. It is about the fundamental machinery leading to WHY that position is taken. Why a government (and population) is led to believe that it must rely on market fundamentalism, the misunderstanding of money flows; why it's thought privatisation should be carried out; what economic premises the idea of shrinking the state is based upon and why it is fundamentally wrong.

I've been involved with economics since long before 2010 and I assure you that these questions were never fully understood. Some here have said they 'knew', but this is not what the economics literature even from the New Keynsians bears out. There have always been parts of theory, but never a fully coherent view. It is only the last 20 years or so that the debt-issue mechanism was fully investigated and properly explained. Pick up any widely-circulated economics text from the 80s to now and you'll see that they do not deal with this.
As much as you keep repeating that 'you've heard of it' the fact remains that aside from Ks, practically everyone here when I started posting (and practically anywhere you go on the web or real life) was/or still is repeating the false debt narrative and has a problematic understanding of core concepts like 'deficit' and taxation. One stuck firmly in the neoliberal framework, even if they dislike the 'effects' of monetarism-cum-neoliberalism.

That's more believable than not. If you want to tell me that in 2010 you didn't think the UK was 'in debt' you're not being truthful. It was the overwhelming narrative from bank analysts, to pop economists to the public.

The knowledge that the CB can create money at will has never been unknown. It's the reason the Friedmans of the world went on a crusade of money supply control mechanisms and built up the money scarcity narrative. To think that what is discussed now is just some superficial 'squabbling' reference to known central banking operations is entirely mistaken. So when I read this post from matthewr, which you referenced above, and replied to it, it was to rein-in the rather nonchalant sentence in that post stating:

No, it's not that. It's the presentation of things, in a coherent fashion, which no-one was talking about because they did not know about them. More of that 'we knew' talk, when the 'we knew' people make fundamental errors. If they knew, they weren't saying much about it despite apparently already knowing what a few dozen economists were busy researching and formulating over 3 decades. It's merely after-the-fact formulating. If you or anyone here can find me, aside from Ks's posts any single instance of prior discussion on these issues:
  • NAIRU unemployment inflation buffer
  • Bond sales as reserve drain mechanism/as asset swap to control spending competition as tax alternative
  • 'Governmnet debt' as an accounting presentation of national wealth rather than national penury
  • Tax flow and spending flow as parallel rather than cause-effect flows
  • Sectoral balances
  • The concept of the tax liability as currency acceptance driver (as opposed to taxation's second role as credit cancellation)
I will interested to know.
Click to expand...
You appear upset and not a little obsessed by people knowing about something when you reckon they didn’t.

I realise you like to include snide insults and suggestions in almost every post you make, but make an effort not to question my honesty, fella.
 
ks.234 said:
The only other thing that MMT “says” is that a Job Guarantee or proper full employment would be a much more effective buffer stock against inflation than our current ideology that says that unemployment should be used as a buffer stock, but again, leave that till later.
Click to expand...

Lets not go too far though. MMT does say a lot about money operations, about tax operations, about balance sheet accounting; debt, spending, inflation, in fact all the areas of economics, but provides a coherent explanation of operations. Also its JG 'policy' is just a logical conclusion in line with the fully accepted notion of full-employment as a core starting point of any economics.
 
Brian said:
You appear upset and not a little obsessed by people knowing about something when you reckon they didn’t.

I realise you like to include snide insults and suggestions in almost every post you make, but make an effort not to question my honesty, fella.
Click to expand...
LOL

If there were numerous people describing the idea that tax does not fund spending before 12 months ago, I’m sure you can find some!
 
Brian said:
You appear upset and not a little obsessed by people knowing about something when you reckon they didn’t.

I realise you like to include snide insults and suggestions in almost every post you make, but make an effort not to question my honesty, fella.
Click to expand...
Answer the question or if you can't then don't reply to me. There is no interest in your psychological observations, fella.
 
Le Baron said:
Lets not go too far though. MMT does say a lot about money operations, about tax operations, about balance sheet accounting; debt, spending, inflation, in fact all the areas of economics, but provides a coherent explanation of operations. Also it's JG 'policy' is just a logical conclusion in line with the fully accepted notion of full-employment as a core starting point of any economics.
Click to expand...
Yes, I still have much to learn, but I’ll get there!
 
ks.234 said:
Yes it is! But I think my post was obvious enough for most reasonable people to understand my meaning!
Click to expand...
You appeared to be offering contradictory advice due much of internet disagreeing with your opinion and therefore being misinformation.
ks.234 said:
Beware of reading from the internet, much of it is anti MMT and proceeds from, “MMT says x, therefore y”, but in most cases MMT doesn’t say x, and false presumptions lead to false conclusions.
Click to expand...
 
You must log in or register to reply here.


advertisement


Back
Top