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Articles by Devin Smith

MMT is a Political Problem: Part 2

March 12, 2020

Thornton Parker
      In the first part of this series, we explained why MMT should be seen as a political problem rather than just an educational one.  In this concluding part, we will discuss where MMT promotion is most likely to fail or have good chances of success.  First, consider some poor prospects.   
      All readers of NEP know how Social Security works and it seems like a natural for MMT.  But is it?  Wall Street sees the program as a leak from what should be their profitable money flow.  For years, the former investment banker and secretary of commerce under Ronald Reagan, Pete Peterson, kept forecasting its failure.  George W. Bush tried to fix the leak by privatizing it.  Arguing the virtues of MMT for Social Security is a sure way to stir up Wall Street bees that are

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MMT is a Political Problem: Part 1

March 10, 2020

By Thornton Parker
       The way a problem is seen can determine how or even if it gets solved.  When the French engineer, Ferdinand de Lesseps, was picked to build the Panama Canal, he saw it as another excavation problem as his Suez Canal had been.  But Egypt was flat and Panama had a mountain. 
When the United States took over the job, John Stevens, who was put in charge, saw it as a railroad problem.  The biggest task was to move ninety-six million cubic yards of rock and earth, as fast as the fifteen giant steam shovels cut them out of the mountain, from the Pacific side of Panama to the Atlantic side for building a dam and raising a lake that would be part of the canal.  

The MMT Problem
Developers and promoters of MMT have seen their task as a teaching problem; explaining

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GW, CC, and MM

February 21, 2020

By Thornton Parker
  The way a problem is seen may determine how or even if it gets solved.  Global warming (GW) and climate change (CC) are going to scramble many ideas about how developed economies work.  At root, GW and CC must be seen as money problems, and modern money (MM) is the key to solving them.   
     Energy companies spend money to find, extract, and market fossil fuels.  Other companies use money to create products and services that consume fossil fuel energy.  Money enables every step from ground to atmosphere and is the common ingredient of all aspects of the global warming problem.    

      Climate change results from global warming, and it too must be seen as a money problem.  Large regions of the country (and the world) face losses from rising sea levels, record

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How White Collar Criminals Get Away with Murder

December 9, 2019

White-collar crime prosecutions are at a 33-year low. Corporate leaders can cause environmental disasters, economic crashes, and the deaths of thousands and still walk free. But there’s a way out. NEP’s Bill Black talks with The Real News Network about this. You can view with a transcript here.
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Trump: The Most Corrupt President in US History

November 18, 2019

So says NEP’s former federal investigator Bill Black, who defines with fine detail what will likely be emerging from the impeachment hearings in this appearance on The Real News Network. You can view with transcript here.
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Wray Appearing Before Congress

November 17, 2019

L. Randall Wray will be providing testimony for Congress on November 20 at 10 am. The topic is the government debt and deficits. His full statement will be available at 10:30AM at the Levy Institute. His goal is to explain a) why we needn’t fear sovereign government deficits and debt; b) why in some important sense, deficits and rising debt are “normal”; c) the deficit is in any case largely outside the control of Congress; d) deficits and rising debt ratios will not lead to government insolvency or bankruptcy; e) all government payments can be made on time, unless f) Congress forces a default (due to the debt ceiling it imposes). The statement will provide a lot of new data related to these topics.
The link to the webcast

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Is it Cynical to Believe the System is Corrupt?

September 4, 2019

While a new poll shows most US citizens believe the political and economic system is rigged against them, Senators Bernie Sanders and Elizabeth Warren also echo this sentiment. Some conservatives are now pushing back. But what says the evidence? NEP’s Bill Black appears on The Real News Network and analyzes the situation. You can view here with a transcript.
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Trump’s China Trade War Increases Risk of Recession

August 12, 2019

Trump accuses China of currency manipulation because their currency devalued in the wake of his tariffs. However, as NEP’s Bill Black explains, this accusation has no basis in fact. Instead, Trump’s trade war only increases the likelihood of a recession. You can view here with transcript.
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Why Is Homeownership Among Blacks Lower Than Ever?

July 19, 2019

Segregation and housing discrimination are affecting Black homeownership today as much as in the days before the 1964 Civil Rights Act. What happened and how can this be reversed? NEP’s Bill Black appears on The Real News Network and discusses this. You can view here with transcript.
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Facebook’s Libra Currency Monetizes Identity and Threatens Privacy

July 8, 2019

NEP’s Bill Black appears on The Real News Network and discusses Feacebook’s new proposed crypto-currency, called “Libra.” Facebook could use this technology to standardize identity and create a world of ultimate surveillance, and then profit from it. You can view here with a transcript.
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Billions Stolen From Black Families by Predatory Lending

June 24, 2019

NEP’s Bill Black appears on The Real News Network and analyzes the new study, “The Plunder of Black Wealth in Chicago,” opening the way for a fruitful conversation about reparations and our future. You can view here with a transcript.
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United Technologies – Raytheon Merger Is the Definition of Crony Capitalism

June 17, 2019

Trump opposes the merger of these two arms manufacturers, which would create the world’s largest such corporation, but why? NEP’s Bill Black appears on the Real News Network and gives us the interesting answer as well as explores why these mergers are dangerous and on the rise. You can view here with a transcript.
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How to Pay for the Green New Deal – Levy Institute

May 31, 2019

L. Randall Wray
How to Pay for the Green New DealWORKING PAPER NO. 931 | May 2019
This paper follows the methodology developed by J. M. Keynes in his How to Pay for the War pamphlet to estimate the “costs” of the Green New Deal (GND) in terms of resource requirements. Instead of simply adding up estimates of the government spending that would be required, we assess resource availability that can be devoted to implementing GND projects. This includes mobilizing unutilized and underutilized resources, as well as shifting resources from current destructive and inefficient uses to GND projects. We argue that financial affordability cannot be an issue for the sovereign US government. Rather, the problem will be inflation if sufficient resources cannot be diverted to the GND. And if

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ZEN and the Art of Modern Money—Part 3

May 13, 2019

MMT for People in a Hurry
POST #3  (Post #1, Post #2)
OPERATION #2—The federal government buys something big for the collective good.
NOTE: A much appreciated comment at Naked Capitalism re: Post#1 suggested that the term “Combustion Chamber” was misleading since the “fuel” (money) put into the chamber is not burned as in a motorcycle engine but is redistributed to other accounts. I was planning to point this out further into the narrative but the comment showed that would be too late. So, beginning now, I’ve changed the name “Combustion Chamber” to “Production/Consumption (P/C) Chamber,” of which we have two: a Public P/C Chamber and a Private P/C Chamber.
OPERATION #1 looked at a transaction in private commerce—an exchange of money occurring in the Private P/C Chamber

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How Far Can We Push This Thing? Some Optimistic Reflections on the Potential For Economic Experimentation

April 29, 2019

Crossposted from Phil Pilkington’s Blog – Fixing the Economists.
Readers are probably aware that there is quite a lot of discussion of Modern Monetary Theory (MMT) and the potential for fiscal experimentation batting around at the moment. Others have weighed in on this already, and I have little to add.
It is striking, however, that most of the push-back — where there is push-back — is not focused on trying to discredit the idea that we should engage in fiscal experimentation. Indeed, the notion that we should engage in fiscal experimentation seems to be, if not mainstream, at the very least part of the discussion.
Yet, vulgar strawman-style arguments against MMT aside, no one seriously disputes the fact that if too much fiscal expansion is undertaken the economy will eventually hit a

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New York Sues Big Pharma for Opioid Crisis

April 15, 2019

Sackler and PurduePharma profited from “suffering and death,” NYC AG Letitia James says. NEP’s Bill Black discusses the case on The Real News Network. You can view with a transcript here.
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Democracies With Sovereign Currencies Can Dance

April 11, 2019

By Anonymous
April 9, 2019
The mainstream attack on MMT is nothing less than an attempt to disguise the glaringly obvious error at the center of the mainstream view of economic thinking.  Mainstream economics is a nihilistic theory devoid of moral anchor.  Mainstream economics ceased to explore the operation of the real economy decades ago and has become an intellectual exercise that assumes the organization of modern society is justified simply because that is how it is.  While some mainstream economists may want to tinker around the edges to make the system more fair few really want to call into question the organizing realities.  The biggest reality they do not wish to face is that money is a symbolic creation rather than an actual productive resource.
Mainstream economics

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MMT, Models, Multidisciplinarity

April 8, 2019

By Pavlina R. Tcherneva
The attacks on MMT are taking a comical turn. A recent one, courtesy of Noah Smith, takes aim at a paper I wrote in the 90s titled “Monopoly Money: The State as a Price Setter”.
It focused on a key MMT idea—that the currency-issuing monopolist (just like any other monopolist) is a price setter. The economics that I was taught didn’t even consider the implications. So I wrote down a few equations to look at different scenarios of prices paid and real resources purchased by a currency-issuing government, given the level of aggregate tax liability and private saving desires.
The paper was followed by other empirical work from the MMT community. So, while I initially started responding to Noah’s hysterical blog, I decided to say a few words about the implications

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The Incoherence of a Serious Economist

March 6, 2019

Lawrence Summers, according to Lawrence Summers, is a “serious economist.” He has just written an op-ed in the Washington Post in which he seriously explains why Modern Money Theory—as proposed by “fringe economists,” as he calls them—is a recipe for disaster. I am going to leave it to the “fringe economists” to rebut Mr. Summers; (I’m confident that professors Wray, Kelton, Tcherneva, Tymoigne, and Fullwiler can take care of that job quite easily). What I want to consider is something even more fundamental: How is it that someone who presents himself as a “serious economist” can get away with speaking incoherently while expecting us—the everyday citizens of America—to take what he is saying as true?
Here is Summers’ first point about why MMT is a recipe for disaster:

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Middle Class Loses, Plutocrats Win With Trump’s Tax Cuts

March 1, 2019

Trump’s “middle class tax cut” is a tax hike. NEP’s Bill Black says Trump could have been a popular President, if he hadn’t lied about middle class tax cuts and building infrastructure in Bill’s latest appearance on The Real News Network. You can view with transcript here.
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