Cullen Roche: Pragmatic Capitalism

Due to high demand I am going to bring back the Pragmatic Capitalism discussion forum. Many of you know I’ve had problems with forums and comments sections in the past and I’ve tried to move commentary to Twitter mostly, but I have to be honest – Twitter has increasingly devolved into an anonymous argument spewing mess. While it has valuable features I feel like it’s hard to maintain a continuous and useful dialogue with people. So, let’s try this again. The new Asgaros Forum on WordPress...

I joined the great Joe Weisenthal and Tracy Alloway on Bloomberg’s Odd Lots Podcast to discuss MMT. We covered my journey learning MMT during the financial crisis, the good in MMT and why I’ve become more critical of it over the years. Overall I think it’s a really balanced and objective discussion. I hope you enjoy it.

Here are some things I think I am thinking about: 1) Ahhhh, the yield curve inverted again!  There have been lots of scary articles about how the yield curve is inverting and that that means recession because, well, yield curve inversions pretty much always lead recessions. I wrote about this a few years back and my conclusions were simple: An inverted curve usually leads by 18-24 months so you have quite a long time to be worried, or, um, not worry. According to the Cleveland Fed today’s...

To The Senators of the United States of America: This letter will be a swift and thorough explanation for why voting NO on Stephen Moore should be one of the easiest decisions you have ever made. Mr. Moore is a well known TV pundit and political commentator. We should be clear – despite often being referred to as an “economist” Mr. Moore is not, in fact, a PhD holding economist. And his basic misunderstanding of economics has been on consistent display over the last 30+ years. His...

NB – About 10 years ago I wrote an MMT primer after first being introduced to the theory. I initially thought the theory was coherent and operationally sound, but it turns out that I was wrong. In fact, my primer wasn’t a complete primer because MMT is MUCH more complex than I initially thought (and also much more wrong than I initially thought).  Over the course of those 10 years I still haven’t seen a succinct primer so there is still tons of confusion about the theory. In fact, almost...

I’ve noticed a trend in some economic circles that seems to stem from the Positive Money and MMT people – this idea that government “debt” is “equity”. While the taxonomy in mainstream macroeconomics can sometimes be messy I don’t think this is a case where we need to be trying to reinvent well established terms. Let me explain. First off, I understand the desire to create a more coherent taxonomy for terms that seem to have no meaning (for instance, the term “money” in mainstream macro),...

I’ve been careful in my research on money not to call money a “store of value”. There’s a good reason for this which I will try to explain in this piece. In traditional definitions of money three criteria are generally applied: Unit of account Medium of exchange Store of value The first two are uncontroversial. Money needs to be denominated in a unit of account (the USD, Yen, Euro, etc) and it needs to be a medium of exchange. As a store of value, however, the best money cannot serve this...

Warning – This is going to be another nerdy one. I apologize in advance. Paul Krugman and Stephanie Kelton are two very good economists. They’re also people I’ve had fights with over the years. Not physical fights. Make no mistake – I am a big wimp, but I could kick both of their asses at the same time with one arm tied behind my back. But as someone who leans somewhat towards Post-Keynesian economics and is critical of both MMT (Kelton’s camp) and New Keynesian economics (Krugman’s...

Modern Monetary Theory, aka MMT, has hit the mainstream and some Liberal politicians like AOC are giving it full-throated endorsements. I need to stop playing Mr. Politically Correct with this idea – it is dangerous and we need to start saying that outright. Now, I’ve been generally fair over the years. I was very critical of Conservative Austrian style economics for years when they were pushing the narratives about how QE would bankrupt us and cause hyperinflation. If anything, I’ve...

The 2018 Berkshire Hathaway letter to shareholders is 14 pages of the usual goodness, but I wanted to skip right to the end and all the best stuff. Over pages 13 and 14 Buffett goes through a brief history of the United States and its successes. In doing so he touches on many themes that are essential elements of this website. Namely: Okay, that’s more than three things. Actually, Buffett refers to it all as one thing – “The American Tailwind”. Whatever it is, it’s lots of good stuff so...