Sunday , October 24 2021
Home / Mike Norman Economics / Absolutely idiotic hit piece on MMT by 3 clowns at the Richmond Fed.

Absolutely idiotic hit piece on MMT by 3 clowns at the Richmond Fed.

Summary:
This is one of the worst hit pieces I have ever run across. Loaded with ridiculous strawman arguments, making claims MMT never made. A display of sheer ignorance and dogma. The authors clearly never read any of the MMT academic papers or literature. This should be a total embarrassment for the Richmond Fed or an indictment of how wedded they are to a deeply ignorant and inapplicable dogma.Starts off with this ridiculous statementDuring the past 25 years, low interest rates and highly expansionary monetary policy with little apparent inflation have created the illusion that a government can simply print money to fund exorbitant deficit spending with no repercussions. This core tenet of so-called "modern monetary theory" ignores the fact that deficit spending is constrained in the long run

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This is one of the worst hit pieces I have ever run across. Loaded with ridiculous strawman arguments, making claims MMT never made. A display of sheer ignorance and dogma. The authors clearly never read any of the MMT academic papers or literature. This should be a total embarrassment for the Richmond Fed or an indictment of how wedded they are to a deeply ignorant and inapplicable dogma.

Starts off with this ridiculous statement

During the past 25 years, low interest rates and highly expansionary monetary policy with little apparent inflation have created the illusion that a government can simply print money to fund exorbitant deficit spending with no repercussions. This core tenet of so-called "modern monetary theory" ignores the fact that deficit spending is constrained in the long run by a government's ability to satisfy creditors.

Satisfy creditors? "Exorbitant spending." They even start off talking about monetary policy when MMT spends little time on that, and in fact has stated how that's ineffective. MMT deals with fiscal policy space of a currency issuer. 

Even invokes the completely idiotic comparisons to Weimer Germany and Zimbabwe.

...economic history is awash with disastrous attempts to finance government spending and debt simply by printing money. These examples range from currency debasement in the Middle Ages to the hyperinflations of the 1900s (for instance, Germany in 1923, Hungary in 1946 and Zimbabwe in the 2000s). All of these examples demonstrate that MMT-flavored policies are, at the very least, poor solutions to fiscal problems.

Really, really, stupid.

There's a lot more misrepresentation, ignorance, and just plain garbage in the paper.

Read it here.



Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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