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Chris Cook Looks Beyond MMT

I foresee two great parallel trends.

Firstly, resolution of unsustainable mortgage (land-based) debt into a new generation of stock based upon rental values in a debt/equity swap on a massive scale.

Secondly, transition to a sustainable economy through direct ‘energy stock’ investment and the Big Trade of the 21st Century will be the exchange of intellectual value for the value of energy saved: Nega Watts and Nega Barrels.

Adoption of an Energy Standard leads to a new calculus forming the basis of all economic decisions. Dollar Economics becomes Energy Economics.

Monetarism versus Fiscalism versus MMT

.In a non-convertible floating rate monetary system, the currency issuer is not constrained operationally. The only constraint is real resources. If effective demand outruns the capacity of the economy to expand to meet it, then inflation will result. If effective demand falls short of the capacity of the economy to produce at full employment, then the economy will contract, an output gap open, and unemployment will rise. It is important to note that MMT economists are NOT recommending the adoption of a Treasury-based monetary system. Rather, they are asserting that the present monetary system is already Treasury-based operationally, even when governments choose to impose political restraints that mimic obsolete practices and create the impression that these are operationally necessary.

Unmissable set of posts re Banking and Euro crisis from #MMT economists

Will Greece let EU Central Bankers Destroy Democracy? Monday, June 6, 2011 Will Greece let EU Central Bankers Destroy Democracy? By Michael Hudson (cross-posted with CounterPunch) The Greek bailout provides an opportunity for privatization grabs When Greece exchanged its drachma for the euro in 2000, most voters were all for joining the Eurozone. The hope […]

Some data that might scare you (2) #MMT

Bill says: Public debt ratios do not scare me. Rising budget deficits do not scare me.

But the job destruction rates in Ireland really scared me when I started to dig into the data. They tell me that the labour market is being severely damaged and the path-dependency will be profound and long-lived. The destruction of jobs at the rates that the Central Statistics Office has calculated are without exception. Given what has happened since this data was compiled – as Ireland endures its fourth year of economic contraction I can only conclude that the costs of this destructive policy choices are so great and so permanent that the costs involved in exiting the Eurozone would be dwarfed.

I challenge all the neo-liberal, pro-Euro types to actually outline what the costs of exit would be. But they should make sure they understand that the majority of their costs would be inapplicable once currency sovereignty was restored.

The best option for Ireland is to default and exit (1)#MMT

MMT does not consider it feasible to run a national economy in a way that advances public purpose at all times if the national government has surrendered currency sovereignty in any way. The point is that default has to accompany EMU exit (in the case of the Eurozone nations). In thinking about that I focused my attention on some interesting data from Ireland that I have been looking at for the last week. What is clear is that Ireland has no real future while remaining in the Eurozone. It might stagger along and grow again some day. But it will be so severely damaged from dragging out the recession for its fourth year now and will similarly collapse when the next negative demand shocks hits the zone that it would be better defaulting now and restoring its currency sovereignty. The best option for Ireland is to default and exit.

Ellen Brown gets MMT

Good piece by  the excellent Ellen Brown in Truthout writing this time about central banks instead of local state (regional) owned banks as she is wont. She seems to have understood the MMT (modern money theory) message of the advantages of truly sovereign currency and a central bank that responds to the peoples needs. … […]

David McWilliams endorsing MMT approach

David McWilliams met with our visiting MMT economists last week and was sufficiently impressed to devote a column to their ideas. We’re very happy that we’ve helped them get this much-deserved credit. So is there a third way? Is there possibly a way we can inject capital into countries in danger without going to the […]

MMT reaches the letter pages in the Financial Times

Letter to the Editor printed in the Financial Times 11th May 2011 From Mr Ralph Musgrave. Sir, According to Martin Wolf, Lawrence Summers (Barack Obama’s former chief economic adviser) is not sure whether an “expansionary fiscal contraction” is expansionary (“Why British fiscal policy is a huge gamble”, April 29). But it is worse than that: […]

Randall Wray, one of MMT team to visit Dublin outlines the issues.

The Irish voters should demand accountability of government, including investigation of the bail out of banks. Government should pursue debt relief on all fronts. Voters should resist austerity programs. If all else fails, they should demand either default or withdrawal from the EMU (in practice these probably amount to the same thing).

And they demand jobs at decent pay. A Universal Job Guarantee program either funded by a newly sovereign Irish government, or funded by the ECB or other EMU institution is necessary to help revive the economy and to relieve suffering caused by high unemployment. (link to article)

Irish Times covers MMT Conference

The Irish Times reported from the Smart Taxes/Tasc conference on Monday, leading with Stephanie Kelton’s call for Ireland to leave the Euro-zone. It would be good for the ideas of Stephanie and her colleagues to get the in-depth coverage they deserve, and we hope to get this soon. Speaking at a conference organised by left-leaning […]

Austrians and MMTers should be on the same side

Very good post by Rogue Economist Rants Austrians and MMTers should be on the same side Austrians and MMTers should be on the same side. After all, both camps understand the relationship between money and credit, and both understand the full ramifications of having fiat money. They should be on the same side arguing against […]

What! Is our Ex Chief Economist, Michael Casey an MMT Convert?

It is not too far from what Michael Casey suggests to go the next step and have the Irish Central Bank distribute ‘liquidity’  (read euro) to Irish citizens on a per capita basis or fund a Green Job Guarantee.  If Casey is capable now of such great leaps of imagination, why did he not see […]

MMT and a Community Currency

Interesting to  see that MMT has been discovered by the alternative currency movement and has been pressed into service.  The acronyms makes this piece in Re-Imagining Economics by Tadit Anderson very hard reading but worth it. The Community Reserve Exchange: a Community Exchange: Based Upon Modern Monetary Economics Submitted by admin on Sun, 04/10/2011 – […]

Daily Kos: Why Paul Krugman, and we, need to take MMT economists seriously.

This post on the Daily Kos re the Krugmann comments about MMT says it all. He ends with this … Part of the reason this may be so hard for progressives to wrap our minds around is that not only does it upend conventional wisdom about the role of money, government spending and taxes — […]

Bill responds to Krugman’s articles on MMT

I guessed Bill Mitchell would not be able to resist.  He starts… Dear Paul We are both academics and have been trained to PhD level in economics. We should therefore understand the difference between good scholarship and bad scholarship whether the final outcome is a peer-reviewed journal article, published book or Op-Ed piece for a […]

Reuters Insider listens to Warren Mosler (MMT expert and successful invester)

Warren on Reuters Insider: Deficit Cuts Could Lead to Depression, Hedge Fund Head Says After the Quake: Japan Avoids Currency Manipulator Status The Fed Has It All Wrong, Hedge Fund Manager Mosler Says

Krugman obsession with debunking MMT continues with more incredible scenarios

The Daily Kos responds again to Krugmann’s second post on MMT.  Why is such an intelligent man so determined to misunderstand the principles of MMT? Krugman says in his printing press post. As I understand the MMT position, it is that the only thing we need to consider is whether the deficit creates excess demand […]

Modern Money Theory (MMT) is Making Waves

MMT has moved to the next stage of the acceptance process,  from being ignored to being attacked.  The great Paul Krugmann has been devoting considerable column inches to discrediting the upstart that is pushing deficit doves like him off the  truly ‘progressive’ platform.  MMT’s great strengths is its links with traders and other financial non-academics […]

MMT Defenders Say Hyperinflation Risk Misunderstood

MMT deniers often cite the ever present danger of hyperinflation were governments to use its power to spend or give money into circulation, as if it were a tinder box ready to burst into flame.  Here in Pragmatic Capitalism is a good outline of why this is a gross exaggeration of the dangers and some […]

MMT Slays the Boogeyman Deficit

John T. Harvey’s argument writing in Forbes holds also for Ireland except we would need the support of the ECB as we gave away our monetary/fiscal sovereignty. He gives a simple and relatively complete description of how the money system really works. Hat Tip to Tom Hickey from Mike Norman Economics who says about it.. […]

MMT Defines Moral Battle Lines

Mike Norman has announced his aspiration that his will be the pre-eminent blog on MMT issues.  Great – makes my task easier. Here below is a short piece that sets out the stakes. Mosler vs. Friedman: Defining Moral Battle Lines Warren Mosler made and interesting comment on his blog the other day. He was responding […]

Printing Prosperity and other strawman arguments against MMT

Peter Cooper writes a long argument, more in sorrow than anger, about critics of MMT who invent strawmen to attack instead of engaging with what Modern Monetary Theory actually says.  This is only a short extract.  Hat tip Warren Mosler. A Comment on MMT Internet Discussions There is one particular straw man that is repeatedly […]

Word is getting out about MMT (Modern Money theory)

Hat tip to Warren Mosler ‘Centre of the Universe’ for this article in Market Watch. Traders seem to be less hidebound by obsolete economic theory -  if it helps make more profits. Modern monetary theory – which is espoused by a growing number of economists and investment managers because it explains the observable facts better […]

Money Systems & MMT

Much of the background to Smart Taxes’ work is influenced by Modern Monetary Theory, the work of post-Keynesian economists such as L. Randall Wray, James Galbraith, William Mitchell, Warren Mosler, Marshall Auerback and Michael Hudson. ‘Lessons from the Crisis’, the conference co-organised by Smart Taxes and Tasc, helped bring these ideas into much-deserved attention in […]


China’s leaders seem to understand Modern Monetary Theory and are using it to their advantage.  Ellen Brown has her own take on it but we can see that the accounting reality of the Chinese money systems that MMT tells us are the actual realities are true also for any sovereign governments that cares to use […]