A clueless Stephanie Kelton on the Thom Hartmann show: Modern Monetary Theory as Marxism lite

MMT Queen Stephanie Kelton was on the Thom Hartmann show this week asserting that "infrastructure" cannot be provided by "the private sector" and because the government can never run out of dollars, it  can never really run out of the ability to construct "infrastructure".  Just as with the Marxists, production happens "SOMEHOW", and the only thing holding it back is a mistaken belief that we still live under a "gold standard".  The law of scarcity and the problems of economic calculation and pricing magically disappear as the result of the unlimited supply of funny money dollars (actually, MMTers lack the mental capacity to recognize and/or understand the concepts of scarcity, economic calculation and the pricing process).  

For a comparison to Marxism, let's examine this review of Thomas Sowell’s Marxism: Philosophy and Economics:

Perhaps the most telling example of Marx’s ideas in practice is the results of Lenin’s early acceptance of the SOMEHOW approach to all but labor, as indicated by this quote from State and Revolution cited by Sowell:

Capitalist culture has created large-scale production, factories, railways, the postal service, telephones, etc., and on this basis the great majority of the functions of the old “state power” have become so simplified and can be reduced to such exceedingly simple operations of registration, filing, and checking that they can be easily performed by every literate person, can quite easily be performed for ordinary “workmen’s wages”, and that these functions can (and must) be stripped of every shadow of privilege, of every semblance of “official grandeur.”

In fact, Sowell observes that:

The early history of the Soviet Union provided the most dramatic empirical refutation of the Marxian assumption that management of economic enterprises is something to be taken for granted as occurring SOMEHOW. When economic incentives were drastically reduce or abolished in the heady egalitarian period following the Bolshevik revolution, the Soviet economy ground to a halt. Widespread hunger and a halt to vital services forced Lenin to resort to his “New Economic Policy” that restored the hated capitalist practices. The later nationalizing of all industry under Stalin and his successors did not restore egalitarianism. Quite the contrary. There were highly unequal rewards to management, including today whole systems of special privilege stores to which ordinary Soviet workers have no access. Moreover, the managers of Soviet industry have been disproportionately the descendants of the managerial class of earlier Soviet and czarist times (193).

Then comes the noteworthy conclusion:

Many observers have seen these developments as mere betrayals of Marxist ideals, missing the more fundamental point that a crucial false assumption must be corrected in practice if people are to survive. Its continuing sacredness in theory can only produce hypocrisy. The betrayal may be real, but in Marxian terminology, “no accident.” A similar process is occurring in China, to which many Western Marxists transferred their hopes after disillusionment with the Soviet Union. This too is seen as simply a betrayal of Mao by Deng, rather than a nation’s painful learning from experience that a key assumption of Marxian economics is false (193-4).

The gross falsehoods of Marx’s communism is why the lament commonly heard from so many communist sympathizers — that “true” communism was never put into practice — ought to be rejected. In fact, the ideals of communism — collectivism, dialectical materialism, the evils of capitalism, the idea of labor as the source of all surplus value, the goal of reshaping of man’s nature, the principle of “from each according to his ability to each according to his need,” and so on — were substantially put into practice by the communist regimes of the 20th century. The fact that the result was widespread starvation, forced labor camps, unbearable misery, totalitarian police states, and mass death is hardly a reason to think that the more consistent application of these ideas would result in blissful paradise.

I have pried and prodded these MMTers until I'm blue in the face. While they understand how the various squirtings of funny money appear within our nefarious fiat money system, they have no conception of how the underlying economy actually works because they do not understand production or pricing and they believe that the entire society is held together by these allegedly essential squirtings of funny money by the fiat funny money system.

Platinum coin would have been seen as preposterous by average people - that's why it wasn't used

Well, Obama has nixed the idea of using the "trillion dollar platinum coin". My opinion on why this option was not used is because the coin idea is SELF EVIDENTLY PREPOSTEROUS and even brain dead Americans can see that. The current money dilution schemes like the Fed buying treasury bonds appears obscure, mysterious and incomprehensible to average people which is how the powers-that-be like it. Not so the coin. 

Jon Stewart mocked the idea of the platinum coin. I doubt that he has mocked the purchase of treasuries by the Fed. This caused the monstrous and horrible King of the Keynesians Paul Krugman to go berserk: 

"Above all, however, what went wrong here is a lack of professionalism on the part of Stewart and his staff. Yes, it’s a comedy show — but the jokes are supposed to be (and usually are) knowing jokes, which are funny and powerful precisely because the Daily Show people have done their homework and understand the real issues better than the alleged leaders spouting nonsense. IN THIS CASE, HOWEVER, IT’S OBVIOUS THAT NOBODY AT TDS SPENT EVEN A FEW MINUTES RESEARCHING THE TOPIC. IT WAS JUST YUK-YUK-YUK THEY’RE TALKING ABOUT A TRILLION-DOLLAR CON HAHAHA. [Bob Roddis says "HA HA HA, Krugman, you miserable jerk!"]

Hey, if we want this kind of intellectual laziness, we can just tune in to Fox.

Update: Some people are asking why I don’t go on TDS to explain. Um, first I have to be invited — which hasn’t happened since, I think, 2005."

Trillion dollar platinum coin is the end of civilization - and no one cares

While I never predicted high inflation to ensue back in 2009, I did think that Keynesianism and the war on terror had been exposed as complete nonsense responsible for our bad times and were finally finished. Never did I expect the welfare/warfare monsters to double down on their horrible policies, in the very least because I thought the public would not let them. Because there is no pushback from the brain dead citizenry, these monsters feel more secure in coming out of the closet from the formerly obscurantist form of Keynesianism and interventionism so now we get the absurdity of a trillion dollar platinum coin.  These people are shameless and hopeless.  

And, of course,  we must continue our bankrupting and barbarous foreign policy because the Bible says we must support Israel’s right and obligation to conquer the Middle East and kill A-rabs. I actually thought exposing these noodle-brains for what they really believed would make an impact. I was wrong.

I also must admit that I never thought that the Keynesians would have the audacity to meticulously and continuously ignore the Austrian concept of economic calculation in the face of a constant challenge on the topic. I was wrong on that too.

If one were looking for a way to demonstrate how faithfully the Obama administration had carried on the evil legacy of the Bush administration, this past week takes the cake.

John Glaser writes that if one were looking for a way to demonstrate how faithfully the Obama administration had carried on the evil legacy of the Bush administration, this past week takes the cake:

1. Warrantless wiretapping of American citizens;

2. Indefinite detention without charge or trial;

3. Targeted killings of suspects by drone, without any pretense of due process (even if they are US citizens) remains none of the American people’s business.

Nothing to worry about there, right?

We really need a public that doesn't think "demand" is the primary driver of unemployment right now

Thanks to Daniel "Strangelove" Kuehn for such an excellent marketing theme in my quest to explain and expose the Keynesian Hoax to the public. 

In our real world of human exchange, "demand" just might be the king of all garbage terms used in "economics".  

If you have something to exchange, you might exchange it. If you don't, you won't because you can't. Is that so wrong?

COLUMBIA JOURNALISM REVIEW'S RYAN CHITTUM BECOMES HACK ADVOCATE FOR UNPAYABLE KEYNESIAN DEBT

From the CJR“Audit” blog:

Ryan Chittum , a former Wall Street Journal reporter, is deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.

Mr. Chittum is quite upset that CNBC is suddenly engaged in “advocacy journalism” because of its scaremongering about the “fiscal cliff” and because it is not giving equal time to the notion that there is nothing wrong with the unpayable debt or that we could even use more unpayable debt.  Somehow the REALLY BIG SCANDAL, the total “journalistic” suppression of the Austrian School for 40 or 50 years, is not news.  I tried posting the following comment, but it failed to clear “moderation”. Perhaps because it wasn’t “moderate” enough?

We see not a word from our business press watchdog about the Austrian School, of course. Austrian economists predicted the housing bubble and bust, and still not a word about it.  Ron Paul convinces Congress to audit the Fed and still not a word about it.  It would only take a 24 hour cable channel fifteen seconds once a week to say something like:

"Friedrich Hayek won the Nobel Prize in 1974 for his work on the Austrian Business Cycle Theory which holds that not only do monetary ‘stimulus’ and fiscal ‘stimulus’ not cure depressions and recessions, those policies are the cause of depressions and recessions". 

To which they could easily add: 

“And, of course, no anti-Austrian in the past 60 years has ever bothered to familiarize themselves with even basic Austrian School concepts”. 

Krugman is clueless on the subject. Austrian School economist Robert P. Murphy of NYU has raised over $80,000 to entice Krugman to debate, but the cowardly Krugman refuses.

I can recall only two serious mentions of Hayek on mainstream television in the last 40 years.  Hayek was on “Meet the Press” in1975 of which I made an audiotape:

In 1977, Hayekwas on “Firing Line” wherein he explained how Keynesianism became so popular:

Hayek:  "You see, another political element was that, of course, politicians just lapped the argument and Keynes taught them if you outspend your income and run a deficit, you are doing good to the people in general.   The politicians didn’t want to hear anything more than that -- to be told that irresponsible spending was a beneficial thing and that’s how the thing became so influential."

On  the same show, Hayek explained that Keynesian was primarily a ruse to trick British workers into accepting lower nominal wages than they were otherwise prepared to accept:

Even the Keynesians know that the public does not understand or support Keynesian policy:

Obama:"Look, I get the Keynesian thing. But it's not where the electorate is…"  p. 338.

Would someone explain why it is that the CJR is unconcerned with the total suppression of even a brief description of the Austrian Business Cycle Theory,  a theory which easily and thoroughly explains why Keynesianism (and its cousin, monetarism) is a ruse and how it is the cause of our present misery.  Especially after Hayek was awarded the Nobel Prize?

UPDATE!!!!!  UPDATE!!!!!!

Anonymous wrote in the comments:

ABCT is complete garbage. If Hayek understood economics than he would not have said this:

“When the government of the United States borrows a large part of the savings of the world, the consequence is that capital must become more scarce and expensive in the whole world. That’s a problem.” -Hayek

I finally get it!  Just because scarce resources are employed by the government to blow money out its ass and pay off its supporters, the very same scarce resources can be used at the very same time for capital investments! I never knew that!

O'Reilly warns about how vicious the left is

I watch O'Reilly so you don't have to.  Last night at the start of his show, he again warned us about how vicious the left is .

Then he had John Stossel on for the weekly 5 minute Stossel segment. Stossel again spoke out against the stupid anti-gouging laws plaguing the Hurricane Sandy victims.  O'Reilly objected and called Stossel a fascist thereby proving O'Reilly's point that leftists are truly vicious. 

Encirclement - Award winning documentary in which French commies blame Hayek for the World Bank

L'ENCERCLEMENT

La démocratie dans les rets du néolibéralisme 

This is an absolutely amazing display of the total ignorance of the left.  This is allegedly a "documentary on the real history of libertarian free-market fundamentalism".  A bunch of weenie French and other leftists literally blame Hayek, Mises and the Austrian School for the present day Keynesian welfare/warfare crony capitalist state.  

Part 1 can be seen here. 

Part 2 can be seen here.

The entire thing is 150 minutes of talking.  The clip above is only about 9 minutes long.

UPDATE!  I was excited when I saw that Susan George was going to be one of the film’s commentators. 

  

Sorry. Wrong Susan George. 

Here is the website for this preposterous documentary which seems to have won a barrelfull of  awards from commie movie reviewers.  It continues a perfect batting average for the critics of the Austrian School since there has never been a single one that understood even the most basic Austrian School concepts or libertarian concepts.  They are congenitally unable to distinguish a fiat money regime from a competitive market in money for example. They cannot and will not differentiate between laissez faire and crony capitalism.   Again, they are simply amazing. 

"A critical and intelligent thesis, as dense as hail, on the origins
and strategies of neo-liberalism and its global neo-colonialist effects."

- Martin Walder, Neue Zürcher Zeitung

"These thesis criticizing globalization are well known,
but we have never seen them exposed so radically in a film."

- Eberhard von Elterlein, Berliner Morgenpost 

 

"Listening to these specialists unravel with stunning clarity the roots of neo-liberalism, the mechanisms of its expansion and the ideas it conveys is a fascinating experience."

- Malik Berkati, Le Courrier (Genève)


"The most conspicuous focus of the 39th International Forum were a number of documentaries on burning contemporary issues. [...] The radicality of Brouillette's summation is reflected in the rigorous design of the black-and-white film in ten chapters.

- Martin Girod, Neue Zürcher Zeitung

 

Hopeless MMTers try to explain things to Erskine Bowles

The MMTers are dumber than a crate of anvils (which actually explains how they can believe that an unlimited supply of "dollars" has solved the problem of scarcity).  Their mighty leader, Mike Norman has boldly announced that the anti-gouging price control regime in New Joisy is the free market,  Do they think this is going to hurt our feelings?

Now, they try to explain their bizarro views to Erskine Bowles.  

 "Fiat" means an order from a SWAT team.  Of course, if "there’s no static asset metric that a unit of account is convertible to upon demand", the government, via its SWAT teams, is unconstrained in robbing everybody everyday all the time and transferring the loot to itself and its friends.  And the MMT guys wonder why we're heading towards a surveillance state.

Simple network dynamics dictate that to make liquidity co-scale with expanding options, a growing population and economy must steadily increase fiat incomes and savings, NOT maintain buying power of the unit of account

There is no basis in fact, logic or theory as to why a growing population and/or economy must steadily increase "fiat incomes". Everyone should always be concerned with maintaining buying power of the "unit of account" or else it isn't much of a unit of account. Everyone should be concerned with increasing their real incomes.  And everyone must always be concerned about saving enough to use for investments for the future.

Obviously, the government can always steal what it wants to steal by spending money into existence but even the thieves, murderers and cutthroats who run the government are smart enough to maintain some resemblance in the current system the existed in the old system so that taxation approximates what the government wants to spend and the rest is or appears to be borrowed.  They are smart enough to know that the MMT proposition is insane. In fact, when average people learn that the government can spend money into existence, they will be properly appalled.  The do not know this because Keynesianism, being a scam for the government to loot the masses, is intentionally confusing and obscure. We can thank the MMTers for making it less obscure.

Finally, the fact that the government cannot run out of "dollars" does not solve the problem of scarcity or create the $200 trillion in goods and services promised to all by the government. The only thing that spending money into existence can accomplish is to steal purchasing power from a victim and transfer it to the government's buyer or recipient. This will cause fewer people will invest when one's savings and property are never safe from the kleptocratic pillaging Keynesian state.

MMT is for people who cannot tell the difference between a free market and an anti-free market regime of price controls and for people who think the government is omniscient, efficient and benevolent. In other words, hopeless dolts of the amoral variety.