Ishi Takes on and Tames the MMT Economy

Ishi take on
and tames
the MMT
Economy

Put the brakes on inflation
took a green job at the train station
bought the radio stations
which saved the nation

which was close to the edge
about to lose its head
and fall out of bed, wake from its slumber ,
and preach to the world, about prime numbers

Who diagnose the psychopathology
and set the people free
with the happy bliss
of green money

MMT is a current approach to economic theory whose goal is to increase economic growth, provide full employment by having government print money to give a guaranteed job to anyone who wants one, abolishes all taxes except land taxes, and sets interest rate for government borrowing at zero. It is viewed as ‘progressive’ (S Kelton, its most prominent evangelizer, is an advisor to democratic socialist Bernie Sanders), though some conservatives are beginning to be interested in it (while others are against it — -possibly different factions of the republican party, or else just confused). I would say theoretically its ‘warmed over Keynesianism’ with a few twists (e.g. its view that the only thing taxes do is regulate interest rates, and do not fund government spending).

It was started by Warren Moser , who ran a hedge fund , is a millionarie , and lives in Jamaica, which is a tax haven, so he can protect his wealth and income — -some of which he uses to fund people like Kelton (and another well known MMTer Randall Wray). Moser was helped by Donald Rumsfield and Arthur Laffer to get his MMT theory above the radar , who in general are both loathed by progressives.

My initial take on MMT was its purpose was to keep pressure off of raising taxes on the wealthy and corporations (promoted by many progressives), and to end poverty, unemployment, and the social problems these cause by creating Soviet, Chinese or Nazi style forced labor camps using the Job Guarantee — -though under MMT work would not be forced, though sometimes people are forced to work (including work they don’’t want to do such as be in the army) so they don’t starve or live in squalor. Kelton and others would compare the job guarantee more to the WPA under FDR which created government jobs by deficit spending — -and many of those jobs I view as basically good,green jobs — -they built national park infrastructure for example.

MMT can be compared to other theoretical approaches to economic policy — — wealth taxes;, transaction taxes (James Tobin); ‘citizen dividends’ and ‘the sky trust’; a Universal or Conditional Guaranteed Basic Income; Georgism; ones proposed which emphasize free markets and libertarianism of F Hayek, M Friedman, and R Lucas; Keynsianism and its descendents (which include MMT) ; social democratic ones such as worker owned co-ops for food, housing, health, education , land trusts, community security services; market socialism or mutualism, centrally planned communism, Bookchin’s libertarian municipalism, market anarchism and anarcho-communism.

My view is that logically or mathematically all of these approaches in certain limits are equivalent. If written down as a set of equations, all of these models will describe the same motion or dynamics of the economy , except starting at different places. However, because real economies are path-dependent and nonergodic , while these models are equivalent ‘in the limit’ , since they start at different places, if one applies these different policies to the real economy they will lead to different results.

(For an analogy if one has 2 drivers , one who starts in New york and one who starts in LA, and each drives around the USA forever and takes every road, then they will see the same things. However, because most will either run out of gas or die before ‘forever’ comes , nor take the same roads (and the network of roads will probably change over time as some bridges fall, others get washed away in floods, or are blocked by fires, and drivers get lost and end up traveling in circles, effectively they will see different things. Both may make it to say Colorado, but not all the way across the US. That is an example of path dependence and nonergodicity — the classic example of which is the ‘Fermi-Pasta-Ulam-+1’ (womyn) model, which is complex, but the simpler ‘traveling salesman problem’ can display some of the same behavior. ).

The choice of which approach and theory to favor (assuming one wants to ‘improve the economy’ or ‘social good’ as most policy proponents claim they want to do — and one way they justify getting paid (they are like doctors who want to ‘cure social ills’) — — is basically based on practical issues, political and personal preferences, and logical and mathematical assumptions and calculations (including whether people can actually calculate the consequences of their mathematical assumptions or axioms — -which even physicists often cannot do ) .

(Some people may not want to nor care about ‘improving the economy’ at least to a large extent — they want to improve their own lives primarily — - so their choice of model depends on whether they can get a job studying one they prefer, whether it is applied or not. )

(There is also a fundamental question, related to whether there exists free will, and whether the universe is random or deterministic, whether any of the factors influencing choice (practical, preference, mathematical ability) are really choices at all. People may be like little (genetically) distinct springs, which are born wound up, and then take paths according to the laws of physics governing springs. If the world is ergodic (see Henri Poincare’s ‘Recurrence theorem’) , all these springs and people will eventually turn into each other, so everyone is the same. The Feynman-Wheeler ‘one electron universe theory is similar, except this would be a ‘one person economy’ theory — similar to the idea of ‘representative agent’ in economic theory, or spiritual theories that ‘we are all one’, as well as a ‘schizophrenic multiplicty’. ).

I would bet that if one were to give the 5 Factor psychological test to anyone who promotes a particular approach, the personality types will fall into clusters which are correlated with the various economics approaches (though not perfectly, because you will be able to find people with all kinds of personality types who endorse just about any approach (just as you can find African American country and classical musicians even though most of those musicians in the USA are caucasian. Similarily, in biology, personality characteristics probably correlate with whether one favors group selection over selfish gene theory; in linguistics with whether one is a connectionist or Chomskyist; in politics, whether one is conservative or liberal; in religion, what your brand of belief is.)

The source of personalities is unknown — -genetics, environment and chance. Why do some people become carpenters, electricians, mathematicians, preachers, drug addicts, sports stars, rock stars, models, etc.?

S Kelton, Moser, and Wray are all in the MMT faction, which is opposed by those into taxation, a Basic Income, or unfettered free markets.

Kelton made a choice, which I take to be political and practical — -she got an academic job she apparently enjoys, and seems to be based on little knowledge of economic theory (she’s more of a historian, philosopher and ‘engineer’ rather than a theorist) , and now has a new job partly in politics and media. But like most ‘political scientists’ (or ‘activist scientists’ — -scientists involved in politics — -she is pushing one basic product called MMT with 3 ingrediants — cut taxes, print money, and appoint someone to create jobs for people to do. Others also have ‘single note’ platforms — -give checks to everyone with no work required, cut or raise taxes (especially on land and natural resources and bank accounts), and make government bigger or smaller.

This is like having 5 or 10 drivers who start at different places in the USA and want to have the best trip — see the best scenery. Where they start and where they go can be determined by listing their preferences, practicalities, and the mathematical algorithm they possess. The you chekc to see which driver had the best trip.

My view is that all these approaches are sort of predictable, which is that they all go the same place, which can be described as ‘nowhere’ or else they go somewhere and then break down and get stuck. This is similar to Obamacare, the Vietnam war, and the current wars in Afghanistan , Syria and Iraq. People made choices to start somewhere, and didn’t end up where they said they wanted to go.

I would start at a different place, and use an approach which is a combination of all these approaches. My algorithm would be based on current ones in AI (such as deep learning and simulated annealing), number theory, combinatorics, graph theory and causal loops, arithmatic, and set theory.

One would have guaranteed jobs, raise some taxes and lower others, regulate and deregulate, print some money and give some away — some unconditionally, and some under some conditions.

There are 3 things i don’t quite get about MMT. What is their stance on social programs like food stamps and housing assistance? And why can’t taxing wealth be used to control inflation?

I think the easiest way to institute an MMT type program would be to simply nationalize most of the wealth — - most of which would come from the rich, but one would also nationalize a little bit (on a sliding or progressive scale ) from all people — sort of confiscate alot of it except from those who have little or nothing. Then you use it to make paying jobs, and hand some out to people who can make their own job, or can’t hold a job (which is their job — eg babies, the sick, and the elderly). If its land , eg a private wildlife preserve such as the one the Rockefellors own in NY, a corporation, or a college or museum, many of these would remain largely as they are if they are seen as national assets. The main thing that would change is the name on the title and who gets any income derived from the asset. This would be a sort of conditional income — -eg part of your income is what you get from your job if you do it — -and this conditionality would be modeled similar to the China Social Credit System — -except rather than soley beibng centrally planned it would be involve a democratic decisionmaking component — — possibly a prediction market, citizen deliberating assemblies, voting, and lotteries.

Voting and participating in any other democratic process could actually be done using dollars. Basically this means people will all start out equal — at least finacially if not in personal characteristics (eg babies and seniors are not the same as people who hang out on street corners, in homeless shelters, or in offices at Microsoft , universities, or government, or sit in classes.) You buy your life.
If you want a job, you buy that. The better the job the more it costs. If you don’t you buy that life too.