Twitter ohiartzunen ganbera

Bill Mitchell-en The Twitter echo chamber


(i) Twitterrak eta DTM1

(ii) Alderdi sozialdemokratak eta DTM2

(iii) QE delakoaz3

(iv) Generoa dela eta4

(v) Marx-ez5

(vi) Australiaz6

Ondorioa: more mindless tripe circulating on Twitter from attention seekers who have nothing constructive to offer.

1 Ingelesez: “It is Wednesday so just a few things to report and discuss. I have noted in recent weeks an upsurge in the Twitter noise about Modern Monetary Theory (MMT) and various statements along the lines that MMT economists are male chauvinists, mindlessly attack other heterodox economists because we are a religious cult, that we thrive on conflict, that only the US has a sovereign government and more. Quite amazing stuff. And these attacks are coming mostly from the so-called heterodox side of the economics debate although not exclusively. It is quite an interesting exercise to try to understand the motivations that are driving this social media behaviour. Things that would never be said face-to-face are unleashed with regularity these days. There appears to be a sort of self-reinforcing ‘echo chamber’ that this squad operate within and it seems to lead to all sorts of bravado that would be absent in face-to-face communication. None of the attacks seem to have any substance or foundation. They just reflect an insecurity with the way that MMT is creating awareness and challenging progressives to be progressive. And, they just make the Tweeters look stupid. I thought I would document some of the recent trail of nonsense to let you know what is going on in case you haven’t been following it. It is a very interesting sociological phenomena.”

2 Ingelesez: “As regular readers will know I am interested in the discussion as to why social democratic parties and the ‘Left’ have fallen so far out of favour.

My work over many years has been researching and writing about that theme for obvious reasons.

Without an effective progressive political voice there is little chance of retarding and stopping the damage that this neoliberal era is inflicting on societies.

My 2015 book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale – explored them in the context of the history of European integration.

Our latest book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017) – explores those themes in detail.

Our follow up book (2019) will extend the theme into new areas.

My position on Brexit is informed by that research in addition to my work as one of the first MMT economists.”

Ingelesez: “[The paper discussed Quantitative Easing (QE) (asset purchase programs)] … “only a limited part of fresh resources injected in peripheral economies via QE were eventually used … to provide loans to domestic firms and households.”

My blog post really traversed these points and noted that:

1. QE is just an asset swap – reserves for bonds.

2. The asset swap drives up prices of the bonds, which lower their yields, and this might stimulate borrowing under some circumstances.

3. Banks do not loan out reserves (except overnight to each other).

4. Loans create deposits and are not reserve constrained.

5. Reserves are added later if necessary.

6. Loans are restricted by the demand from credit-worthy borrowers.

I asked the question: Why is a heterodox economics research unit still publishing stuff that is based on pure mainstream myths about how the banking system works?

Ingelesez: “

1. My blog post was nothing to do with gender. Since when is it ‘male’ to point out an error in the academic debate?

2. To cast it as a disagreement (“we disagree”) is to then suggest the Tweeter agrees with the mainstream position that reserves are loaned out by banks and are required prior to loans being made.

It was not a disagreement. The Greenwich paper was a wrongful construction of the way modern banking works.

3. And then the insult “a macho sense of superiority”. That is no argument. Just the ‘squawk squad’ in action.”


The links were to these blog posts:

1. We need to read Karl Marx (August 30, 2011).

2. The roots of MMT do not lie in Keynes (August 25 2015).

The Amazon link was to our book Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017).(…)

the ‘no Marx in MMT’ claims…

This is another myth that is now being advanced by many British Tweeters who are trying to discredit MMT – that ‘MMT only applies to the US’.

Even John McDonnell’s advisor claimed that.

I covered that claim in detail in these blog posts:

1. MMT is just plain good economics – Part 1 (August 9, 2018).

2. MMT is just plain good economics – Part 2 (August 13, 2018).

3. MMT is just plain good economics – Part 3 (August 14, 2018).”

Ingelesez: “So, lets get it straight – again.

It is certainly a “self-evident” that Australia, like all currency-issuing countries that do not borrow in foreign currencies or peg their currencies by any arrangement is sovereign in that currency.

To say otherwise is to misunderstand what currency sovereignty means.

The Australian government:

1. Issues its own currency exclusively. No-one else creates Australian dollar currency.

2. Requires all taxes and related obligations to be extinguished in that currency.

3. Can purchase anything that is for sale in that currency at any time it chooses, without financial constraints. That includes all idle labour.

4. Its central bank sets the interest rate.

5. The currency floats.

6. The Government does not borrow in any currency other than Australian dollars.



Iruzkinak (2)

  • joseba

    Adierazpen fiskala
    Bill Mitchell-en British fiscal statement – no end to austerity as the Left face plants
    Last night in Britain (October 29, 2018), the British Chancellor released the – Budget 2018 – aka the 2018 fiscal statement (my terminology, to avoid triggering the flawed household budget analogy). The detailed analysis is being done by others and I haven’t had enough time to read all the documents produced by the Government and others yet anyway. But of the hundreds of pages of data and documentation I have been able to consult, the Government is trying to win back votes while not particularly changing its austerity bias. That is fairly clear once you dig a little into the outlook statement produced by the Office of Budget Responsibility (OBR). The Government’s strategy is also unsustainable because it continues the reliance on debt accumulation in the non-government sector, which will eventually hit a brick wall as the balance sheet of that sector becomes overly precarious. Nothing much has been learned from the GFC in that respect. The Government can only cut its debt by piling more onto the non-government sector. Second, the response of the Left has been pathetic. The Fabians, for example, has put out a document that uses all sorts of neoliberal frames and language, making it indistinguishable from something the mainstream macroeconomists would pump out – the anathema of the constructs and language that the Left should be using. There is a reason the political Left has fallen by the wayside over the last 3 or so decades. And their penchant to write and speak like neoliberals is part of the story.
    The private domestic balance is computed to be consistent with the sectoral balances identity derived from the national accounts framework.
    The summary accounting identity is:
    (S – I) = (G – T) + CAD
    The sectoral balances equation says that total private savings (S) minus private investment (I) has to equal the public deficit (spending, G minus taxes, T) plus net exports (exports (X) minus imports (M)) plus net income transfers.
    This is interpreted as meaning that government sector deficits (G – T > 0) and current account surpluses (CAD > 0) generate national income and net financial assets for the private domestic sector.
    Conversely, government surpluses (G – T < 0) and current account deficits (CAD < 0) reduce national income and undermine the capacity of the private domestic sector to add financial assets.
    Fabian face plant
    The most disappointing aspect of the fiscal discussion yesterday was the release by the Fabian Society (in partnership with the Institute of Chartered Accountants in England and Wales (ICAEW) of their Report (October 2018) – The Fiscal Alternative Public finance choices for the left – which is about as neoliberal and mainstream as it gets.
    Okay, Tweeters – pay me out for attacking the so-called Left again.
    But really, if the Left is to make any progress it has to jettison this self-annihilating tendency to channel the economics of the Right.
    The Fabians say that their report “examines the UK’s future fiscal policy choices” with a mind to considering “the options and dilemmas that would face an incoming Labour government after the next general election”.
    They support British Labour’s unworkable and neoliberal fiscal rule. To make sure we know that they put the Rule in a callout box of its own.
    They repeat, uncritically the ridiculous claims from the Office of Budget Responsibility that:
    If Brexit leads to recession, the UK will have between £20-£50 billion less to spend in 2022 than under existing Office for Budget Responsibility (OBR) assumptions.
    They even highlight that with a callout box in the margin to make sure the reader takes the warning in.
    They claim that under a Labour government, which would increase spending in “the fields of health and care, pensions, education and investment”:
    A lot of extra money will be needed to deal with existing and future spending pressures so there will be little left over to pay for new entitlements …
    Any further increases beyond this level will only be possible in the future if politicians are prepared to noticeably increase the taxes paid by middle-income households.
    They only want the government to “favour borrowing when it creates assets”.
    They use terms like “to give up money through higher tax reliefs”.
    They conclude that:
    Now the deficit on current spending has been eliminated. This creates the economic headroom to start to debate post-austerity spending choices, since the Labour party’s proposed fiscal framework seeks to balance only day- to-day spending.
    They claim that Britain now has “a radical left-wing Labour leadership which has shifted the ‘Overton window’ when it comes to the limits of conceivable tax and spending choices.”
    And then tell us that:
    … perhaps Balls and McDonnell are not so very different. Then and now, Labour is signed up to fiscal discipline with credible rules to set public debt on a downward path and keep borrowing under control.
    They talk about fiscal discipline being:
    … the right thing to do for future generations but it will also be essential in the short term to give markets confidence as they adjust to the novel context of a Corbyn government.
    What was that about a “radical left-wing Labour leadership”?
    Have you any hair left to pull out?
    In no order:
    1. The Labour fiscal rule is a dud which will be unworkable in a major recession and bring them grief. Please read my last salvo on that topic (which has a host of links to previous analyses) – The British Labour Fiscal Credibility rule – some further final comments (October 23, 2018).
    It also uses neoliberal frames and language that just triggers and reinforces exactly the beliefs that the Fabians think are working against the British people.
    It is a sop to the financial markets and just shows that British Labour hasn’t progressed beyond the myths of the 1970s when the Left started losing its way by falling into the trap set by the Right that somehow financial markets could overpower a democratic-elected government and its legislative and regulative capacity.
    2. Whatever the outcome of the Brexit negotiations, Britain will have no les money than it had today. Recession or otherwise.
    In fact, if a recession did ensue then Britain would have more fiscal space because there would be more idle resources to bring back into productive use.
    Why would a Left-leaning organisation believe that the currency-issuing British government is ever ‘short’ of that same currency?
    3. Even if British Labour prioritises “health and care, pensions, education and investment” there will all the currency it needs to “pay new entitlements”.
    Again, the Fabians have fallen into the government is financially constrained like a household myth.
    The only question that the Labour government would have to deal with is to ensure the real resource usage is sustainable and reflecting their priority areas.
    It might be that the available real resources will not allow them to do everything they want, in which case they have a choice – cut back on their aspirations or take some resources that are currently being used elsewhere and redirect them into their priority areas.
    If those resources are currently being used in the non-government sector then they have to tax them into non-use and redeploy them through spending.
    4. Cutting taxes does not reduce the currency available for the government to spend. It only reduces the real goods and services available for use by the public sector (should the economy already be at full capacity).
    5. The reduced fiscal deficit provides no more or no less “headroom” for government spending. The constraint on government spending is not determined by the fiscal balance.
    6. Fiscal discipline is one of those neoliberal terms that is designed to add a moral dimension to public decision making and bias it against expanding the public sector.
    The financial markets are supplicants. They only have power that the legislative framework permits them. It is time that Labour woke up to that.
    And a “radical left-wing Labour leadership” would never design policy out of ‘fear’ of what the financial markets might do.
    It would only seek to limit the scope of those markets and ensure that they serve a productive function. That requires major legislative intervention to outlaw many financial activities, major re-regulation of banks, and strong oversight.
    Please read my blog post – Prime Minister Corbyn should have no fears from global capital markets (October 17, 2017) – for more discussion on this point.
    Anyway, you get the picture.
    If you ever wanted a demonstration of why the Left side of politics is struggling everywhere then this Report is a great example.
    The Duck Test allows us to identify something by “observing that subject’s habitual characteristics”.
    The framing, language and conceptualisation in the Fabian report tells us that they are as neoliberal as they come despite their wish list of progressive things for governments to spend on.
    It is not a progressive input into the debate in other words.
    Tweet away!
    NIESR trying to be important but demonstrating its irrelevance
    In the lead up to the fiscal statement by the Chancellor, the the British Brexit debate was bombarded with another classic piece of misinformation – or lying – from the National Institute of Economic and Social Research (NIESR).
    This organisation has continually offered up tripe about Brexit, instead of providing analysis basis on reality of the British monetary system.
    Really, the Fabians and NIESR should get together.
    While the Leave team has gilded the lily on occasions, the on-going misinformation from the likes of the NIESR is also disturbing.
    In their latest Press Release to accompany the November Review – Prospects for the UK economy – the NIESR claim that Brexit will reduce the ‘fiscal space’ available to the British government and under a “no-deal Brexit scenario”, the Chancellor will lose “£14 billion” in fiscal capacity.
    NIESR acknowledge that despite the lack of certainty about the “future relationship between the UK and the EU”:
    … the economy has gained momentum over the last few months, fiscal outturns have been better and financial markets appear to be sanguine about the uncertainty.
    Which presents quite a different perspective relative to the usual doomsday scenarios that are being pumped out regularly.
    See for example, the latest diatribe from the UK Guardian’s William Keegan (October 21, 2018) – Brexit is like a Premier League side wanting to be relegated.
    But after spending hours running their models and what-have-you, NIESR comes up with a mythical estimate designed to further the squawk squad pushing for another referendum.
    That squad is operating on the principle that if you don’t win the first democratic vote, you keep lying about it and pushing for additional votes until you do win.
    As I noted above in the discussion about the Fabian report, whatever Brexit outcome is negotiated or not, makes zero difference to the fiscal capacity of the British government.
    It will be able to purchase whatever goods and services are available for sale in sterling at any time not matter how Britain leaves the EU.
    And given the NIESR is forecasting a major slowdown in GDP growth (from 1.9 per cent in 2019 with a “soft Brexit” to 0.3 per cent with a “no-deal Brexit”), then, in fact, if they understand the constraints on government spending, they would have told its readers there will be more fiscal space under a “no-deal Brexit” than otherwise.
    That is because there will be more idle resources at a growth rate of 0.3 per cent than under a growth rate of 1.9 per cent.
    As usual, the UK Guardian decided to produce an article (October 26, 2018) – Difference between soft Brexit and no deal worth £15bn – analysis – that gave this stupid NIESR analysis oxygen.
    The article didn’t question the premises upon which the NIESR forecasts were produced.
    Sad that.
    And further, for all those predicting doom, even the NIESR is not forecasting a recession under even the most ‘extreme’ Brexit scenario.
    In fact, under a “soft Brexit scenario”, they believe Britain will grow stronger than the OBR forecast in its October 2018 Outlook.
    The latter forecast a GDP growth rate in 2019 of 1.6 per cent (compared to 1.9 from the NIESR) and 1.4 per cent in 2020 (compared to 1.6 per cent).
    Remainers, what about that?
    A pretty dismal picture really, especially from the Left.
    We move on.

  • joseba

    Europar Batasuna: proiektu neoliberala hirien aurka
    Bill Mitchell-en EU Services Notification Directive will undermine democracy within cities

    (i) Sarrera

    In a blog post last week – Financial services agreements – the EU as a neoliberal, corporatist project (November 13, 2018) – I wrote about the way the EU compromised the capacity of elected Member State governments to advance the well-being of their nations by the way they negotiate trade arrangements in services, particularly with respect to the financial services sector. For all those Europhiles that regularly deny the core agenda of the EU is to compromise democratic outcomes in favour of capital, that analysis, alone, should be sufficient to discourage those thoughts. Of course, that isn’t the only manifestation of this neoliberal, corporatist bias in the way the EU has developed over the last decades. I mostly conduct my analysis at the macroeconomic level but I am also interested (as my publication record demonstrates) in urban and regional analysis. At the level of the European city, the EU is behaving in the exactly the same way – to curb that ability of city authorities to render their cities favourable environments for the residents who live there.
    (ii) Bartzelona
    Some background – Barcelona
    Tourism in Barcelona is massive – in 2016, 32 million visitors were recorded as arriving there, despite a population of just 1.7 million (2016).
    While the commercial interests laud this invasion, the fact is that it drives up rental costs and real estate prices for locals and crowds out residential neighbourhoods with all sorts of behaviour that most of us would not tolerate in our own residential areas.
    Barcelona is following Venice in becoming a city that is severely compromised by the tourist hordes.
    In January 28, 2017, 2000 locals marched down the streets of ‘La Ramblas’ carrying placards “Barcelona no esta en venda”, which brings into relief, the often encountered conflict between commercial exploitation of residential areas and the rights of residents.
    I wrote about the concept of the so-called ‘Visitor Economy’ in this blog post – The blight of the visitor economy (February 6, 2018).
    This was in relation my own city and local neighbourhood being taken over by the Supercars event once a year, which is a racing franchise that survives on local and state government subsidies and causes massive damage to the local area – all in the name of tourism.
    I will write more about that event in due course as the Newcastle Council has just released a so-called independent report that was meant to examine the contribution of the event to the city but excluded most of the costs. It was not a report that should have been published.
    In one part, it claims as benefits the fact that the local residents abutting the racetrack were so against the event being run that their common cause brought the community together. That was deemed to be a benefit of the event. Go figure that sort of reasoning.
    Anyway, back to Barcelona.
    In response to the growing tension between locals and tourists, the local city council started to implement a number of initiatives designed to curb the tourist invasion – prosecuting Airbnb providers for not having licenses, limiting the accommodation licenses that can be issued, charging tourist taxes on hotels, and placing curbs on how many new hotels can be built in the city area, among other restrictions.
    In April this year, the Barcelona City Council introduced a new decree to regulate tourism in the city by controlling access to neighbourhoods in order to protect the amenity for local residents.
    The new regulations indicated that between April 1 and October 30 tourists groups in excess of 15 people and a guide would be prohibited entry to the Boqueria market area.
    The problems of tilting a city towards the ‘visitor economy’ approach for development is summarised by one of the Barcelona residents who told the UK Guardian (Source) that:
    One thing we could do is stop spending millions on promoting tourism … We’re subsidising tourism with public money, by exploiting workers in the service economy and exploiting the infrastructure of the city, which we citizens pay for. Furthermore, tourism is distorting the economy and there is little support for anyone who wants to establish non-tourist enterprises.
    In Newcastle’s case, the Supercars event would not exist without the millions of public money that is paid both directly to the franchise, but also, indirectly in the form of public infrastructure designed to support a high-speed car race (wider roads, parkland lost to hair-pins etc).
    Barcelona’s regulative response to tourism, is, of course, the worst sort of nightmare that the European Commission can imagine.
    For it shows that democratic intent in the form of laws and regulations imposed by elected authorities can temper the worst ravages of commercialisation.
    That sort of restraint, though, is exactly what the neoliberal Single Market policy aims to eliminate.
    (iii) Munizipalismoa
    One of the many narratives that progressive Europhiles hang on to, in their continued hope that the EU can be reformed to shift its neoliberal, corporatist core, is the concept of municipalism.
    In June 2017, the city of Barcelona held a conference – Fearless Cities – which brought together local government officials and activists from all around the world.
    This was the first show for the global or international municipalist movement which has the goal of “radicalizing democracy, feminizing politics and standing up to the far right.”
    The plan is that:
    … these neighbourhood movements, mayors and local councilors have been collaborating to build global networks of solidarity and hope from the bottom up.
    So there is a sort of pincer movement going on in this progressive dream sequence.
    On the one hand (flank) we have the Progressive International proposals stemming out of DiEM25 handling the big picture, and on the other hand, we have the globalist municipalist movement looking out for cities.
    But these are pipedreams within the existing institutional structures governing Europe’s geographical spread.
    The municipalist movement believes that cities can take back control of basic local service delivery from the neoliberals and reversing austerity imposed by national governments, following the Brussels line.
    They believe they can stop the so-called ‘transnational speculation’ in local real estate markets, stop multinational exploitation of local urban environments and counter corporate power in all their ambits.
    Good luck.
    As we will see, the European Commission has these ‘movements’ in its sights and is pushing ahead with policies and legislation that will thwart the capacity of local groups to maintain democratic decision-making.
    I will write more about the reality facing the globalist municipalist movement in later blog posts.
    (iv) EUko zerbitzuen direktiba
    The EU Services Directive
    The EU Services Directive is the application of the ‘single market’ to the services sector and attempts to remove “legal and administrative barriers to trade” and make “it easier for businesses and consumers to provide and use services in the Single Market”.
    While the rhetoric is glowing about “strengthened rights of consumers” and “higher quality of services” the reality is that the Directive is another plank in the EU’s core neoliberal agenda to wipe out discretion by democratically-elected governments at all levels and force a one-size fits all technocracy on citizens no matter what their cultures, traditions and local needs might be.
    So the Europhile Left has another challenge.
    They have been dreaming of reform at the ‘macro’ level and have been banking on the globalist municipalist movement to fix things up at the local level.
    Neither hope has a chance of being realised under the current neoliberal bias of the European Union and its Single Market obsession.
    And, this discussion has massive implications for the current Brexit imbroglio.
    Britain would be as bound by these Directives as the rest of the EU if it stays.
    Local governments will be forced to open their cities to ‘competition’ and will be exposed to all sorts of threats from corporations seeking profits.
    The capacity of cities to plan via zoning will be severely compromised if business thinks the zoning inhibits its business to make money.
    My blog post – Financial services agreements – the EU as a neoliberal, corporatist project (November 13, 2018) – argued that these agreements were sufficient reasons for progressives to reject the Remain argument for Britain.
    But then add in the ‘EU Services Notification Directive’ which will take away democratic control of cities and their local governments to this mix.
    Then it is remarkable that anyone on the progressive side of the debate would not support Brexit and ensure that the terms of that exit were such that these anti-democratic rules (which are really the Single Market core) are excised in total.
    Anything to do with the Single Market is neoliberal to the core. No progressive should aspire to be part of it.

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