blog MMT2
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Welcome
NeilW 17th July 2020
(https://new-wayland.com/blog/#Welcome)
This blog is a quine in that the blog you are seeing is also the tool that is used to create it.
Since this blog will mostly be about how dynamic self-referential feedback loops confuses the brain I figured we may as well start with one.
We have a private New Wayland Discord Forum where we keep the baying mobs out, the discussion civil and the disagreements polite. Please pop over and join in.
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The MMT Approach in a Nutshell
NeilW 20th July 2020
(https://new-wayland.com/blog/#The%20MMT%20Approach%20in%20a%20Nutshell)
MMT takes the view that monetary policy is largely useless as a stabilisation device, and what is known as the horizontal circuit (“bank money”) should be left to operate as a market rather than being manipulated all the time. Therefore you leave the base rate at the natural rate of 0% and stop artificially trying to hold it above that, particularly stop moving it around.
What that means is that government stops paying banks “welfare on reserves” payments. No Interest on Reserves. No Bond Coupons. Any income banks earn they have to get by discounting collateral in the private economy and charging for that service (aka making loans).
System stabilisation can then be done using the vertical circuit (“central bank money”) which is added and removed as required to commercial bank’s balance sheets and forcibly creates additional bank deposits in the hands of individuals – because bank money is pegged one-to-one to central bank money.
The result is that the bank money system operates within a containment vessel defined by fixed banking policies, not ones that change month to month, and the banking system ebbs and flows within the policy boundaries, with the government’s vertical system countercyclically matching the ebb and flow.
This is where the Job Guarantee sits. The wage is paid with vertical money and matches the ebb and flow of bank money spending countercyclically. But importantly it does the same thing on the production side with labour hours – injecting and removing labour hours countercyclically with private and public sector demand keeping labour hours near constant relative to the working population.
A guaranteed alternative job replaces bank credit manipulation as the stabilisation process. The production system gets a change in output, not a dead loss. You get income in your pocket, not a debt millstone around your neck.
And that’s how you get to true full employment and price stability within an economic system where demand is satisfied.
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NeilW 23rd July 2020
(https://new-wayland.com/blog/#MMT%20on%20The%20Weekly)
Kudos to the Australian contingent getting this sketch on The Weekly. Can’t see the BBC doing something like this – either about MMT or a decent comedy show.
Bideoa: https://www.youtube.com/watch?time_continue=30&v=uEqucQNLIko&feature=emb_logo
Gehigarria:
Lukenomics eta DTM
(In http://bilbo.economicoutlook.net/blog/?p=45446)
Lukenomics casts its expert eye over Modern Monetary Theory (MMT)
A few weeks ago, I was sent a script for an upcoming comedy segment and asked to give input. The first iteration was already terrific and after a few more iterations, it was in great shape – representing Modern Monetary Theory (MMT) faithfully and pointedly.
I was pleased to have been given the chance to advice the writers so they did not misrepresent MMT. Not often that happens. I really respected that.
The segment by comedian – Luke McGregor – was aired last night (July 22, 2020) on the ABC program – The Weekly with Charlie Pickering.
He calls his segment – Lukenomics – and uses it to explain economics things in an amusing but clear way.
Last night, he covered MMT and I saw the script that had been worked on over a few weeks come to life. That alone was an interesting thing for me.
But Luke’s depiction of our work was great and I hope that he will make some cameo appearances in the future for MMTed.
Here is the segment:
Bideoa: Will Australia ever run out of money?
https://www.youtube.com/watch?v=uEqucQNLIko&feature=emb_logo
1 Neil Wilson.
(In https://renegadeinc.com/author/neilwilson/)
Neil Wilson is the editor of Modern Money Matters and an expert in finance and information systems. He is an Engineer, not an economist, and therefore has to make things work in the messy old real world that has actual people in it. After more than 20 years in the IT industry, Neil has learned the hard way that systems rarely follow the manual. Moving from network crashes to financial crashes, Neil was intrigued as to whether the economy could be fixed with a reboot – which lead him to Modern Monetary Theory (MMT). Neil has become one of the UK’s leading writers on MMT and its implications. His blog “Modern Money Matters” challenges the high-priesthood of Important Grey Men who refer to people as “resources”, and who believe debt is bad for government and good for you. Neil dreams of a world where everyone who wants a living wage job can find one next to their home, friends and family. (…)
2 Wonderfull new blog, by Neil Wilson: https://new-wayland.com/blog/.
