By now, you’ve probably read (or at least seen coverage of) President Biden’s op-Ed in today’s Wall Street Journal. And you probably know that the president met with Jerome Powell in the Oval Office just a short time ago. There’s nothing particularly important (let alone unusual) about a president getting together with his Fed chair to talk about the broader economy. In this case, the two men were expected to discuss the path of the recovery, supply chain disruptions, the impact of the Russian invasion on global energy prices, and of course the near-term outlook for inflation.
Let's see... this administration wants to address inflation caused by short supply because of COVID, jammed ports and a resource war in Ukraine with...(wait for it)...higher interest rates! Yep! that'll cure COVID, unjam the ports and get rid of the shortages caused by war...Yep, yep... One cannot make this stuff up.
But that's the current state of orthodoxy in the pseudo-science of economics. That's the same orthodoxy that didn't see the biggest economic event in nearly a century coming (the GFC). It's roughly like reverting to the advanced superstition that passed for medical knowledge in the 19th century when doctors thought bleeding patients would cure them.
Here's Jamie Galbraith's take: “Leading active members of today’s economics profession… have formed themselves into a kind of Politburo for correct economic thinking. As a general rule—as one might generally expect from a gentleman’s club—this has placed them on the wrong side of every important policy issue, and not just recently but for decades. They predict disaster where none occurs. They deny the possibility of events that then happen. … They oppose the most basic, decent and sensible reforms, while offering placebos instead. They are always surprised when something untoward (like a recession) actually occurs. And when finally they sense that some position cannot be sustained, they do not reexamine their ideas. They do not consider the possibility of a flaw in logic or theory. Rather, they simply change the subject. No one loses face, in this club, for having been wrong. No one is disinvited from presenting papers at later annual meetings. And still less is anyone from the outside invited in.” - from James K. Galbraith’s Who are these economists anyway?
It is so hard to not think that any government action is designed to simply maintain power. This newsletter presents a case that find convincing: https://taibbi.substack.com/p/blue-and-red-do-have-something-in Does MMT have anything to say about how the rich will never let the less rich get a little bit more?
I remain optimistic the Administration gets this right but it’s a maddening situation.
Thank you for your informative blogs!
Letter in Globe and Mail May 5 (as originally submitted)
Breaking the expectations of the little guy
https://shar.es/afaZiQ
Let's see... this administration wants to address inflation caused by short supply because of COVID, jammed ports and a resource war in Ukraine with...(wait for it)...higher interest rates! Yep! that'll cure COVID, unjam the ports and get rid of the shortages caused by war...Yep, yep... One cannot make this stuff up.
But that's the current state of orthodoxy in the pseudo-science of economics. That's the same orthodoxy that didn't see the biggest economic event in nearly a century coming (the GFC). It's roughly like reverting to the advanced superstition that passed for medical knowledge in the 19th century when doctors thought bleeding patients would cure them.
Here's Jamie Galbraith's take: “Leading active members of today’s economics profession… have formed themselves into a kind of Politburo for correct economic thinking. As a general rule—as one might generally expect from a gentleman’s club—this has placed them on the wrong side of every important policy issue, and not just recently but for decades. They predict disaster where none occurs. They deny the possibility of events that then happen. … They oppose the most basic, decent and sensible reforms, while offering placebos instead. They are always surprised when something untoward (like a recession) actually occurs. And when finally they sense that some position cannot be sustained, they do not reexamine their ideas. They do not consider the possibility of a flaw in logic or theory. Rather, they simply change the subject. No one loses face, in this club, for having been wrong. No one is disinvited from presenting papers at later annual meetings. And still less is anyone from the outside invited in.” - from James K. Galbraith’s Who are these economists anyway?
Bravo! Keep up the good work and the pressure. Very kind of you to speak at a level all can understand, and prophetic-we must all get this.
How well is MMT working now? What a joke MMT is. If only Milton Friedman were here…..
Late to the party, but a great read! I had no idea how much that the US deficit is plunging
It is so hard to not think that any government action is designed to simply maintain power. This newsletter presents a case that find convincing: https://taibbi.substack.com/p/blue-and-red-do-have-something-in Does MMT have anything to say about how the rich will never let the less rich get a little bit more?