Today’s post will be short. I spent the day mostly doing interviews and ran short on time. I was planning to write about Turkey at some point, but Brian Romanchuk beat me to it. So I’m just going to set things up and encourage you to read what Brian has written.
Before we go any further, I need to set the stage for what follows. Take a listen.
It’s worth noting that Summers has previously argued that France, Germany, Italy, the United Kingdom, and “countries all over South America” have experimented with MMT, so it’s hard to see how Turkey became “the world’s first.”
If you watch this video, you’ll hear Larry claim that MMT says, “we can rely on money finance for everything.” That is called a straw man. MMT says no such thing.
Anyway, Larry references an academic paper that supposedly reveals additional problems with MMT.
Brian read the paper and wrote a response. Here’s the takeaway:
Once again, the authors did not mention MMT (or at least, I did not see any), rather that was an observation by a mainstream economist [Larry Summers] who enjoys making up stuff about MMT. From my perspective, there is nothing in the data or the modeling that is in the least bit surprising, so it is hard to see how it is a challenge to MMT.
This might also be useful. I have only quickly skimmed it.
Have you noticed how the powers that be like to mention Turkey, but never bother mentioning what is going on in Zimbabwe at the moment?
Zimbabwe has followed the World Bank and IMF prescriptions to the letter. Have a look what their interest rate and inflation rates are.
In Turkey Erdogan believes public interest is a sin, which used to be the mainstream position prior to the 17th century. Sovereign debt was advanced to the sovereign interest free, and died when they died.
Erdogan wants interest eliminated as a matter of religious devotion due to his Muslim beliefs. In everything else he's as neoliberal as they come. Sovereign debt in foreign currencies, importing energy and food - alongside lots of gold, government spending without sufficient taxation to free up resources. About as far from a policy informed by MMT analysis as you could get.