Even though the Bloomberg article is labeled an opinion piece, it was journalistically irresponsible of them to publish it without requiring its author to include some comment from authoritative sources about MMT. Same thing for the Washington Post in reprinting it.
However, there's one small saving grace. When I went to post a comment to the Washington Post article, I saw that the article had elicited precisely zero comments during the period when comments were open. Now, given that WaPo opinion pieces typically attract hundreds of comments within hours of publication, so the absence of any comments for Sharma's piece was striking.
While MMT is an appealing way to look at economics, finance, and economic policy, it is frustrating to have to read reams of attacks against and defenses of MMT by ostensibly bright economists. It would be much more interesting and productive if the economists who were so inclined spent their time developing useful ideas.
Can someone write the similar article for Nepal ? People in global south are pointing to Nepal's economic challenges similiar to sri lankan economic failure, would love to see the MMT impact if any, in Nepal.
Global South is where Christianity (increasingly Pentecostal / charismatic / prosperity gospel flavored) is currently growing. Domestically, the USAn denominations which take decolonization, manifest destiny, doctrine of discovery, IMF trap issues seriously not so much.
That's an excellent capsule description of inflation. The issues with the IMF and Western "advice" in general are so clear and well-known, yet there never seems to be any organized opposition or alternative.
Imagine if Fadhel was the current Fed Chair. Instead of engaging in financial wealth destruction in order to deliver the private demand destruction to slow US inflation, he would be repurposing the Fed's army of economics PhDs.
They would be tasked with building Leontieff input/output tables while deploying 21st century monitoring tools to evaluate capacity constraints at key bottlenecks.
They would be devising targeted credit allocation programs and selective capital and liquidity requirements to speed up and scale up private investment in those industries with the tightest capacity constraints.
They would be acquiring Global Carbon Rewards (https://globalcarbonreward.org) as a precautionary measure to mitigate the inflation pressures likely to arise as the US weans itself off an ecocidal petroleum addiction.
They would, in other words, with Fadhel's wise hand on the tiller, be demonstrating how a central bank can deliver a pro-growth, anti-inflationary policy - instead of the recurring "fly it into the mountainside, full throttle" game of financial wealth, demand, production and job destruction that we seem to, for reasons unfathomable, be willing to tolerate.
That is both a world worth living in, and it is a world we all know is entirely possible.
Ironically, in many ways, this neocolonialism is at work within the US' domestic politics and economy.
Much evidence that double down strategies are in play.
Levels of abusive market power, entrenched cartels, shadow and predatory finance, lack of strategic
fiscal investment for sustainability (read:climate, jobs guarantee, education), 50 years of withering regulatory public policy by the FTC, DOJ, SEC defunding, defending, condoning and otherwise disregarding the duty to work in behalf of societal needs and wants. Wrap it up with a legislative bipartisan complicity which leaves markets, policy and democracy in the hands of self-interested financial actors/entities (inequality). The more that accelerator is pressed on, the more debilitating it becomes (see cold/ wars, sanctions, hegemony). Stop the madness, please!
It's worth noting that NO ONE is arguing that the current inflation surge was in any way caused by the $28 trillion of so-called "national debt" rung up by 2019. (Don't call it a debt, because we're never paying it back.) So what happened during the pandemic? Something different and truly weird. We had to pay people NOT TO WORK to curb covid transmission while at the same time not driving those workers into abject poverty. So the gov't stunted SUPPLY at the same time it spurred DEMAND by putting money in the pockets of people who were actually going to spend it! Well, gee, does anyone think that's not a recipe for inflation? Was it worth it? I suspect low income people would scream: YES! The spoiled brats of the world most likely have a different view.
So was it a moral necessary? Absolutely! But once you suspend the laws of economics, you have to be ready to impose price controls to deal with the consequences. This was the Biden Administration's mistake. One obvious example. Biden ordered a million barrels of oil per day released from the Strategic Petroleum Reserve. That's not great for climate change, but I get it. But if Biden can do THAT, why not order the price of a gasoline to be pegged at $2.50/gallon? Reimburse oil companies for any losses. It's worth noting that Exxon Mobil reported a 1st quarter profit of $5.5 billion even after deducting a $3.4 billion Russia charge.
Bottom line: if anything, the current inflation surge CONFIRMS the insights offered by MMT. Deficits don't matter when we're not firing on all cylinders. But don't inject enough gas to power a V-8 engine when you're driving a VW.
Sri Lanka’s problem is beyond economical one. Since they independence they were spending enormous amount on military to oppress Tamil people and Tamil genocide in 2009. The actual massacre began in 1983. Most of the politicians live in Sinhala Buddhiest supremacy mentality and they wanted to convert SL as Sinhala only country eliminating Tamil and Muslim minorities. There are over 2m Tamils took refugee in western nations during the last 35 years. Most of them are highly educated and resourceful. Many are very wealthy and can help struggling SL. But unless SL gets rid of her Sinhala minded unitary constitution and create a secular one acknowledging Tamil nationhood and agree for equal citizenship and power sharing. It’s a political problem not just inefficient and corrupt economical problem
No, MMT Didn't Wreck Sri Lanka
Even though the Bloomberg article is labeled an opinion piece, it was journalistically irresponsible of them to publish it without requiring its author to include some comment from authoritative sources about MMT. Same thing for the Washington Post in reprinting it.
However, there's one small saving grace. When I went to post a comment to the Washington Post article, I saw that the article had elicited precisely zero comments during the period when comments were open. Now, given that WaPo opinion pieces typically attract hundreds of comments within hours of publication, so the absence of any comments for Sharma's piece was striking.
While MMT is an appealing way to look at economics, finance, and economic policy, it is frustrating to have to read reams of attacks against and defenses of MMT by ostensibly bright economists. It would be much more interesting and productive if the economists who were so inclined spent their time developing useful ideas.
Can someone write the similar article for Nepal ? People in global south are pointing to Nepal's economic challenges similiar to sri lankan economic failure, would love to see the MMT impact if any, in Nepal.
Global South is where Christianity (increasingly Pentecostal / charismatic / prosperity gospel flavored) is currently growing. Domestically, the USAn denominations which take decolonization, manifest destiny, doctrine of discovery, IMF trap issues seriously not so much.
That's an excellent capsule description of inflation. The issues with the IMF and Western "advice" in general are so clear and well-known, yet there never seems to be any organized opposition or alternative.
Imagine if Fadhel was the current Fed Chair. Instead of engaging in financial wealth destruction in order to deliver the private demand destruction to slow US inflation, he would be repurposing the Fed's army of economics PhDs.
They would be tasked with building Leontieff input/output tables while deploying 21st century monitoring tools to evaluate capacity constraints at key bottlenecks.
They would be devising targeted credit allocation programs and selective capital and liquidity requirements to speed up and scale up private investment in those industries with the tightest capacity constraints.
They would be acquiring Global Carbon Rewards (https://globalcarbonreward.org) as a precautionary measure to mitigate the inflation pressures likely to arise as the US weans itself off an ecocidal petroleum addiction.
They would, in other words, with Fadhel's wise hand on the tiller, be demonstrating how a central bank can deliver a pro-growth, anti-inflationary policy - instead of the recurring "fly it into the mountainside, full throttle" game of financial wealth, demand, production and job destruction that we seem to, for reasons unfathomable, be willing to tolerate.
That is both a world worth living in, and it is a world we all know is entirely possible.
Brilliant, clear analysis, Stephanie and Fadhel. The harvest of MMT straw-men is plenty and the workers are few, but brilliant!
Ironically, in many ways, this neocolonialism is at work within the US' domestic politics and economy.
Much evidence that double down strategies are in play.
Levels of abusive market power, entrenched cartels, shadow and predatory finance, lack of strategic
fiscal investment for sustainability (read:climate, jobs guarantee, education), 50 years of withering regulatory public policy by the FTC, DOJ, SEC defunding, defending, condoning and otherwise disregarding the duty to work in behalf of societal needs and wants. Wrap it up with a legislative bipartisan complicity which leaves markets, policy and democracy in the hands of self-interested financial actors/entities (inequality). The more that accelerator is pressed on, the more debilitating it becomes (see cold/ wars, sanctions, hegemony). Stop the madness, please!
It's worth noting that NO ONE is arguing that the current inflation surge was in any way caused by the $28 trillion of so-called "national debt" rung up by 2019. (Don't call it a debt, because we're never paying it back.) So what happened during the pandemic? Something different and truly weird. We had to pay people NOT TO WORK to curb covid transmission while at the same time not driving those workers into abject poverty. So the gov't stunted SUPPLY at the same time it spurred DEMAND by putting money in the pockets of people who were actually going to spend it! Well, gee, does anyone think that's not a recipe for inflation? Was it worth it? I suspect low income people would scream: YES! The spoiled brats of the world most likely have a different view.
So was it a moral necessary? Absolutely! But once you suspend the laws of economics, you have to be ready to impose price controls to deal with the consequences. This was the Biden Administration's mistake. One obvious example. Biden ordered a million barrels of oil per day released from the Strategic Petroleum Reserve. That's not great for climate change, but I get it. But if Biden can do THAT, why not order the price of a gasoline to be pegged at $2.50/gallon? Reimburse oil companies for any losses. It's worth noting that Exxon Mobil reported a 1st quarter profit of $5.5 billion even after deducting a $3.4 billion Russia charge.
Bottom line: if anything, the current inflation surge CONFIRMS the insights offered by MMT. Deficits don't matter when we're not firing on all cylinders. But don't inject enough gas to power a V-8 engine when you're driving a VW.
Yes. Sri Lanka didn't do MMT right, just as any tyranny never did socialism right.
When one puts decision making for the economy into the hands of big govt loving socialists or MMTers, the results are always bad.
The private economy solves economic puzzles best. Government is generally a worthless and wasteful instrument.
Here is a breakdown of Sri Lankan debt by Ben Norton. Tha capitalist debt trap of the west.
https://youtu.be/U52tT5hgtSk
Sri Lanka’s problem is beyond economical one. Since they independence they were spending enormous amount on military to oppress Tamil people and Tamil genocide in 2009. The actual massacre began in 1983. Most of the politicians live in Sinhala Buddhiest supremacy mentality and they wanted to convert SL as Sinhala only country eliminating Tamil and Muslim minorities. There are over 2m Tamils took refugee in western nations during the last 35 years. Most of them are highly educated and resourceful. Many are very wealthy and can help struggling SL. But unless SL gets rid of her Sinhala minded unitary constitution and create a secular one acknowledging Tamil nationhood and agree for equal citizenship and power sharing. It’s a political problem not just inefficient and corrupt economical problem