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Friday, April 17, 2020


There have been quite understandable efforts to compare the current COVID crisis to the 2008 crash or to 9/11, but I suspect those comparisons are mistaken.  More and more, I am coming to believe that in its impact on the country and also on our politics, the proper comparison is to the Great Depression.  I think we can all agree that Joe Biden is no FDR.  So be it.  But I do not see how the Republican Party survives this governmental debacle.    I have already observed that the efforts to deal with the economic crisis have elevated MMT from a barely respectable fringe hobbyhorse to an operational necessity.  Universal health care is now taken for granted.  If Biden can fight off dementia long enough to be inaugurated [something Reagan did quite successfully], the stage is set for at least the possibility of a once in a century transformation of American politics.

It better come quickly.  I am not getting any younger.


Anonymous said...

Yes, no FDR, but hopefully he'll be more than a Herbert Hoover.

s. wallerstein said...

Of course rightwing populism, indeed fascism, might easily accept MMT. Hitler spent his way out of the Great Depression just as FDR did.

Anonymous said...

What do you think of the claim in the Atlantic, that Joe Biden isn't suffering from dementia, but simply displaying the effects of suppressing a stutter?

Jerry Brown said...

'MMTers' such as me, would say MMT has been an operational reality since the US formally ditched the gold standard completely in 1971. Just took a long time for people to understand it. Unfortunately, S. Wallerstein is correct that the right wing and fascists can also use the same understanding to further their goals. Luckily, many of them are ideologically opposed to understanding what MMT actually says- and most proponents like me are fairly far to the left of center. Which of course is the only reasonable place to be :)

Anonymous said...

I think we're all being short sighted here. Its going to come to light that this natural virus escaped from the lab in Wuhan and the Chinese in conjunction with the WHO suppressed it. China will be the scapegoat and Trump will emerge as a disliked but marginally competent leader. I think we are seeing the tip of the iceberg right now, this may lead to a military conflict or all out war. China will have to pay reparations for the damage to the economies globally and change their behavior just as Japan had to in WWII. Its just beginning, folks.

Anonymous said...

“How the government pulls coronavirus relief money out of thin air”

It’s Modern Monetary Theory (MMT) in action, it seems.

But it may not be so simple. Here’s a more critical view of it (authored by Michael Hudson, research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College; Dirk Bezemer, Professor of Economics at the University of Groningen in The Netherlands;Steve Keen, Professor and  Distinguished Research Fellow at the Institute for Strategy, Resilience and Security of University College London; and T. Sabri Öncü, economist based in İstanbul, Turkey):

which warns that:

“Modern Monetary Theory (MMT) was developed to explain the logic of running government budget deficits to increase demand in the economy’s consumption and capital investment sectors so as to maintain full employment. But the enormous U.S. federal budget deficits from the Obama bank bailout after the 2008 crash through the Trump tax cuts and Coronavirus financial bailout have not pumped money into the economy to finance new direct investment, employment, rising wages and living standards. Instead, government money creation and Quantitative Easing have been directed to the finance, insurance and real estate (FIRE) sectors. The result is a travesty of MMT, not its original aim. “

Jerry Brown said...

Well Anonymous, I can agree with 'marginally competent' as a description. Especially if we are comparing Trump to a person in a coma.

But the man has plenty of fans and obviously managed to become the President. So I wouldn't write off the chance that he can do that again. I very much hope you are wrong about the possibilities of war. And I think you are wrong there.

Jerry Brown said...

Um, 2nd Anonymous @4:06, to be clear- that was written by three economists that basically agree with what MMT says overall, but are concerned that government policy has not recognized all the implications and has been misguided. But not that government policy has been misguided by Modern Monetary Theory in any way. said...

Anonymous, at best Biden is suffering from a neurotic over-sensitivity to the accusation that he has dementia. He's always been a blunderer. Open suspicion of his competence perhaps merely exacerbates the problem. His wife seems a fairly rational person, as physicians go, and would not hesitate, should she detect a problem, to counsel her husband to stand down.

Anonymous said...

I have to admit I'm relieved that both Jerry Brown (who, I believe, is an MMTer) and S. Wallerstein (who isn't) agree on this:

"Of course rightwing populism, indeed fascism, might easily accept MMT. Hitler spent his way out of the Great Depression just as FDR did."

That's a very good point, SW.

As a long-time observer I have come to believe that people tend to think MMT = Leftist because of the general leftwing preferences of the main MMT theorists (in no particular order Wray, Mitchell, Kelton). Even without a deeper analysis, that association becomes suspect, as Warren Mosler is another MMT elder. And Mosler is extremely wealthy and, therefore, in principle less credible as a leftist.

By the way, the same broadly leftist stance seem to characterise the younger MMT theorists (Tcherneva, Fullwiler, Tymoigne, among others).

And because MMT began as an Internet phenomenon, it offered a target for many careerists and opportunists quick to jump into the first bandwagon open to take them on board. The good, the bad, and the ugly can and do adopt not only MMT, but other Internet initiatives.

Some of those newcomers are probably merely intent on self-promotion. Others, I fear, seem to have much more sinister purposes (I am thinking here of the by now almost forgotten alt-right and its more obscure twin sister, the alt-left).

Regardless, that kind of association will not benefit MMT.

And I could give examples, but perhaps it's better to leave those interested to find things by themselves.

- The AnonyMouse

Dean said...

Folks, This is completely off topic, but scroll down to the embedded YouTube thingum here:

I myself harbor little but disdain for nature. It's vile and vicious and it introduces shit like COVID-19. I'm also a proud Luddite, wholly opposed to cameras everywhere. But this makes me wonder that perhaps I'm overreacting.

David Palmeter said...

Anonymous refers to "the enormous U.S. federal budget deficits from the Obama bank bailout after the 2008 crash through the Trump tax cuts." The starting point for the deficits wasn't Obama's bank bail out, it was Bush's 2001 tax cuts followed by a war in Afghanistan and another in Iraq with a further tax cut for the rich in mix. Bush inherited two consecutive years of budget surpluses.

While Republicans scream about deficits, the two worst economic hand-offs from an outgoing to an incoming president in the last 100 years have been Hoover's to Roosevelt and Bush's to Obama. If Biden makes it in November, the hand-off from Trump to Biden will join those two. An interesting exercise would be to rank them from worst to least worse. I'd be inclined to say Hoover's to Roosevelt was the worst, bad as Bush's hand-off to Obama was, I think Hoover's was worse. Trump, however, might out-do Hoover.

Jerry Brown said...

That is a great observation David Palmeter. Although I hope that Trump will be handing it off to someone else in January of 2021, I also really hope that wont be as bad as the Hoover transition economic circumstances were. I am sure that we are in for worse than anything in the Bush-Obama period, at least short term. I won't depress myself by looking at the actual stats but if we are not at +15% unemployment rate next week I would be very surprised.

I am optimistic we will get a handle on this soon- but there is no science standing behind that optimism. But I try to be happy.

Paul said...

MMT, insofar as it intends to say something non-trivial, is bullshit. Doug Henwood, Matt Breunig, and others have decisively argued that it is no friend of the left. One day, we on the left will wake the hell up to the fact that we can’t win huge social democratic reforms without massive taxes on the rich and, to make that happen, worker organization and struggle at the point of production.

J. Fleming said...

I believe Jill Biden is an educator not a physician.
Has anyone on this blog ever read Guy deBord's The Society of the Spectacle?
Seems quite applicable since the fifties and even more appropriate presently.

Jerry Fresia said...


"at the point of production"....haven't heard that in awhile....I think you are on to something!! Bravo!

R McD said...

Wrt what Dean said at 8:45.

First, thanks for the berkeley birds. In pre-covid days I regularly walked past the tower they're nesting in completely unaware that they were there. Should I ever be able to walk there again, I will think of this.

But I have to disagree with your assertion that nature is vile and vicious. Every time I listen to the news, alongside all the reports about some people being selflessly helpful and courageous there are still so many other reports that almost make me weep for the vileness and viciousness of human beings. But then again, we are part of nature and have never been a very pleasant species. So maybe I can agree with you about nature?