MMT’s True Colors Appear

Anyhow, this morning we got an FT op-ed by three MMT thought leaders and boy is it a doozy. Here are some snippets about how they’ll control inflation:

  • “if inflation is rising because large corporations have decided to use their pricing power to increase profit margins at the expense of the public, reducing demand may not be the most appropriate tool.”
  • “we must also confront the fact that the fossil fuel, real estate, defense, and financial industries are too large, too dirty, and eat up too much of our national resources. They must be shrunk one way or another.”
  • “another way to offset excessive demand pressure is to tighten environmental and other forms of regulation”
  • “To address this failure, the Congressional Research Service (as well as other budget advisory organizations) will need to be enlarged to do the analysis necessary to find the right mix of inflation offsets that best move forward the task of decarbonizing our economy.”
  • “our principal policy recommendation is a Job Guarantee”
  • “That said, we are not against one or more agencies being given additional tools to collectively manage demand on a discretionary basis”.

In summary:

  • Price controls.
  • Actively busting up the largest parts of the US economy. 
  • Lots more regulations. 
  • More government agencies. 
  • A Job Guarantee. 
  • Full discretion for price setting by more government agencies. 

I am not even sure what to say. They think they can control high inflation through price controls, more government, and a Job Guarantee? Is there any evidence that all of this would work? We know from South American economies that have attempted similar policies that the results tend to be mixed if not disastrous. I am tempted to throw the big bad S word at them, but that might be too much. But make no mistake – if this smells a helluva lot like South American style Socialism then you’re right. That’s exactly what this is. And we need to recognize that this is an extremely dangerous view.¹

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