Monetary Realism

Understanding The Modern Monetary System…

“What I am asking you is whether you believe MMT’s order of the trifecta would be FE>PS>production?”

“What I am asking you is whether you believe MMT’s order of the trifecta would be FE>PS>production?”

The MMR crew had a conversation about the order of importance of these three policy goals:

  1. Full Employment
  2. Price Stability
  3. Production
The MMR view of this would be: Production > FE > PS.   (Feel free to chime in, C&C!)
The mainstream operates under: PS > FE > Production. We can be sure Price Stability is in the #1 position; this is expressed by Michael Woodford in his monumental work.

“The present study argues instead for a different view of the proper goals of monetary policy. Its use to stabilize an appropriately defined price index is in fact an important end toward which efforts should be directed—at least to a first approximation, it should be the primary aim of monetary policy”

It seems to us MMT thinks FE>PS>production. Here is Tom Hickey on this same topic:

“I have never heard the MMT economists address this, and I am not well versed enough in macro and the MMT professional lit to give any sort of definitive answer. Basically, the PK-MMT approach is demand-driven and NAD drives production and investment. This is the basis of the sectoral balance approach and FF to adjust NAD to the ability of the economy to expand to meet it at FE while also maintaining PS. Based on this I would say, maintaining NAD at the appropriate level optimizes production (uses of available resources including human resources (FE). Then the issue become maintaining PS as well. But as I say, that is my take, which may not adequately summarize theirs.”

Tom’s always gracious and smart.  The title of this piece is meant to be an attention-grabber rather than a slam on you, Tom. I thought it was a good, provocative quote to get a debate going.

What do you think?

(Update: I’d like to apologize to Tom Hickey. I did not mean to offend him and I did. The short warning at the end was not enough. Tom, I am sorry. )

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195 Responses

  1. Cullen Roche says

    You don’t have to agree with anything. You could create a mythical JG on Mars that employs nobody. I don’t really care. All I did was take a simulation by an MMTer from the most recent crisis and use it to provide evidence of a real-life example of how the JG might work. It’s about as close to empirical evidence as we have on this matter since the JG has never been implemented in real-life. I know the conclusions don’t support your politics, but that’s just something you’re gonna have to deal with. You attacked my referring to the JG as huge. The evidence and commentary from MMTers supports my comments. So I have no idea what you’re trying to achieve here other than being difficult and generally arguing in the same stubborn manner that makes everyone despise MMTers.

  2. AK says

    Why should I have to agree with Scott’s choice of 16 million (used for the purpose of a simulation) as the final set-in-stone figure that the JG is supposed to employ at all times?

    You keep engaging with snippets of other people’s statements and assumptions rather than mine.

  3. Cullen Roche says

    16MM is the number Fullwiler provides. Not me. So it’s 16MM with 1.73MM pvt sector jobs created through the JG. They’re huge numbers no matter what. This is not even my data….I’m not sure what you’re getting at. You’re just being difficult for no reason.

  4. AK says

    16 million was approximately the number of unemployed in the United States at the peak of this crisis. So to say that 16 million is the number that the JG intends to employ would still require you to ignore the effects of the fiscal adjustments that MMT has been calling for from day one.

    Also, since when did anyone ignore the practical difficulties of getting a JG through Congress? Everyone knows its nearly impossible in the United States and will probably not happen any time soon.

    But so what? Does that mean we just stop talking about everything that is politically impractical? One point that MMT and MMR agree on is that the USA needs a large stimulus at the moment in some form; what’s the chances of that passing Congress? Near zero. Should we stop talking about that too?

  5. Cullen Roche says

    You were making a semantic point. The Fullwiler sim uses 16 million. So let’s erase that whole conversation and start there. It’s still a humongous program so this whole conversation was never going anywhere….The reason this annoys me is because you guys are picking out comments of mine to claim I am misrepresenting MMT when the reality is that this is not remotely true. I just used the biggest figure I’d seen to date because it’s what MMT says. There’s no point in my using 0 for my JG argument is there? But fine, you want to use a smaller number so let’s use 16MM. That’s a 75% bump in govt employees. Sell that to Congress as “small”. Even the Democrats will laugh in your face….See my point and why this is all so frustrating? You guys aren’t arguing rational points. You’re just arguing for the sake of it with no real rational basis to back it up….

  6. AK says

    Sorry but that is where I disagree entirely. Painting with a broad brush is never necessary and lumping in opinions as “you guys” is also not necessary or productive. When you respond specifically to my points, as you do most of the time, the debate is fruitful and enjoyable. When you begin to talk about the gripes you have with a bunch of other MMTers and overlay them on to my debate, the discussion becomes rather pointless because it is no longer a response to what I actually said.

    The above debate would have been a lot more fruitful if you engaged with my point that, despite Wrays blog post, a JG would never apply to anywhere near 30 million people if fiscal operations work as MMT intends. But unfortunately we couldn’t get to that point without first talking about how some internet posters seem not to be able to engage in persuasive debate which, although probably correct, is not the point I am here to debate.

  7. Tom Hickey says

    One of the problems is that economists have little control over their advocates on the blogs, and probably most damage is the result of excessive zeal in proselytizing . The prominent economists get hit by a barrage of zealots of different brands everyday. I will say that the Austrian-Libertarian fanatical types tend to be the most persistent and annoying though.

    I have tried to engage Thoma on occasion and he has responded to some of my comments. He has actually moved a bit forward in my view, although not a whole lot.

  8. Cullen Roche says

    Tom,

    You’re generally very good with this stuff so take the lead on this since you’re active on other sites. Beat people with facts. Avoid the nasty rhetoric and even suck up to guys like Krugman and Thoma if you have to. Krugman’s a Nobel Prize winner. He doesn’t need us. He’s used to being praised for his genius even if you don’t think it’s genius. That’s just the way it is. You have to remember – we’re on the outside looking in. Demanding that we be allowed in doesn’t cut it. You’ve got to win people over and sometimes that involves being excessively nice. You don’t have to be fake, but keep in mind that these guys don’t need to give you a seat at the table. And in order to get a seat you’re going to need to give them something they need. Stroking their egos and sticking to the facts is probably your best bet. Thoma and Krugman are probably lost causes at this point. Thoma f$cking hates MMTers. But it’s worth keeping in mind for the future. Burning bridges through inflammatory rhetoric is really setting us all back. MMTers need to tone down the attack dog approach.

    This is a really good teachable moment. Now, it might be too late for the MMT reputation, but it’s not too late to start trying to change it. But it will take even more time and effort now.

    Cullen

  9. Tom Hickey says

    Cullen: “You’ll notice that Mark Thoma is also involved. That dude should be 100% on our side. Instead, he’s taking the sides of the monetarists! Talk about burning bridges. Geez. How did MMT not win over PK and Thoma. They should have been slam dunks.”

    Easier said than done. Some time ago, Bill Mitchell agreed to a debate with Mark Thoma and the Mark rejected it publicly on his blog, saying that talking to someone who rejected the money multiplier was just a waste of his time. These guys are tough nuts to crack, and the only way to “play nice” with them is to agree with them, at least as far as they are concerned.

    Agree that pissing them off is a probably counterproductive though.

  10. Cullen Roche says

    Here’s Keen doing the same thing. http://www.debtdeflation.com/blogs/2012/04/04/krugman-apologises/

    Krugman stopped reading this stuff days ago. It’s now just a circle jerk of heterodox thinkers piling on….This was a big opportunity missed. Warren should have responded on behalf of MMT and he should have been the ONLY one. You’ll notice that Mark Thoma is also involved. That dude should be 100% on our side. Instead, he’s taking the sides of the monetarists! Talk about burning bridges. Geez. How did MMT not win over PK and Thoma. They should have been slam dunks.

  11. beowulf says
  12. Cullen Roche says

    This is important. Now, I am being overly hard on a few of you who haven’t done much (if anything wrong), but I am realizing that the problem with MMT discussions is so pervasive that painting with a broad brush is necessary. The latest Krugman debate is a perfect example of what you guys do. You try to bulldoze your competition with inflammatory rhetoric. This distracts from the entire point. Just look at what’s happened. Krugman didn’t even consider you guys right for a second. Why? Because he started reading the tone of the comments and got turned off. And my guess is he’ll think twice about mentioning Keen or MMT ever again. That’s a huge loss. Krugman is 90% on our side. And MMT burns a bridge with him over what? A basic misunderstanding of banking? Sure, it’s a big deal. He should know this stuff and he should take the time to understand it. But we need to hug up to him and get him to embrace our position. Not write snide comments and posts which basically call a Nobel prize winning Princeton professor an idiot. And yes, it does matter that Paul Krugman has achieved a great deal (whether anyone agrees with it or not). He has nothing to lose. MMT has everything to lose.

    Anyhow, I am sorry to come down on you so hard, but this is becoming a real problem. I know first hand having been on the receiving end of it so much. You guys need a new approach. Try to build bridges and stop burning them because at this point MMT is becoming more and more isolationist every day. And yes, I need you guys to succeed because even though we disagree on some stuff we’re still all heterodox looking in….We’re on the same team whether we want to like it or not. So if you guys go down in flames because you can’t make friends then it makes MMR’s existence that much hard. We’re all Mosler Monetary Theorists. So let’s do it like Mosler does it….With respect, courtesy and by staying on point!!!!

  13. geerussell says

    Like when you come here accusing me of lying and claim a big (pyhrric) victory over getting me to change my stance from 30MM to 27MM.

    Just be clear, I don’t believe you lied about, well, anything. Nor do I seek to claim a victory (big, small, pyhrric or otherwise. I’m fine with being wrong, it’s an opportunity to learn something… from you… which would be nothing new as I’ve learned a great deal reading your material in general.

    I do happen to disagree on facts and framing wrt some of the topics you mentioned but hopefully that’s a basis for constructive discussion. If there are gaping holes in MMT or in a particular critique of MMT, laying them out for examination is a win-win when it’s done constructively.

  14. Cullen Roche says

    Okay, you’re doing what MMTers always do. I don’t know why you guys are so extreme in all your views. A little balance and flexibility would help in a lot of ways. I didn’t say I was trying to prove the entire theory wrong as you claim. That’s extreme and totally wrong. I am probably 75% on board with MMT. But I do find that other 25% troublesome. And they’re not minor things. We’ve seen persistent inconsistencies in the thinking and rationale behind MMT. You abuse language to push a point (like the saving debates or the use of net financial assets). Your own research proves the JG isn’t a liquid buffer stock or a growth tool, but other research claims it is. You claim we live in a state money system, but you guys don’t even have a single definition of “money” to work from so your language on this is all over the map with some people claiming that debt isn’t even money (which is really a flabbergasting statement) but still using the term “money monopolist”. You pick and choose when the govt gets to be a monopolist and when it doesn’t despite claiming that monopolists should be price setters because “that what they do” (probably because Keyesians hate monetary policy and love fiscal). You claim to care about production, but the research is so heavily skewed towards the JG (which doesn’t optimize production according to the JG research) that it’s impossible to conclude anything other than MMT is geared towards full employment first and everything else second. You separate Fed and Tsy when you need to make a political point, but you combine them when you need to make an operational point (what?). There are a ton more of these inconsistencies and they’re not minor points. They’re big gaping holes across 20 years of research. If someone were to organize them all and lay them out it would really be a big problem for MMT.

    Personally, I am not here to debunk MMT. Doing so only makes my life a lot harder because then I am on the receiving end of the same sort of nonsense that I am trying to get you guys to cool your jets on (like calling Krugman an idiot in every other comment on his website). And since I consider myself a Moslerian I really have no intention of trying to debunk MMT. I’ve been trying hard to simmer down the tone of these discussions. Something I’ve been trying to do since day one of these debates. But the MMTers are practically rabid in their attacks. It’s great that you guys are passionate, but at some point it’s just self defeating. Like when you come here accusing me of lying and claim a big (pyhrric) victory over getting me to change my stance from 30MM to 27MM. This sort of stuff burns bridges. And for what? So you could try to claim that you’re never wrong? Man, what a misguided approach.

    I’d love to help you guys out. And my advice to you all would be to try being a bit more open minded and reasonable in debate. Don’t call people names and try to stick to the facts. Don’t just regurgitate what you read in some MMT literature. Consider that your opposition might actually be right for once. MMTers don’t have all the answers to everything. Try to form bridges with people and not burn them. People want to know how I’ve amassed a million monthly readers on Pragcap in the first 18 months I was running the site? I’m reasonable. That’s how. I admit when I am wrong. I keep an open mind. And I hug up to even those who I disagree with. This is life and business. If you don’t get these points about relationships, society, networking, etc then you might as well go live in a cave. Money is a social construct and your ultimate form of currency is your ability to get your PERSONAL CURRENCY accepted by others. MMT is failing miserably in this regard right now and has for 20 years. I was a big boost to MMT because of my approach. But you’ve burned that bridge. Ironically, this is all happening because MMTers don’t live what they preach about money being a social construct….Just another inconsistency among many.

  15. AK says

    Don’t remember doing any of that.

    You keep presenting selections of blog opinions as the definitive text on MMT. That’s just not the right approach. Given a long enough time scale everybody will make careless and badly contextualised statements, and yes, some plain wrong statements too. This is magnified in non peer reviewed writings such as blogs.

    You can keep pointing to those occurrences as evidence that the entire theory is “wrong”. Or, you can view the body of work as a whole, in which case it would be patently obvious that if MMT were applied, the jobless figure should be far below 30 or 13 million due to fiscal adjustments, before we even think of a JG.

    I’m not asking you to agree with me, or with the idea of a JG. I’m asking you to engage with the statements I make, based on the body of MMT literature as a whole, rather than snippets of other people’s blogs.

    Lastly: refusing to change my position is not an exercise in religious fervour. Quite simply, i just haven’t yet been convinced by any of your core arguments against MMT. And whilst you continue to invite debate by specifically mentioning MMT in your blogs (which is a good thing) i dont think its at all “trolling” for me to respond. Debate is always fruitful. I gather that you may not share that opinion, which is a shame.

  16. beowulf says

    As I believe I mentioned in the “going in the weeds” link, there’s no reason not to have a broad exemption for small businesses (since if they had monopoly pricing power they wouldn’t be a small business for very long). For larger companies, the added cost of excess profits taxes would be offset by the elimination of corporate income taxes.

  17. beowulf says

    Ha ha, speaking of Hitler… JK Galbraith summed up his economic impact (i.e. rebuilding Germany and then starting WWII) thusly:
    “Having solved the problem of unemployment in Germany, Hitler then set about solving it for his enemies as well.”

  18. Michael Sankowski says

    a quick point

    An excess profits tax would be harder on successful small businesses that you might think. Many small businesses have high profit margins, even though they are not even close to a monopoly.

  19. beowulf says

    Exactly. Think Lerner Index.

    “The Lerner Index attempts to measure classical market power directly by subtracting a firm’s marginal cost from its price, and then dividing the result by the firm’s price. Lerner ratios range from 0 to 1. Firms that lack market power show ratios close to zero. As the ratio increases from zero to one, it is more likely that the firm possesses significant market power.”
    http://www.ftc.gov/opp/jointvent/classic3.shtm

  20. Tom Hickey says

    Speaking for myself here rather than MMT, my concern is over central banking assuming a command role in the economy. This is both anti-capitalistic and anti-democratic when central banks are made politically independent and control over their policy is in the hands of a small group of interested people who are unelected and unaccountable. Interest fate setting is bad enough, but conducting fiscal policy is even worse, in my view. Once a command system is in place, then what are the limits on its creeping into full control? We are seeing the result of this in the EZ, which for all intents and purposes is operating under a command system run by the ECB and the Eurocrats that control it, with predicable results.

  21. Ramanan says

    thanks.

  22. Cullen Roche says

    Very good points Ramanan. MMT loves to use the USA example in order to prove points. But you and I know the USA is a rather exceptional case in many ways and so doesn’t fully apply. They’ve built one neat little packaged theory and try to fit this square peg into all the round holes in the world. Economies are more dynamic than this though. It’s bizarre that MMT doesn’t support FX intervention because it can add NFA’s in what is essentially a form of fiscal policy by the central bank. If MMT were consistent with their consolidation of the Fed and Tsy then this wouldn’t bother them, but I presume it bothers them because it just doesn’t fit into their policy agenda which flows through traditional fiscal policies, ie, govt spending.

  23. Ramanan says

    Cullen,

    Good points on rigidity. Same view as mine. Another example where I see this rigidity is the external sector and official intervention in the currency markets by the Treasury and/or the central bank. In MMTers view this shouldn’t happen because it spoils the virginity of pure float. But official intervention is regular and this is not out of choice but help markets clear.

    Monetary sovereignty – as figured by British Keynesians – when Maastricht Treaty was proposed is a right concept but the MMT concept is too rigid and hence incorrect. Most countries do not even qualify for that. Very few who do not intervene regularly do it sometimes – for example have debt denominated in foreign currency. So there are not really pure virgins but have kissed sometimes. And the few who have the power really are advanced nations because of their industrialization and production capacity. Some such as Japan are even big creditors of the rest of the world.

    Somehow I see them holding same dogmas as Jean Claude Trichet.

  24. Cullen Roche says

    It’s this. Scott ran a simulation of the JG for the crisis. The results basically show what I’ve been saying all along. The JG is nothing special. It creates full employment, but doesn’t prove to be a superior growth tool or buffer stock. Though it also doesn’t result in high inflation which I guess is a point for MMT….

    http://prezi.com/wkqco-muy29e/costing-the-job-guarantee/

  25. Ramanan says

    What’s the simulation one keeps talking of. Any link to a paper?

  26. Tom Hickey says

    Greg, sociologists have shown that poverty is a complex issue that is seldom only about money, or even mostly about money. This is a common misconception in economics. There is a strong cultural component, and it results in structural problems for a society and its economy. Structural poverty is a waste of resources that could become available but are languishing because the problem is not being approached effectively. And a well-designed JG could go a long way in addressing it. See Daniel Little, “Culture of jobs?” at Understanding Society, Mar 28.

  27. Tom Hickey says

    excess profits tax = tax on monopoly rent?

  28. Tom Hickey says

    As someone with some experience with the homeless, there is a lot of wisdom in that, beo. The problem is whether to institutionalize someone or let them fend for themselves on the street since they are not a danger. The first deprives a person of freedom and the second is unrealistic. A special section of a JG program could go a long way to dealing with this.

    I have occasionally tried to give work to people like this, and some even are willing to work free, just to have something to do. But they just just don’t do anything for business. In addition, many are erratic and need more than just a job if they are to cope over time.

  29. Cullen Roche says

    Whatever Tom. The Fullwiler sim showed 16 million. So if you want to argue that increasing the govt workforce by 75% is small then go for it. You’ll need all the luck in the world for that sale because you’d have to be blind to buy it….

  30. Tom Hickey says

    Out of context.

    Wray is advancing a hypothetical there of his desire to get rid of military Keynesian and reduce the size of the military, there changing the structure of the US economy. He is saying that in that case a large welfare program would be needed to pick up the slack from that shift away from massive military spending. In this case he says that a MMT JG of 10-30 million might (he gives numbers overestimating what he thinks likely) be needed and that it is doable. He is actually speaking to Austrian-Libertarians here about how their desire to curtail US foreign policy could be handled.

    This is not offered as a general MMT policy recommendation. It is a policy option should the US suddenly return to sanity and nchange foreign-military policy.

  31. Cullen Roche says

    What is the point AK? You guys are set in your ways. So what happens is I say something you don’t like, then you make some semantic point (like 27MM vs 30MM), accuse me of lying, pat yourselves on the back for nothing and then attack the next point in the same way. The thing is, MMT is incredibly rigid. There is no gray area. There is the MMT way or the highway. I’ve shown clearly, using MMT’s own evidence, that 30MM jobs would result in roughly 3MM pvt sector jobs and would leave a MASSIVE govt bureaucracy at work. Even if you want to claim I am being dramatic using the 30MM figure then let’s use Fullwilers 16MM and 1.73MM pvt jobs. Is that not enormous? Yes, it is enormous. There are currently 22MM govt employees and MMTers have the balls to come in here and claim that increasing that by 75% is not a lot? Are you kidding me? Give me a break. We could do this all day and I could make fact based points and you guys can point to ideology all day long and we’ll get nowhere. So let’s just cut the BS from now on and call you guys what you are – trolls. If you want to actually debate and you’re open to reasonable positions then maybe you’re different than some of the others. But there are 5 or 6 commenters here who I see a pattern in. So be prepared in the future. If you troll this website pushing some nonsensical MMT ideology then I’m going to shut you down for trolling. If you are flexible and open minded in your positions then let’s debate. But don’t take my quotes from MMTers and throw them in my face accusing me of lying or misleading. That’s just MMTers being intolerable.

  32. Greg says

    You are soooo right Mike. Poverty is not just a money thing, but it is probably mostly a money thing. Or at least its a thing that while it may be true that giving the person money wont help, someone will have to spend money on something to alleviate it. There are resources that must be brought to bare on the problem, some goods some services, but these will cost someone some money.

  33. Greg says

    Well put Beo

    It would probably be relatively cheap too. Considering how expensive good mental health is.

  34. AK says

    I find it disappointing that you seem not to want to engage in reasonable debate about these points any more (which ironically, is what you accuse MMT of).

    And it’s not even like we are saying the same thing every time – every debate covers at least some new ground.

    Anyway, it’s your site, so I’ll leave this debate peacefully.

  35. Cullen Roche says

    Your comments, like those of a few other readers, have fallen under a pattern of only responding to others when you feel the need to defend MMT. The pattern in these comments is a repeated almost robotic like response of well known MMT positions. It’s almost like some of you have been programmed or paid to go out into the blogosphere and repeat these points to bolster MMT’s reputation or something. You generally do it respectfully, but many of you do it in an inflammatory and nasty manner. Many of the worst offenders are here on a regular basis and have made it a daily ritual to trash me or repeat chapters from the MMT bible in an almost nauseating manner….

    If you want to eternally defend MMT then fine. But don’t troll this site doing it. Start your own site or go to one of the many MMT sites and voice your opinion. I’ve done nothing in my comments to misrepresent MMT comments or misconstrue what they’ve said. If you’re upset that I am taking their comments to prove my point then you should tell MMTers to be more careful in their terminology. Unfortunately, MMT is so inconsistent about things and so vague in terminology that it’s pretty easy to take their comments and use them against them in easily proven points. But again, this is not my fault. It is MMT’s fault. So please don’t come here trolling and accusing me of fear mongering when all I am doing is quoting MMTers verbatim. Thanks.

  36. beowulf says

    An excess profits tax was effective anti-inflation tool during both World Wars and is worth considering, as President Wilson advocated, as a replacement for the corporate income tax ( Vickrey’s market is essentially a cap and trade version of an excess gross profits tax). Perhaps you could peg the excess profits (whether net or gross) tax rate to the BLE’s monthly inflation report, say, 21% at 2% inflation, 40% at 4%, and so on.

    As long as the numbers are approximately right, the simpler the formula the better. For political reasons, the easier the operations of an anti-inflation tax is understood by the public the more effective it will be, the economists can save the algebra and fancy algorithms for monetary policy (which after all, is like an elevator whose close button may or may not actually work). More at the link where I go even further in the weeds.
    http://traderscrucible.com/2011/04/21/yglesias-and-mmt/#comment-350

  37. beowulf says

    1. Exchange rate policy (Ravi Batra’s dual exchange rate plan would grant de facto export subsidies without need of congressional appropriation).
    2. Creating 13(3) lending facilities to lend to state/local govts or to refi home mortgages at a cartoonishly low rate.
    3. Using its authority to levy and adjust transaction fees to tighten and then lighten fiscal stance based on economic conditions.
    4. Placing orders with the US Mint for jumbo platinum coins (which would an example of demand creating its own supply). Wouldn’t actually change fiscal policy directly but may affect it indirectly as it dawns on the politicians that Uncle Sam can’t run out of its own money.

  38. beowulf says

    “So I see a government run JG where workers are working for the government as a mental health program. ”

    That’s actually the strongest imaginable case for the JG.

  39. geerussell says

    If you consider it trolling, then I respectfully apologize. My intention was to get into the details behind a claim to shed light on the facts and I think my posts acquit themselves well in that regard. Goodnight.

  40. Cullen Roche says

    You’re just trolling. Good night. Next time I won’t warn you.

  41. geerussell says

    Yes, dancing back and forth. You’re combining the multiplier from Fullwiler’s simulation with the upper bound from Wray’s quote in order to produce the biggest, scariest number you can.

    On what basis do you ignore the drastically lower JG employment figures from Fullwiler’s simulation?

    On what basis do you apply Fullwiler’s multipler to Wray’s quote? Wray didn’t specify how that number breaks down.

    Also, there’s this, which is kind of incoherent but keeps getting repeated:

    the JG doesn’t prove to be much of a liquid buffer stock at all when compared to regular pump priming

    Define liquidity. When Mosler described JG as a more liquid buffer stock, he described it in terms of fitness for work. Comparing a stock of UE vs a stock of JG, a currently employed worker is more readily employable than one who is unemployed. Liquidity in the sense that it might be used for an asset, how readily can you sell or convert it.

    Can you clarify whether you A) have some personal definition of liquidity of your own construction or B) believe that unemployed people are more employable than unemployed?

  42. Cullen Roche says

    The stimulus performed in-line with the JG. Ie, it didn’t add anything more beneficial. But whatever, this is a dead end conversation. This is like trying to argue with religious zealots. It’s totally pointless.

  43. Cullen Roche says

    Yes, I am now “dancing back and forth”. Actually, I am using the comments made by MMTers and the factual data showing that had the JG resulted in 30 million jobs as Wray implies then roughly 3 million of them would have been pvt jobs. It’s simple to compute and it’s based on quoted statements and simulations by MMTers. If you want to say I am misconstruing things then fine, but I am not.

    I see where this is going and it’s precisely nowhere. I’ll continue to use the figures I’ve always used because those are the ones provided to me by MMTers. Thanks.

    Btw – disappointed to see that you’re adding yourself to the list of MMTers who frequent this site and can now be pinpointed as trolls. You were generally well behaved until the last few days when your comments became increasingly inflammatory.

  44. AK says

    Cullen Roche
    It’s not about how you see it. It’s about the facts. And the facts from the Fullwiler simulation clearly prove that you guys are wrong about this. You’re vastly overstating the effect of the JG as a liquid buffer stock and a transfer job. In fact, the JG doesn’t prove to be much of a liquid buffer stock at all when compared to regular pump priming as the Fullwiler simulation clearly shows. In fact, the JG just barely outperforms the stimulus package on a dollar for dollar basis in terms of pvt job creation.
    The evidence there is pretty cut and dry. So sure, you guys can cite less than 30 million if you want, but it’s still going to be a huge number….But to keep you all happy I’ll use 27MM in the future. Wouldn’t want Geerussell to feel like he didn’t embarrass himself by throwing down the gauntlet tonight. Call me generous.

    Who is overstating anything? You keep implying that the JG is some alternative to stimulus. It’s not. The simulation clearly showed that a JG combined with adequate stimulus measures has a positive effect. Which is what MMT says.

  45. geerussell says

    Cullen Roche
    It’s not about how you see it. It’s about the facts. And the facts from the Fullwiler simulation clearly prove that you guys are wrong about this. You’re vastly overstating the effect of the JG as a liquid buffer stock and a transfer job. In fact, the JG doesn’t prove to be much of a liquid buffer stock at all when compared to regular pump priming as the Fullwiler simulation clearly shows. In fact, the JG just barely outperforms the stimulus package on a dollar for dollar basis in terms of pvt job creation.
    The evidence there is pretty cut and dry. So sure, you guys can cite less than 30 million if you want, but it’s still going to be a huge number….But to keep you all happy I’ll use 27MM in the future. Wouldn’t want Geerussell to feel like he didn’t embarrass himself by throwing down the gauntlet tonight. Call me generous.

    You’re dancing back and forth from the Wray quote to the Fullwiler simulation. For consistency’s sake, it would help if you decided on which one you’re going to use as your JG “scare” number. The range of JG employees in Q4 2010 in the Fullwiler simulation is between 13 and 15.7 million depending on whether you include stimulus, holiday or JG alone.

    Now 13-15.7 is a far cry from 27 so again I have to ask what assumptions are you making for the JG “scare” number you use?