EconoMonitor

Great Leap Forward

  • Fear of Flying

    Sorry my post for today will be a bit late; just got back from a 1000 mile trip that took 14 hours to fly. I can drive it in 20 hours. A hundred years of aviation evolution has managed to shave six hours off the trip. The connecting plane, operated by one of Delta’s regional […]

    More ›

  • Framing Modern Money

    Here’s an excellent example of good framing. Susan Feiner explains why sovereign governments using “modern money” (their own currency) cannot go bankrupt.   U.S. Bankruptcy–A Colossal Hoax. by Susan Feiner, Professor of Economics, University of Southern Maine Readers put on your thinking caps and learn something new about money. Modern money—not the old fashioned, greasy […]

    More ›

  • Framing: Morality Trumps Reason When it Comes to Vampire Squids and Other Blood Suckers

    Here is an excerpt from the most important article you will read this year, by George Lakoff: Here’s how public intimidation by framing works. The mechanism of intimidation is framing, not just the use of words or slogans, but rather the changing of what voters take as right as a matter of principle. Framing is […]

    More ›

  • An Alternative to President Obama’s Jobs Plan

    By L. Randall Wray and Stephanie Kelton On Thursday night Barack Obama will deliver his highly anticipated jobs speech. At this point, only those closest to the president know exactly how he intends to help spur the economy and create jobs, but reports suggest that he is mulling a $300 billion jobs package that includes […]

    More ›

  • Helicopter Ben: How Modern Money Theory Responds to Hyperinflation Hyperventilators, Part 3

    In the first part of this series on hyperinflation I addressed the critic’s view that if Modern Monetary Theory were adopted, this would inevitably lead to hyperinflation. I argued that this is obviously false—MMT describes how any sovereign government that issues its own currency spends. They’ve all done it for the past “4000 years at […]

    More ›

  • Not Worth a Continental! How Modern Money Theory Replies to Hyperinflation Hyperventilators (Part 2)

    Last week we began what is a three part series on the Modern Money Theory’s response to critics who argue that a government following MMT principles will necessarily generate hyperinflation. Last week, in Part 1, I explained that when MMT says that government spends by “keystrokes”, this is a description, not a prescription. If critics […]

    More ›

  • Zimbabwe! Weimar Republic! How Modern Money Theory Replies to Hyperinflation Hyperventilators (Part 1)

    In last week’s post, I responded to Paul Krugman’s critique of Modern Money Theory (MMT), which argues that a sovereign government that issues its own floating exchange rate currency cannot face an affordability constraint—which means it cannot be forced into involuntary default on its own currency debt. His criticisms really boiled down to a misunderstanding […]

    More ›

  • Paul Krugman Still Gets it Wrong: Modern Money Theory

    On Monday, Paul Krugman tried yet again to spell-out where he disagrees with “modern money theory” (MMT)—the approach that I adopt. (http://krugman.blogs.nytimes.com/2011/08/15/mmt-again/) And, again, he gets it wrong. He continues to make two kinds of errors: errors of attribution, and errors in his understanding of money and finance. I don’t normally like to include long […]

    More ›

  • Update on S&P and Fraud

    A couple of days ago I urged the Federal Government to go after the ratings agencies, including S&P, for all the fraud they perpetrated over the course of the real estate bubble. Without the Triple-A ratings they assigned to junk assets, there is no way the banksters could have sold their fraudulent securities. We know […]

    More ›

  • MMT as an Alternative to Austerity

    In recent weeks we all watched in horror as the world’s greatest economic power almost defaulted because its elected representatives would not raise the self-imposed debt limit preventing Washington from spending already budgeted monies. Armageddon was narrowly averted by a grand compromise but only through a combination of small spending cuts soon and a series […]

    More ›