australianvoice (australianvoice) wrote,

There is an ALTERNATIVE to neo-liberal austerity - Modern Monetary Theory

Guest Post by Stephen Tardrew

Apart from the day to day lies in the media like "the Russians hacked the last US election" all mass media and academics who write or teach about economics work from the same self-interested doctrine known as neoclassical economics, neo-liberalism, the Washington Consensus, or the Chicago School founded by Milton Friedman.

It is an approach to invented by banks and used by the super-rich to formulate policy which benefits them at the expense of everyone else. This is what Margaret Thatcher meant when she said: There Is No Alternative = TINA. Because the banks and their many friends in high places this doctrine has replaced the older dogmas of religion as the one thing no politician, journalist or academic can challenge if they value their careers or their income. Apart from a few genuinely independent voices, all investment advice is also made within this framework. It is the gospel truth for everyone. One very good reason to call it a dogma is that it does not actually explain or predict economic reality. It has little empirical evidence for it, and much that is opposed.

In effect this answers the question asked in the article posted below by Stephen Tardrew, namely: Why is an alternative approach to economic policy like Modern Monetory Theory not even mentioned in any political discussion today? This quite sane and empirically based approach has not effect on the way our economy is discussed by anyone "important" because it is deliberately ignored, suppressed or ridiculed. This doctrine is the "theory" which is used to justify political choices because it reinforces the power and importance of our real rulers, a small number of super-rich individuals and families who control the largest banks and multinationals. Through the doctrines of neo-liberalism they set the agenda for our politicians, an agenda which includes austerity (minimal government services), low taxes on corporations, and privatization.

Why doesn't Modern Monetary Theory have a profound impact on the way we understand the economy?

Neoclassical economics was designed for the gold standard however when the amount of gold was insufficient the US changed to a fiat currency during the Nixon administration. The point about neoclassical economics is that it continually feeds wealth upwards while putting the burden upon the working class, low income and poor. The corporations, banks, financiers and venture capitalists own the government and so they own the message. Remember Marshal Mcluhan "the medium is the message" and Chomsky's "Manufacturing of Consent".

Economics - as understood today in public life - is not a science it is a bunch of self-interested opinions overlain with pseudo mathematical justifications posing as a science when in fact it is a pseudo science. MMT economist simply asked what is the real implication of fiat currency and when they found out the facts were marginalised by conventional academics simply because they had invested their whole careers in a system that was essentially broken and corrupt. Too much to lose for the power brokers. Lots of neoclassical and neoliberal stooges loosing all credibility so they hang on for dear life to their lies. Politicians, including treasurers, are uninformed completely indoctrinated playthings of the corporations, bankers, and financiers.

Don't expect much critical thinking from this lot. Point is MMT is the most science based empirical approach to economics however they do not want you to know the truth. The trillions they offshore is their power base and weapon for hoarding currency while the rest suffer debt servitude and general hardship. And our greed infested PM and his L-NP mates are at the head of the gravy train. Meanwhile Labor sleeps in ignorance.

1. The government is not currency constrained
2. Taxation does not pay for expenditure
3. Bonds are literally government run savings accounts that pay interest and are balance sheet debits not profit and loss debt.
4. Full employment is possible with a Job Guarantee
5. Austerity dries up the money supply and shrinks the economy
6. Governments nearly always need to run a deficit
7. A balanced budget or surplus means more private debt servitude and borrowing for you
8. A government budget is a double entry balance sheet not a profit and loss statement like a family budget
9. Families cannot print currency however treasury can literally print as much as is necessary so a government with a fiat currency can always pay down its debts as long as it controls inflation and prevents over production of commodities.
10. All welfare demands can be reasonably met if we have full employment
11. There is absolutely no need for poverty and hardship

Work by Stephen Tardrew can be found here:
Tags: all, archive, australia, australian economy, neo-liberalism

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