MMT and the Jobs Guarantee
Senexx! You got my attention with your comment!
My take on the Jobs Guarantee? It’s not what I consider to be “core MMT”. Nowhere in the description of the money creation process is there anything about moderating demand through keeping people employed.
I found Ralph’s post and responses about Malcolm Sawyer’s problems with MMT to be very good. I have many of the same problems, yet I am a full-throated supporter of what I will call “Core MMT”.
Yes, I do think the ELR price anchor is far superior to using unemployed as a price lid. I’ve been working on something on the natural rate of interest for many months now (you haven’t seen it) and I am coming to the conclusion full employment is the only way we can observe we have hit the barter economy ideal of matching supply and demand.*
I also have many problems with it. I think it’s near political suicide, and the implementation of it is a problem I have not seen addressed well.
I went on a driving trip through the United States this summer. I drove from Chicago to Long Beach California. It’s hard to imagine how vast the United States is unless you do a drive like this. A highlight of the drive was on what is called “The Loneliest Road in America”.
There were unemployed people everywhere, in the smallest towns on desolate roads. How can we get these people to the ELR? It’s a huge problem
But in any case, I’ve thought exactly the same thing Scott wrote about MMT getting changed by people like me and Cullen and Steve Randy Waldman many times: It’s great news MMT is getting out into the world and getting changed by people who like it and challenged by people who do not like it.
MMT is an idea with “legs” as they say, and part of that process means change.
*You all know me by know, and know my obsession with being able to tell if something works or not. When I see Paul Krugman lamenting the path of modern economics, I know the exact reason why economics can’t learn. The feedback links of theory and empirical evidence aren’t strong enough to be toss out the trash ideas due to the way economics as a broadly based philosophical line of inquiry thinks about the world.
In short, they are poets when they need to be technicians, and technicians when they should be poets. .
Re: Barter economy. I know they never existed. I am just pointing out a logical inconsistency of someone using a barter economy framework, slapping on money, and then assuming we’re at full employment constantly. It’s about the least productive line of thought you could have, because it ignores demand nearly entirely.