I'm not sure if it's worth spending time on. A bunch of high-profile economists running a smear campaign against a low-profile colleague whose results indicate just how poorly managed the economy is under their guidance -- almost as arcane as it is irrelevant.

It only intrigues me to see Operative K at the receiving end of some well-deserved flak. And it intrigues me to see celebrities of the orthodoxy lash out not just against heterodox economists, but also orthodox economists who merely run the numbers. Cracks and fissures, hold the line at all cost, etc.

Small indicators of future things to come, maybe...

Did you follow any of that wierd Krugman/Friedman/CEA feud over the last few days?

If not, nevermind.

But if you did, take a look at Bill Black's latest on the matter. Both Bill Black and Jamie Galbraith had already torn Operative K a new one over this, yet Bill just keeps on pounding. It's quite brutal, and supremely entertaining.

I just love open conflict between heterodox economists and defenders of the orthodoxy.

Well, cheers for sticking with it anyway, I really appreciate it.

It's a one hour talk on the deficit in particular, and most of what she says is based on MMT principles that would add another 5 hours to her talk if she were to explain them. With neoclassical economics, you can sort of jump right in, given how they are taught at schools and regurgitated by talking heads and politicians, day in and day out. MMT runs contrary to many pieces of "common sense" and since you can't really give 10 hour talks everytime, this is what you end up with – bits and pieces that require previous knowledge.

I'd offer talks by other MMT proponents such as William Mitchell (UNSW), Randy Wray (UMKC) or Michael Hudson (UMKC), but they are even less comprehensible. Sorry. Eric Tymoigne provided a wonderful primer on banking over at NEP, but it's long and dry.

Since I'm significantly worse at explaining the basics of MMT, I'm not even going to try to "weave a narrative" and instead I'll just work my way through it, point by point.

@notarobot

"Let's address inequality by taking on debt to increase spending to help transfer money to large private corporations."

You don't have to take on debt. The US as the sole legal issuer of the Dollar can always "print more". That's what the short Greenspan clip was all about. Of course, you don't actually print Federal Reserve Notes to pay for federal expenses. It's the digital age, after all.

If the federal government were to acquire, say, ten more KC-46 from Boeing, some minion at the Treasury would give some minion at the Fed a call and say "We need $2 billion, could you arrange the transfer?" The Fed minion then proceeds to debit $2B from the Treasury's account at the Fed (Treasury General Account, TGA) and credits $2B to Boeing's account at Bank X. Plain accounting.

If TGA runs negative, there are two options. The Treasury could sell bonds, take on new debt. Or it could monetise debt by selling those bonds straight to the Fed – think Overt Monetary Financing.

The second option is the interesting one: a swap of public debt for account credits. Any interest on this debt would be transfered straight back in the TGA. It's all left pocket, right pocket, really. Both the Fed and the Treasury are part of the consolidated government.

However, running a deficit amounts to a new injection of reserves. This puts a downward pressure on the overnight interest rate (Fed Funds Rate in the US, FFR) unless it is offset by an increase in outstanding debt by the Treasury (or a draw-down of the TT&Ls, but that's minor in this case). So the sale of t-bonds is not a neccessity, it's how the Treasury supports the Fed's monetary policy by raising the FFR. If the target FFR is 0%, there's no need for the Treasury to drain reserves by selling bonds.

Additionally, you might want to sell t-bonds to provide the private sector with the ability to earn interest on a safe asset (pension funds, etc). Treasury bonds are as solid as it gets, unlike municipal bonds of Detroit or stocks of Deutsche Bank.

To quote Randy Wray: "And, indeed, treasury securities really are nothing more than a saving account at the Fed that pay more interest than do reserve deposits (bank “checking accounts”) at the Fed."

Point is: for a government that uses its own sovereign, free-floating currency, it is a political decision to take on debt to finance its deficit, not an economic neccessity.

"Weimar Republic"

I'm rather glad that you went with Weimar Germany and not Zimbabwe, because I know a lot more about the former than the latter. The very, very short version: the economy of 1920's Germany was in ruins and its vastly reduced supply capacity couldn't match the increase in nominal spending. In an economy at maximum capacity, spending increases are a bad idea, especially if meant to pay reparations.

Let's try a longer version. Your point, I assume, is that an increase in the money supply leads to (hyper-)inflation. That's Quantity Theory of Monetary 101, MV=PY. Amount of money in circulation times velocity of circulation equals average prices times real output. However, QTM works on two assumptions that are quite... questionable.

First, it assumes full employment (max output, Y is constant). Or in other terms, an economy running at full capacity. Does anyone know any economy today that is running at full capacity? I don't. In fact, I was born in '83 and in my lifetime, we haven't had full employment in any major country. Some people refer to 3% unemployment as "full employment", even though 3% unemployment in the '60s would have been referred to as "mass unemployment".

Second, it assumes a constant velocity of circulation (V is constant). That's how many times a Dollar has been "used" over a year. However, velocity was proven to be rather volatile by countless studies.

If both Y and V are constant, any increase in the money supply M would mean an increase in prices P. The only way for an economy at full capacity to compensate for increased spending would be a rationing of said spending through higher prices. Inflation goes up when demand outpaces supply, right?

But like I said, neither Y nor V are constant, so the application of this theory in this form is misleading to say the least. There's a lot of slack in every economy in the world, especially the US economy. Any increase in purchases will be met by corporations with excess capacity. They will, generally speaking, increase their market share rather than hike prices. Monopolies might not, but that's a different issue altogether.

Again, the short version: additional spending leads to increased inflation only if it cannot be met with unused capacity. Only in an economy at or near full capacity will it lead to significant inflation. And even then, excess private demand can easily be curbed: taxation.

As for the Angry Birds analogy: yeah, I'm not a fan either. But all the other talks on this topic are even worse, unfortunatly. There's only a handful of MMT economists doing these kinds of public talks and I haven't yet spotted a Neil deGrasse Tyson among them, if you know what I mean.

Your video, economists for bernie sanders speak up, has made it into the Top 15 New Videos listing. Congratulations on your achievement. For your contribution you have been awarded 1 Power Point.

I'm impressed that Bernie has been endorsed by 170 economists. This information should be broadcast more by his campaign. I'd like to see the list.

Just wanted to respond to show that I'm not ignoring this, but mainly just nodding my head. I don't consider myself a feminist, but I think that feminism is needed despite some of the excesses of its adherents, just like I don't consider myself a civil rights activists, but think that it's a needed movement despite some of the excesses of its adherents (I'm too lazy to be either a feminist or a civili rights activist).

I completely agree that the wage gap is real but incredibly hard to isolate, define and quantify, and that a lot of the intended measures to adress it can end up fucking over individuals while failing to adress the core issues. That, to me, means that we have to work smarter and harder, which some economists are doing. I just don't think CHS is the one leading that field forward, unfortunately.

And finally, death threats and threats of violence seem to me like they are almost synonymous with the internet. I find I can't draw any conclusions from the existence of threats of violence online, because if I did I would conclude that the following are all toxic cultures of death and violence: feminism, gaming, conservatism, progressivism, ISIS, Harry Potter, men's rights activism and environmentalism, to mention just a few. Of all of those I'm pretty sure it's only ISIS that actually represents a toxic culture of death.

@Babymech
alright!
/claps hands..
now we are getting somewhere!
is it time to make out yet?

on a good note.
we agree more than disagree.
so it appears anyways.we may vary on the particulars but i think it safe to assume we can agree on the bulk i.e:human rights,fairness and justice.

(or it may be because you are just as disgusted by those overly privileged whiners as i am,snapping their fingers and shouting about "safe places")

solidarity!!

anyways...
i used sommers as a reference because she identifies as a feminists.you may dispute if she is in fact a feminist but thats how she identifies.i thought i was being deliciously ironical,but i digress.

here is a far better,and bipartisan source for your consideration from 2011:https://www.stlouisfed.org/Publications/Regional-Economist/October-2011/Gender-Wage-Gap-May-Be-Much-Smaller-Than-Most-Think

notice everything is sourced and noted.

the key in our discussion is how we comprehend data,and data in raw form can be just as confusing and misleading if the right questions are not asked,which makes it easy for us all to be manipulated (which i think you mentioned as well).

so just for the record:
i am not anti-feminist,but i am anti-bullshit,against weak and facile arguments to create an emotional response in order to promote a political agenda.

because we all lose in the end,and it detracts from the real issues and real grievances.

why certain rabid feminists thought it perfectly ok to threaten this woman with death and violence,and yet,with zero sense of self-aware irony will use the threat of violence to THEM to promote their politics.

all because she disagreed with them.

anyways..thanks for hanging in there mate.
ill be right over for our lil make out session.

Feel free to be specific, and not just coy and vague. Which parts were intended as 'tongue in cheek' - was it linking to right wing activist blogs? I am truthfully and honestly unsure, because we don't know each other - for some people, quoting CHS would be a joke, similar to quoting Anne Coulter, and for others it's a valid source. I still don't know which, if either, opinion you hold.

Trust me, I will happily and heartily chuckle at your wry, irascible tongue in cheek wit, if you can tell me which parts you thought you were being tongue in cheek about, and what your serious arguments are.

As to whether Christina Hoff Sommers is a feminist or not, I would guess that it's not as easy as just calling yourself a feminist. I can call myself a conservative, but the evidence is against me: I never vote conservative, I typically espouse progressive views, and I usually criticize flaws in conservative thought and policy, comparing it unfavorably to progressive thought. I think a reasonable person would have to say that I'm either being disingenuous if I call myself a conservative, or that I'm very very bad at it.

I don't get to decide what CHS calls herself, but as a rational person I have to look at her argument and see if it's based in feminism or in something entirely different, and make up my own mind about it regardless of labels.

As for the rest, I'm not sure, again, which parts you say are just straw manning it up and which parts we agree on. I thought we had some disagreements but you might have been tongue in cheek about all of it, for all I know.

For example, I thought we were in agreement on this: "so the situation is not some cut and dried situation,and there are extreme elements of any social movement,but those elements should not invalidate the message" - so I didn't comment on that part. It makes sense to me, and unless you were being tongue in cheek, we're in agreement.

I thought we came to an agreement (?) on the prevalence of rape and the need to look at the whole picture, but also agreed (?) that there are several other disheartening factors at work in the so-called justice system.

I thought, however, that we disagreed about your entire first point (both about how making discrimination illegal should eliminate the wage gaps, and about how no serious economists cite it). This is where I thought CHS was a poor rebuttal - regardless of her right wing activism, she's certainly not an economist; she's a philosopher by education, and not a particularly credible source on the economy. Again, if you were being tongue in cheek when quoting her I'll just erase that part and assume that we agree.

As for contradictory evidence, I can't swear that I'll be influenced by it, and I certainly won't accept it uncritically - we all have a hard time breaking down our own biases. But I'll happily and gratefully read it, as I assume you will too.

@Babymech

are we playing the numbers/statistic game?
oh goodie../claps hands
i love these games.
can i play?

since i actually agree that mens issues are different than womens in certain cases,and that you recognize that the "patriarchy" affects men as well as women.i see no reason to address something we both agree on.

so we can agree the base premise is "power vs powerlessness",and that women have a right to address this power structure,just like men do,because BOTH suffer under its influence.

but then you posted some tasty links for our enjoyment,and then made the specious claim that this somehow made your argument MORE valid.

ok..lets play by YOUR standards shall we?

1.the gender pay gap,which before 1962 may have been a valid argument,but since it is ILLEGAL to discriminate in that way in regards to pay,and if true would translate to waaay more women in the workplace (because corporations love them some dirt cheap labor).so why is this trope still trotted out?why is it given so much validity as being born as fact?when no serious economist ever sites this disparity,yet so many keep regurgitating this gap is being a real thing?

well,i will just let a feminist economist break it down for you:
http://www.huffingtonpost.com/christina-hoff-sommers/wage-gap_b_2073804.html

see? just got me one of them fancy links you like so much.

2.political power in regards to gender.well,i cant argue the statistics.there ARE more men in politics,but what your link fails to do is ask a very basic question:why?why are there more men than women?

pew research addresses that question,and is fairly in line with your link:http://www.pewsocialtrends.org/2015/01/14/women-and-leadership/

3.as for who suffers from the most sexual violence.well,according to your link which uses cdc numbers,women suffer far more,BUT (and is the statistic that the women in my video pointed out) when you include prison (which the cdc did not) that number flips on its head:
http://www.dailymail.co.uk/news/article-2449454/More-men-raped-US-women-including-prison-sexual-abuse.html

so the situation is not some cut and dried situation,and there are extreme elements of any social movement,but those elements should not invalidate the message.

just like this woman in my video is not dismissing feminism,she is disagreeing with feminisms more extreme authoritarian bullies,who because they scream louder and are more controversial..get more attention,but that does not make their position MORE important just because they are louder and more obnoxious.

in fact i would posit that this obnoxious behavior works against the very thing they are trying to convey.

we can all agree that we all want equality,fairness and justice and the current,and historical power structures,have always sought to retain and even further their own power.which has been traditionally held by men,but this does not automatically equate to men getting a free ride,quite the opposite.

so women absolutely have a right to challenge this power structure,just as men do.what they do NOT have a right to is imposing their ideologies upon me,or this woman in my video.

this woman has received death threats and threats of physical violence from other feminists! just because she had the audacity to disagree with their position.

at the end of the day this is actually a human issue,and a valid one and we all have a right to our own opinion,but not a right to impose it upon another.

feel free to disagree.

"The decline in work has particularly affected those under age 29, and the less-educated, who are the most likely to be in competition with immigrants. A study by the economist George J. Borjas and others found that immigration reduces the employment of less-educated black men. Another study came to the same conclusion. A recent analysis by Federal Reserve economist Christopher Smith (2012) found that immigration reduces the employment of U.S. teenagers."

Source: http://www.nytimes.com/roomfordebate/2015/01/06/do-immigrants-take-jobs-from-american-born-workers/unskilled-workers-lose-out-to-immigrants

Too many unsubstantiated assertions here. From a website titled Storm Clouds Gathering, rumor mongering isn't exactly a surprise.

John McCain does not represent US foreign policy and sounds misinformed. The 4-5 US trained fighters and provision of tactical equipment pretty much represents the degree of support/involvement the US has provided Syrian rebels. For obvious reasons that he himself points out. There's no credible opposition remotely alligned with US values, and any arms provided risk ending up with radical groups.

Just because McCain thinks it's a good idea doesn't mean it is happening, will happen or that the executive branch shares his mindset. However it is true that Russian air strikes have primarily targeted other groups over ISIS. This aligns with what I talked about elsewhere that Russia's aim is to prop up Assad. With a western coalition taking on ISIS already, this naturally leaves Assad in the strongest position.

http://cdn.static-economist.com/sites/default/files/imagecache/original-size/20151010_MAM922.png

1 - Well let me deconstruct that a bit. Presumably you rely on news, how can you rely on any of it to be trustworthy? Several ways obviously, I would say the main are (A) Ownership, (B) Reputation and (C) Funding.

A - Ownership - RT (and it's web of shadowy news sites pretending to be local) are owned by the Kremlin or clearly Kremlin linked oligarchs. Their incentives should be clear, promote the Putin narrative. When all independent TV news has been shuttered within Russia or taken over, you would expect these outfits to be heavily biased towards propaganda. I would similarly have to be suspect of outfits like Voice of America (US government funded). Corporate news sources have their own incentives. I happen to like the Economist but I'm mindful of its ownership involving the Rothschild family and Eric Schmidt (Google) being on the board for example. After all, every news outfit is owned by someone.

B - Reputation - This is the main one to me. You can say what you will about Western media, but there is a cultural expectation among its people and its reporters of the freedom to report newsworthy stories. There are obviously biases and those form part of the news source's reputation. We know TV news tend to be short on fact and sensationalist. Equally, we know Fox News to be right wing. We inevitably find these things out because no matter how much a news owner might want to control its message, freedom of speech sees the reputation leak out. We have reports (regarding Fox for example) that memos go out to use specific language like "Climategate" or we have controversies such as when photos of NYT reporters were photoshopped with yellow teeth.

C - Funding - Advertising vs Subscription, but that's not really relevant here.

My main point is, relying on Putin directly or any of his web of 'news' to get information about Russia or America is particularly silly. We know their ownership, reputation and thereby incentives. Or any state backed news. For corporate news, ultimately any bias from ownership, reputation or say government influence will leak out.

2 - I don't see him as any more politically effective or intelligent than necessarily any other major leader. If I've expressed anything here it should be that what Putin says is just as calculated and manipulative as any politician. Just because it has a veneer of 'speaking truth to power' or recounts some truths does not mean it is true in its entirety. Bluster and waging wars is politically popular in Russia, he is simply playing to a different audience. I would say any notion that he is more 'objective' is farcical. After all the kind of imperialism that he decries of America is the exact kind he's engaged in in Ukraine and now Syria!

@Asmo

Don't really want to get a more general argument about the history of US foreign policy, I was talking more about the present day. The US's rationale for intervention during the Cold War was an exaggerated sense of the spread of communism and later to prevent anything that might precipitate an oil price spike like in the 1973-74/79. Nowadays with greatly expanded US shale oil supply and no Cold War I simply don't see any real incentive, if anything with the furore over debt, quite the opposite.

@enoch

Successful US intervention in the previous century generally involved large sums of money, whether it be propping up a government (Zaire/Congo) or funding an insurgent militia (Guatemala). Same thing with the USSR (North Korea). The ability to influence public opinion or mount credible propaganda campaigns in my opinion is generally exaggerated especially in a large, modern and educated country like Iran. It's also the conspiratorial myth that repressive regimes (like Iran, Russia) frequently turn to when they need to discredit dissent. A good example is:

http://www.economist.com/blogs/pomegranate/2013/11/arab-conspiracy-theories

I mention Russia because this is the line pushed aggressively to both his domestic audience by it's wholly state controlled television media and to a mix of foreign and expatriate audiences (of which Russia Today is most successful) through a web of shadowy funding and home grown sounding organisations (see link below for a nice overview, e.g. http://www.globalresearch.ca/). It's pretty important to view what he says as part of a narrative to vastly exaggerate US and western intervention in Ukraine and previously Georgia, because that allows him to construct his myth of being a counterbalance to present day western imperialism.

https://criticusnixalsverdruss.files.wordpress.com/2014/05/propagramm3.jpg

"A gun-control movement worthy of the name would insist that President Clinton move beyond his proposals for controls ... and immediately call on Congress to pass far-reaching industry regulation like the Firearms Safety and Consumer Protection Act ... [which] would give the Treasury Department health and safety authority over the gun industry, and any rational regulator with that authority would ban handguns."
- Josh Sugarmann, executive director of the Violence Policy Center

“If I had my way, sporting guns would be strictly regulated, the rest would be confiscated.”
– Nancy Pelosi, US Congresswoman

“US Senator, If I could have banned them all – ‘Mr. and Mrs. America turn in your guns’ – I would have!”
– Diane Feinstein, US Senator

"My view of guns is simple. I hate guns and I cannot imagine why anyone would want to own one. If I had my way, guns for sport would be registered, and all other guns would be banned."
- Deborah Prothrow-Stith, Dean of Harvard School of Public Health

"I don't care if you want to hunt, I don't care if you think it's your right. I say 'Sorry.' it's 1999. We have had enough as a nation. You are not allowed to own a gun, and if you do own a gun I think you should go to prison."
- Rosie O'Donnell, Actress

“I don’t believe people should to be able to own guns.”
- Barack Obama (during conversation with economist and author John Lott Jr. at the University of Chicago Law School in the 1990s)

“We must get rid of all the guns.”
- Sarah Brady, Widow of James Brady

“I believe for example when Washington, D.C., passed a law that nobody could have a gun except law enforcement and it was struck down by the United States Supreme Court, that we should overrule the Supreme Court with a Constitutional amendment. I don’t believe that in our society that we should have guns.”
- Ed Koch, former NYC Mayor

“Confiscation could be an option…mandatory sale to the state could be an option.”
- Andrew Cuomo, NY Governor

“an assault weapons ban is just the beginning...a complete ban on handguns could be possible through state and local action.”
- Jan Schakowsky, llinois Congresswoman

“governments should start confiscating semi-automatic rifles and other firearms
- Dan Muhlbauer, Iowa state Rep.

Now, this was with a quick search on Google. I am sure there are more, but I just thought I would give a sample. Additionally, the really rabid activists have learned to rephrase statements to avoid the term ban. They aren't stupid, they know that they have to soften the phrasing to make it more palatable to the everyday citizen.

... and those are comments on a video sharing platform, posted by a bloke without any economic bona fides.

Doesn't speak favourably to the state of the media, does it now...

Edit: I should be clearer. Some folks do a marvelous job of reporting on this issue. AEP, for instance, had a great piece yesterday, and so did George Monbiot. But the really good stuff, I'd say, comes from outside the media. Blogging economists all over the world are doing a terrific job. Yves Smith alone, over at NakedCapitalism, provides more and better info than the entire German press combined.