11 Apr 2013

It’s On Like Donkey Kong: John Carney Will Host Murphy/Mosler Debate

Shameless Self-Promotion 32 Comments

Just confirmed it with John… He is hosting the debate on MMT/Austrian economics. John was the perfect choice because of articles like this at CNBC.

More details soon…

32 Responses to “It’s On Like Donkey Kong: John Carney Will Host Murphy/Mosler Debate”

  1. Bob Roddis says:

    John Carney said…

    Let me explain why I think this important.

    I’m not trying to shoot down the core insights of MMT. In fact, I find them extremely valuable to my reporting and analysis.

    But there are some statements coming out of MMT that are highly misleading or confusing to people. Much of this confusion stems from the impression people get reading MMT blogs and papers that saving requires deficit spending. This is wrong, of course. But many smart, intelligent folks think this is what MMT is claiming.

    So they dismiss it as nonsense.

    What I’ve been trying to do is explore what it is that makes people think this is an MMT claim and what must be said to clarify it.

    Furthermore, I do think there’s a problem with MMT that cannot be confined to confusion.

    The problem is as follows: MMTer are so focused on sectoral balances and the interaction between the private domestic sector and the public sector that they often downplay the intra-sector dynamics.

    Finally, MMTers do not seem to fully appreciate the problems of ignorance and calculation that inform Austrian economics. They seem to recoil at even thinking about them because of the implications for the limits of political action. This also needs to be corrected.

    http://mikenormaneconomics.blogspot.com/2012/03/john-carney-comments-on-jkhs-post-on.html?showComment=1332343882664#c370523094954810558

    • Tel says:

      Much of this confusion stems from the impression people get reading MMT blogs and papers that saving requires deficit spending.

      I thought you were a lawyer… read the fine print.

      “Net saving” requires deficit spending. What is this “net saving” you might be tempted to ask? Sounds like “saving” right? Well, no actually, “net saving” is just that bit of saving which happens to be vested in government bonds. Cool huh?

      Remember, MMTers only divide the economy into three parts: government, private domestic, and foreign (external). If it doesn’t involve a transaction between those, then they just ignore it. Hence, they can’t measure saving even if they try, they can only measure artificial crap like “net saving” and then say it quickly hoping you don’t notice.

      Oh yeah, and they ignore prices too… all prices, of everything. Economics apparently happens without prices.

      • Bob Roddis says:

        “John Carney said”…..

        I didn’t write a word of that. I copied the entire thing from a Carney comment.

        I didn’t write this either.

        And there you have it: When MMTers speak of “net saving,” they don’t mean that people collectively save more than people collectively borrow. No, they mean people collectively save more than people collectively invest.

        I’m not trying to make fun of Nick Rowe; he is a professional economist who has written some very nuanced posts relating MMT to more orthodox mainstream economics. But look at what he was forced to type: “Define ‘private saving’ as ‘private saving minus investment.’” As I noted in my response to Rowe, if we define “private saving” as “private saving,” then my critique of MMT stands. (That’s supposed to be funny, by the way — at least insofar as economics can be funny.)

        Now Nick Rowe and the MMTers are certainly correct when they observe that “private saving net of private investment” can’t grow without a government budget deficit (again if we disregard foreign trade). But so what? The whole benefit of private saving is that it allows for more private investment.

        http://mises.org/daily/5260/The-UpsideDown-World-of-MMT

        And I think there are many more problems than that with the concept of “net saving”. Like, where do the resources come from to pay off the rich bond holders? Martians? Oh yes, government debt is obviously such a necessary and cost-free bonus from the government sector to the “non-government sector”.

        • Tel says:

          My apologies, I missed that you were quoting.

          We agree then the “net saving” concept is a word game, and nothing more.

      • Bob Roddis says:

        Bob Murphy also wrote this in the same article:

        I hope I’ve convinced the reader that something is very fishy with the MMT conclusions regarding private saving and government budget deficits. The error crept in at step one, with the equation GDP = C + I + G + (X − M). The only justification for measuring “output” (left-hand side) by the summation of spending (on the right-hand side) is that in a market exchange, the “value” of something is whatever the buyer spends on it.

        However, if the government can raise revenues through present taxation or by borrowing now and paying back with future taxes, then this justification falls away. It’s simply not true that $1,000 in private consumption or investment spending is an equivalent amount of “real output” to $1,000 spent by bureaucrats who raised the money without the consent of their “customers” and who may very operate under a “use it or lose it” appropriations process.

        That should have been the end of Keynesianism, the “trend line” and “the gap” right there.

        • Tel says:

          Rothbard went to some trouble to calculate a modified gross product that included voluntary private spending only. I think he called it GPP.

          Overall, if you look at high GDP per capita nations and low GDP per capita nations, it does roughly come out that the high GDP per capita tend to be the ones you want to be living in. However, there is the perverse “broken window” incentive that setting fire to lots of stuff will push up GDP, but also reduce living standards.

          A lot of economists from all schools have wrestled with finding a genuine theory of value, but they seem to keep giving up and going back to GDP or GNP or one of the near equivalents.

  2. Dan says:

    I should get a free subscription to Free Advice for being the first to recommend him.

  3. Maurizio says:

    I wonder how you are going to respond to the their claim that inflation in the 70′s was solely due to the oil crisis.

    Another typical claim is that devaluation per se does not cause price inflation. (Not sure what they believe is the real cause of inflation).

  4. AD says:

    Would like to see you debate on market monetarism. Even fewer people care about MMT than MM.

  5. Noah Smith says:

    I MUST see this debate. I would not miss it for the world. Make sure the details are well-publicized!

  6. Adrian Gabriel says:

    Looking forward to your win. Interesting that Carney thinks he’s critiquing Wenzel in suggesting that first Wenzel says values are subjective and gain value according to subjective valuations, but then proceeds to make an “is vs ought” mistake. If he thinks that poverty “is” bad, then why does he not agree with Wenzel. Having a government highly distorts and removes subjective valuation. How are capital goods priced if government is involved in a certain sector of the economy. This creates false price spreads and thus basically means that subjective valuation does not matter. Governments do not take subjective valuation into consideration. Interesting article, but it seems Carney still needs to learn a bit about the structure of production. He is also missing the fact that his position is nihilist. If he misses that fact that all humans act according to their subjective value scales, then he is being nihilistic. He is denying the logic behind a person’s ability to choose for themselves within their actions, irrespective of mathematical mechanics or misdirected assumptions.

  7. Robert McKeown says:

    Schiff had an MMTer on his show last year, I think, and she made some statement that as an MMT researcher, they don’t believe that the federal government should tax anyone because we have use of the Fed’s printing press. When the government spends it need only print up a new batch of money. Gee, how’d that work out for Zimbabwe?

    • Major_Freedom says:

      The Zimbabwean government just had to print and spend less money.

  8. Seymour says:

    Schiff also had Warren Mosler on his show and the MMT fanboys were saying that Peter was being smug and interrupting Mosler. Peter could do better at interviewing people though.

    • Bob Roddis says:

      I heard that interview. Mosler was completely polite. Schiff was completely rude and condescending but never really made any incisive points about MMT per se. Tom Woods is the only reason I listen to the Peter Schiff Show.

      • skylien says:

        Yep Mosler really is a nice, polite and responsive guy.

      • Seymour says:

        I completely agree. Schiff, Norman, and Shedlock all have products to sell so they’ll say anything to keep their audience even if it means having to be as rude and condescending as possible.

    • MamMoTh says:

      Schiff is a moron and he proved it on that show

      • Seymour says:

        You do have a point. Schiff isn’t exactly the best representative of laissez-faire. I wish Thomas Sowell, Bob Murphy, Steve Horwitz, David Henderson and others were more well known to the general public. Warren Mosler and others who support MMT should have more exposure so that people will be aware of both Austrian economics and MMT.

        • Bob Murphy says:

          Seymour wrote: “I wish Thomas Sowell, Bob Murphy, Steve Horwitz, David Henderson and others were more well known to the general public.”

          Me too!

        • MamMoTh says:

          I mean he is a moron because of the way he behaves not because of his world view.

          You don’t invite someone to your talk-show to bully him in public instead of listening to him.

          The debate comes much too late to give MMT and AE more exposure, they both lost momentum.

          I don’t know how much Warren knows about AE but he is not the most antagonistic MMTer towards it.

          He just describes the world we live in where currency is a public monopoly that serves a public purpose and that’s about it.

          • Seymour says:

            Yeah. That seems to be a common trend with Peter Schiff whether he’s right or not and I completely agree with you there.

          • Bob Roddis says:

            He just describes the world we live in where currency is a public monopoly that serves a public purpose and that’s about it.

            MMTers may have some insight into short term movements in the inflation and interest rate. They go off the track when claiming that the government’s alleged ability to create all the funny money it wants to solves the problem of scarcity. Further, the government does not directly create funny money, the Fed does. Finally, the concept of “public purpose” is nonsense.

          • Bob Roddis says:

            I omitted that private banks also create funny money via loans.

      • Bob Roddis says:

        Schiff is not a moron.

        http://www.youtube.com/watch?v=1G0tfb8ZefA

        However, I wish that his investment strategies were not seen as co-extensive with Austrian analysis.

        • Robert McKeown says:

          No, I agree, Peter isn’t a moron. A couple of weeks ago he conceded that he interrupts his guests too much after an interview he did with Paul Craig Roberts. He said he would try to do a better job.

  9. Major_Freedom says:

    How long is the debate going to be? Hope it’s at least an hour and a half.

  10. MamMoTh says:

    This debate comes way too late, you should have had it much earlier and it would have been good propaganda for both schools.

    If it’s going to be an online debate make sure the sound quality is good.

  11. Argosy Jones says:

    John Carney: a great choice. I can’t think of a better moderator in the universe. This is a real coup.*

    Bob Murphy: good choice. Decent guy. accomplished and competent presenter. Seems to be conversant in postkeynesian/mmt concepts.

    Mosler: not so familiar with this guy, clearly on top of his mmt game, of course. Not clear whether he’s got a great grasp of the austrian perspective. Not the most charismatic presenter.

    Topic: overbroad for a single debate. Should be nailed down a little more narrowly. Hopefully carney will guide the discussion in a productive manner. Otherwise, there is a huge potential for talking past each other.

    Format? Unknown. This needs to be given some thought, though.

    • Argosy Jones says:

      *I must admit the Major Freedom/ Lord Keynes tag team moderation concept has its appeal. Both wish to preserve their anonymity. Let them wear ‘lucha libre’ masks on skype, or whatever, and all will be well.

      http://en.wikipedia.org/wiki/Lucha_libre

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