Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

Copyright Notice

Everything that appears on this blog is the copyrighted property of somebody. Often, but not always, that somebody is me. For things that are not mine, I either have obtained permission, or claim fair use. Feel free to quote me, but attribute, please. My photos and poetry are dear to my heart, and may not be used without permission. Ditto, my other intellectual property, such as charts and graphs. I'm probably willing to share. Let's talk. Violators will be damned for all eternity to the circle of hell populated by Rosanne Barr, Mrs Miller [look her up], and trombonists who are unable play in tune. You cannot possibly imagine the agony. If you have a question, email me: jazzbumpa@gmail.com. I'll answer when I feel like it. Cheers!

Saturday, April 23, 2011

Quote of the Day

This from Winterspeak, in critque of Steven Randy Waldman's article on MMT.

Again, Steve's Progressive instincts cloud what remains of his judgement. A government's capacity to impose taxes has nothing to do with the quality of the real economy it oversees and everything to do with its sovereign power.

I've been looking at Waldman's article off and on over the past many days, but have been unable to give it any real attention, in the press of other things, which is not going to get relieved any time soon.  Oh, well.  So I can't add anything meaningful about the pros and cons of MMT, or anyone's view of it.

Further, I only discovered Winterspeak fairly recently, and haven't read enough to form an opinion of the views and/or viewpoint expressed there.  However, a couple of things strike me wrong about the above quote.  First, does progressivism really cloud judgment?   Sure, a dogmatic clutching at any ideology can lead to a negation of reality, whenever it comes up against the tenets of the one true faith.  But isn't an open-minded and pragmatic inquiry into the real nature of things a trade mark of progressivism?  Not that any way of thinking has a corner on the truth, but suggesting that progresivism is an impediment to seeking the truth smacks of ideological claptrap.

More importantly, the dogmatic statement about the nature of taxation is simply wrong.  Sure taxation policy is a vital element of sovereign power.  But to suggest that tax policy is irrelevant to the quality of the economy is nonsense.  Besides funding the government, taxation always and everywhere accomplishes some sort of wealth distribution.  The government does more than just engage in warfare and maintenance of the nation's physical plant.  It buys stuff, it lets contracts, it employs people, it provides medial care, food stamps and, best of all, Social Security payments to old fogies like me.  The latter two are particularly effective ways of getting money to flow into the economy.  I certainly spend every penny of my SS check. 

So - sorry Winterspeak - poorly thought-through, and badly done.  I wonder why?  Could your ideological instincts be clouding your judgment?


The Arthurian said...

yeah winter is not usually so crotchety. his post felt to me like he was defending principles on principle, in start contrast to waldman's thoughtful statement. winter is usually much better than this.

BadTux said...

Basically, to state that tax policy has nothing to do with the economy is stating that the entire fundamental premise of capitalism is wrong. The fundamental premise of capitalism is that money (tokens of value) motivates people to behave in certain ways that increase the supply of goods and services in areas where they are in demand, and decreases the supply of goods and services in areas not in demand. This is sort of the whole point of capitalism -- that it's the best way thus far that we've arrived at for balancing supply with demand, and that money is the token we use to perform this balance via a training process where people strive to maximize their supply of this token of value by adjusting their output to match demand. To state that government taking some of these tokens and redistributing them has no effect upon the economy is to basically say capitalism is bunk. Is that *really* what Winter was saying?!

- Badtux the Baffled Penguin

Jazzbumpa said...

I suspect it was just a momant of carelessness. Or, at least, I sincerely hope so.


BadTux said...

On the other hand, if he *really* just said "Capitalism is bunk", I'm sure the Communist economic theorists (yes, they still exist! I know because I get into TwitFights with them over the issue of the intermediaries problem and how it's provably theoretically unsolvable under Communist theory!) will welcome him with open arms :).

- Badtux the Snarky Penguin

Jazzbumpa said...

Somehow, I just don't see that happenin'.


The Arthurian said...

Jeff65's cold reply at Winterspeak --

JzB said "But the primary function of taxation is to fund government spending."

If you're going to comment here, perhaps you should read the host's other blog posts? You will see that your statement is not accepted as self-evident.

-- is a good example of the religious embrace of the MMT ideology. Very much like Mises folk, MMT people often have strong, well-formed ideas and, if you don't agree with them, well, you can go to 7734.

Jazzbumpa said...

I thought that blog might be a good place to acquire some brain groceries. I'm beginning to have my doubts.


BadTux said...

I'm just trying to get their point, at which point I'm done with them. My own thought is that they're ideological kin to the Austrians, except in a mirror. The Austrians recoil in horror at the thought of printing money. The MMT guys think printing money solves all problems. Neither is correct, because there is no one-size-fits-all solution to all problems.

I'm especially baffled by their definition of the word "taxation". It appears to disqualify virtually all taxation that has occurred in human history as taxation. The modern notion of taxation as seizing tokens representing value rather than seizing actual goods is fairly new, but the end result ends up the same -- government ends up seizing production, either implicitly or explicitly. It is a fundamental exercise of sovereign power, without which there is no sovereign.

So it goes. I'll try to hang around there a few iota longer and see if I can figure out WTF they're going on about, but right now it looks like they're doing the Austrian voodoo in a mirror, and dealing with delusional people who think they have the One True Solution to all problems is not fun enough to interest me for long...

- Badtux the Pragmatic Penguin

The Arthurian said...

There are profound differences between money based on gold, and money based on the judgment of policymakers. MMT recognizes these differences, and that is a good thing.

But they turn everything backwards with their explanations, so it is very difficult to understand them or to think like they think, unless you're starting from scratch.

Winterspeak is often good, because he puts things in his own words. Lots of MMT-speak is just repetition of what the chieftains have said.

MMT says that money is an IOU of government, and when you pay taxes you are returning govt IOUs to govt, and so basically they could throw the old IOUs into the garbage, and just issue new ones when they spend... It has its own internal logic. But it is foreign to everything that has to do with economics as I know it.