Paul Krugman on Modern Monetary Theory
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- Опубликовано: 2 фев 2020
- Paul Krugman discusses modern monetary theory. Interview Recorded January 28, 2020.
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Nothing worthwhile said, but that's okay! As the song goes: "We're all Keynesians now"
Keynes vs Hayek.
"Say it loud, and say it proud." 🙄🙄🙄
She jumps in with “it makes no sense” five seconds in. Thanks for the smart host.
But she's wrong! Krugman says repeatedly that MMT is correct, it's just a new gloss on an age-old theory (Keynesianism). It makes sense and its right, Krugman just doesn't like the rhetorical gloss Kelton and others put on it.
@@davidwave4 join Krugman in the doghouse David. It's got nothing to do with "gloss" and everything to do with heterodox economics. Keynesian isn't heterodox (remember "we're all Keynesians now" is the neoliberal catch-cry of today). Hyman Minsky and many others went well beyond Keynesian . If you want to apply a label to MMT use Neo-chartalists. And while we're on Krugman, he is neo-liberal to the core and a big part of why the left in USA in non-progressive in it's outlook and approach to economics. Read some:
Stephanie Kelton (general audience, stephaniekelton.com/book/)
Warren Mosler (free paper, the Seven Deadly Innocent Frauds of Economic Policy moslereconomics.com/mandatory-readings/innocent-frauds/)
Bill Mitchell (co-author of Macroeconomics textbook and a great blog bilbo.economicoutlook.net/blog/) if you want to understand why Krugman doesn't get it.
All the mainstream sometimes mistakenly-called-progressives, usually nothing more than neoliberal economists who subscribe to capitalism 101 (money talks, markets "just work"). now they're trying to say they always knew MMT even though they contradict it all the time (and more so before it became as widely known as it is today)
@@alastairleith8612 have you read steve keenm
With that comment she signals her allegiance to conventional wisdom, and her desire for Krugman's approval.
Austrians: Keynesians are destroying the economy MMT: Hold my beer
No fuckin shit! 😂 this stuff makes me nauseous after reading mises
Austrian economics are absolutely garbage, Friedman, ugh, disgusting policies, individualism, rightwing bull shit, they want your wages to be low, to be "competitive" for the "markets", but the truth is when applied is complete rubish, we have had 2 hardcore libertarians in Argentina as presidents, Menem, in the 90's it was a complete disaster, sold every public company and the private sector turned them all into garbage, bankrupcy, they paid all the private sector big companies foreign debt using government money, thus creating more debt, unemployement went through the roof, violence, poverty, hunger, all bad things spiked and never got back up... They ruined generations, and then we had a cuple of governments with balls and bought back the public companies, they are great companies now, created way more, surplus companies... and now as stupid as it sounds, we voted another fucking libertarian in Milei, who is a fucking wanker who only tweet stuff and is complete demential, he wants all to be private again, regardless of the well perfomance of the company, he doesn't believe in that, but we are coming from high inflation, to hiperinflation with him, he said no taxes, now it's no taxes for the big companies only, the working lower and middle class are being ripped apaprt with taxes and "free market" prices going berserk @joeyc4492
Libertarians are autocrats disguised in their "freedom" chants, they just want freedom for the companies to pay you way less, without benefits, without compensation, they want freedom to seel your natural resources to privates that may not see it as strategic, they may not take care of the nature just because they want profit you know? it is not in their interest to have care of the soil, of the mountains, of the rivers, they are gonna pollute and they are going to be agressive in their greed, and they are going to get rich and then if you want to do something do it, the damage is already done. It doesn't matter that the user is going to buy something else because the products of quality and bla bla bla, the people are going to buy whatever they can buy from the few monopolies that run most needs, either basic needs or acquired needs.
Gotta love that they ask a person that doesn't know about MMT about MMT.... It's almost like they invited someone to discredit it. Why not invite the person she mentioned as the biggest proponent as well?
Not really. They asked a leading economist to discuss a pseudo economic talking point and he did. The leading proponent of MMT has also been interviewed by the same org. Big Daddy Krug’s point stands.
The most accurate statements that Krugman has made . ' they are doing Keynesian economics but don't know it".
It’s not though
Keynesian says to run surpluses when the economy is doing well. MMT says no such thing
@@uhohhotdog It's even worse . It's based on false assumptions piled on each other. If it were a building it would fall down immediately.
@@Rob-fx2dw you have no clue what you’re talking about
@@uhohhotdog Another comment that contains no reasoning or explanation.
“It makes no sense.” Margaret Hoover I wouldn’t go around admitting you don’t understand something that’s as straight forward as MMT.
i would advise everyone to read Functional Finance from Abba Lerner. Thats essentially the point of new-keynesian/MMT policy implications...
This is public broadcaster PBS host saying “you should have dismissed them (MMT or heterodox economists) as cranks on the far left”. Yet calls herself a layman in the same five minute exchange of nonsense. Where does public broadcasting stand if it wants to mirror the mainstream captured media?
She said, 'you sort of dismissed them'.. In relation to the fact that it's gained traction 'popularity'
Whatever Krugman says, the opposite is likely to be true
History tells us this, over & over again
Oh, yeah. Ask THIS guy...
I watching this again she says MMT'er are quacks and it makes no sense. Then as if her memory is whiped out reads a quote from Krugman saying there's really no sense in debating MMT'ers because we essentially believe the same thing. When she talks the first thing out of his mouth is "No."
Hoover calling MMT a policy was the quickest way into a video to say you dont know what the f youre talking about. 🤣🤣
Paul Krugman obviously is not happy to discuss the MMT, what he said is indicative of his opinion regarding MMT
Economic theory is like climate theory. Climate theory has basic rules that are like axioms and always true. But when you need to predict a future state of an entire system, these basic axioms are not enough.
I remember the right honorable weatherman Al Roker discussing a hurricane moving towards the US. He first said the US model predicted the hurricane to land South of the DC coast and then added the European model predicted more North. He added the latter was better and he had more confidence in this model. And even the better model had uncertainties.
Economic (macro economic) theory depends on how deep and wide the model can "see" into the data mirror of recent history. It depends on how many times some political measure or influence is run through the circulation of the economic system under scrutiny. It depends on the quality of the input data and their age. It depends on processing power afforded to the model. Like the climate modeling.
Every demand/supply-ceteris-paribus reasoning is just a theoretical, academic, discussion of base principles as they also exist in climate theory. It all depends on the relative price elasticity between demand and supply can kill all demand-supply conversations. That does not help.
Once "science" has come up with such models, and they can actually explain them, "we" need to talk about what and whom we want to protect with monetary policies.
The definition of an economist in the student house: "somebody who also doesn't know".
Maybe "we" should ask meteorologists to teach them a lesson.
Economics has the added X factor of human behavior. This is why no one can beat the S&P 500 index for the long run. Although "The herd" is smarter than the individual. Sometimes it makes a mistake and stampedes off the cliff for an unknown reason. Think of all the market crashes like Black Monday that happened for no apprant reason?
MMT is, as krugman said, just keynesian by another name, and with all the same inflationary deflationary problems.
The thing that really ended my skepticism of MMT and really made me a believer was from watching videos of people trying to criticize MMT and failing miserably. I don't mean from watching just random RUclips bloggers that call themselves economists. I'm talking about even Nobel Prize winning economist Paul Krugman.
The host was wrong on all of her thoughts and opinions of MMT and the "expert of economics" big argument against it is that he can't misrepresent the arguments MMT economists make.
🤔 Wow. Really great arguments guys.
Lol you need to go listen to some real macro economist :
Jeff snider
Luke grommen
Lyn alden
They will open your mind and make u understanf just how clueless MMTers are
@Don Shepard MMT is not how the system works, mmter claimed they discovered that the government can spend before the get taxes , obvisously governements already knew this
MMT as a framework is wrong about what causes inflation.
Ask any MMTer what caused inflation in the 1970s
Also ask any MMTer if the entire usa $ 27trillion cud have been monetized by the fed without causing inflation
@Don Shepard what data and facts?
@Don Shepard lmao that only true for deficits created by new money (printed)
@Don Shepard most of usa public sector debt came from the private sector, about $24 trillion came from tge private sector so its not a surplus its jus redistributed. Again mmt wants it followers to believe all usa debt was created thru new money ,when infact most comes from bonds the government sells to private sector
Is this guy for real? the MMT people must be really laughing.
MMT is institutional post-Keynesianism
When Paul Krugman thinks you're a crank...
It's no good talking to MMTers and expecting them to provide a consistent answer because they are confused themselves and one part of their theory contradict another.
thanks for the info Rob
Totally agree. Just for clarification though, where you referring to the first part of their theory conflicting with the middle part, or last part?
@@anthonypape6862 I was referring to the fact that MMT say taxes drive the value into the currency and later say the government does Not need to tax because it can issue money. Yet they say if there is too much government spending the government they can control inflation by taxing it back. - They try to have it both ways on a lot of issues.
@@Rob-fx2dw The way I understand MMT from the one book I read on it by Kelton, the government does need the money for what you outlined ( for purpose of giving the dollar value through taxing its citizens or for the purpose of combating inflation by removing money from the through taxation) but that they do not need the money for the traditional sense that a household needs money : to buy things. They are trying to drive home the point that our government that we built, designed, and own is not like an individual household. Taxation is used not buy things it’s used as a lever to steer behavior.
@@anthonypape6862 MMT is wrong about taxes and government spending. It defies historical facts. It also wants to have things both ways because Mosler the designer of the MMT also says Taxes are to "provision" government. How is that so if taxes are not spent after collection?
The facts are (as supported by the information from Federal Reserve ) that taxes and bond sales (borrowed money) are the source of funds for government spending.
You know what a government budget deficit is - government spending exceeding tax revenue. The historical facts that show the amounts spent by government and the years of deficits as well as the years that the government budget was in balance (tax revenues = spending). These facts are available on the Whitehouse historical budget site.
In the years that government was in balance or surplus there was no borrowings needed to support the spending because taxes fund all of the spending.
The additional facts are there have been many countries where there was plenty of spending and taxes collected but also massive inflation that sent the currency completely broke. So that shows taxes add nothing to the value of a currency at all.
The reality is government is not an entity that can do anything on it's own. It is an abstract entity created in people's minds and voted into power.
It is run by people only and they do not have any skills that anyone else doesn't have and must be judged this way. Government is also run by politicians who have mostly no specialized creative skills but just say things to get get votes and get re elected. Unlike the private sector people they take no responsibility at all for their failures or inefficiencies.
That being there is No rational reason to believe a group of people names "government" has any more special ability to do anything other than any other group of people and there given they are just headed by politicians is reason to believe they don't have the skills of people who are the skiiled creators.
So why would anyone who is sane believe it ?
It totally irrational to believe that some group 's finances or mother skills are superior to another unless there is logical reasoning behind it backed by historical fact.
One can't just make claims such as things are nothing like other things unless there are facts to prove it. MMT puts up No facts to prove anything that the government does is not constrained in economics just like any other group is by the laws of demand , supply and price or any other laws or limitations.
His response was actually gold, I agree with MMT but its essentially a component of keynesian economics
its not really an economic theory, because they add anything new to explain economy. its just Keynesian + own political statement.
@@dark6c159 MMT focuses specifically on monetary operation, its limitations and the need for government spending now more than ever.
@@jagsherdhaliwal3191 thats what we call NAIRU. nothing new.
@@dark6c159 I agree. But neoliberals have always thought spending to be inherently inflationary, which is not the case and that's what MMT is trying to engage with. One only has to look at Japan.
@@jagsherdhaliwal3191 MMT people always bring up japan as example. but i think its a bad idea. after all these spending, japanese government failed to stimulate the economy. yes there is zero inflation, but so is the growth. economic stagnation is the real reason there is no inflation in japan. in another word , MMT did not worked.
It's super arrogant to assert MMT academics and proponents "don't know that they're doing Keynsian economics" as if these people have never studied what they're talking about or the history of economic thought and precisely where ideas differ.
All firing, no line 😂😂😂
Is Paul Krugman really ignorant and blind on how the monetary system really works?
And MMT people are complete morons. Yay, so both Keynesian and MMT a people are wrong, I agree
youtube commenter knows more than a nobel laureate economist
@@hillbilly4333 also friendly reminder that nobels in economics are not nobels, they are given out by a swiss bank.
Yeesh, Margaret has a perspective completely devoid of substance. X associates with Y, and Y is a Z, therefore X is a Z.
MTT is refuted by the performance of the Singaporean economy which not only has zero net debt but ran a 3.84% GDP surplus in 2019 and is a massive net creditor. MTT indicates that Singapore should be poorly performing because it is not running the deficits required for growth. Furthermore, here is a list of creditor countries, there you will find the wealthiest nations in the world, with only 2/19 being weak economies.
en.wikipedia.org/wiki/List_of_creditor_nations_by_net_international_investment_position_per_capita
MMT is reinforced by your example, can you figure it out?
did MMT indicate deficit is needed for growth?
@@liyexiang666 Govt Deficit is the economic growth, where else does the economy get the currency from? Mars? No the currency Issuer, the Govt. Those countries with growth are not because of their Govt Surpluses, it's growth in spite of that, kinda like walking with a plastic bag on your head, you can do it, but its a struggle, then try running and it gets tougher and tougher to breath, unless you have built in Co2 scrubbers in your lungs. Govt Deficits aren't 'required' for growth, you can grow backwards too, so it depends on how much you want to grow, the growth can come from private debt, but only to a point, eventually the source of the currency (Govt) will need to issue more of the currency through its agents The Banks (regulated by the Central Bank well, if the Bank Supervision is up to scratch)
@@patakainstitute346 thats not the question i was asking, but thanks anyway
Government debt is not required for growth if you’re getting money from elsewhere. But one persons surplus is another persons debt.
They way I take it is MMT just wants to stop fear mongering about the debt, and makes it's recommendations for stimulus or retraction. But it's cornerstone is to educate the public. Keynesians simply make the recommendation but don't seem interested in educating the lay person which is too bad because that is who politicians are praying on to get re-elected.
Exactly economics isn't perceived as very accessible MMT has made a lot of people interested in economics
MMT is like the Law of Attraction. Makes people interested in economics because it promises to solve all of their problems, no matter how la-la-land it is...
@@highvoltagee I must admit it got me interested. Not because it solves problems. I’m not. sure it solves any it just wrestles with different problems. Often harder ones. What got me interested was it provided information that I did not know I had no idea that this was how the US government budget worked. It just made sense if the government is the only one that can create money and I have money how do I think that it got there. Plus they don’t want our tax dollars they can make much why would they want it back it’s just an accounting legend really
@@anthonypape6862 For me the Econ books that blew my mind was Principles of Economics - Carl Menger. Boring title, but made me rethink everything I thought I knew
cdn.mises.org/principles_of_economics.pdf
What a quack
i find it startling that Krugman is so irritated to even discuss it.. if its so rubbish why isnt he calmly take it apart.. why are traditional economists so freaked out by new paradig,ms, new language, new working premise? why do they feel so threatened... it doesnt negate them and their education, does it
Useless vid
lmao this lady is so confused. He's criticizing them as just rehashing orthodox economics and changing terminology, she's trying to criticize them as crazy when in reality MMT is just orthodoxy from a different perspective
you better define orthodox because every MMT academic I know thinks the orthodoxy (non-hetrodox economists) couldn't be more wrong about Macro.
@@alastairleith8612 just standard neo Keynesian views. I agree most mmt people would argue they are radically different because they control unemployment and inflation through fiscal policy rather than monetary policy (tax to lower inflation spend to increase it) but IMO the problem with MMT is that it’s very hard to raise taxes in a democracy so when you have runaway inflation it’s a lot easier politically to just change interest rates rather than trying to raise taxes every time there’s too much money in circulation.
@@thegreen2504 you're assuming that deficits create inflation. Japan has been trying to spend it's way into inflation for years and it hasn't come. Check out Warren Mosler on this, he talks about it a lot. Taxation is not the only way to slow inflation. (Most OECD economies would like a little inflation ATM too). Inflation is usually a result of demand ans supply mismatch, driving up prices. If fiscal policy is say for a federally funded Job Guaranty as the economy picks up, people move into the private sector and the public sector financed JG jobs concertina out of existence. They are just there for those who need or want them.
Dr Victor Quirk on FJG ruclips.net/video/75k_8TYOas8/видео.html
If the feds only fund roads then we will run out of road making equipment and skilled workers and the construction firms will bid up projects and pull employees out of other sectors (the way the mining industry likes to with booms and busts). So they shouldn't do that. But they could fund dental and mental health for all. They could raise the basic living wage for those who cannot or don't want to access the JG networks. That wouldn't be inflationary but would grow the economy.
@@alastairleith8612 I think inflation and spending are positively correlated. Deficit spending is basically taking production from the future and investing it in the present. Inflation IMO happens when you take more money from the future than you’re actually capable of producing. In Japan’s case I agree they aren’t spending enough. If you aren’t seeing inflation that’s a symptom that you need to spend more because the full economic capabilities of your country still aren’t being used. In other words, in Japan’s case for example, they could be running even bigger deficits and could be more productive then they already are but there is a certain point where too much money in circulation chasing after too few goods leads to inflation. Japan hasn’t hit that point but that doesn’t mean it doesn’t exist
@@thegreen2504 you need to understand i think that money, currency is not a commodity. You cannot take it from the future, even metaphorically. (and literally you cannot take anything from the future to the present, try taking an unborn child from the future to today). Money is federal tax credits and the federal Govt spending minus tax is nothing more than a scorekeeping ledger about how much currency is in circulation.,
LOL @ krugman
As much as I hate MMT, Krugman might be worse.
Like Milton Friedman before him and many other economists today, Krugman is overrated.
Friedman was overrated was he? i beg to differ. hardly any of his ideas have actually been used in practice. The same can be said for Hayek as well
@@hamishcounsell5579 Not that I agree, but If you're claiming his ideas weren't even used then for someone who was supposedly so influential, he was definitely overrated!
@@GonzoTehGreat Not claiming that all Friedmans ideas have been used but probably to not the extent that he would have hoped for. him and hayek would probably roll in their graves if they saw the modern day economy today
@Danny B k
Friedman and Hayek weren't really economists following empirical data. They were right-wing ideologues advancing crackpot theories that were wrong in hopes of securing political power. Friedman especially was a neocon whose economic ideas relied on flawed data and premises, and he won the Nobel Prize solely because of his political ideas, which were seen as the cool, intellectual rejection of the New Deal consensus.