New Economic Perspectives has the article Paying for Lunch – MMT Style, MMT being Modern Monetary Theory, and the paying for lunch has to do with the common aphorism, “There is no free lunch.” The article starts of with some criticisms of MMT before it gets to the definition below:

Many of the key ideas of Modern Monetary Theory go back to the years during and immediately following the Great Depression and the Second World War, when great thinkers and public servants applied bold, creative thinking and practical problem solving to the daunting economic and organizational challenges of their times, and helped their societies overcome systemic failure, triumph over threats and adversity, and achieve renewed optimism and growing prosperity. One of those thinkers was Abba Lerner, who developed the concept of functional finance, which he described this way in his paper “Functional Finance and the Federal Debt”:

The central idea is that government fiscal policy, its spending and taxing, its borrowing and repayment of loans, its issue of new money and withdrawal of money, shall be undertaken with an eye only to the results of these actions on the economy and not to any established traditional doctrine what is sound and what is unsound.

Lerner then articulated two “laws of functional finance”, which I think still very well capture the spirit of the MMT approach to economic policy.  The two laws are given as follows:

The first financial responsibility of the government (since nobody else can undertake that responsibility) is to keep the total rate of spending in the country on goods and services neither greater nor less than that rate which at the current prices would buy all the goods that it is possible to produce.

…

The second law of functional finance is that the government should borrow money only if it is desirable that the public should have less money and more government bonds, for these are the effects of government borrowing.

Read the rest of the article to get the full impact. It might blow your mind.

The Real News Network has an interview with Lawrence Wilkerson: Senate Pushes Obama Towards War and Susan Rice a Bad Choice.

When the discussion of Susan Rice starts, the video cuts to a 2008 interview of Rice by Paul Jay.

JAY: You talk to anyone who knows the situation, they know more troops in Afghanistan is—unless there’s hundreds of thousands of troops in Afghanistan for years to come, it’s not going to significantly change the situation without dealing with warlords and dealing with reconstruction.

SUSAN RICE, SENIOR FOREIGN POLICY ADVISER TO SEN. BARACK OBAMA: Not by itself. I mean, I mentioned very—I said, coupled with the economic and political steps.

JAY: So what would be concrete steps?

RICE: Well, we have underinvested in Pakistan and Afghanistan, but particularly Afghanistan, with respect to the counterterrorism effort. We haven’t done the socio and economic investments in infrastructure and education in alternatives to poppy.

Later in the interview with Wilkerson, he refers back to the snippet of the Rice interview that he had just chosen to show us and remarks:

JAY: When I interviewed her in New Hampshire, I was primarily focused on candidate Obama’s position on the Afghan War, essentially to expand it, and I asked her, well, doesn’t there—if you’re going to expand, don’t you really have to expand solving problems facing the Afghan people in a serious way? A lot of rhetoric’s been thrown around about doing something to win the hearts and minds of Afghanistan, the Afghans, but very little in terms of real money and real on-the-ground action. She kind of said, oh, yeah, yeah, yeah, and kind of dismissed it. Her main argument was about increasing troop levels.

I don’t know about you, but I didn’t hear Rice say what Paul Jay says that she said. If he wanted to make this point, couldn’t he have chosen a better snippet from the interview? I presume that since he did the choosing of the snippet, that a better snippet to make his point could not be found.

I have a perverse conspiracy theory for you. The Republicans actually want Susann Rice as Secretary of State. They are making the silly charges about her remarks on Libya so as to back Obama into a corner where he has to stick by Rice in order to not look like a weakling. If they really didn’t want Rice, they would focus on the issues raised by Jay and Wilkerson in this interview.

The other side of this odd conspiracy may be that the Obama side has realized that they cannot get Rice approved for Secretary of State and therefore feel the need to save face by pointing out her flaws as justification for dumping her.

This political business can get so convoluted it makes you dizzy.