Stephanie Kelton has a substack post Unfinished Business.

Earlier today, I joined CNN host Fareed Zakaria to talk about deficits, inflation, and whether we’re focusing on the wrong things when we debate the price of the Build Back Better agenda and how to “pay for” it. I knew ahead of time that we would have only 5-6 minutes to cover a lot of ground, and I did my best in the short time we had.

Here was my reaction.

Totally inadequate response. Instead of wasting time trying to say that the inflation people see isn’t what they think, you should have spent all your time explaining what is the cause of the inflation that they do see. As I see it, the supply chain that we have that depends on “just in time delivery” may be efficient under normal circumstances, but it is very fragile in the face of the unexpected. The disruption to the supply chain from the pandemic is now showing up even as we are making feeble attempts to restart the economy. We need to take steps to fix the supply chain situation. I have seen a report that the backup at the ports of entry is just the tip of the iceberg. We don’t have the warehouse space to even store the goods if they went through the ports with no backup. These are problems that need solving, but they may be outside your area of expertise.

For years I have been warning MMT proponents to stop dismissing inflation just because there has not been any inflation up to now. Instead MMT should have discussed why there was no inflation before, and what would have to change to see inflation rise. Up until know there has not been enough consumer demand to raise consumer prices. The oligarchs, who have been receiving trillions of dollars that the Fed has pumped in, aren’t the ones who buy consumer good. The oligarchs take excess money and put it into the stock market, which has been rising. (Stock market price inflation).. Now that consumers have started receiving a little money from the government/Fed, they are trying to buy more, but the supply chain is in a big mess. The disrupted supply chain wasn’t so much of an issue as long as the consumers couldn’t afford to buy things. You could also point out that when workers couldn’t go to work they couldn’t produce the supply of goods that was needed. The external supply from China was also being disrupted.

This resort to economic reports from “experts”, is not going to convince the many people who have become skeptical of all experts lately (and with good reason). Explain things in understandable ways without resorting to playing the credentials game.

I also note that MMT has always said that all the historical hyper-inflations have resulted from supply disruptions. This is what is going on, so MMT has always had an explanation. Now is the time to bring it up. Also explain that MMT is not able to predict unexpected supply disruptions. But MMT proponents should have been looking out for their occurrence when they happen. MMT should have been able to predict this inflation as soon as they saw the huge supply disruption caused by the pandemic.