Search Results for : mmt


Inflationary Pressures in the Time of Covid-19: MMT as a Theory of Inflation

I have just started reading this December 2021 paper Inflationary Pressures in the Time of Covid-19: MMT as a Theory of Inflation.

Abstract: According to Modern Monetary Theory (MMT), the only constraint on public spending for a currency issuing authority like the United States government is inflation. This paper develops an alternative understanding and analysis of economic inflation through the lens of MMT in the aftermath of the Covid-19 public health crisis and consequential economic shutdown and reopening. It argues that conventional explanations of inflation remain ideologically constricted to an outdated social theory and conceptual framing. As such, public policy responses to contemporary price increases are limited in scope and incapable of neither effectively stabilizing prices nor avoiding the worsening of social inequities and harm. The paper will first develop MMT’s insights about inflationary pressures as a theory of qualitatively determined resource use, costs, and political coordination, as opposed to a collapse in the value of money from excessive public spending. An analysis of price pressures throughout 2021 is then provided by examining supply chains, industry specific shocks, and market power. Lastly, inflation is explored in the context of an ongoing planetary climate and environmental crisis with deep implications about the future of sustainability, economic development, and price stability.

Here are some snippets I have gleaned from the first 10 page out of 40. There is so much more already in the first 10 pages.

MMT describes how monetary economies work and prescribes how to best apply public policy and investment based on productive capacity, available resources, and price stability.
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Currently, the political process of price setting is overwhelmed by neoliberal disinvestment, corporate greed, and monopolization, but it does not have to be this way.
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The “crypto” agenda often comes in the form of appeals to the ideological superiority of “hard money”, meaning finite and scarce, but other times has a more ambitious objective to replace public fiat altogether with private actors such as Facebook’s Diem. 36 This is especially pernicious when it takes the form of new developments in monetary imperialism as is the case with El Salvador further privatizing its economy over to fintech 37 or billionaire vultures 38 seeking to take over Puerto Rico’s energy grid with crypto after Hurricane Maria.

When public money is reduced to the constrained function of taxing and spending it represses it true world-building capacity and lends itself to the exploits of powerful private interests. By contrast, MMT sees money as an instrument of generative production and reproduction with many more positive-sum and qualitatively unique results than the mainstream orthodoxy allows us to see.


Dr. Fadhel Kaboub – Climate Change, Climate Reparations & MMT

Youtube has the video Dr. Fadhel Kaboub – Climate Change, Climate Reparations & MMT.


Great and powerful presentation. Fadhel Kaboub presentations are always good, but I think this one has outdone previous presentations.

Fadhel is sticking to his explanation of the 1970s inflation. There is nothing untrue about what he says, but I think he leaves out the important driver. The driver was the USA trying to wage the Vietnam war without changing the civilian economy to account for the resources necessary to support the war effort. This failure on the part of Lyndon Johnson is the opposite of what we did for WW II, so eloquently described by Fadhel Kaboub. Not contrasting the two behaviors is an opportunity missed when Fadhel focuses on the unrest in the Middle East. The unrest in the Middle East was partially caused by Lyndon Johnson’s inflation.


Fadhel Kaboub On Saving The Planet With #MMT — The Political Vigilante

YouTube has the video Fadhel Kaboub On Saving The Planet With #MMT — The Political Vigilante.

Graham interviews Professor of Economics, Dr. Fadhel Kaboub, about MMT and it’s impact on saving the earth from climate collapse.


Fadhel explains the key feature of Modern Monetary Theory in a way that would be hard not to understand. Specifically, the irrefutable explanation focuses on how the USA funded WW II. The audio from Graham Elwood’s side is not the greatest, but Fadhel’s audio is much better.


MMT Explains the Current Inflation

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.


MMT for You and Me

This is the easiest to understand explanation that I have seen about taxes, government spending, borrowing, deficits, and surpluses.. It is on YouTube as the video MMT for You and Me (consolidated).


You may not believe any of it, but the explanation is impossible to refute. Warren Mosler is a successful investor and owned a bank at one time. Warren knows how it works, whether you want to believe him or not.


Getting to Know Modern Monetary Theory (MMT)

Nerd Farmer Podcast has the episode Getting to Know Modern Monetary Theory (MMT): Nerd Farmer Academy — Dr. Fadhel Kaboub, Denison University — #136.

Today’s #NerdFarmerAcademy episode is a conversation with economist Dr. Fadhel Kaboub, Associate Professor of economics at Denison University and President of the Global Institute for Sustainable Prosperity. He is a noted expert in Modern Monetary Theory, heretofore MMT. MMT is an economic theory that posits our approach to debts and deficits is just wrong. MMT economists believe that the concerns frequently expressed about the US debt are basically economic concern-trolling. They note that because the US government, unlike you and I, is a currency issuer, rather than a currency user, the limits on government debt are much higher than most of us have been led to believe. They call on the government to use debt to do great things. MMT-ers believe we can afford a much more generous government that can make a meaningful difference in the lives of working people.

Fadhel Kaboub gives you the most painless introduction to MMT that you will ever hear. In less than an hour he tells you all the fundamentals you need to know and explains why you need to know them.

Fadhel Kaboub might be just a tad harsh in his judgment of Paul Samuelson. Over 50 years ago, I took my first college level economics course. It used Paul Samuelson’s book Fifth edition 1961. Somewhere I learned of the teachings of John Maynard Keynes. I presume it was from Paul Samuelson’s book. There are 7 entries on Keynes in the index of Samuelson’s book.

From what I have read since then, later additions of Samuelson’s book may have de-emphasized Keynes. Fortunately, I was out of college and didn’t get tainted by those later editions.


Warren Mosler on MMT, CBDC, bitcoin, bonds, interest rates, inflation, taxes and unemployment.

YouTube has the video Warren Mosler on MMT, CBDC, bitcoin, bonds, interest rates, inflation, taxes and unemployment.

MMT founding father, Warren Mosler, explains Modern Monetary Theory (MMT). He says it’s about sequence. Governments don’t need to borrow or tax before they spend, if they issue their own currency. The economy needs the government money, not the other way around. Most politicians don’t understand how the monetary system works, also for example the way how banks create money.


As this interviewer shows, it is quite possible to talk to Warren Mosler and still not agree with nor understand what he is saying. The mind with preconceived notions is very hard to change. As this interviewer implies, “Yes, Warren Mosler, Modern Monetary (Money) Theory changes everything, but all the ideas I have had before knowing MMT still hold.” It is just so funny to hear it. I am sure I suffer from the same problem.

A wewsite that warren mentions is moslereconomics.com. Mosler also mentioned Money on the Left.


Discussing MMT (Modern Monetary Theory) with Warren Mosler

YouTube has the video Discussing MMT (Modern Monetary Theory) with Warren Mosler.

Discussing MMT (Modern Monetary Theory) with Warren Mosler


Warren Mosler might have explained that money created by private banks has been tried many times throughout history, but most times such monetary systems were subject to panics and crashes. That’s ostensibly why the Federal Reserve Bank system was created. Why didn’t Warren understand where the interviewer was coming from so that he could adjust his explanation to the capabilities of the interviewer? I could only stand to watch about 50 minutes of this. Maybe, in the next hour that I didn’t see it all worked out.

This is the comment I left for Warren Mosler.

Sorry to say this, but in the 49 minutes of this that I watched, it seems like you kept going around in circles. You kept sticking to your fundamental, but you weren’t successfully communicating with this guy. It’s a fun exercise if you like that sort of thing, but after enough experiences with this type of argument, wouldn’t you start to suspect that there must be a better way to go at this? Have you ever watched Fadhel Kaboub? He seems to make progress explaining these things to people that you don’t seem able to achieve.

Is there some point to discussing MMT beyond just being right? Tell me where in this two hour video I should look to see where you finally got through to this guy. If you continually fail to get through to large numbers of people, maybe the blame doesn’t fall solely on the listener. Maybe the speaker has to learn how to adapt to the way people learn.

Your teaching methods worked for me, because I have learned to understand MMT pretty well. However, the vast majority of the people haven’t go it yet. Some of the people who have got it learned from Stephanie Kelton and Fadhel Kaboub. I am also a big fan of Michael Hudson’s, but it has taken me several years to finally understand him.

It was either Bill Keane or William Mitchel who mentioned the high level of debt that was a problem in China. I thought that was an odd thing for an MMT proponent to say. It took me a few years to realize thew debt he was worried about was private sector debt, not government debt of a country that had a sovereign currency. Maybe it was listening to Michael Hudson over and over again that finally made me see the light.

I love good explanations that straighten out my understanding of reality, but I also appreciate good teaching methods that more people can use to understand the explanation.

Where I went to college we often talked about lessons where the professor would apocryphally say that “this is obvious to the most casual observer”. However, that was an ironic joke on how some professors taught. To many very smart students it was not obvious at all. We spent many hours trying not to be the most casual observer, and we still had troubles some times.

As a matter of fact, I have great difficulty explaining this problem to some leading proponents of MMT. I keep plugging away trying different methods of explaining, but so far I don’t seem to find the way to explain it. I wish Fadhel Kaboub would teach me how to explain it the way he does.

I have two previous posts that demonstrate how Fadhel Kaboub explains things. See MMT Insights on Different Amounts of Currency Sovereignty and African Monetary Sovereignty


MMT Insights on Different Amounts of Currency Sovereignty

YouTube has the video “MMT Insights for the Ukrainian Economy,” Speech for the Ukrainian Society of Financial Analysts by Fadhel Kaboub.

In this presentation, I introduce the basics of Modern Monetary Theory (MMT) and highlight some red flags for the Ukrainian economy with regards to inflation, exchange rate stability, food prices, real estate speculation, and external debt.


Watch the video to see how Kaboub comes to these conclusions.

This is a video that the USA and the EU would rather the Ukraine not hear. When the USA overthrew the elected regime and installed one favorable to the west, they gave the Ukraine an economic deal that is the antithesis of what Kaboub would recommend. I bet the first question being asked is motivated by the debts owed to the IMF and the EU. This deal was intended to limit The Ukraine’s monetary sovereignty. This facilitated the ability of the western powers to strip the assets from The Ukraine.

If you can make it through the Q & A part of this video, Prof. Kaboub makes the above point, but perhaps too diplomatically. Since I have no need for diplomacy, I can come right out and explain that this trap for The Ukraine was purposely set by the USA and the EU. The current build up of hostilities between Russia and The Ukraine may be motivated by the West’s need to distract The Ukraine from understanding the damage we in the West are doing to them.

I realize that this presentation is the answer to my complaint about how the leading lights of MMT discuss inflation. I have often heard them bat down complaints of inflation, by saying “See, inflation is not a problem now.” I complain that is not enough of an answer. You have to look at why inflation has not been a problem and what could change to make it a problem in the future. Prof. Kaboub’s response “Look for the actual sources of inflation in the real economy” is exactly the answer I would like to hear from the other proponents of MMT.