What is it about Modern Monetary Theory (MMT) that renders ordinarily brilliant economists incapable of comprehension?
Superficially, it appears that MMT is too radical for these mainstream stalwarts to address face to face. I won’t mention all points of contention between MMT’ers and the rest of the economics world. But specifically, MMT’s denial that taxation and bond sales fund government expenditure never gets ink spilled by the likes of Paul Krugman, Dean Baker or Robert Murphy. It’s simply too much for public discourse to address the state theory of money, despite the fact that its blindingly obvious now that that’s how it works.
In reality, MMT is really pretty tame as far as it goes. When you really dig down into it, MMT is hardly about the re-distribution of wealth from upper classes to lower classes which would ordinarily disqualify it from public consideration. The essence of MMT is that, if we take an honest look at how the monetary system operates, it’s easy enough to see that we can raise the floor for everyone, and it often goes out of its way to say that the rich don’t have to be worse off for it. It’s a construct.
In any event, none of this is out of the comprehension levels of the aforementioned economists or our political and media public figures. They just simply leave it out when talking about MMT, toning it down for the public into just “good old Keynesian economics,” as Dean Baker says.
All of which goes to show that the whole thing–and by that I mean anything which reaches the level of public discourse– is just a charade. In the words of Pete Townshend, it’s an “eminence front. It’s a put on.”