MMT Documentary – Finding the Money

A documentary on MMT is now available: “Finding the Money”. I haven’t watched it yet, because it’s on a streaming service that I recently abandoned. (My family goes through the various streaming services, so I’ll watch it once we talk again.) Obviously I can’t make any recommendations on this, but it seems like a good introduction to some debates.

Unfortunately there was a lot of screaming X (all application) on one aspect: the economist Jared Bernstein had a bad interview based on a question he hadn’t thought much about (I think it was along the lines of “why would a sovereign with a floating currency borrow its own currency?” “). What is unfortunate is that many activists released this clip, which was then taken up by Bernstein’s right-wing political opponents. This then led to a backlash from major players on the liberal left over Bernstein’s creation. (From what I understand, other mainstream(-ish) critics of MMT fared better in the documentary.)

Since I haven’t watched the documentary, I obviously can’t comment on whether Bernstein’s treatment was appropriate. This indicates poor preparation on his part – I suspect he did exactly what almost all mainstream critics have done: just read critiques of MMT by mainstream critics without asking whether those economists gave a description in good faith of MMT.

The problem with focusing on defining fiscal policy is that it can cause people to lose sight of the importance of that definition. You should focus on the substantive theoretical differences that have led to different policy analyses. This was much easier in the early 2010s, when traditional budget analysis was utterly abysmal. “The United States will be the next Greece!” “, etc. However, proponents of austerity have been politically defeated and it is therefore much more difficult to determine what exactly is the dominant position on fiscal policy. We cannot have a debate with a group that does not have concrete points of view.

What people are debating about right now is inflation. And what is the prevailing view on inflation? They assume that higher interest rates lower inflation. However, they don’t know exactly what the amount is because they have no idea where that amount is. r* East. Have fun debating this point of view!

Right now, political debates are about foreign policy and political economy – not raw fiscal policy. Debates over MMT’s views are largely limited to commentary on financial markets, where the richest people find it very difficult to avoid being completely wrong about fiscal policy. While such debates can be amusing, they are merely an ancillary to what is actually happening in the political sphere.