Several weeks ago Rick Perlstein wrote a piece about the standoff between Cliven Bundy and the Bureau of Land Management (BLM). He called it “a watershed in American history” because those at the ranch were able to use firearms and the threat of violence to get the BLM to back down. Perlstein notes “anti-constitutional insurgency as Constitution-worship on the right” has a long history, and cites the Minutemen as an example. Yet he neglects to mention more recent history that provides important context.
The federal government had similar confrontations with armed insurgents at Ruby Ridge in 1992 and Waco in 1993, and both cases ended with people dead - spectacularly so in the latter. Those events have taken on iconic significance for the far right. A quick trip to your favorite search engine will turn up an abundance of pages devoted to memorializing the events, and citing them as examples of a tyrannical government waging war against its citizens.
How would Perlstein have the BLM approach this case? There is every reason to believe another armed showdown would once again lead to loss of life, and another item being added to the far right’s list of grievances against the government. I understand his consternation at the BLM backing down last month, but history has shown that escalating tensions at such a volatile moment can have disastrous short term consequences and pernicious long term ones.
For as much as I think Bundy is a freeloader, a liar and a mooch, I was glad to see the BLM pull back. Situations like this one, Ruby Ridge and Waco are typically years in the making - and the worst thing the government can do is to force a dramatic conclusion. The BLM acted prudently by not creating one. I thought it showed the government had learned from recent history and was being careful not to repeat it.
That doesn’t mean the government should just go away, of course. It should just use the better means at its disposal to bring Bundy to justice. It can play the situation out longer than Bundy, and it should. The gun toting yahoos who showed up at Bundy’s ranch aren’t going to stick around if it looks like they won’t have a chance to play Freedom Fighter. They’ll drift away when it becomes clear the resolution is going to be considerably less exciting.
Officials seem to be thinking that way. On Sunday federal and state employees were quoted saying that Bundy crossed a line and the matter should continue to be pursued through the legal system. They haven’t given up or gone away, and they haven’t conceded anything to Bundy. They just decided - sensibly, I think - to dissipate the tension that led to the crisis and take a less provocative approach.
For as unsatisfying as it is to see the gun nuts claim victory in that one encounter, it’s better in the long run to see the thing slowly wind down with a whimper and not a bang. It isn’t hard to isolate Bundy. One way is just to put a microphone in front of him and let him talk. The support that sprang up around him began to wither once he began to expand on his thoughts. Another is to start cutting him off from the civilized world. Surely a rugged individualist like him can do without postal delivery, right? That’s just another form of dependence on the feds.
Maybe the same could be done with phone and Internet service. Other, non-firearm intensive federal agencies could start giving him some extra attention. He can be gradually squeezed without being attacked. Doing so will take more time, but it’s a necessary precaution when dealing with violent extremists. It would be nice to bring such people under the law more quickly; not doing so is no watershed moment, though. Hotheaded fanatics have to be handled differently. The last thing we need is to create a new generation of martyrs.
Years ago - I don’t remember where or when, or I would give credit - I heard the line “don’t pay attention to what’s in the news; pay attention to what’s not in it.” Media cultures often develop story lines and decide what is newsworthy based on how well if fits the narrative.
The protests in Wisconsin a few years ago were a really clear example. Large corporate outlets have been long settled into a neoliberal economic framing. Capital mobility is the new reality. International agreements that facilitate it are merely expressions of that reality; issues like collective bargaining and establishment of community standards are fondly regarded but antiquated notions in our brave new world.
So when Madison erupted over union representation, many outlets didn’t have any sensible language for describing what was going on. As a result, a huge story was mostly ignored. (Interestingly, many of the themes from it foreshadowed the Occupy movement later that year, which was similarly blacked out in its first weeks.)
Sometimes, though, a story gets ignored because it has simply become too routine to be considered news any more. Gun violence in urban areas like Chicago is not a national story now (if it ever was), and school shootings appear to be getting regarded as less and less newsworthy. After Tuesday’s shooting in Oregon, CNN initially tucked it under an “OJ 20 years later” story. CNN’s Wes Bruer initially tried to explain why it was right to do so, but ending up falling back on a defensive “the other guys aren’t covering it either” reply. Perhaps related: CNN followed up the next day with a “this is becoming the new normal” story.
Treating the proliferation of gun violence as routine means relegating certain stories to the sidelines. A four hour pursuit and standoff with an automatic weapon-wielding gun nut that winds through neighborhoods, evacuates schools and concludes with the suspect getting smoked out? No body count, so don’t bump it. Bulletproof blankets to shield kids during school shootings? Just another day in America.
We might be starting to see some changes, though. Some on the left have urged the media to make the connection between violent right wing rhetoric and metastasizing gun violence. While that isn’t a new observation, it’s starting to get picked up in established outlets. One of my regular reads, Esquire blogger Robert Bateman, has announced his intention to focus his post-military career on the issue. Moms Demand Action has a passionate and grassroots approach reminiscent of Mothers Against Drunk Driving, and I don’t think many people would dispute MADD’s success in changing both laws and culture on that issue.
If none of that is considered a sufficiently compelling news hook, how about this. I know the Republican establishment is currently voiding its bowels over the teabaggers claiming the immaculately coiffed scalp of Eric Cantor, but the gun violence coming from the ammosexuals has a character to it that demands a response from GOP leadership. We now have armed right wing extremists targeting law enforcement officers for summary execution. That’s not just a horrific crime, but a political statement as well.
John Boehner and others at the top of the party should be very specifically and persistently asked how they characterize political murder, and where they draw the line between a horrific crime and domestic terrorism. The execution of police officers doesn’t qualify for Boehner. OK, fine - then what does? Does Boehner consider the Oklahoma City bombing domestic terrorism? Since he doesn’t consider the Las Vegas murders to be, we know that at a minimum he draws the line somewhere between the two. Where is it?
Here’s another thought. The Las Vegas killers were trying to use murder to launch a revolution. That’s something that unfortunately has a history in our country, most infamously with Charles Manson. Does Boehner think there is any difference between Manson and the Las Vegas killers? If so, what are they? He shouldn’t be allowed to keep doing his cigar store Indian impression on this issue, no matter how unfavorable the political environment is at the moment.
Revolutionary violence has a history in our country. So does domestic terrorism. It’s entirely appropriate to link contemporary violence to comparable events in our past, and to get our leaders on the record. Where on the continuum do they place those events? They don’t happen in a vacuum or exist in isolation. Pressing leaders to clarify where today’s gun violence fits in our history might reveal some interesting positions. Might, you know, make some news.
Economics is a closed system; internally it is perfectly logical, operating according to a consistent set of principles. Unfortunately, the same could be said of psychosis. What’s more, once having entered the closed system of the economist, you, like the psychotic, may have a hard time getting out.
- Judy Jones and William Wilson
I had planned to follow up last week’s post with at least a couple others, but the various discussion threads have persuaded me that it’s probably best to just do a single “summing up” post, go through the comments, and leave the topic for the forseeable future.
My main reservation with Modern Monetary Theory is this: It is named a monetary theory, yet its proponents expand its scope - in all directions, it sometimes seems - to include topics that have nothing to do with monetary theory. I think it’s reasonable to expect a monetary theory to describe the way money works, and nothing else. Here is how money is created. Here is how it is destroyed. Here is how it gains value. Here is how it loses value. Here is what governments must do to increase its value, here to decrease it.
Yet proponents insist that other things, things that have nothing whatsoever to do with monetary theory, are part of Modern Monetary Theory. I’ll illustrate using my exchange with letsgetitdone since it’s fresh, but I think it’s also representative.
He writes that “economics ought to be practiced, as Galbraith, the elder said, to fulfill the public purpose,”1 that Modern Monetary Theory “is an approach and not ‘a theory’” (!!) and that “‘public purpose’ is core to MMT.” Public purpose may be core to economics, but not a monetary theory. A monetary theory exists to describe how money works. One may advocate for public purpose, as one understands it, and show how it works under a given monetary theory - but that is no longer monetary theory.
If he (and other advocates) would just call the thing Modern Monetary Policy or Modern Monetary Advocacy or anything else that encompasses “public purpose” commentary, I wouldn’t have any argument. But you can’t have it both ways: If you want to present your ideas in the dispassionate, technocratic, scientific-sounding mantle of monetary theory, then you need to stick with monetary theory.
Proponents of Modern Monetary (not a) Theory choose instead to use the monetary theory as a launching pad for a bewildering, sometimes contradictory, variety of prescriptions. For instance, the un-theory endorses a basic income (“Job and income guarantees are complementary policies”), except when it doesn’t:
basic income guarantees are unlikely to achieve the objectives of alleviating poverty, income inequality or poor standards of living, because the proposals have an inherent highly inflationary bias with disastrous consequences for the currency.
Modern Monetary Theory has no equivalent of Keynes’ General Theory of Employment, Interest and Money (which, incidentally, advertises itself as something more than a monetary theory).2 Without an identified creator and foundational text, everything is up for grabs. And untethered from actual monetary theory, proponents are free to turn it into whatever they want.
Turning again to letsgetitdone’s comment, he took advantage of that opportunity (“I wrote a 16 part series on this subject”), but given his tendency to lapse into incomprehensible jargon (“a new ecology of self-organized voting blocs and electoral coalitions fueled by an IT application enabling people to create a metalayer of constraints”) I don’t feel inclined to jump in. Oh, and also: his reference to getting “the right people in charge” has a really creepy, totalitarian ring to it.
There’s just too much. It’s all too scattered, too open-ended and waaaaaay too verbose for anyone outside the closed system to get an easy grip on. Rainbow Girl may have put it best:
Does this mean that “MMT” is whatever one’s “construct” or “definition” of it is? Like a Roscharch test? Is it even possible to provide citations or links in responding to a discussion or post about MMT that consists of a “construct” or “definition” or “interpretation” of the large opus of MMT — which is a corpus of separate writings by separate people several of whom seem not even to agree with each other on essential features like “public purpose,” “tool” vs. “Policy,” etc. (for example: you and Ben right here; another writer responding to a critique of Wray’s “no taxes” post at NC saying “Wray is not MMT”).
Simply focusing on the monetary theory part of Modern Monetary Theory ought to be enough to occupy any proponent for now. Calling for austerity with “we don’t have money” is factually wrong; those who say it should be made to look foolish. Pushing back against that line, emphatically and persistently, until it gets discredited, is a tall order.
Succeeding won’t by itself end the austerity narrative. Those who invoke it have a deep hostility to social programs, and will just find another story to attack them. But looking foolish will erode austerians’ credibility, which makes austerity budgeting harder to justify. It’s too bad that isn’t seen as a sufficiently ambitious goal.
2. Some might recommend Mosler’s Seven Deadly Innocent Frauds as a foundational text. If so, fine - but he doesn’t describe it as a modern monetary theory (or even use that phrase). Call it Mosler Monetary Policy, get everyone to defer to Mosler as the final word on MMP, and order starts to form out of the chaos.
I’ve gotten some pushback from Monday’s piece on MMT and plan to address the criticisms in some upcoming posts. Next week I hope to get to inflation and taxes. For now I’d like to cover something I didn’t even mention in the post but that popped up almost immediately in the comments: a job guarantee.
MMT, at least as advertised to liberals, postulates a job guarantee. One of my problems with MMT is the way various proponents’ wish lists get conflated with the theory. Stripped to its barest essence, MMT is the theory that:1
governments with the power to issue their own currency are always solvent, and can afford to buy anything for sale in their domestic unit of account even though they may face inflationary and political constraintsThere are no policy prescriptions contained in that, or even implied. One may apply that theory in different ways, but the thing itself requires nothing. The case for the job guarantee is a moral one, not something intrinsic to the theory itself.
Randy Wray makes the moral case with his analogy between disease and unemployment. He spends an entire post describing how MMT can accommodate a job guarantee. Yet he also concedes that “some other advocates of MMT do not accept the human rights angle” (oof), and concludes:
Can you separate the MMT explanation of the cause of unemployment from the policy to cure it? Yes.In other words, MMT does not require a job guarantee, but it would be unjust to omit one. Of course, that also means that the prospect for one under MMT would be contingent on the policymakers charged with implementation sharing Wray’s sense of justice. That’s hardly an economic imperative demanded by the theory.
Should you? Of course not.
The problem right now is not that we lack the tools or economic model to address unemployment. The Federal Reserve ought to be terribly concerned. The problem is that no one in Washington actually is - not enough to act decisively, anyway.
MMT would (theoretically) transfer currency creation from the Fed to Congress or the president, which I suppose would make monetary policy marginally more responsive to public sentiment. It would hardly be a revolution, though. Who among our current elected leaders do MMTers see treating the problem of unemployment with the urgency of a national disease? What we need is for our representatives to have a different estimation of what equity demands, not a new theory of currency.
MMTers also envision a wildly optimistic outcome for the job guarantee. It certainly sounds wonderful, and MMTers are content to let everyone believe in a full employment worker’s paradise if MMT is implemented. That’s the Utopian version. How about a dystopian one? Instead of hoping for the best why not consider a less cheerful outcome?
Let’s just imagine for a moment that Washington is willing to listen to MMTers and consider adopting MMT. What will you need to do in order to get policymakers to sign on? Lawmakers would need to be sold on, or more crudely bribed to accept, the concept. I think we all know cutting taxes on the rich is a perennial favorite in the capitol. So liberal MMTers concede on tax cuts in order to get a job guarantee. Fair trade off, right? And if aggregate demand becomes an issue down the road we’ll just deal with it then.
So great, slash income taxes and you plebes can have your precious job guarantee. And as part of the job guarantee legislation we’ll just go ahead and zero out the minimum wage since MMT obviates it. But hey, victory! We’ve got a job guarantee! Now, how to implement it. Pavlina R. Tcherneva and L. Randall Wray have some thoughts:
the actual hiring of most of the workers would be highly decentralized, and undertaken by not-for-profit community organizations, and state and local governments.OK then. How could we expect that to work out based on recent history?
- Federal government block grants job guarantee money to states.
- States cut income taxes.
- States divert portion of money to rainy day funds that require Noah’s Ark levels of rain to tap into.
- States use rest of remaining money to “partner” with contractors who are charged with creating jobs.
- Contractors extract rent.
- Contractors design half assed program that employs entirely inadequate numbers with the kind of punitive, angry, pinch-faced resentment that state social programs are famous for.
- With no minimum wage, those who are (inexplicably!) unable to find a job under the job guarantee will just have to accept whatever best offer they can find elsewhere.
- Where’s my fucking pony?
One would hope MMT’s leading lights would have favored a simpler model that has actually been successful:
- Federal government employs people, pays them.
And as with unemployment, why not make the ethical argument directly instead of routing it through a value-neutral vessel like MMT, then hoping for the best? Hammer away at the moral urgency of the situation and say we’ll work out the details later. The people who oppose policy like a job guarantee do not do so because they haven’t been introduced to a sufficiently persuasive economic model. They do so because they are ideologically opposed to federal social programs, and if you take away their current argument (“because no money”) they will just substitute it with the next handiest one (“because inflation”). But that’s not a legitimate problem, you say? No it isn’t. Neither is insolvency. Has that deterred them so far?
There is nothing, absolutely nothing, in MMT that requires a sense of public purpose. Inculcating that is the work of democracy, not economics. Harnessing that project to a monetary theory will only cede its direction, sooner rather than later, to those who value money first among all things.
1. Yes, Wikipedia. New Economic Perspectives is touted as one of, if not the go-to source for MMT. If you go there wondering “hey what is this MMT thing anyway?” you can buy the brochure, buy the book (MMTers definitely practice their “show me the money” ethos) or start wandering through the maze of hyperlinks in the primer looking for a concise description. And MMTers are confounded that their work is considered inaccessible.