Dear Citizens and Elected Officials:
I wish you all the best for this 4th of July holiday. The weather is warm, seasonal, with possible thunderstorms in the forecasts for Western Maryland for the next five days. Therefore, I'll keep the introduction of Professor Stephanie Kelton, giving a 50 minute "Presidential Lecture" on Modern Monetary Theory (MMT) at Stony Brook University in October of last year, in New York, brief. Here at: https://www.youtube.com/watch?v=WS9nP-BKa3M
She's simultaneously sharp and "down-home," not "coastal" elitist in style or substance, and I could imagine her giving this talk at Frostburg State University or Allegany or Garrett College. However, understand this: it does turn the conventional wisdom on government spending and accounting upside down. With a central bank and sovereign currency, the dollar, the federal government's accounting "universe" is not the same as the family's household budget. Kelton chastises President Obama for misleading the public, repeatedly, with that misplaced analogy.
I've compared the intellectual shift on the table in this speech to other major ones in Western intellectual history, in astronomy, physics, and yes, religion: Luther challenging the authority of Rome in 1517. The conventional wisdom of the economics of our day is that pervasive, dominating political assumptions and the questions journalists posed to the 21 Democratic candidates onstage on June 26 & 27th. Indeed, so great is the pressure to show exactly how big programs will be paid for in advance, that that issue may be at the heart of Professor Kelton's departure from the Sanders' campaign. Sanders is often scrambling to come up with revenue sources she feels are not all necessary. That is my inference, though; she merely hints at it.
Professor Kelton has revealing segments of Alan Greenspan being pressed by Rep. Paul Ryan (hearings in March of 2005), quotes from the St. Louis Federal Reserve (2011) buttressing her arguments, the example of the US in World War II, and something I have used before in my own writing, the startling evidence that every time the U.S. federal government has engaged in a serious bout of budget balancing and debt reduction: 1817-1824, 1823-1836, 1852-1857, 1867-1873, 1880-1893, 1920-1930,1998-2001, the exercise has been followed by economic tragedy, deep recession or worse. By the depressions of 1819, 1837, 1857,1873, 1893, 1929, 2001 & 2007-2008.
I've also added two interviews with the left pundit Jimmy Dore, not because I'm a fan of his (he is actually new to me) but because he seems to pose the questions and eye blinking responses of the average citizen's "common sense" understanding of economics, and the jostling that common sense will take in the hands of Kelton and the other leaders of MMT. Here they: https://www.youtube.com/watch?v=5baKgv7Zl5g (33 minutes, from Oct. of 2018).
And Part II, just 13 minutes, where Kelton criticizes Speaker Pelosi's commitment to the governing rules in the House, "Pay-Go."
https://www.youtube.com/watch?v=3hfjisTs-WA
If you wonder why our nation cannot get anything "big" done no matter how practical, like upgrading our infrastructure, much less cope with climate chaos and economic inequality, these talks offer a good part of the explanation. It's tragic; no exaggeration. Without more budgetary "room" there will be no adequate funding for a just transition for displaced fossil fuel workers, thinking of the tragedy at Luke, Maryland, or for the job guarantee necessary for the parts of rural Red State America now depending on the fossil fuel industry, and its own dreams for the future, like the Appalachian Storage Hub.
Risky ideas, I know. As risky as defying the world's leading military power in 1775-1776.
Best,
Bill of Rights
Frostburg, MD