For those who actually care about macro, there is a Macro Musings podcast with David Beckworth and him. He is extremely knowledgeable about the mechanics of the Fed and has very interesting insights. I first heard of his because he perfectly called the repo squeeze last fall. The fact that he is completely self-taught is mind boggling.
Thanks for your pointing out the Macro Musings Podcast. I found this Tankus fellow's article that I referenced to be remarkable in its clarity and insight. Sometime after 2005 I became a serious student of Economics, and it wasn't long before I came across the MMT economists and began to read both Wray and Mitchell and other MMT economists. That they have a thorough understanding of consolidated fed-treasury operations should no longer be questioned. The area where debate is appropriate is the social-political implications of MMT.
Wray, at least as early as 1995, possibly Mosler before that, pointed out that the central bank (the "fed") and the U.S. Treasury were really one coordinated operation; this could be discerned by examination of the consolidated books. Therefore, what I found astounding in Tankus's article were his charts of treasury--fed-banking-private sector assets and liabilities. Although these charts make a very complex monetary system seem less complex than it is, to get them right requires a depth of knowledge that I doubt exists in very few economists, even many working at the fed or treasury. I want to know now whether they appear in the new Macro Economics text , just out with the 1st edition already sold out, by Wray, Mitchell, and Watts; or did Tankus originate them? If the latter is the case, then he has already made a major contribution to the full understanding of MMT economics. I shall write to Tankus to find out.
I always thought the idea that taxes gave money value, a core idea within MMT, while not wrong, was too simple, I and find support for my view in Jo Michell's (Univ. of the West of England) review of the Wray, et. al, text. [see
https://www.researchgate.net/public...Randall_Wray_and_Martin_Watts_Macroeconomics]
In that same review, however, i found this, which I believe evidences a rather profound misunderstanding of MMT by the reviewer:
In focusing on the immediate balance sheet implications of money-financed
government spending activity, MMT downplays the implications of subse-
quent factors such as funding through taxation or bond issuance, and other
constraints such as exchange rate movements or foreign exchange shortages.
This is done partly through esoteric use of language and redefinition of com-
monly used terms.This approach is reflected in the structure and content of
Macroeconomics; as a result, readers are likely to come away with an uneven
view of the potential trade-offs and constraints associated with the use of
fiscal policy.
I underlined the "such as funding through taxation or bond issuance..." because here is where MMT departs drastically from conventional thinking on government spending and financing. MMT offers convincing proof that governments finance their spending
neither by taxation nor bond issuance! ; despite giving the outward appearance of doing so. MMT economists will tell you that bonds and taxes serve an entirely different purpose than paying for government expenditures!!!
So, in the above remarks by the reviewer, we have highlighted the difficulty any new theory that breaks drastically from the old will run into: those that do not yet have a complete grasp of the new theory will be capable of viewing it only through an old lens! The inevitable result will be people talking past each other.
Thank you again for the tip on the Beckworth-Tankus podcast.
