43 Comments
Aug 11Liked by Bernard Hickey

MMT is refreshing and just what we need, we in Aotearoa have an amygdala fear response to debt after Muldoon. MMT is nothing like that from my limited understanding. I’m hopeful we can move on and embrace ideas such as this.

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Yes! Well said Ben Marino. MMT is about focusing on optimal use of our available sustainable real resources. Which are, via our existing MMT system, political choices, not financial constraints. So mainly that means using wisely all idle willing labour (our greatest resource). It is an epic tragedy our governments have not understood this since we moved to a float in 1985 and thus forever eliminated the need to tolerate involuntary unemployment and other currency constraints. (We actually do not even have a nominal inflation constraint, as Warren Mosler will agree with me on!)

There never was a need for a fixed exchange rate, so the tragedy is even more epic and horrific, until MMT came along no one understood the source of unemployment and the price level. Now that we know it is an *actual* crime against humanity for government to be still unemploying hundreds of thousands (millions in some nations).

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“MMT is about focusing on optimal use of our available sustainable real resources.” Isn’t that what Adam Smith was saying, too?

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I believe so. However, Smith, Ricardo, Marx, et al., also all had many things backwards. Not to overly blame them, with governments being relatively small percentages of the economy in those days , and with almost no accounting data (sectoral balances) they *might* be forgiven for thinking under the terrible illusion that a physical commodity was the currency.... even though it was known to Smith that the colonial state of Virginia burned their tax receipts. (Did he not know about tally sticks in England? Guess not!) But that missimpression destroyed their moral political economy thinking.

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Aug 11Liked by Bernard Hickey

Yes! Government for the sake of enabling better lives for citizens rather than pretty spreadsheets

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Aug 11Liked by Bernard Hickey

Hi Bernard,

Good Kaka. I am not an economist but few who say they are actually understand modern economics. This is the 21st century. Countries do not "budget like households", that is a Right-wing trope from last century used by supposed "finance ministers" citing economics 101. Countries with a fiat currency can spend to improve the lives of their citizens do not go on Austerity binges to "balance the books". Good stuff, I think you are now on to it. Look forward to more deep dives from you on MMT. How would thinkers survive in NZ without you! Congrats.

Patrick Medlicott

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author

Thanks Patrick.

Yep. Some work for me to do.

cheers

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Patrick, Gary Stevenson bemoans the quality (in general) of economics reporting. He clearly describes how inequality has jumped massively in the UK. Find him on youtube (Gary's Economics). Can also recommend his auto-biography (The Trading Game). Cheers, Tracy

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Aug 11Liked by Bernard Hickey

So, it occurred to me while making my morning coffee, a lot of NZer’s have gained wealth by leveraging themselves to the hilt so they can realise their wealth down the line, as the debt can be maintained the wealth comes later. & those that haven’t/or can’t just continue to struggle along. If our govt insists we run the country like a household I feel unfortunately we will be like the later, & continue to struggle along.

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Aug 11Liked by Bernard Hickey

I did enjoy the dawn chorus including the screeching Kaka

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I look forward to more deep dives on economics whose central is ensuring planet and people thrive. Can I suggest you add Regenerative Economics to the mix. I learnt about this from long-time Mangere community leader Peter Sykes. He's been walking the talk. The Capital Institute would be a good place to start. https://capitalinstitute.org

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author

Thanks Stephen. That's great.

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Aug 11Liked by Bernard Hickey

Can we get this current Govt to actually listen to this? Is there some room for sense and sensibility within the Willis/Luxton team? Last night we walked home through the streets of Auckland after watching a fabulous film called Head South by Jonathan Ogilvie at the Civic. It was made with funding from The NZ Film Commission which The Taxpayers Onion will be rolling their eyes at... and it was wonderful right down to its 1970s decor and the fledging punk rockers of Christchurch. Go and see it when it comes to cinemas in September. As we walked back to the ferry we saw young women sniffing Rexona Deo (new weird trend) and tourists taking photos of them doing it and our unhoused people curled up with their cardboard mattresses in doorways trying to keep warm. It can feel like hope is in short supply. It's really about having a home, isn't it? Will now fill in the Granny Flats submission. Thanks for your work Bernard. We need more solutions.

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100% encourage people to head along. I was at a screening on Thursday night and filmmaker Jonathan Ogilvie made a strong case to actually go to the cinema - don't wait for the movie to come out on streaming services.

BTW can we get Labour to listen to this? They seriously need to face up to the fact that buying into the neo-liberal economic consensus is a losing position.

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Aug 11Liked by Bernard Hickey

Looking forward to some tutorials in MMT & Ecological Economics , and the Kaka Oracle agreed, on behalf of the Realm of the Wild - which includes us all actually, "whether you like Her or not", to paraphrase Greta.

Ref. https://en.m.wikipedia.org/wiki/Ecological_economics

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Aug 11Liked by Bernard Hickey

Going to the MMT presentation in wellington tonight Bernhard. Read "The Deficit Myth" recently and it seems at least interesting and at best a revelation

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Aug 11Liked by Bernard Hickey

I found this really useful and now on my To Do list to read more and understand. I have left economics to others, and now at a ripe age I am beginning to understand this far more. Sometimes I wish I could begin again!!!! But the more we share the more we grow and defeat those who only speak in meaningless abstract phrases. Thank you.

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Here's an unorthodox economics text you might be interested in. From the blurb on adbusters: "Erase the outmoded Econ books of the past and make way for the textbook of the future with our limited Sand-paperback Meme Wars book. Spur a paradigm shift away from the suicidal formalism of neoclassical economics and humanize the dismal science." https://www.penguinrandomhouse.ca/books/219342/meme-wars-by-kalle-lasn-with-adbusters/9781609804732

I'm the spirit of adbusters, I suggest you ask your local library to order.

PS As a former student of yours, I am chuffed to get a chance to suggest a book to you. I was in your history class at Mairehau HS in 1985. You bought the subject alive. I'm delighted to say the passion that you instilled to know our past -- good, bad and indifferent -- I have passed on to my daughter. They're studying Year 13 history this year. Thank you.

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Aug 12Liked by Bernard Hickey

Dear Stephen, I remember your name!!! but not much more!!! Such kind words, and I am so pleased that your daughter is studying history and that it is much more inclusive history that I learnt.

I shall go look for your suggestion. Currently I am reading the latest from Joseph Stieglitz.

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I’m loving our comment thread action.

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Marion, I've just read "Simple on a Soapbox", which reminded me that those in power need eternal vigilance by us, the great unwashed. When I finished, I removed the photo of Michael Joseph Savage from my office wall. Isn't it shattering when you realize that you have subscribed to a myth........

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The Deficit Myth by Stephanie Kelton is a good read (or audio book if you have Spotify premium).

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author

Thanks Marian.

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Aug 11Liked by Bernard Hickey

Thanks Bernard. I hope your ride on the MMT wave will score a Gold. Stay in the board!

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Oh oh, the Rexona thing is a very nasty thing. Teenage deaths linked to misuse of Rexona in Australia. It's called chroming and gives you a cheap but dangerous high. Oh come on Unilever.

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Aug 11Liked by Bernard Hickey

Really interested in what you'll have to say about MMT as you know what you're talking about. I've studied it a bit and find it very compelling. As a former bank director, I never could find the room where we were creating money (I know that's silly). I find it fascinating and a little perplexing that we don't really understand money and how it comes into existence. It's completely a human creation appearing repeatedly over thousands of years, determines and constrains so much of what we believe we can do, and seems to beguile the current crew in charge. In anticipation. Btw, I think your local kaka might start to demand some royalties for the podcast...

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On MMT - I started reading The Deficit Myth recently. It's been enlightening - and I was sorry that I couldn't attend the seminar. I'm sure it was superb.

On housing and moving tamariki out of emergency housing. On the face of it, those numbers look great. BUT (I'm becoming quite the cynical old bat) I really would like to know where these children and people have been moved to; for example, I would be concerned (understatement of the millennium) if they were now homeless. I'd love to see one of those charts; the ones that sho the inflow and outflow. Where are people in emergency housing coming from, and where are they going.

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I agree, it is deeply concerning that the government it light on details as to the hows & the whys & what has happened since, to those families.

Somewhat related to this, I am expecting the unemployment rate to increase substantially & have the government "brag" about getting (potentially) tens of thousands of Kiwis off the benefit(At the same time). The metrics do not track with each other & that is a worry. This government in living in a spread sheet world.

I don't think this is exactly what you are looking for but is a pretty good source of graphical information & stats. Hope it still helps somewhat.

https://tradingeconomics.com/new-zealand/home-ownership-rate

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Aug 11Liked by Bernard Hickey

It seems that our household Finance minister and her simpleton boss are continuing to rely on zombie economics for their policy making around the countries finances. It hasn't occurred to them that their myopic focus on reducing government spend has been the biggest factor in Aotearoa's current economic woes which will continue to deteriorate until they figure out that they're the problem!! (sadly for us, I suspect their narcissism will preclude that from ever happening!!)

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Aug 11Liked by Bernard Hickey

We have many trades customers and every one we talk to is saying the near future is not looking good. We do our best to not remind them they are the ones that voted National.

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Indeed. A high-street furnishings shop in Levin that was plastered in National posters during the election has just downsized to a side-street.

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