A video, papers to be read and a song

It’s Wednesday and so only some snippets today. First, a video of a seminar I participated at the other day where we talk about the future of Europe (and the World). Second, some working papers that might be of interest. And finally a music segment. I felt like posting the 1980s song from The Vapors – Turning Japanese – after the Reserve Bank of Australia announced yesterday they were now modelling their monetary policy interventions of the excellent template that has been pioneered by the Bank of Japan. You know get the government to buy all of its debt – then pay itself back – then remit the payments as ‘dividends’ back to itself. Right pocket meet Left pocket. I will analysis the big shift in the RBA’s position tomorrow. And when you listen to the RBA Governor this morning trying to tell Australians that black is white when we all know it is black and they have let the cat out of the bag, you will realise why the whole hysterical show they are putting on is important. But that is tomorrow. And I hated the song anyway.

Economic Policy after Brexit and COVID-19: Taking Control seminar – October 29, 2020

The group at The Full Brexit – ran a seminar last week on October 29, 2020. The date is contestable because for me it was early next morning on the Friday (30th).

For me it was a case of doing two seminars on the same day in Europe (Thursday 29th) but for me across two days (Thursday night late and then Friday morning early). Such is life at present in this Zoom-COVID era.

Thanks to Dr Lee Jones for all his work to organise this. His efforts were much appreciated. We had originally planned an event in London in May. I had met Lee in February in London at a workshop I ran and I was due to return in May for other commitments. But the virus intervened and so we finally agreed that it had to be a virtual event.

The promotional message was:

Britain is in its worst economic crisis since the Great Depression. The costs of the coronavirus pandemic continue to dwarf even the most exaggerated Remainer predictions of the costs of leaving the European Union.

But neoliberal shibboleths have also been shattered, with the government intervening to save jobs and businesses, while even the EU has set aside its treasured state aid rules (despite continuing to try to force the UK to abide by them).

At the same time, governments around the world seem short on imaginative ideas to reboot the economy. The priority seems to be trying to restore a pre-crisis system that was already failing millions long before COVID-19.

So how do we really “build back better”? How do we avoid a slow, jobless recovery – a degraded “new normal”? What policies and programmes are required to allow working people to take control of their lives, and enjoy a more prosperous and fulfilling future?

Join two world-leading experts to debate these crucial issues:

– Professor Costas Lapavitsas, renowned economist, former member of the Greek parliament, and author of The Left Case Against the EU (Polity, 2019), and

– Professor Bill Mitchell, one of the leading lights of Modern Monetary Theory, and co-author, with Thomas Fazi, of Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto, 2017).

It was an interesting discussion and I think it highlighted some of the major differences that still exist on the Left of the political debate between an MMT economist and a more traditional Post Keynesian (Marxist) economist.

For example, Costas thought governments should be issuing large tranches of debt to fund a post-COVID reniassance. The arguments are that debt is cheap so why not use it.

I dispute that position because I think it just feeds into the narrative that governments are financially constrained and the issuing debt just offers the pretext for all the liars to pillory any government that dares increase the debt ratio to the level that would be required to spend enough to deal with the crisis.

The debt wouldn’t be funding that spending but that truth would be obscured in the public debate.

So why would progressives fall into that trap.

It would be better for progressives to highlight what is actually going on.

That is, that central banks are buying massive amounts of public debt and effectively ‘funding’ the deficits and breaking all the taboos and scare tactics that the conservatives use to avoid the public finding out that the government is just funding itself – right and left pocket stuff.

I would be out on the parapets demonstrating to the public that this is what is happening and applauding and elevating the central bank governors to hero status for saving our nations and all that stuff.

Use what is going on to break the myths.

But if you watch the video which records the whole evening then you can make up your own mind on these issues.

Thanks again to Lee and also to Costas for a very civilised debate.

Some Working Papers

Most of my work is finally published in one way or another. But some academic publications are inaccessible to people without library subscriptions.

I used to publish all my research in working paper form (which was the traditional way) before it was published in final form somewhere.

I stopped doing that when I decided to put my work out in blog post form. My blog posts are effectively, mostly just notes that I write as part of my daily research work.

That is not exclusively so because I found that journalists that I often work with liked my updates on data releases and found it was easier to get them from my blog rather than try to track me down during the day given my normal commitments.

Also I write a lot of thing things that do not necessarily show up as blog posts because I have also learned over time as a writer that the academic style is not easily built up from my blog style writing.

The level of discipline is quite different.

So I thought I would make some of my writing this year so far that has or will be published in formal outlets available via our Working Paper series at the Centre of Full Employment and Equity to make it more accessible to all.

Here are some of those papers:

1. William Mitchell – Preface for Africa’s Last Colonial Currency (Fanny Pigeaud and Ndongo Samba Sylla) (February 2020).

2. William Mitchell – An MMT perspective on the US crisis (August 2020).

3. William Mitchell and Louisa Connors – Capitalism on Life Support (August 2020).

4. William Mitchell – A paradigm shift in Macroeconomics is underway – a cause for celebration (September 2020).

5. William Mitchell – Debt and Deficits – an MMT perspective (October 2020).

Music – Four Strong Winds

This is what I have been listening to while working this morning.

I first heard this version of the song – Four Strong Winds – in the early 1970s as a youngster.

It was written by the Canadian folk singer Ian Tyson and recorded with his then wife Sylvia and released in 1963. They formed the folk duo – Ian & Sylvia – who were popular in the 1960s and ended in the mid-1970s when their marriage fell apart.

By the time I heard the song, the folk period was losing momentum as electric guitars were dominant. Bob Dylan had switched to a Fender stratocaster with the Butterfield Blues Band as backing at Newport in 1965, which caused a – controversy – among the diehards.

I liked Neil Young’s 1978 version, but always return to the original on a regular basis.

The song has a really lovely chord sequence – G Am D G, G Am D, G Am D G, C Am D.

Anyway, a nice smooth way to avoid listening to the results coming in from the US election.

That is enough for today!

(c) Copyright 2020 William Mitchell. All Rights Reserved.

This Post Has One Comment

  1. While digging into the UK’s QE this week I found some choice lines from a few mainstream papers that suggest there are some people in the field who know roughly how banks work.

    such a characterisation seems to assume there is a normal tight link between reserves, money and the quantity of lending via a money multiplier. But the UK sterling monetary framework has no such feature

    and even “extending loans (assets for the bank) is matched by the creation of deposits (a liability for the bank)”


    A slightly less impressive paper from the BoE at least has the process correct.

    Asset purchases are funded by creating electronic central bank money. This money is then deposited into the reserves account of the seller’s bank which, in turn, credit the same amount into the deposit account of the seller. The MPC didn’t anticipate strong transmission of the APP through the bank lending channel


    Both papers suggest that the Bank Lending Channel does nothing – at least as far as the UK is concerned and that any impact claimed for QE is via the “wealth effect”.

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