Yesterday, the Bank of Japan increased its policy target rate for the first time in…
A podcast on Japan and MMT
I have a major reporting deadline today and also have to travel interstate, which means I have no spare time at all. So for today, I am promoting a Podcast I recorded a few weeks ago with Steve Grumbine at Real Progressives. We talked about my recent period living and working in Japan and questions of culture and Modern Monetary Theory (MMT). The discussion goes for just over an hour and you can shorten it by fast tracking with volume set to zero the musical introduction and the musical intermission. Steve’s tastes (heavy metal) are quite disturbing (-: I would sooner like a nice quiet jazz oriented introduction. So save yourself some time and skip the music!
I also thank Steve, Jules and the rest of his team for all the tireless work they do promoting MMT.
At times, the task of getting new ideas through to people is frustrating and one wonders whether any progress if ever being made.
But the growth of the Real Progressives is testament to the fact that more people are becoming aware that we can do things differently and take care of each other in the process.
By the way, I regularly am asked to start a podcast myself.
Apparently some people prefer that communication format to reading. If you think that would be useful, let me know in the comments section and will think about the logistics.
I am in the process of changing things here at present – taking the blog onto a new server in our server farm and getting rid of old plugins that have run out of time (security wise).
The weekly quiz will disappear from here and resurface as an app on MMTed’s home page and be available on call to anyone who enjoys it. Other shifts are coming.
So now is the time to think of new formats.
Change is good.
That is enough for today!
(c) Copyright 2022 William Mitchell. All Rights Reserved.
Yes, I wish he would drop the music too.
It’s quite off-putting!
Bill, Great podcast.
I do sometimes wonder if explaining the facts of something is a waste of time. Politicians of both parties argue black is white when it comes to MMT. Here in New Zealand both parties talk of lowering the deficit and how we have to get back to surplus…. They talk in a way to frighten the masses so that they understand everything as if government spending were like a household budget. All just to get elected. I sometimes wonder if the masses are less educated than they were and so whether a democracy can ever achieve much at all.
A podcast is great now and again (say once a week), but I’d miss the writing. Being able to go over sections to clarify them is essential, but this can zip past on a podcast in the heat of discussion. And how do you incorporate graphs etc into a podcast?
I’ve greatly enjoyed podcasts (like The MMT podcast) in the past, I promote those early Randy Wray ones to other people. All media are useful, but sometimes longer-form reading is essential for thorough explanations.
I commented on Twitter to Steve some years ago about the intro music. He seemed disappointed so I left it. I see I’m not alone…
We’re beginning to hear the mainstream narratives spoken in Japan once again, at least from the news feed we get here in the west.
It arises when there is discussion of the decision to double Japan’s military budget from 1% of GDP to 2%, due to the perception of an increased threat from China; then the “how you gonna pay for that” question pops up.
The neoliberal mainstream never seem to miss an opportunity to try and swing those questioning back to their preferred way of thinking; however, one does have to question whether the demand for real resources for such a large burden can be serviced with the population ageing?
I totally agree with your assessmente on the musical choice X)
Great interview!
Happy holidays and appropriate music for the season: music by Mateo Flecha el Viejo from the 16th Century.
https://youtu.be/B-kw5Qngx3s
To all who dislike the Macro N Cheese theme music, when listening from the website, https://realprogressives.org/macro-n-cheese-podcast/, you can fast forward in 15-second increments.
Also available for the episodes are Show Notes, a page of “Extras,” and full transcripts.
I hope you will enjoy future (and past) episodes even more.
Thanks as always Bill!
The story of the song is worth telling.
The song is by my little brother (guitars) and one of the converts to MMT we made named Tim Youmans who sings. This song was written by their old band “In Theory” and the words are “The smile on my face is meant to deceive you, am I that See through or is it only in my mind, I can’t break free from this hold on me, there’s no more I can pretend…and now I see the reality is we’re closer to the closer to the end… I’m so tired of the lies you tell me, lies you tell me” and from all that, it came about as I first got sober as my dad saved my life taking my keys after a bad drunk night (September 15, 2006) and a decade later he died on my sobriety date 9/15/2016).
Add all that together and I hope the gentle ears of many supporters can find it within them to endure a few seconds of “off putting” music and realize that sometimes… its not about them. Sometimes… we need to make macro cool for others that simply are different
As always… the material past the 30 seconds that present so many a challenge… excellent. Wonderful. Thank you for listening 🙂
Music is great in small pieces, just like a good cheese.
Audio , maybe a way to automate, AI uses your voice to readaloud ?
Cheers
Dear Steven D Grumbine (2022/12/20 at 4:52 am)
The story of the song makes it worth something – that is beyond meagre taste.
Thanks for providing it and as always everything else you people get up to.
all the best
bill
In related news, the Bank of Japan has defied economist expectations and modified its yield curve control to “improve market functioning” and “encourage a smoother formation of the entire yield curve”.
The central bank kept its policy rate unchanged but increased the upper band limit on the yield target to 0.5 per cent.
“The central bank kept its policy rate unchanged but increased the upper band limit on the yield target to 0.5 per cent.”
Still addicted to messing around with interest rates to try and drive an economy. Much like trying to steer a car by moving your weight around in the back seat.
Stabilisation policy needs to be about fixing the price of labour, not fixing the price of money.
Hi Bill, I found the podcast interview insightful, particularly contrasting the collectivism of Japanese society to the individualism of most western societies, especially those under a neoliberal model.
I would be very interested to hear your take on the BOJ’s change to the upper limit of its 10-year bond yield.
@ Patricia Smith
Yes, reading peoples comments on NZ Stuff is quite disheartening as they are so indoctrinated in the orthodoxy and no amount of counter argument will alter their views.
Re confusion of the general public about money; I was chastised by Dr. Steven Hail , lead lecturer of the new online doctorate level studies in MMT at Torrens Uni, for suggesting the RBA should finance the government with money created ex nihilo, when the necessary resources are available for purchase by the government.
Someone else studying the course butted in and tweeted govt. “pays for”/ funds itself via “treasury swaps”…… seeming to ignore the “$1 trillion debt which must be repaid”.
What gives, when even these MMT experts rejected my simple proposition above?
Neil Halliday, you might try telling that guy that the UK, aka England, has had a national debt in every year since 1694. It has not needed to pay it off for over 325 years. Why does he think that nations ever need to pay off their debt as long as their central bank can buy their bonds? Online it is hard to know if people change. I have had no success with this, but I hope many understand and just never admit it to me on line.
@Steve_Ameican, I’m more alarmed by Dr. Hail’s seeming rejection of the idea of money creation ‘ex nihilo’ by the central bank, to fund government (when the resources are available for purchase by the government).
Thereby unburdening government from the necessity for taxation, and/or selling/buying bonds, to fund government.
Dear Neil Halliday (at 2022/12/21 at 10:28 am)
The official MMT position – that is, the view of the original founders – is that currency-issuing governments do not and should not issue debt.
We outlined that view formerly in our submission (November 2002) to the Review of the Commonwealth Government Securities Market – http://www.fullemployment.net/publications/reports/2002/treasury_review_2002.pdf.
I have no idea why those who came to this late and hold themselves out as MMT ‘experts’ (your words) would say otherwise.
Presumably they have their own non-MMT agendas to promote.
But their views have nothing to do with MMT.
best wishes
bill
Dear Steve Grumbine.
I’ve recommended your podcasts to people, but on at least one occation they couldn’t get past the introductory music before bailing out!
Dear Neil Halliday,
If Steven Hail was telling you that the Treasury Department should continue to issue Australian Government Securities, that does indeed sound odd because it contradicts a key point made by MMT: that debt issuance by a currency issuer is not only completely unnecessary but also unhelpful because it obscures how the government spends. It perpetuates the myth that the currency issuer is financially constrained like a household or a state or local government. But perhaps he was pushing back at your phrasing “central bank financing of the government” because of another key MMT insight: that the central bank and the Treasury Department are both agencies of the government. It is misleading to suggest that the central bank is separate from the government. They are simply two different arms of the same consolidated entity, created by legislation and executive instruments (and therefore capable of being changed whenever the relevant decision-makers choose to make changes), and assigned different functions (one runs the payments system, the other executes fiscal policy, and they work together closely on a daily basis).
Thanks Bill and Nickolas. Was wondering if my understanding was badly off the mark.
btw, I’ve been wondering if the real reason MMT hasn’t swept the world’s central banks (and treasury depts) is to do with national “security”.
eg, since WW2 and more specifically since the fall of the USSR, the US – as ‘global policeman’ – has enforced the ‘rules based order’, based on free market economics.
Now, in the absence of proper international law which would ban war as a means of dispute settlement between nations, the pentagon – as global policeman – will not tolerate the public sector in any nation funding itself via the ‘consolidated government sector’ because any rogue nation might decide to utilize its resources to usurp the pentagon’s position.
That’s why I love Doc Evatt’s original proposal for a UNSC without veto.
Hi Neil, I extremely doubt Steven was saying government debt issuance was a necessary part of MMT. Based on the paper linked to below and other commentary I’ve heard from him, his position is the opposite: http://www.global-isp.org/wp-content/uploads/PN-121.pdf
The RBA is merely the govt’s bookeeper (funds spent into existence on one side and record of taxes collected on the other side of a ledger) with a delegated authority to set interest rates. What it does could all be done by and within Treasury in its stead. The RBA could shut down tomorrow and nothing of aggregate substance would change. There is no operational need to issue Treasury bonds and all the associated jiggery pokery that gets played out between the RBA and Treasury and the RBA and the private banking system/non-government domain. The present bond issuing and trading operations merely provide welfare payments for the wealthy through coupon payments to government bond holders while also feeding through interest payments on bank reserves. I understand, for example, that interest on bank reserves did not exist in the US until introduced late in 2008 at the end of the GW Bush final term during the GFC (a parting gift from the GOP to the donor class).
The purported separation/independence of the RBA in setting interest rates was a Keating initiative, I think. The central bank was delegated the right to set interest rates without interference from politicians. Through that sleight of hand the government acted to remove any opprobrium for interest rate setting activity from itself and transfer that to the “independent” RBA.
Formal teaching of neoclassical economics is without reference to money, debt and limits to resources. But when those shiny new economics graduates enter the workforce it’s all about money, debt and finite resources. How absurd is that? They render themselves unemployable in my world as they perpetuate a flawed neoclassical groupthink theology.
Jude, perhaps Steven didn’t like my expression: “the central bank should ‘finance government'”. Subsequent comments from others here have shed important light on the matter. (Fred said – roughly paraphrasing – we don’t even need the RBA – I love it!).
The issues raised appear to be ‘prickly’: last year Ross Gittins wrote an article entitled: “central bank money printing is closer than you think”, which received some pushback on this blog, yet I reckon Ross is on the same wavelength as Bill. (In the article, Gittins noted a reply to Adam Bandt at a parliamentary hearing (during the start of the pandemic) in which Philip Lowe said “he would ‘push-back’ against *any assertion* the RBA was ‘financing’ the government”. (not that it should, or already was…!).
Neil, that’s right, I think. Any suggestion that the currency-issuing government’s monetary sovereignty/ fiscal capabilities is beholden to the graces of the #independent central bank is going to get straight up the noses of MMTers, chartalists, and post-Keynesians. Fred – spot on. I’m 100% appropriating your brilliant quote here: “Formal teaching of neoclassical economics is without reference to money, debt and limits to resources. But when those shiny new economics graduates enter the workforce it’s all about money, debt and finite resources. How absurd is that? They render themselves unemployable in my world as they perpetuate a flawed neoclassical groupthink theology.”
Prof Keen couldn’t have put it better.
As Bill himself has mentioned the music that accompanies podcasts, I’ll take the opportunity to say that have long thought it regrettable that the UK’s otherwise excellent “MMT Podcast” also has dire , grating, intro music . I have often been reluctant to send/post links to episodes of both these superb Podcast series to people who might benefit from them , as I fear they won’t get past the intros which don’t reflect the authoritative and learned programme content. What is it about MMM? – modern monetary music?
I will be a dissenting voice here-as an improvising double-bass player from a Jazz background I love the intro music and the story makes it even cooler. Keep it up!