Dean Baker — Reconciling Modern Monetary Theory with the Wisdom of Mark Thoma

The NYT had a brief discussion of Modern Monetary Theory (MMT) today in the context of a profile of Warren Mosler, one of its major proponents. The profile includes a dismissive comment from Mark Thoma, a professor at the University of Oregon and the creator of the blog, The Economist's View....

CEPR
Reconciling Modern Monetary Theory with the Wisdom of Mark Thoma
Dean Baker
(h/t Andy Blatchford on FB)

Stephanie Kelton comments:

Thanks, Dean. It is possible that Mark was taken out of context. The quote attributed to me wasn't remotely close to anything I actually said. The notion that MMT has no academic footprint is laughable. There are literally hundreds of articles in peer-reviewed journals, books, chapters in edited volumes, etc. This was a(nother) deliberate attempt to cast MMT as a kooky Internet phenomenon. Anyone else wonder why the NYT would send a reporter and a photographer all the way to St. Croix (yes, they physically went there) for a story about a silly little Internet theory? I suspect they know it's much more than that.
On a different point: MMT supports tax increases and/or spending cuts to address demand-pull inflation. No different from, say, Abba Lerner or Marriner Eccles.
The real point of departure for MMTers and textbook Keynesians is, I think, very much bound up in the loanable funds theory of the interest rate (the former rejecting and the latter accepting it). From that follow all sorts of differences re: fiscal sustainability. Scott Fullwiler has written brilliantly on this.

In other words, they just made shit up.

"First they ignore you, then they attack you, then you win." — paraphrase of M. K. Gandhi. Gandhi actually said, "First they ignore you. Then they ridicule you. And then they attack you and want to burn you. And then they build monuments to you." Wikiquote