Modern monetary theory (MMT), it seems, has given politicians license to do what they always want to do anyway – buy votes with government giveaways of one sort or another. This is not the first time politicians have abused economic thinking to ignore economic and accounting limits. In the 1930s, when John Maynard Keynes introduced his explanation of the Great Depression, politicians used his thinking to justify pouring a tsunami of money on the economy though a raft of Washington agencies. It seems only to be expected that politicians would do the same with MMT, since, for all its claims of novel thinking, it is at base little more than warmed over Keynesianism.

Both theories, we are told, say that money does not matter, that governments can create (print) as much as they want to finance their own spending, fearing neither inflation nor any other ill effects on the economy. On the right, politicians use MMT to argue that Washington can cut taxes but do nothing to contain spending and use newly created money from the Fed to cover the resulting deficit. On the left, progressives talk less about taxes, except perhaps as a way to punish some citizens. Instead, they put forward wildly expensive programs – the green new deal and Medicare for all, for instance – and not even mention how they would finance the billions, even trillions of dollars involved. In the pinch, they, too, would finance their spending by ask the Fed to create more money, pointing to MMT to justify their proposals.

Some proponents of MMT contend that only money creation now can save the economy from the next recession. They would channel those extra dollars created by the Fed into every citizen’s bank account. Some call “helicopter money” after the “solution” once voiced by former Fed Chairman Ben Bernanke that as a last resort he would stimulate economic activity by dropping newly printed notes from a helicopter. MMT people argue that an infusion of new money into people’s bank accounts would make them feel rich. the would accordingly and spend the funds and propel the economy forward faster. Keynes, living in an age before helicopters were common and electronics was less slick, nonetheless said something similar. He argued, factiously, that the government should bury mason jars full of bank notes all over the country and let it out that anyone who found them could keep them. The quest, he argued, would get the economy’s wheels spinning again. 

The two “solutions” sound similar, but the circumstances surrounding MMT’s proposals and those of Keynes differ greatly. Keynes faced the Great Depression. Optimism and the willingness to take risk had all but disappeared. He wanted to shock the system into motion. When more orthodox economists pointed out the long-run dangers of excessive money creation, inflation in particular, Keynes replied: “In the long run, we are all dead.” By saying this, he did not mean to dismiss their concerns. Actually, he shared them. He offered his glib remark to remind them, and others, that the world faced an emergency. Unemployment verged on 25% of the workforce. If governments did nothing to remedy immediate problems, there would be no long run. The MMT folks are advocating an updated version at a time when the economy is near a cyclical high, when unemployment as a portion of the workforce stands on 50 year lows. Keynes, rightly saw ample time to normalize policy once the economy got going again. The MMT crowd, or at least those leveraging MMT thinking to justify extravagant policies, seems not to have given any thought at all to the long run.

If we have an idea what motivated Keynes, it is harder to know what the MMT crowd wants to accomplish. Some, it would seem, have a political/social agenda they want to serve and would willingly bend their economic thinking to that end. Prof. Stephanie Kelton of the State University if New York at Stoney Brook, a major MMT proponent and eloquent advocate might well fall into this category. She served on the staff of Bernie Sanders’ candidacy in the 2016 campaign. Having clearly progressive if not socialist political and social leanings, she has all sorts of reasons to push the economics she does. For others, it is harder to know why they would promote warmed-over Keynesianism in a very different environment than that great economist faced, though the cynic in me does note that seeming novelty can sell textbooks. For the politicians, of course, an age-old adage should serve to explain things: It is illegal to buy votes with one’s own money but okay to do so with the taxpayer’s money.

I consult on economics and investment strategy and serve as chief economist for the NY-based communications firm, Vested. I am a contributing editor for The National…

I consult on economics and investment strategy and serve as chief economist for the NY-based communications firm, Vested. I am a contributing editor for The National Interest and an affiliate of the Center for the Study of Human Capital and Economic Growth at the University at Buffalo (SUNY). In my long career in finance, I have held positions as portfolio manager, director of research, and chief investment officer. My most recent book, Thirty Tomorrows, takes up the question of how economies can meet the challenge of globalization and aging demographics. I hold an MSS in mathematical economics from Birmingham University in England and a BA in economics from the State University of New York at Buffalo.

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I am a bestselling author, speaker and president of Red Team Thinking LLC. I teach organizations and individuals around the world how to see the truth, tell the truth and act on the truth – because believe it is the lies we tell ourselves that hold us back. My books include Red Teaming: How Your Business Can Conquer the Competition by Challenging Everything and American Icon: Alan Mulally and the Fight to Save Ford Motor Company. I also lecture at U.C. Berkeley’s Haas School of Business.

Bryce Hoffman is the author of Red Teaming. To learn more about red teaming, please visit redteamthinking.com.

I am a bestselling author, speaker and president of Red Team Thinking LLC. I teach organizations and individuals around the world how to see the truth, tell the truth and act on the truth – because believe it is the lies we tell ourselves that hold us back. My books include Red Teaming: How Your Business Can Conquer the Competition by Challenging Everything and American Icon: Alan Mulally and the Fight to Save Ford Motor Company. I also lecture at U.C. Berkeley’s Haas School of Business.

Bryce Hoffman is the author of Red Teaming. To learn more about red teaming, please visit redteamthinking.com.

At Larry Fink’s urging, climate change finds a place on the board’s agenda.

Healthcare Transformation Will Fail If Personalization Is Not Respected

Healthcare is in the process of shifting its entire financial model from volume (fee for service) to value (quality of care). But that shift cannot be achieved without each provider finding its right balance between standardization and personalization. n

Healthcare is in the process of shifting its entire financial model from volume (fee for service) to value (quality of care). But that shift cannot be achieved without each provider finding its right balance between standardization and personalization. n

Where healthcare goes with personalization – so does American enterprise. Healthcare is in prime position to make personalization strategies the de facto reality throughout an enterprise.n

Where healthcare goes with personalization – so does American enterprise. Healthcare is in prime position to make personalization strategies the de facto reality throughout an enterprise.n

My goal is to prepare organizations for Leadership in the Age of Personalization℠– to help companies and their leaders evolve and stay ahead of the rapid changes in the workplace and marketplace – as the individual defines the business. I am a former C-suite corporate executive and entrepreneur of several successful companies, including my current business, Glenn Llopis Group: a nationally recognized workforce development and business strategy consulting firm. Most of my writings, speaking engagements and consulting assignments focus on enabling business evolution through inclusive leadership and the power of individuality. I am the author of The Innovation Mentality: Six Strategies to Disrupt the Status Quo and Reinvent the Way We Work and Earning Serendipity: 4 Skills for Creating and Sustaining Good Fortune in Your Work.

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I decided to become an economist at age 16, but I also started reading my grandmother’s used copies of Forbes. After degrees including a Ph.D. from Duke and three years as a professor, I found my calling in the business world. I began as a corporate economist (PG&E, Nerco, First Interstate Bank) and then entered consulting, helping business leaders connect the dots between the economy and business decisions. I wrote “Businomics: From the Headlines to Your Bottom Line—How to Profit in Any Economic Cycle” to help corporate executives and small business owners understand how the economy impacts their companies. Side trips on this journey include co-authoring a high school economics curriculum, “Thinking Economics,” and earning the CFA designation (though I’m not an active charter-holder). I’m the longest-tenured member of the Oregon Governor’s Council of Economic Advisors and chairman of the board of Cascade Policy Institute. My friends and fans love their monthly fix of economic charts, a 60-second scan of the economy. The latest edition is always up at https://www.conerlyconsulting.com/writing/newsletter/, and notice the link to subscribe for free on that page.

Learn about my economics and business consulting. To get my free monthly newsletter, view a sample, then hit “subscribe.” I’m a great speaker on the economic outlook, futurist, strategist.

I decided to become an economist at age 16, but I also started reading my grandmother’s used copies of Forbes. After degrees including a Ph.D. from Duke and three years as a professor, I found my calling in the business world. I began as a corporate economist (PG&E, Nerco, First Interstate Bank) and then entered consulting, helping business leaders connect the dots between the economy and business decisions. I wrote “Businomics: From the Headlines to Your Bottom Line—How to Profit in Any Economic Cycle” to help corporate executives and small business owners understand how the economy impacts their companies. Side trips on this journey include co-authoring a high school economics curriculum, “Thinking Economics,” and earning the CFA designation (though I’m not an active charter-holder). I’m the longest-tenured member of the Oregon Governor’s Council of Economic Advisors and chairman of the board of Cascade Policy Institute. My friends and fans love their monthly fix of economic charts, a 60-second scan of the economy. The latest edition is always up at https://www.conerlyconsulting.com/writing/newsletter/, and notice the link to subscribe for free on that page.

Learn about my economics and business consulting. To get my free monthly newsletter, view a sample, then hit “subscribe.” I’m a great speaker on the economic outlook, futurist, strategist.

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SYDNEY, AUSTRALIA – JANUARY 11: A general view during the semi-final singles match between Nick Kyrgios of Australia and Roberto Bautista Agut of Spain during day nine of the 2020 ATP Cup at Ken Rosewall Arena on January 11, 2020 in Sydney,