Apr 10, 2022
Welcome to episode 116 of Activist #MMT. Today I talk with author, financial analyst, and applied mathematician, Brian Romanchuk. We talk about his journey from mainstream economics, to Minsky, to MMT; and his experience writing the 2021 book Modern Monetary Theory and the Recovery. He also describes some of his concerns regarding the common MMT assertion that government spending always comes before taxation.
(Here are links to parts two and three. A list of the audio chapters in this episode can be found at the bottom of this post.)
This is part one of a three-part conversation. In parts two and three, we discuss the many varied techniques used by bad-faith critics of MMT, which more broadly are the techniques used by simple bullies who want their followers to think that they're not. The second two parts were inspired by chapter five in Brian's book, his recent appearance on MMT Podcast, and my own post documenting several good-faith critiques and the MMT responses to them [a link to which can be found in the show notes]: What are some **good-faith** criticisms of Modern Money Theory (MMT)?
Regarding the assertion that government spending always proceeds taxation, Brian's concerns are not related to its accuracy. In my view, it remains a valuable and important insight. Rather, the problem is that it's a cycle that can only be resolved by going back. in the words of Fadhel Kaboub, "to the beginning of the beginning." After that, it's so close to a chicken and egg question that, in the context of public conversations, it can sometimes cause more problems that it solves. Instead, Brian suggests asking why the assertion is so important. The answer is the assurance that the national government, the currency issuer, can never default on its obligations. In other words, regardless whether the chicken or the egg came first, the government can always pay its bills.
If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons have exclusive access to several full-length episodes (including parts two and three with Brian), right now. A full list is here, each with a brief highlight. Patrons also get the opportunity to ask my academic guests questions, such as my recent episode with Warren Mosler. They also support the development of my large and growing collection of learn MMT resources. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.
And now, onto my conversation with Brian Romanchuk. Enjoy.
Audio chapters
- 4:19 - Hellos, curling
- 7:24 - From mainstream, to Minsky, to MMT
- 14:11 - Mainstream maths and DSGE
- 17:46 - Did learning MMT change your trading? (No. It better validated my decisions.)
- 22:37 - Chicken and egg, spending must come first; versus default risk
- 30:08 - Trillion dollar coin, needle in a haystack, institutionalism
- 41:47 - Good-faith critique- a definition
- 47:32 - Duplicate of introduction, but with no background music