Bill Mitchell and Chris Williamson Podcast

The GIMMS organised Labour Fringe Meeting with Bill Mitchell on the Green New Deal successfully happened and there will be a forthcoming video on this from GIMMS shortly.

A second meeting, organised by Greg Hadfield at the Rialto Brighton (no surprises there on either count with respect to Chris Williamson alone), involved both Chris Williamson and Bill Mitchell. I was not able to attend either meeting but, thanks to the MMT Podcast team,  there is an audio podcast of the latter.

This is primarily Williamson introducing and mc’ing a talk by Bill on MMT and Labour and. also, MMT in general. It is a good talk with some decent and serious questions with interesting answers in the Q&A. I do recommend it, whether you are a Labour supporter or not. There is much to gain there, especially if you are not familiar with MMT.

Still I think a major opportunity was missed by GIMMS and Bill, on both the topic and fellow participants. Given Bill”s last two books (not the text book) and the situation in the Uk over Brexit I thought a three way talk/debate between a hard Lexiter such as Bill, a soft Lexiter such as Stephen Kinnock and a Remainer such as Kier Starmer could have drawn much interest from across Labour and possibly achieved national media coverage.

Once I had heard there was going to be a GIMMS Labour Fringe meeting, I thought of then suggested this to a couple of Labour activist friends who are well connected in Labour and with whom I have discussed MMT before and had recommended they read Bill’s blog. They thought this was an excellent idea and very doable but there were a number of caveats.

Whether we could have got the MPs I suggested, still possible they said but given the official evolving stance of the Labour Party was moot but, certainly, we could have got speakers significant to Labour, MPs or not, to represent those other positions.

Yes, this would have been more than just an MMT meeting but Bill (or someone else) could have started with an introduction to MMT, noting that, even within the MMT lens, one could be for any of those three positions (as is the case across the different members of GIMMS and the advisory board).

When GIMMS was  planning this meeting, surely something like this was thought of as a possibility? Maybe this was preferred but not feasible in the end – unlikely given the feedback I received? Surely someone in the advisory board would have suggested something like this, if not by GIMMS executives? Were the board consulted? I suspect that nothing like this were ever considered and the board were not consulted.  which would be a failing of the GIMMS team.

From my chats with these activists we all thought this could have far more potential than just a GND/MMT meeting with one MP. Which brings us to the other caveats.

Of course they said : “it’s a bit late to suggest this now”,  “you need a venue”, “who is going to organise/promote/fund it” , “too late to get on the official fringe program”. When they found out that there was a venue, organiser, topic and speakers already, we still all thought my suggestion was better. The killer, go on guess,  was when I said it was currently with Chris Williamson. They both said this might make it harder for GIMMS, and  Bill, for any future such meetings especially with other MPs such as I suggested. Neither I nor they knew the personal stance of these specific MPs on each other (one signed the letter to re-suspend him, one did not) but they noted it as a general concern.

Now I am sure that GIMMS executives are far better connected with Labour than I am and they will disagree with this, but this is what two people I know, both very long time Labour activists, that I happened come across recently said. In old internet parlance YYMV, your mileage might vary.

Following on this note, I have to add a few comments given the background of my issues over Chris Williamson  with regard to the promotion of MMT.

On the one hand, this talk alleviates 99% of my concerns in  my previous post. There was nothing contentious or controversial that would have caused me problems to have attended. I was going attend anyway and the training meeting the next day but was unable to attend either in the end. Certainly, even though, as should be clear, I dislike Chris Williamson, and continue to hold the position that our  only official MMT organisation should not be promoting him, should there any further such meetings, I would have no qualms about attending. I will continue to criticise GIMMS if it were them doing the promotion, in the future. In this case, and only through force majeur, the second meeting was not organised by GIMMS.

On the other hand, this podcast was weirdly edited. Williamson’s introduction to Bill sounds like it starts mid flow and that likely other prior statements had been omitted, or it could have just been an engineering/sound issue? At around 14 minutes, Bill comments on social media controversies over him talking with Williamson. Apart from me defending Bill against an insinuation of antisemitism by a well know UK economist, there was apparently much I missed out on. I could not find the particular phrase Bill stated was associated with him (or MMT?) “the dark side of fascism” in online searches.

On a side note, I did find something intriguing although not do with Bill directly, but I imagine it is of the same ilk – Statement Against Stephanie Kelton’s Meeting With the Far Right in Japan –  since I know Bill has met up with Japanese politicians too. This goes to the point that I have made  calling MMT a ‘framework’ and, what Bill calls a “lens”, it is independent  of ideology and values. Bill makes this clear in the talk and I fully agree and have stated the equivalent myself. We want all parties to use the MMT framework, this will manifest different policy implementations given differing value sets. For just illustration one could imagine both Labour and the Conservatives agreeing that the Job Guarantee is a better macroeconomic stabilization tool than the alternative of unemployment, but Labour might do this with a Basic Income too and the Tories without. (Bill uses another example).

Still Bill does make some unfortunate and ill judged comments, in the talk and online. He unnecessarily defends Williamson over his antisemitism issues in Labour in the talk. He does the same online and, it seems,  he continues to encourage a silly and non-existent division in the MMT community when he says, in conspiratorial tones:

As a result of Chris’s suspension from the Labour Party for spurious claims he made anti-Semitic comments, some characters (unknown – not enough courage to reveal themselves) threatened the venue where our event was to take place.     

Well every MMTer I have (UPDATE: I meant privately, most, cowardly in my view, go public on this)  corresponded to on Bill’s position with respect to Chris Williamson, given my previous posts and tweets, is of the view, explicitly or implicitly,  that Bill is simply blinded to the failings of Williamson, because Williamson is the only UK MP who promotes MMT, thats it.  Whilst I can’t speak for anyone else, from my correspondences, I doubt that any MMTer would have tried to sabotage that event.  Far more likely, in my view, it would have been either a campaigner against Labour Antisemitism or a local resident, as this was public knowledge given the Independent article: Labour facing fresh Chris Williamson row as suspended MP set to speak at ‘multiple’ events at party conference, 

Making such insinuations is pathetic and unbecoming of an economist of your stature  Bill. Grow up.






Gower Initiative at Labour Fringe

Most people who study, follow and/or advocate Modern Monetary Theory (MMT) in the UK probably know that the one official advocacy body here – the Gower Initiative for Modern Money Studies (GIMMS) – is organising an event at the Labour Fringe – the unofficial events around the official Labour Conference in Brighton next week. I want to make a few comments about this.

I say this is the only official MMT advocacy body because of the many eminent MMT academics, practitioners and advocates who have backed this group by joining the advisory board.  Primarily this blog post is addressed to that board.

First of all, I fully support that GIMMS is organising a meeting promoting MMT at this event. That is a key part of its advocacy. Such a body surely should also organise events at all major party conferences, the Liberal Democrats, the Conservatives and so on? Well, it is doing so at the Greens conference and that is to be commended too. However, it is not at the other major party conferences and that is a pity. I suspect that is because we do not know significant people, in either of those parties, that could help us do so. For sure, both of those parties are far more wedded to a neoliberal political program than Labour (although that still is with, e.g. its Fiscal Rule) but neither are intrinsically neoliberal and could still promote their own political values without neoliberalism (albeit some would have to change) and through MMT. Unlikely, at present, I know but still, if we do not show them There are Real Alternatives – TARA –  then they will remain stuck, through ignorance (as opposed to choice – we can’t reach those), in TINA – There Is No Alternative. Hopefully, next year, GIMMS will organise events at all party conferences.

Some of you might be aware that I have had issues with GIMMS original planned meeting promoting the highly controversial and suspended Labour MP Chris Williamson to speak alongside Bill Mitchell. I had previously asked for GIMMS stance on this and now have an answer and one with which I am extremely disappointed and concerned.

This is not the place to discuss the antisemitic issues specifically with regard to Chris Williamson, that has been covered thoroughly elsewhere. Whatever you position over this, it is surely undeniable that this makes him both controversial and divisive. So why did GIMMS invite him to speak?

I can only guess but there appear to be two rather obvious reasons and one questionable one.

First no one more than Bill Mitchell (along with Warren Mosler) has worked to promote and get traction for MMT in polities around the world. As I understand it Chris Williamson is the first MP to publicly support and promote MMT. The first of many I hope. Still he is currently the only one. (Given his noted notoriety I hope that Bill’s efforts to find any MP who could openly advocate MMT has just blinded him to the other issues surrounding him).

Second, he is a Labour MP and this is the Labour Fringe.

The third one is more of a marketing or PR nature, his controversial status would help promote MMT. I am really not sure about this but certainly this had to be factored in anyway, one way or another, in deciding to have him at this event. And surely the advisory board would have been consulted on this both for the the meeting and any statements made by GIMMS in this regard?.

Still he is a suspended MP and currently without the Labour Whip. He specifically is barred from official Labour Conference.

He is so controversial that he has been barred by various venues, obviously not the Fringe event organisers who invited him, from speaking at various Labour Fringe events. This now includes the main GIMMS event and so it is proceeding without him. However GIMMS still plans to have another meeting with him there and they have not remained neutral on this controversy and this is what I am addressing here.

Now if the meeting had gone ahead with Chris Williamson I was in two minds as to whether to attend or not.

On the one hand, I have previously expressed my concern that the association with Chris Williamson could tarnish the MMT brand in the UK.

It is important to note that I only paid attention to Chris Williamson because, long ago, I was informed that he was the only MP openly promoting MMT but I was concerned over his connection with antisemitic issues. Plenty told me one issue should not overlap with the other and I agreed then but needed to find out more. Now whilst antisemitism has always been a concern to me, in the various groups and organisations I have been involved in over many years, it was always secondary and mostly very minor. So I needed to find out more about Chris Williamson and Labour Antisemitism and spent much effort researching this. I have learnt far more about antisemitism than I wished but do not regret this work in the slightest. As a consequence, my position on Chris Williamson is that a necessary but not sufficient condition to fix problems in the Labour Party is that he needs to be expelled. For sure, I am aware that  many will completely disagree with my position here, well we both now know each others views on this.

Anyway,  given this,  I would not wanted to have been the person to aggravate the controversy in that meeting. I certainly would never have initiated it nor been pro-active but I certainly might have found it difficult not to be reactive. I had hoped the GIMMS meeting could and should focus solely on the economics and the politics of economics and nothing else. The question outstanding to GIMMS was whether they were to remain neutral on this and ensure such controversy would not obfuscate the primary thrust of the meeting,

On the other hand, on the assumption that this meeting was going to be neutral on this controversy, I would have attended and hopefully learnt something more about MMT and the Green New Deal and so on. I would have had no interest in Chris Williamson talking on these topics especially when we have Bill present, but to hear Bill speak again  and to network with others would have been worth it.

Still, even given my stance on Chris Williamson, there is a topic that would have been worthwhile to hear him speak on and one which GIMMS could have promoted in an uncontroversial manner (as they could the planned one too). GIMMS could have said something along the following, which goes back to my point about GIMMS advocacy of MMT at all party conferences:

‘We are inviting Chris Williamson as a sitting MP to speak on the challenges of getting other MPs in various parties to be educated and understand MMT. We recognise that he is currently suspended and controversial but we take no position on that controversy and that issue is not to be discussed in any way in this meeting’.

I would certainly have been interested in that talk, would have attended and would not have had concerns over GIMMS promoting it in that manner. Whether you like my topic or the planned one, either way I expected (and previously asked) GIMMS to make an effort to block or neutralise the controversial aspects of this MP.

This is not what happened

On the 24th of August GIMMS issue a Press Release , in which they made a number of concerning statements.

First, with regard to Chris Williamson, over the antisemitism issues they state: “we know are false allegations against him”!!  Really? How do they know? On what basis can Prue Plumridge, Sara Holland and Claire Jackson-Prior confidently claim this? Because he said so? How do they know  in spite of a series of copious publicly available independently verifiable evidence? Can this all be subjectively interpreted to make him innocent of all allegations? With difficulty but I guess so. Not sure how that counts as objective knowledge and for this official body to make such a strong a statement, one quite unnecessary and irrelevant to MMT theory, practice and advocacy, whether you you disagree with me or not over their claims about Chris Williamson, they are clearly no longer neutral on this matter and very much over-reaching. I am not going to speculate on their motives but, as I have said before, this is not a good look. A great disappointment. Far from avoiding controversy they are courting it. Is this a planned and carefully considered PR move?

“Having searched without success for an alternative venue at such short notice and following a great deal of discussion and personal distress we have taken the difficult decision to go ahead.” Did this discussion involve the advisory board? It should have done.

“We are painfully aware that this may cause some unease amongst our supporters however we hope that you will understand our reasons.” They were already aware that inviting him, if not handled carefully, would cause unease among other supporters – and surely not just me. Whilst I have addressed  Bill’s over-reaction to a tweet not addressed to him in a previous post, I did not need let alone expect support on that. Yet it happened. However, most of it was private. It seems no one else wanted to put their head above the parapet as I had  done, not only due to Bill’s over-reaction but to GIMMS now quite clear position over Chris Williamson.

They continue with “However, whilst we share left-wing values, we also took the decision at the organisation’s inception to remain politically non-aligned.” That is exactly what they have failed to do by clearly coming out and supporting Chris Williamson – not through inviting him to talk, as I noted above that could have been handled sensibly and sensitively – but by their non-neutral stance here: “we know are false allegations against him”. This is nothing to do with genuine left-wing values.  A blatant performative contradiction.

“Whilst we are indeed very disappointed and upset by this turn of events there are plans afoot for Bill to join Chris, a much valued MMT advocate in the UK, on a fringe platform elsewhere on the same day. We are, however, not in a position to give any details at the moment as the logistics are currently being worked out.”

My primary concern over the official organisation in all of this. If Bill had wanted to organise a non-GIMMS meeting with Chris Williamson that would have been another matter. And one perfectly possible too. (Not so long ago Bill had a free slot and asked to see if I could organise something (not with Chris of course) but I had no time). Now I would have disagreed with Bill on this but it would not have been the official UK organisation doing it.  It seems GIMMS still want to promote such a meeting even if they do not organise it? Far from hoping GIMMS would neutralise any controversy over Chris Williamson, it now seems they have gone out of their way to court controversy. And that is my concern.

Were the advisory board consulted on any of this? What is their position on this? I am addressing Warren Mosler, L Randall Wray, Mathew Forstater, Stephanie Kelton, Pavlina R. Tcherneva, Fadhel Kaboub, Rohan Grey and Steven Hall (and Deborah Harrington and Jessica Ormerod). Also the GIMMS associates too Phil Armstrong and Alan Hutchinson.

Given the divisive position that GIMMS has taken over Chris Williamson how effective do you think they can be to convince other Labour MPs, let alone MPS from other parties? As I see it, this has impaired their advocacy ability going forward.

Whatever anyone says or does not say, does not alter any of the evidence and reasoning behind MMT, we desperately need an official body to promote MMT in the UK,  however do you want one that is so currently and unnecessarily divisive?

I know I am not the only one who wants to know.


Quora answers on Quantitative Easing

A couple of Quora answers here.

How is QE different from MMT

My answer:

These are not comparable as they are entirely different – one is a policy evaluation framework and the other is a specific policy tool.

Modern Monetary Theory (MMT) is a macroeconomic paradigm that can be used as a policy science framework to evaluate the context specific economics of any policy.

Quantitative Easing (QE) is an “unconventional” monetary policy.

MMT can be used to evaluate the claimed benefits and deficits of a monetary policy such as QE.

So what is Quantitative Easing anyway? My answer   to the question Where can I find a theoretical framework for quantitative easing?:

The German Professor of Economics at the University of Southampton, UK, Richard Werner, invented the term, developed in advising the Japan government on fiscal and monetary policy in the 1990s. How QE is actually applied now is different but you should start with some of his arguments such as Quantitative Easing and the Quantity Theory of Credit. This starts:

“‘Quantitative easing’ (QE), has received much publicity in the past five years. However, its effectiveness remains disputed. Moreover, there are different views about what constitutes QE. It is the purpose of this contribution to review the origins and varying applications of QE, using and thereby explaining the macroeconomic model that gave rise to the concept. Called the ‘Quantity Theory of Credit’, this is arguably the simplest empirically-grounded model that incorporates the key macroeconomic role of the banking sector — a task belatedly recognised as crucial by researchers in the aftermath of the 2008 crisis.

The Quantity Theory of Credit after 20 years (QTC)
“The central argument is a dichotomous equation of exchange distinguishing between money used for GDP-transactions (determining nominal GDP) and money used for non-GDP transactions (determining the value of asset transactions). Money is not defined as bank deposits or other aggregates of private sector savings. Banks are recognised as not being financial intermediaries that lend existing money, but creators of new money through the process of lending. Growth requires increased transactions that are part of GDP, which in turn requires a larger amount of money to be used for such transactions. The amount of money used for transactions can only rise if banks create more credit. Banks newly invent the money that they lend by pretending that the borrowers have deposited it and thus crediting their accounts without transferring any money from elsewhere. This expands the money supply and it suggests that the accurate way to measure this money is by bank credit.It can be disaggregated into credit for GDP transactions (CR) and credit for non-GDP (i.e. asset) transactions (CF). ”

The Origins of Quantitative Easing

“The QTC suggests that neither interest rate reductions nor fiscal expansion, nor reserve expansion, nor structural reforms would be able to stimulate nominal GDP growth. Based on this model I proposed in 1994 and 1995 that a new type of monetary policy be implemented in Japan, which aimed not at lowering the price of money, or expanding monetary aggregates, but at the expansion of credit creation for GDP transactions. Since the expression ‘credit creation’ was considered difficult to understand in Japanese, I prefaced the standard Japanese expression for monetary stimulation (‘monetary easing’ or ‘easing’) with the word ‘quantitative’ to declare that ‘Quantitative Easing’, defined as credit creation for GDP transactions, would create a recovery”

“ I suggested in numerous publications that the central bank purchase non-performing assets from the banks to clean up their balance sheets, that the successful system of ‘guidance’ of bank credit should be re-introduced, that capital adequacy rules should be loosened not tightened, and that the government could kick-start bank credit creation and thus trigger a rapid recovery by stopping the issuance of bonds and instead entering into loan contracts with the commercial banks ”[My emphasis]

Abuse of the term Quantitative Easing

“While my recommendations were not heeded, the label I used caught on. Critics from both the Keynesian and monetarist camps began to redefine QE as an expansion in bank reserves — despite the fact that I had been arguing that such a policy would not work. A new name for an old policy was only likely to cause confusion.”

Leading MMT economist, Australian Bill Mitchell, Professor of Economics at the University of NewcastleNew South Wales, Australia analyses what is actually QE – an expansion in bank reserves – arguing a) that that is just an asset swap of primarily Treasury Securities for Central bank Reserves, neither adding nor subtracting to private sector assets, only changing their composition and the interest rate channel and b) that, since banks do not lend out deposits and that, instead, loans create deposits, therefore they are not reserve constrained and, therefore reserve expansion has no direct affect on banks willingness to create new bank credit “loans” – which was the purported goal of QE.

For more see Quantitative easing 101

Note that some QE, such as part of QE1 in the USA did buy “bad” loans from the banking sector, such as some Mortgage Backed Securities and this is closer to the original design of Werner’s QE but, on the whole, QE is reserve expansion.

It is important to note that Werner and Mitchell both disagree on the model of bank credit – particularly on the second emphasis point above in the Werner quote, that is, banks loans to the government – although they are more closely aligned than, by contrast, the Monetarists and “Keynesians” (actually New Keynesianism) that Werner discusses.

How does MMT avoid the results experienced in Weimar Germany?

Another quora answer. The question was “How does MMT avoid the results experienced in Weimar Germany?”

MMT (Modern Monetary Theory) is a description of economic reality, arguably better than alternatives such as New Classical and New Keynesian etc. approaches.

Hence it can be applied to any economy, including the Weimar Public and to identify whether policies were fit for purpose, that is to achieve what the policy makers claim.

A government can only buy available real resources including the unemployed. If its balance is more than available resources, inflation will result since there is too much money chasing too few resources. It also recommends not to have foreign currency denominated debt, as this diverts and prevents efforts to successfully manage the domestic economy

In the Wiemar’s case, due to the Treaty of Versailles, Germany both had unsustainable gold denominated debt (which is equivalent to foreign currency denominated debt) and there was a supply side resource crash, due to the actions of France over Rhine resources. In such a scenario MMT shows that inflation would result, and, with positive feedback due to these two process, likely to turn into hyperinflation.

If people had understood MMT (or the equivalent then), they would have argued against the terms and conditions of the Treaty of Versailles and predicted the result. This is pretty much what Keynes did in The Economic Consequences of the Peace – Wikipedia.

So if MMT had existed then, it would have evaluated and criticised the Treaty of Versailles economic policy proposals, warning of the consequences of those policies and it would have been shown to be correct for that scenario.