Thread by @MacroEdge1

New Keynesians, or Old Fisherians? MMT & All That.
Dear Dr's Summers, Krugman, Rogoff, et al. Please give a quick glance at "How Much Does Finance Matter", from the book, Keynes on the Wireless.
With all due respect, your version of Keynes does not match his own words. Read them.

Here, let me make this a little bit easier. This is the opening passage from a BBC Radio address by JMKeynes, March 23, 1942. JMK is working on preparing apt economic policies to manage the transition from the wartime economy. My apologies in advance if I am violating copyrights.

JMK speaking: "For some weeks at this hour you have enjoyed the day dreams of planning. But what about the nightmare of finance? I am sure there have been many listeners who have been muttering" 'THAT'S ALL VERY WELL, BUT HOW IS IT TO BE PAID FOR".

"Let me begin by telling you how I tried to answer an eminent architect who pushed on one side of all the grandiose plans to rebuild London with the phrase:'Where's the money to come from?' 'They money?' I said. 'But surely, Sir John, you don't build houses with money?'

'Do you mean that there won't be enough bricks and mortar and steel and cement?' 'Oh no', he replied, 'of course there will be plenty of that'. 'Do you mean', I went on, 'that there won't be enough labor...builders...architects?' 'Oh no, that's all right', he agreed.

'What I want to know', he repeated, 'is where the money is coming from'.'The same place it is coming from now.'

Out of courtesy to Palgrave and Donald Moggridge, the editor, I will paste no more. Please get the publication and read it with your own eyes, in JMK's own words.

Because when you do, you will see the JM Keynes was, some 77 years ago, very much in accord with the points of view espoused by the MMT camp. The New Keynesians have, in fact, very little to do with Keynes. ISLM is Hick's bastard version of Keynes. ISLM is not Keynes's device.

Keynes was not just an academic, and a policy advisor, like the New Keynesian economists of our day. He was a currency and commodity speculator, an institutional investor, as well as in the UK Treasury during WWI, arranging finance. He knew a few things about money and finance.

These are things he learned from direct experience in finance. These things got left aside, watered down, and distorted by the straitjacket of ISLM and the neoclassical synthesis that supposedly took up his theory. In ISLM, it is not even clear what is being financed.

Please read the full radio address by JMK. The remainder of it drives MMT points home, one after another. 77 years ago!

Truth in advertising...it's a thing.