Paying for the #GreenNewDeal
#Thread 5
Managing Inflation, pt. 1
Pavlina Tcherneva @ptcherneva
1/
Most inflation is cost-push, not demand-pull. This lack of demand-pull inflation means that we have the capacity for ambitious public spending.
#Thread 5
Managing Inflation, pt. 1
Pavlina Tcherneva @ptcherneva
1/
Most inflation is cost-push, not demand-pull. This lack of demand-pull inflation means that we have the capacity for ambitious public spending.
2/
The orthodoxy of inflation resulting from ‘too little’ unemployment is a toxic myth. There is no 'just right' number of involuntarily unemployed people.
The orthodoxy of inflation resulting from ‘too little’ unemployment is a toxic myth. There is no 'just right' number of involuntarily unemployed people.
3/
The #MMT solution is to replace; to give up; to forever forget the concept of a 'natural' rate of involuntary unemployment -- and to replace it with policies that do not permit that condition in the first place.
The #MMT solution is to replace; to give up; to forever forget the concept of a 'natural' rate of involuntary unemployment -- and to replace it with policies that do not permit that condition in the first place.
4/
When the Fed ⬆️ interest rates to cool the economy, it grows the pool of unemployed -- the unemployment buffer stock. The #JobGuarantee would just give people jobs at a basic and livable wage. Why have an unemployed buffer stock when you can have an employed buffer stock?
When the Fed ⬆️ interest rates to cool the economy, it grows the pool of unemployed -- the unemployment buffer stock. The #JobGuarantee would just give people jobs at a basic and livable wage. Why have an unemployed buffer stock when you can have an employed buffer stock?
5/
Our current system of neglect is incredibly expensive. It practically guarantees that there will always be some people who are ready, willing, and able to work, but will be prohibited from doing so.
Our current system of neglect is incredibly expensive. It practically guarantees that there will always be some people who are ready, willing, and able to work, but will be prohibited from doing so.
6/
Besides that it squanders human potential, the current trickle-down paradigm is also more inflationary than the #JobGuarantee. The only reason why we don't see inflation today is because we are not attempting to use this flawed paradigm to achieve full employment.
Besides that it squanders human potential, the current trickle-down paradigm is also more inflationary than the #JobGuarantee. The only reason why we don't see inflation today is because we are not attempting to use this flawed paradigm to achieve full employment.
7/
Trickle-down economics became most noticeable during the Reagan admin. The consequences have meant that since 1960, smaller and smaller segments of the USA have benefited from economic growth.
Trickle-down economics became most noticeable during the Reagan admin. The consequences have meant that since 1960, smaller and smaller segments of the USA have benefited from economic growth.
8/
Even before Reagan there were indications that the broadly shared benefits of government stimulus would not withstand a strengthening neoliberal assault. This erosion happened because we never secured a wage floor.
Even before Reagan there were indications that the broadly shared benefits of government stimulus would not withstand a strengthening neoliberal assault. This erosion happened because we never secured a wage floor.
9/
Today, traditional economists are again promoting fiscal half-measures as sufficient economic stabilizers, as they did pre-Reagan. We are not interested in again watching this disappointing movie. They are omitting the most direct and efficacious stabilizer: a #JobGuarantee.
Today, traditional economists are again promoting fiscal half-measures as sufficient economic stabilizers, as they did pre-Reagan. We are not interested in again watching this disappointing movie. They are omitting the most direct and efficacious stabilizer: a #JobGuarantee.
10/
The task before us is to secure full employment, and shift the burden of inflation fighting from the monetary to the fiscal authorities. We either make a pyrrhic project of “stable” prices and unstable lives. Or we mitigate #climatechange with good, green jobs for all.
The task before us is to secure full employment, and shift the burden of inflation fighting from the monetary to the fiscal authorities. We either make a pyrrhic project of “stable” prices and unstable lives. Or we mitigate #climatechange with good, green jobs for all.
11/
For the full video: payforgnd.org
Managing Inflation, pt. 1
by Pavlina Tcherneva @ptcherneva
start time: 5h:29m
Previous threads in this series:
Please stay tuned for our next thread!
For the full video: payforgnd.org
Managing Inflation, pt. 1
by Pavlina Tcherneva @ptcherneva
start time: 5h:29m
Previous threads in this series:
https://twitter.com/payforgnd/status/1199519202421415936
Please stay tuned for our next thread!
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