Pavlina R Tcherneva Profile picture
Economist #mmt, money, macro, policy; Director, @EDI_Tweets; Author, The Case for a Job Guarantee…
Mark Flowerchild #MMT #RealProgressives Profile picture 1 added to My Authors
May 22 11 tweets 2 min read
The New Deal projects employed millions of people, even if not enough relative to need.
They made a real impact on those who found employment, the economy, and left a lasting legacy.
In just a few short years, they built (a partial list):
🧵 Image Civilian Conservation Corps, 1933-1942:

2.3 billion trees planted
2,500 cabins built in state & national parks & forests
6.4 million man-days fighting forest fires
68,000 miles of new firebreaks constructed
1 billion fish stocked in lakes, ponds, rivers, and streams
Aug 23, 2021 7 tweets 2 min read
Heterodoxy has long criticized the NAIRU and the natural rate, but has not mounted a robust challenge for lack of a clearly articulated policy alternative that can secure full employment without compromising price stability.
MMT has such a proposal.
The federal Job Guarantee As an anti-cyclical economic stabilizer JG creates employment when it's needed most: downturns. As permanent policy it tackles pandemic, structural, climate related job losses.
JG is self-limiting. It shrinks when other parts of the economy furnish their share of well-paying jobs
Aug 11, 2021 8 tweets 2 min read
Lots to like in the #InfrastructureBill, esp that public investment is back.
For me, the Q is always about scale & direction.
-US school bus fleet 480,000
-Cost per bus $100,000-$300,000 (electric cost more)
-Fleet replacement cost $48b-$144b +
-Infrastructure bill: $7.5b🧵 Allocation to address inequities from gentrification and the highway system: $1b

That's approx what it costs to build 100-200miles of highway. I.e., a very small amount to redress decades of legacy investments in an interstate hwy system that ripped through many communities.
Jun 1, 2021 10 tweets 2 min read
There was a recent exchange on whether MMT prescribes a certain size deficit. As @KarlWiderquist argues here, the answer is no. But I would go even further.
MMT does not prescribe or aim to estimate a specific size of 'desirable' govt deficit for several reasons.
🧵 The deficit is not under govt's control. Govt can appropriate budgets, but cannot control actual spending. Some line items are automatic. Govt can set tax rates, but cannot control size of tax collections. They are endogenously determined by changing incomes, profits, etc.
Feb 18, 2021 8 tweets 3 min read
9 in 10 Americans support a national jobs and training program
Gallup poll.… Support for paid work dwarfs other options
Feb 11, 2021 5 tweets 1 min read
Quick comments:
Postwar "Keynesianism" prioritized govt support for private industry & dropped the direct govt employment efforts after the New Deal/WWII. This was a mistake. No direct job creation featured here though there's potential in Biden's platform… If "bold efforts" end up meaning only large govt spending, be prepared to be disappointed.
While green manufacturing is critical, manuf employs only 8% of workers. Double it. Impact will still be small. Service sector employs 80%. Tis where the pain is: unstable, poorly paid jobs
Dec 30, 2020 25 tweets 5 min read
$600/wk Unemployment Insurance cannot deliver the benefits of a $600/wk Job Guarantee. From the outset, I should say JG is not a replacement for UI, no matter what you may have heard. I’ll get to this later, but read this long 🧶 w/ that in mind. Automatic stabilization: Both $600/wk UI and JG will provide counter cyclical spending. But UI will be weaker. Counter-cyclical stabilization is not just about the absence of income. It is also about the transmission and structure of economy
Aug 22, 2020 17 tweets 4 min read
Are you scared of the the #JobGuarantee?

Have you heard that it's hostile or antithetical to welfare or unions? Let me try to help. 1. The JG is a missing piece of the welfare safety net, an add-on, not a replacement. We
strengthen the welfare system by adding an "employment option". I have a whole book about it:…
Aug 16, 2020 6 tweets 2 min read
"The private sector always does things 'better' than the public sector" is a perennial and pernicious argument. There is of course no 'natural law' that makes this so. But defending it often rests on a confusion between Administration and Purpose. FedEx is 'better' than #USPS, private charter schools are 'better' than public schools, a private payments system is 'better' than one run by the Fed, private banking is 'superior' to public banking... you get the gist
Mar 28, 2020 13 tweets 4 min read
[thread] What If We Nationalized Payroll?

It was great to speak with @petersgoodman about a Nordic style rescue of the US economy. We ran a few thought experiments. Here are some thoughts that didn’t make it in the article… 1st the US can budget/pay for ANY amount that's appropriated for whatever reason.

Peter asked “what if the govt paid all US payroll for a time?” My answer: "it would amount to nationalizing the payroll & would make the govt the Employer of First Resort"
Mar 15, 2020 8 tweets 3 min read
Recession is sadly required to tackle the pandemic. As millions lose their jobs, we still need an army of ppl to disinfect, deliver essential meds, food, etc
The solidarity economy is key. But we have no preparedness/protocol how 2 do this w/o putting ppl in harm's way 1/n This is why we cannot rely on emergency responses. Going forward, preparedness in all aspects of public life must guide policy. So that we have the institutions and protocols for dealing with shortages in both equipment and human resources. 2/
Dec 12, 2019 10 tweets 6 min read
I realize many celebrate the Fed’s newfound comfort w/ low unemployment. I do too. But I don’t think this is a fundamental change in perspective. As @TheStalwart points, for Powell “It’s all about wages”. I.e. wage discipline is still the Fed's plan to fight inflation 1/n @TheStalwart So inflation will continue to be stabilized on the backs of working people. Before it was the NAIRU (not yet dead btw): unemployment as inflation fighting tool. But w/ unemployment breaking through every NAIRU barrier, the Fed acknowledges the relationship isn't a good guide 2/n
Oct 15, 2019 8 tweets 2 min read
We call it the "Roosevelt Revolution" (I use the term too) but it's technically Perkins' revolution. Underappreciated is her influence over FDR at the start, when he didn't have his policies prioritized yet. (Recall he tried to balance the budget causing the '37-38 recession) 1/x 1st on Frances Perkins' list where public works. She did think of them as temporary, but as the primary tool for tackling unemployment. 2/x
Jul 10, 2019 4 tweets 3 min read
Prob the most significant Fed testimony of the decade, almost entirely due to the thoughtful questioning by @AOC, @RashidaTlaib & @AyannaPressley on the futility of the NAIRU, the need to support the real economy in recessions, & importance of an equitable public payments system. Esp moving to hear @AOC challenge the Phillips Curve as a policy guide for Fed policy. While this was happening I was teaching my #MMT course in Spain--a country whose "NAIRU" the EC estimated to be 25% just a few yrs ago & in the double digits today
Apr 24, 2019 4 tweets 2 min read
I spoke with @worldfinance about #MMT and appreciate how this piece tackled some misconceptions and overlooked aspects.… Some additional points that we didn't get to discuss w/ the author. The article says: the #jobguarantee would be "hugely expensive". On the contrary. The enormous costs of unemployment & poverty is what's "hugely expensive". The #JobGuarantee controls & prevents these costs.
Mar 30, 2019 13 tweets 3 min read
Several thoughts on Brad DeLong’s mocking comments on the #JobGuarantee:
1. Abba Lerner was clear “functional finance is not priming the pump” (1951). If we wanted tight full employment, he argued, direct job creation in the form of public works may be necessary in order to attain and maintain full employment and price stability.
Mar 21, 2019 4 tweets 2 min read
👇 why I ask my students to read Adam Smith. Few know about the richness of his work and why he is considered the father of neoclassocal AND heterodox econ schools alike
E.g. Adam Smith had:
-utility AND labor theory of value
-chapters on govt & importance of public works
-the famous invisible hand metaphor is mentioned only once in the Wealth of Nations but apart from markets it was meant to govern his Theory of MORAL Sentiments.
Dec 5, 2018 10 tweets 5 min read
Clarity of vision & purpose [thread] 👇
@Ocasio2018 recognizes that the #GreenNewDeal and federal #JobGuarantee are two distinct but intimately connected goals. Saving the planet goes hand-in-hand with providing economic opportunities & good jobs for ALL.
We need urgent mass mobilization to transition to a Green Future, and it's important to remember that the #JobGuarantee is the only policy that ensures that there will be good jobs for all who want them in this process.