Ep128[1/2] Dirk Ehnts: From mainstream to MMT

Activist #MMT - podcast

Ep128[1/2] Dirk Ehnts: From mainstream to MMT https://youtu.be/m0uyelaD4uA https://make.headliner.app/project/5cca5c19-38ae-4aa6-8da8-b241d449689b

Welcome to episode 128 of Activist #MMT. Today I talk with Dirk Ehnts, about his personal journey to MMT, which happened only after obtaining a PhD in mainstream economics. One of Dirk's first hints that something was wrong, was discovering that Paul Krugman's 1991 new trade theory was not representative of the world in which we actually live. He was also told by his professors that what is obviously true must be ignored, which only serves to further diverge the theory from the world it purports to explain. Only after receiving his PhD did he discover MMT which finally put all the pieces together. It did so in a way that is falsifiable, which means its main assertions are provable or disprovable by empirical evidence.

(Here's a link to part two. I also interviewed Dirk in episodes 66 and 69. A list of the audio chapters in this episode can be found at the bottom of this post.)

Today in part one, Dirk and I also talk about how microeconomics and macroeconomics relate and are ultimately inseparable. We end with a question from Activist #MMT patron Chiel Harmsen, on the problems of the Eurozone and how to address them. Next week in part two, I ask Dirk questions circling around his new co-authored piece for the Gower Initiative, called Raising Interest Rates Is Like Blowing Up The Garden To Weed It. I start with some very basic questions about how and why central banks maintain stability of the payment system. I then ask him to describe the specific mechanics of how the central bank raising the overnight interest rate target results in millions becoming unemployed – and ultimately more exploitable.

And now, onto my conversation with Dirk Ehnts. Enjoy.

Audio chapters

• 3:49 - Hellos, terrible fives, new paper summarizing UK exchequer
• 6:22 - Can you tell your personal story from mainstream to MMT?
• 9:29 - Paul Krugman's new economic geography theory
• 15:14 - Knapp's state theory of money and "reading between the lines"
• 17:45 - The issuer is above, and creates, economic law
• 20:54 - Did mainstream feel off while you were in school?
• 25:29 - No macroeconomic accounting in mainstream macroeconomics
• 28:31 - When did you read Keynes and how did it affect your education?
• 30:47 - Did you have an instinct that something was off, or did something specific trigger your skepticism?
• 32:12 - "I have to incorporate money", second time
• 33:32 - MMT is falsifiable (where does money come from?)
• 35:04 - Companies move where wages are (and demand is) high. (Fallacy of composition)
• 37:14 - Macroeconomics is the study of the systemic effects of microeconomic behavior
• 39:28 - The desire to lower wages is microeconomic but is so impactful it threatens our species. So how is that not macroeconomic?
• 43:13 - The consequences of accepting MMT
• 44:45 - Anti-MMT sentiment in Europe
• 49:00 - Positive consequences of accepting MMT
• 52:17 - Patron question from Chiel Harmsen: Problems in the EuroZone.
• 1:00:35 - Start of academic questions
• 1:04:06 - Duplicate of introduction, but with no background music (for listeners with sensitive ears)

Ep129[2/2] Dirk Ehnts: Raising interest rates is like blowing up the garden to weed it https://youtu.be/hhgI7ubfXW4 https://make.headliner.app/project/fd8e62e9-db28-4b2b-9e3b-12cf0c765bc1

Welcome to episode 129 of Activist #MMT. Today's part two of my two-part conversation with Dirk Ehnts. Last week in part one, Dirk described his journey from a PhD in main stream economics to discovering and accepting MMT. Today, I asked question circling around his new co-authored piece for the Gower Initiative, called Raising Interest Rates Is Like Blowing Up The Garden To Weed It. It starts with some very basic questions about how and why the central bank maintains the stability of the payment system. I then ask the specific mechanics of the central bank's raising its overnight target rate, and how it ultimately results in millions more becoming unemployed – and therefore more exploitable. I continue to struggle with these concepts, but after this conversation, I feel like the questions have become more clear.

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 episode, right now. A full list is here, each with a brief highlight. Patrons also get the opportunity to ask my academic guests questions, like in last week's episode with Dirk, my previous interview with John Harvey, and 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, let's get right back to my conversation with Dirk Ehnts. Enjoy.

Audio chapters

• 5:13 - Start of academic questions
• 5:35 - What is the nature of a catastrophic failure of the payment system?
• 12:12 - Central bank versus Blockchain, a financial justice system
• 14:59 - Warren Mosler story about company accidentally receiving millions extra from central bank.
• 15:24 - Central banks and reserves, parents and food for the kids, power struggles
• 21:36 - Increasing interest rates- the mechanics and its effects (dis-employing people) (transmission channels of monetary policy)
• 29:07 - The MMT view of interest rate targeting
• 36:53 - I try to restate
• 44:44 - Germany are Greece are both currency issuers, but with different power
• 50:48 - The difference in power between Germany and Greece
• 56:23 - Goodbyes and Levy summer session
• 1:01:02 - Duplicate of introduction, but with no background music (for listeners with sensitive ears)