MMT is the future of economics

It’s funny seeing all these economists bash MMT given that we know that it has come halfway to taking over the economics profession already and will likely take over the entire economics profession over the next two decades. The top solution to rising inflation advocated by the median economist of 2040 will not be tighter monetary policy or any form of supply-side reform, but price controls combined with (on the conservative side) subsidies to alleviate shortages or (on the leftwing side) rationing. How do I know this? Polling, following takes, and looking at retweets and replies.

Sandro Sharashenidze @neocentrist

4. 94% think fiscal policy can be useful as stimulus when below full employment 5. 93% want to enforce antitrust laws 6. 90% would expand the EITC 7. 86% would prefer more income equality in the US 8. 71% think that inflation is a monetary phenomenon 9. 74% believes in u* 2/2

Now, there is no reason whatsoever to believe fiscal policy can be useful as stimulus when below full employment in countries with floating exchange rates. Nor is there any reason whatsoever to believe “Differences in economic outcomes between whites and blacks in the US are in large part due to the persistence of discriminatory norms and institutions” (78% agreement) or “Climate change poses a major risk to the US economy” (86% agreement) given that the U.S. population center keeps moving South, not North.

What you have to understand about economists is that they are, on average, a low IQ (or, generously, “midwit”) and highly conformist profession. They are, fundamentally, representative not of reality, but of the fashionable opinions of high IQ (not very high IQ, though) people in America. And since about the mid-1990s, those opinions have been shifting far to the left. Consider question 18 here;

Management of the business cycle should be left to the Federal Reserve; activist fiscal policies should be avoided.

Literally all evidence since 2000 has been in support of this for developed countries. Yet, economists’ opinion of this, astonishingly, shifted from 72% in favor to 67% against. “Market monetarism” has not been winning in the marketplace of ideas! Or take question 15:

A large federal budget deficit has an adverse impact on the economy.

Economists shifted from being 86% in agreement to 61%.

Or take question 11:

The level of government spending relative to GDP in the U.S. should be reduced (disregarding expenditures for stabilization).

Economists shifted from being 61% in support in 1990 to 43%.

Or take question 36:

There are few gender compensation and promotion differentials unexplained by differences in career and/or life choices.

Economists shifted from being 60% in support in 2000 to 41%.

Or take question 29:

Welfare reforms which place time limits on public assistance have increased the general well - being of society.

Economists shifted from being 76% in support in 2000 to 54%.

Or take question 20:

The distribution of income in the U.S. should be more equal.

Economists shifted from being 68% in support in both 2000 and 1990 to 86% in support.

Clear evidence of an extreme MMTization on theory and a less strong, but still real, leftward shift in policy preferences. What’s the cause? A dramatic shift in sentiment among educated people. “Trumpism” made high IQ right-wing people much more leftwing on the economy (though it did not change the preferences of low IQ people to any great degree):

A big shift from 2011, when the college educated were more likely to support cutting the deficit than the non-college educated. And, of course, the leftward shift among the high IQ was not just due to Trump. It has been due to the left, in general, being far more aggressive and advantaged in the age of social media, and there’s no reason that shift will not continue over at least the coming decade. Twitter replies to economists are filled with people calling for price controls, Krugman apologized for criticizing an economist advocating for price controls, and there’s every reason to believe social media has a powerful impact on academics’ beliefs, and from them to highly educated and high IQ people in general.

Now, in the long run, class interests will certainly take precedence over ideological interests, leading the Democrats to become an overtly neoliberal party. In the short run, however, facts are facts: economists have rapidly shifted (for no reason whatsoever except ideology and changing American political dynamics) into becoming a quasi-MMT faction, while the working class has kept its policy views the same. On net, this amounts to a clear win over the past couple decades and over the next couple decades for MMT, a smaller, but still large win for the left, and a clear loss for common sense.