As a sort of Keynes-manqué, Stephanie Kelton’s moment in the limelight is being granted her for much the same reason as was that of her more illustrious predecessor: she is telling free-spending politicians what they always want to hear – viz., that their habitual incontinence is statesmanship of the highest order.
With our good professor never missing an opportunity to remind anyone and everyone that her book – a veritable almanac of economic hocus-pocus – tops the non-fiction charts (surely a gross miscategorization if ever there was), we must therefore re-emphasize our view that the REAL peril of Magic Money Tree economics – aka MMT – is what it means for the private sphere in general and the scope for genuine entrepreneurship in particular, NOT whether it causes prices to rise or not. The question is one of liberty, not inflation; real prosperity, not growth.
The crux is not the (slim) possibility that MMT might not guarantee a rapid inflation of prices but rather that it unashamedly guarantees the inflation of unchecked governmental power. It removes the last restraints on the executive and offers a venal legislature an inexhaustible fount of graft. When the Sword is no longer separated from a Purse now become bottomless, we should shudder to think how sharp will be that blade and how many necks will feel its edge.
It will make everyone dependent on the Commissar’s caprice and the Gauleiter’s greed. It will funnel ever more resources to the actor – the Leviathan state – the least willing or able to use them wisely, sparingly or profitably. It will endow every planner and Platonist, every technocrat and tyrant, every visionary and vote-grubber with what such types always crave – the power to make every facet of society dependent upon their will – by furnishing them with seemingly limitless quantities of ‘fiat’ money, in all senses of the word.
In her ceaselessly self-promoted incarnation as the Muse of this movement, Stephanie Kelton has become the Pythia of political overstretch; a priestess for the power hungry, a procuress for the profligate. She is MMT herself: Madam Mephistopheles of Tammany.
The dangerous temptations which she and her rehashed doctrine offer are therefore to be strenuously and unrelentingly resisted.