Innocent Bystanders

The Sad Reality of Patriot Front April 28, 2024

Apparently the stupid Patriot Front losers are at it again, which has once again elicited hopeful outcries from the Right that they must be feds or liberals. Unfortunately I don’t believe that’s the case.

Back in 2022 31 members of the organization were arrested in Idaho. They were, of course, unmasked by law enforcement, and their names are publicly available. Here they are:

Now you know why they wear masks. [I’m going to have to write some more posts just to push that image down the page.]

Anyway, it’s time to stop our wishful thinking and accept the fact that these guys are exactly what they claim to be: White Supremacists. Not Feds, not liberals trying to gin up outrage against the opposition, not victims of a honeypot operation.

Just irredeemable idiots.

MMT, We Hardly Knew Ye April 26, 2024

Was noticing that I hadn’t heard much about Modern Monetary Theory (MMT) in the news lately. Since Biden’s economic policies appear to be based on MMT, either willfully or by chance, I was wondering if the economists advising the White House were cooling off on the notion that they could print arbitrary amounts of money and control inflation via taxation.

Then I ran across this recent article by some fellows in the UK, where they built economic models for MMT and “New Keynesian” (NK) theories, and compared the predictions of both to the economy from 2008 to 2019. From their conclusion:

Modern Monetary Theory (MMT) portrays a world in which fiscal activism need not be constrained by the government budget, for which it has received much attention since the Financial Crisis while the space for monetary policy has largely contracted. Nevertheless, while MMT economists have failed to sell their Theory as well as its associated policy advice with evidence established by formal economic models, the wider group of mainstream economists have not been able to assess MMT in a formal manner, either—the fundamental barrier being that none has been able to embody MMT in a structural model in a testable form.

In this paper, we filled this gap by spelling out MMT as a full DSGE model, and tested its empirical validity and implications on economic stability and welfare, side by side with a standard New Keynesian (NK) model treated as the benchmark model. By testing both models against the post-Crisis data with indirect inference, we found the MMT model was rejected at the usual 5% significance level, while the NK model passed the test with a high probability. Thus, there is strong evidence against the MMT narrative of how fiscal and monetary policies have interacted and affected the US economy post-Crisis; by contrast, the NK model with a Taylor rule explains the data fairly well.

[Emphasis mine in the second paragraph. DSGE is Dynamic Stochastic General Equilibrium, and no, I don’t know that is either.]

To those of you who thought MMT sounded like a complete crock; yeah, it’s a complete crock.

CPI March Badness April 10, 2024

The news is abuzz with the latest CPI release, wherein the month-over-month inflation was 0.4%, compared to the expectation of 0.3%.

As usual, I think year-over-year and month-over-month stats are not very illuminating, so here’s this month’s CPI chart (downloaded, also as usual, from the St. Louis Fed):

Can’t wait for Paul Krugman to lecture us again about its our perception of inflation that’s the real problem. Couldn’t possibly be the nasty post-Trump slope of the CPI.

A slope which doesn’t suggest that inflation is under control.