The video lecture from Mitchell & Wray I linked earlier:

http://e1.newcastle.edu.au/coffee/multimedia/video/2009/Macro_Lecture_2_May_20_2009.mp4

is an absolute must watch to grasp just how important the difference is between 'micro' economics (of households & firms) & 'macro' (of currency sovereign nations). In fact, this issue is at the heart of the shocking state of mainstream economics' intellectual dishonesty. Before 1930 'macro' did not really exist. Economists just scaled up 'micro' assumptions which people like Keynes knew didn't hold, are indeed flat wrong in real economies. It's fairly obvious that the bankers have made huge efforts & spent billions over the years to keep people away from the truth of this. We are now paying the price again. Sadly, the public remain largely in ignorance.

Yes, I agree. I don't think it's an overstatement to call it economic warfare. A really callous attitude among most of the wealthy that was always there.

Bill Mitchell's blog is here:

http://bilbo.economicoutlook.net/blog/

It's well worth going back thru' his posts of the last several weeks as he's been giving an excellent commentary on recent events from an MMT perspective. It's the best source for background explanations too for learners in economics (which includes me too aside from very basic studying previously).

@ Golem

David, perhaps if you were to include one link to an MMT blog? I would strongly reccomend Bill Mitchell's above as being the most in depth & accessible on the subject & in particular for commentary on current events. (I know Hudson is a supporter but his topic is more political economy than macro nuts & bolts.)

I agree that the ''real'' stimulus package put forward by Obama was far too small – watered down anyway I think in the Senate? from an already small package.

I tend to think of QE – alongside austerity – as a pretty dangerous policy and one that will cause a tiny elite to keep on gambling and making money while the real problems in the finance sector are glossed over – whilst the rest of us suffer depression like conditions made worse and worse by austerity measures. The fact that the US is now too talking about austerity and yet signalling that there may be(probably will be, once Wall st crash themselves enough to scare Bernanke to death) more QE frightens me.

I might be totally wrong here but instinctively it seems to me that QE alongside austerity is socialism for the very, very few and a very long depression (or ''jobless recovery'') for the rest of us.

Do you have a link to Bill Mitchells blog? I'm trying to read up on MMT at the moment -it's certainly very interesting and I want to know more about it.

Yes, the MMT economists (& others) believe the data shows some effect from the stimulus, but given the massive scale of the burst debt bubble, it was no where near big enough. Note that QE was very different, was as you say more a gift to the banks & had little or no effect on the US domestic economy. In terms of the US administration tho', QE is monetary (Fed) policy & 'stimulus' is fiscal (Congress). Bernanke knows full well that money introduced at the lowest wage levl, as directly as possible was the correct policy. He went for QE because Congress refused any more stimulus. (It doubtless played to his own 'constituency' too.)

MMT proponents favour spending at the lowest wage level too (the most effective) when required & advocate a Job guarantee scheme. Generally at the minimum wage level & with some flexibility to allow expansion & contraction according to economic conditions.

One of the fundamental problems identified by Michael Hudson & others, is the massive oversize of the 'FIRE' sector, much of it in essence a casino. As you imply, QE tends to bypass the 'real' economy where it's needed & just give the gamblers more free money to bet with.

BTW, MMT entirely disputes the 'money multiplier' effect in banks' propensity to lend. Bill Mitchell has a lot on this on his blog. I think they are right. Mainstream economics seems very poor – utterly bogged down in false 'micro' thinking & non too clever on actual real world bank operations.

I'm glad you find MMT interesting. I cannot understate how transformative it could be if adopted imo. I've seen no flaws, their basis is solid & thoroughly argued, & reflects 'reality' of macro behaviour better than anything else by some margin.

I think history will look back at this period with incredulity, considering the economics we could be using, but aren't.

It's for the petition.

The QE helps hold up certain asset values (Bernanke openly admitted that QE was partly there to help Wall St stay afloat) but because the banks are not lending into the wider economy (in essence the financial system is still not working properly) then QE has little effect on the wider economy? I mean I get the whole 'lets put it through the banks due to the lending multiplier' thinking but if the banks aren't lending and are using that QE for other purposese then it won't work.

Glenn Hubbard is fortunate it wasn't me he was asking to " Give me your best shot " but then, they would soon pack me off to prison.

I liked how it ended, & they are right, it will be hard, but it is worth fighting for.

Meanwhile France is still holding out against a similar deal: see "France stands up to Swiss dodging", Thursday 18 August post at http://taxjustice.blogspot.com/ :

"So what's going on? The Swiss have offered to impose a withholding tax on the interest earnings of British and German residents and to pay the revenues direct to London and Berlin respectively. In return, Swiss bank's clients will retain their anonymity (and continue to dodge inheritance and similar taxes), and Swiss bankers will be allowed immunity from investigation and prosecution for assisting with tax evasion. No matter which way you look at this arrangement, it stinks".

The Swiss government has agreed to tax money held by UK citizens in Swiss bank accounts for the first time, while still hiding their identity.

http://www.bbc.co.uk/news/business-14649194

This puts a positive gloss on the deal, but an earlier blog post on a similar proposed German deal was highly suspicious: http://taxjustice.blogspot.com/2011/08/swiss-german-tax-deal-more-dominoes-to.html