51: MMT's Bill Mitchell - Unemployment, Surpluses and Investments

Professor Bill Mitchell is one of the key figures behind the Modern Monetary Theory, a term he coined himself. We talk to Professor about the impact of the pandemic on economies, what can be done about the sky-high unemployment rates and why ultimately unemployment is a political choice. Overview of Podcast with Bill Mitchell, University of Newcastle 1:00 You coined the term 'Modern Monetary Theory'? 3:00 Starting tto blog: http://bilbo.economicoutlook.net/blog/ 5:00 More interest from the investment industry 6:00 The Australian economy has collapsed 7:00 Most of the collapse could have been prevented 9:00 We are about $100 bn short of government spending 10:00 Not against the lockdowns 12:00 Much attention goes to MMT's comments on deficits, but what it says about budget surpluses is much more interesting: it detracts from economic activity. 15:00 What is the role of fiscal policy? It is to ensure that spending in the economy is sufficient to maintain production at levels which will provide jobs for everybody. 16:30 To run a deficit is to undermine economic activity. That is okay in the case of Norway (where the economy runs hot). 17:00 A surplus not only undermines economic activity but it also destroys private sector wealth 22:30 Can we solve unemployment? A very pertinent problem at the moment. 23:30 Mass unemployment like we have today is a political choice 27:00 The Green New Deal or Green Transition. 28:00 If I was the government I would be embarking on large scale investments in renewables, transition technologies, in speeding up the process of carbon elimination. 28:30 Why not use the Hunter Valley culture of high productivity manufacturing to build a renewable energy hub for Australia and create jobs in manufacturing, R&D, et centera. 31:00 What do you want people to take away from MMT? 34:00 Does working from home distort the measuring of worked hours? 35:30 There is a massive distortion in economic data. This is not to blame the statistic agencies, but it is just very hard to measure right now.