How does a multi-millionaire plutocrat earn good press from the New York Times? Apparently, espousing some of the far-Left's most radical economic theories is a good start.
Friday morning's paper (B-1) featured an adoring profile [1] of Warren Mosler, who reporter Annie Lowrey brands as a "card-carrying member of the 1 percent....But his prescriptions for economic policy make him sound like a warrior for the 99 percent."
Lowrey, who visited Mosler in the U.S. Virgin Islands, explains:
When the recession hit, Mr. Mosler said, the government should have spent and spent until unemployment came down to a comfortable level. Forget saving the banks through the Troubled Asset Relief Program. Washington should have eliminated the payroll tax, given every state $500 per resident and offered a basic job to anyone who wanted one.
“There would have been no recession,” Mr. Mosler, 63, said over a salad at a hole-in-the-wall seaside cafe called Rum Runners.
Washington’s debts would have soared, of course. But Mr. Mosler sees no problem with that. A failed Senate candidate in Connecticut with unorthodox but attention-grabbing economic theories, he says he believes the United States should be running much bigger deficits and that the last thing the government needs to worry about is balancing its budget.
While admitting that this kind of economic theory is "clearly on the fringe," Lowrey insists the "modern monetary theory" Mosler expounds is gaining traction, and she juxtaposes it with libertarians who advocate the gold standard:
They have attracted a growing following, flourishing on the Internet and in a handful of academic outposts, as he and others who share his thinking have made the case that austerity budgeting in the United States and in Europe is doing irreparable harm.
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Just as a return to the gold standard has attracted a popular following — including many supporters of Ron Paul, the charismatic former Texas congressman — so has modern monetary theory, which has been spread on the great stage of the Web. A thriving academic blogosphere brings ideas up and knocks them down, and popular sites like Business Insider and Naked Capitalism have given modern monetary theorists a platform to join in.
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[Mosler] has also helped to build an infrastructure to mint new modern monetary theorists, helping to found the Center for Full Employment and Price Stability at the University of Missouri-Kansas City, and financing a small army of graduate students. “Someone once said that economics advances one funeral at a time,” Mr. Mosler said, chuckling. “The hope is that we have a generation of economists coming up who really understand how things work and can put those ideas to a public purpose.”
But, of course, there is the fig-leaf graph to balance out the largely positive piece: "They [modern monetary theorists] deny the fact that the government use of real resources can drive the real interest rate up,” said Mark Thoma, an economics professor and widely followed blogger who teaches at the University of Oregon. After delving into the technical details of modern monetary theory for a few minutes, he paused, then added, “I think it’s just nuts.”
Nutty enough, apparently, to earn an honorable mention in the New York Times.
-- Rich Noyes is Research Director at the Media Research Center. Click here [2] to follow him on Twitter.