Why a Green New Deal?

https://thenextrecession.wordpress.com/2019/02/08/the-green-new-deal-and-changing-america/

So the GND involves a federal job guarantee, the right to unionize, action against free trade and monopolies, and universal housing and health care.  In Europe and other advanced capitalist economies, these aspirations are not so radical(although in the neoliberal world, they are increasingly so), but in Trump’s America, where corporate interests are paramount and the main enemy is now ‘socialism’, the GND programme is an anathema.

But it is not just Trump and Wall Street who have thrown up their hands in horror at the GND proposals.  Some orthodox Keynesians have wrung their hands.  Noah Smith, the Keynesian economics blogger and Bloomberg columnist, let out a howl of anguish because he reckoned that GND, as promoted by AOC,”definitely seems to include: 1) universal health care paid for by MMT; 2) trillions of dollars in infrastructure spending paid for by MMT; 3) economic security for those “unwilling to work”, paid for by MMT and makes clear that it will ultimately rely on deficits to pay for the Green New Deal. As justification, it points to the basic ideas of MMT.”  Smith is horrified by this because he considers the ‘nonsense’ of MMT will completely undermine the objectives of the GND.  He wants the Democrat lefts to decide between work-based policies and redistributive policies.

It does seem that AOC and other promoters of the GND programme think that MMT can justify and explain where the money is going to come from to pay for all the aspirations and necessary public investment.  For example, leading MMTer, Stephanie Kelton was asked: “ Can we afford a #GreenNewDeal? She replied: Yes. The federal government can afford to buy whatever is for sale in its own currency.”  So there it is. The financing of the GND will apparently be achieved by government spending the necessary money, which it gets by running deficits and ‘printing’ whatever amount of currency required.  Other means of revenue, like taxes, come later (if at all), and issuing government bonds for households or financial institutions to buy is not needed.

What is wrong with this?  Well, I have argued in previous posts that MMT is a novel ‘trick of circulation’ (Marx) that ignores the whole circuit of money that goes from money through capital investment into production for profit and more money.  The MMT argues that we can just start with the state printing money and then all will flow from that – more investment, more production, more incomes, more employment – as though the social relations of capitalism were irrelevant.  MMT will deliver full employment at decent wages, healthcare, education and other public services without interfering with the big banks, the multi-nationals, big pharma and Wall Street.  You see, because the state controls the money (the dollar), then it is all powerful over the likes of Goldman Sachs, Bank America, Boeing, Caterpillar, Amazon, WalMart etc.