Printing Trillions: Modern Monetary Theory April 24, 2020April 23, 2020 But start with this: The Russia hoax was never a hoax. An encouraging bipartisan report confirms it. The Senate Intelligence Committee has released a bipartisan report with a stark bottom line: What President Trump calls the “Russia hoax” isn’t a hoax at all. The fourth and latest installment in lawmakers’ review of Moscow’s meddling examines a January 2017 assessment by the nation’s spy agencies that Mr. Trump has repeatedly attempted to discredit — and confirms it, unanimously. Russia sought to subvert Americans’ belief in our democracy, bring down Hillary Clinton and bolster her rival. That these legislators from both sides of the aisle are willing to say as much after three years of thorough investigation is an encouraging sign of some independent thinking still left in government. It’s also a reminder of the peril this independence is in today. . . . . . . [L]awmakers wouldn’t have had a report to analyze at all if it weren’t for an intelligence community willing to dig up inconvenient truths. This is the community Mr. Trump is slowly destroying, most recently by firing his director of national intelligence and nominating an unqualified loyalist to fill the slot, as well as by dismissing Inspector General Michael Atkinson for lawfully alerting Congress about a whistleblower complaint. The most recent Russia report is a reminder of the need to protect our elections against a repeat performance, whether by disrupting online influence campaigns, securing critical infrastructure or requiring paper trails and risk-limiting audits at the ballot box. But it’s also a reminder of the need to protect the intelligence community from co-option by a leader hostile to any truths that threaten his power. CORRECTION? The Washington Post argues in detail that the 30-second spot featured in yesterday’s column — about Trump shipping PPE to China — is misleading. The team behind the ad disagrees. “We believe the Post got this one wrong. See Snopes and PolitiFact and the Post’s own reporting. Secretary of State Mike Pompeo himself said the shipment was ‘under the direction of President Trump.’ We’ve attached some more background that further supports the claims made in the ad.” Which they did. Still, as one of you wrote me: “There are enough real problems with the orange clown that we don’t need to reach.” Nor should we set the bar for political correctness at 110%. At 100%, maybe . . . at 80%, surely. But listen to Bill Maher on political correctness and over-reaction on the left. We’ve almost arrived at the substance of today’s column, but wait! Like the light of a blue moon — something investment-related! Dennis M.: “Any current thoughts on CNXM? You’d recommended in February and again in March. I bought some at $5.55 then and today it’s $12.50. Yes, it’s money I can afford to lose, per your earlier caveats. Unfortunately I bought it in a taxable account, so short term gains would be at top marginal %. Sell? Take some off the table? Maybe set a stop-loss order at ____?” → You’ll only remember this advice if it proves to be bad. But as the shares were purchased with money you can afford to lose, hold on; collect the huge, partially-tax-free distributions; reassess after it’s gone long-term. OK, now: An important debate between two different ideas. The first, as expressed here by Robert Samuelson (The Debt Reckoning Has Finally Arrived) is that we should balance our budget in good times, run deficits during wars and recessions. It’s okay to have a National Debt . . . it just shouldn’t be allowed to grow too large relative to the economy as a whole. And when it does — as it did when it grew from 30% of GDP at the start of the Depression to 121% at the end of World War II — the trick is to allow it to keep growing, but slower than the economy as a whole (at least in most years), so that over time it shrinks. By 1980, after 35 years of gradually shrinkage, it was back down to 30%. Then Reagan and Bush and sent it soaring again; Clinton got it to shrinking; Bush 43 got it soaring again; Obama got it shrinking; Trump blew off the roof. Samuelson isn’t saying all that, but it’s been my own mantra for a long time — along with the widely-shared idea we should be borrowing trillions to revitalize our country’s infrastructure — and I’m guessing he would agree with much of it. It’s pretty conventional wisdom. But now comes Stephanie Kelton (Just Use ‘the Computer’ at the Fed to Give People More Money), who argues the old way of worrying about deficits, debt, and inflation, has been wrong. So long as there’s untapped capacity, we don’t have to worry about sparking inflation, any more than we had to worry about it when she was chief economist on the Senate Budget Committee, working on Obama’s then-giant “stimulus” package to rescue the world from global depression. Author of the forthcoming The Deficit Myth, Professor Kelton is a leading proponent of Modern Monetary Theory. I’m too new to this to understand it well or to have formed much of an opinion. But I do know it’s a multi-trillion-dollar conversation we’re going to be having — and who better to be having it with than you? How many cat videos can you watch while quarantined? Have a great weekend!