A handful of prominent male economists, including former Treasury Secretary Larry Summers, are freaking out — mostly on Twitter — about a weekend New York Times profile of economist Stephanie Kelton, known for her work on Modern Monetary Theory, or MMT.
Why it matters: This Twitter-based econ fight is about more than one economist. It’s an argument over a natural economic experiment — the U.S. government spending unprecedented sums to keep the economy from free-falling during COVID.
- And the gender dynamics — male economists piling on against a female economist and a female journalist, Times’ reporter Jeanna Smialek, in ways distinctive from typical academic arguments — look terrible here.
The backstory: MMT proponents argue that countries that control their own currencies have the ability to run much larger budget deficits than they’ve done until recently, in part, because central banks can create new money to help pay for the budget gap.
Catch up quick: “I am sorry to see the @nytimes taking MMT seriously as an intellectual movement. It is the equivalent of publicizing fad diets, quack cancer cures or creationist theories,” Summers tweeted.
- Summers’ tweet was criticized by some for being condescending and dismissive in its equating an economic idea with a quack cancer cure.
- In that same twitter thread, Summers then suggested a list of some male economists to write about instead of Kelton. And at least one is also a proponent of some MMT ideas, notes Claudia Sahm, director of macroeconomic research at the Jain Family Institute.
- “We can have a debate about substance but in these debates there is a layer of disdain and times when [Kelton’s] intellectual integrity and even her character are impugned or attacked,” she said.
What they’re saying: Noah Smith, a well-known economist and former Bloomberg columnist, wrote a Substack post calling the article “bad.”
- Other economists say that the merits of MMT are up for debate, but noted the criticisms of Smialek and Kelton got personal in ways atypical from how men’s economic research is criticized.
- For example, Smith, who does offer substantive criticisms, also calls the Times profile a “puff piece,” noting that Smialek writes about Kelton’s outfits
- The phrase puff piece wasn’t much used back when Summers was credited with saving the world from an economic meltdown on the cover of Time magazine in 1999, Mark Paul, an economics professor at New College of Florida, tells Axios.
State of play: The headline on the story, which ran on the cover of the Times’ Sunday business section, suggested Kelton — and MMT — were taking a “victory lap,” as the surging economy seemed to confirm MMT theories about government spending.
- But the piece also emphasizes that this “win” comes with a big asterisk — inflation.
- That wasn’t enough to appease the critics who believe MMT causes inflation.
- We don’t exactly know what is causing inflation — how much is about supply chain versus economic spending — as Kelton told me recently and others have explained.
The latest: “The multi-faceted feedback to Jeanna’s weekend story in The Times bears out the very reporting she did on the topic: traditional economic thinkers are reckoning with an upstart approach, generating diverse reactions that range from criticism to support to bewilderment,” Times’ external communications director Charlie Stadtlander told Axios in a statement.
- He also pointed to reporter Smialek’s twitter thread, defending her piece (and correcting Smith’s misspelling of her name).
What we’re watching: Separate attacks are also being levied against Lisa Cook, an economist, current nominee to the Federal Reserve board, and a Black woman.
- Cook’s critics accuse her of not being qualified, even though she is as qualified as most typical nominees. (Consider that Fed chair Jerome Powell is not an economist.)
- Economics is a predominantly white, male field, and women and people of color often face fierce resistance and hostility.
The bottom line: “This is a theme we struggle with in economics,” says Paul.
Editor’s note: This story has been updated with additional context and quotes from Claudia Sahm and Mark Paul reacting to criticism of Stephanie Kelton’s work as an economist and Jeanna Smialek’s profile.