It looks like Marco Rubio didn’t get the memo about Modern Monetary Theory.
His Republican colleagues in the House and Senate are busy circulating resolutions, or organizing hearings, that denounce the doctrine as a threat to the U.S. economy.
But the Florida senator published a 40-page report this week lamenting the decline in American investment, and it draws heavily on ideas associated with MMT.
Rubio, who’s joined a bipartisan effort to dissuade companies from spending so much money buying back their own shares, argues that American business is drifting away from its traditional role as the engine of capital investment. Instead of borrowing to build things, he says, many non-financial corporations have effectively become lenders -- behaving more like banks and leaving government to fill the gap with budget deficits.
Just as striking as the thesis is the range of sources invoked in the footnotes. Rubio’s report cites Randall Wray, one of the founders of MMT, and Hyman Minsky, the American economist reckoned to be the doctrine’s godfather.
It also draws on work by the British-Canadian duo Wynne Godley and Marc Lavoie, whose framework for the way governments, businesses and trade partners interact -- known as sectoral balances -- has influenced MMT and Goldman Sachs economists.
America’s widening budget gap, the focus of Republican mobilization against MMT in Congress, only gets a passing mention in Rubio’s report. He’s more worried about the deficit in business investment -- and what it says about the state of U.S. capitalism.
“Something is wrong with the institutional arrangement of the American economy if that is not happening,” he concludes.
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