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We are all MMTers (Still)

Summary:
To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. You’ll get two or three of these emails every week, and your email will not be shared with anyone. Ever.I don’t think it would be especially insightful for us to point out that everybody knows everybody knows stimulus talks are what market participants are paying attention to. At this point, I think the idea that this is common knowledge is, well, common knowledge.We did, however, think that it would be interesting to see how different patterns of language were more or less common among stimulus-related news reports. In other words, we thought it would be fascinating to see which Fiat News expression of “what the stimulus is really about” was the most connected and which was the

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To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. You’ll get two or three of these emails every week, and your email will not be shared with anyone. Ever.


I don’t think it would be especially insightful for us to point out that everybody knows everybody knows stimulus talks are what market participants are paying attention to. At this point, I think the idea that this is common knowledge is, well, common knowledge.

We did, however, think that it would be interesting to see how different patterns of language were more or less common among stimulus-related news reports. In other words, we thought it would be fascinating to see which Fiat News expression of “what the stimulus is really about” was the most connected and which was the least.

The network graphs below – produced using software from our friends at Quid – show articles referencing “stimulus” language since October 1. A dot is an article. A “cluster” designated by color and proximity indicates highly similar language, as does a line between two dots. North/south and east/west have no meaning other than proximity. The most connected dots and clusters are those which demonstrate the most similar and connected language. For each graph below, the bold-faced lines and dots reflect those which also reference the language of a range of secondary topics (e.g. families, the unemployed, markets, etc.) as highlighted in the graph’s title.


Fiscal Stimulus is About American Families

We are all MMTers (Still)
Source: Quid, Epsilon Theory

Fiscal Stimulus is About Small Businesses

We are all MMTers (Still)
Source: Quid, Epsilon Theory

Fiscal Stimulus is About Financial Markets

We are all MMTers (Still)
Source: Quid, Epsilon Theory

Fiscal Stimulus is About the Unemployed

We are all MMTers (Still)
Source: Quid, Epsilon Theory

If I were to ask you, “In which of those graphs does it feel like the bold-faced dots and lines are the most connected to the overall structure of the graph”, I suspect I could account for most of the answers with one of the following:

1) They all seem pretty close; or

2) Maybe the “About the unemployed” map by a little bit.

And that’s correct. Qualitatively, which is to say intuitively, and quantitatively, based on our measures of narrative attention. In short, there are a LOT of missionaries out there trying to tell you what prospective stimulus is about and what other parties are trying to make it about. It hasn’t coalesced into a single narrative structure, so far as we can tell.

But what is fiscal stimulus absolutely, positively not about? If you answered any of “the deficit”, “the debt”, “small government” or “the budget”, you are today’s big winner.


Fiscal Stimulus is About the Deficit

We are all MMTers (Still)
Source: Quid, Epsilon Theory

When (or, y’know, if) the election concludes peacefully and the turn of the calendar arrives, you will read a lot of predictions about what from this insane dumpster fire of a year will become an essentially permanent feature of our world. Want a sure bet?

It’s this.

It’s budgets-don’t-matter-anymore-for-countries-who-can-print-currency narratives.

It’s MMT from either party and both at once, from capitalists and anti-capitalists alike.



Rusty Guinn
Executive Vice President of Asset Management, Salient. Rusty Guinn is the executive vice president of asset management at Salient. He oversees Salient’s retail and institutional asset management business, including investment teams, products, and strategy. Rusty shares his perspective and experience as an investor on the Epsilon Theory website.

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