Mentally Unscripted

Modern monetary theory may not have won the fiscal policy debate. But its promise of free money has more politicians listening.

Stephanie Kelton, the author of The Deficit Myth, appeared on Bloomberg's Odd Lots podcast. Paul and Scott were hopeful that Ms. Kelton would answer some of the questions they had about MMT coming out of their review of The Deficit Myth.

Guess what? Ms. Kelton left them disappointed.

Paul and Scott continue their discussion of MMT in this episode of Mentally Unscripted. They cover a range of topics, including:

• Whether MMT has indeed won the fiscal policy debate?
• More politicians are boarding the MMT bandwagon. But do they understand it? Or is the MMT refrain of "deficits don't matter" catnip to policy-makers who want to buy votes?
• Does MMT destroy the incentive to innovate?
• Is MMT shifting the conversation surrounding fiscal questions without solving any problems?
• Is MMT devoid of concrete steps to achieve its goals. Is the lack of a framework and objective measures a problem? "It's descriptive" and "we have to look at the situation when we get there" will only go so far.

Image by kalhh from Pixabay

Attention is the new currency. And news outlets will do anything to get it. That includes doling out biased information lacking context or straight-up deception. Critical thinking is your weapon to cut through the noise. But how? The New York Times presents a method, called SIFT, in the article, Don't Go Down the Rabbit Hole.

In this episode of Mentally Unscripted, Paul and Scott dissect SIFT. In doing so, they render their judgment on this model.

To borrow a phrase from data processing, garbage in garbage out. That means the output of any model is only as good as the data you put into it. SIFT is no exception. It's only as good as the effort you put into it.

While it seems like the authors are presenting this model in good faith, it only works if you use it in good faith. If all you're doing is looking for information to confirm your biases, this model is perfect for you.

To put it another way. SIFT is much more apt to give biased, agenda-driven people the illusion of critical thinking than it is to help them get to the meat of an argument. Thus, it will only reinforce the notion that they're correct. 

Think of it as "How stupid people can make it look like they're thinking without having to think."

Listen to the podcast to hear the flaws in the model and how you can improve it.

Resources mentioned in this episode:

• The Madness of Crowds: Gender, Race and Identity, by Douglass Murray
• Paul Graham

Mental models, biases, and fallacies mentioned in this episode:

• Incentives matter
• Consensus and social proof
• Steelman
• Confirmation bias
• Disconfirming evidence
• Cognitive dissonance
• Probabilistic thinking
• Bayesian updating
• Halo/Horn effect
• Triangulation
• Prioritization
• Low information diet
• Availability heuristic
• Silly/serious syndrome

Image by John Forster from Pixabay 

Focus on building your health, wealth, and relationships to improve your life. It's often a gap in knowledge or an inability to communicate that causes problems in these areas. Mental models are a way to improve both.

Imagine being able to have a productive, enlightening discussion with friends and family. A debate where everyone understands and accepts that differences of opinion exist. And those differences are a feature, not a bug, of a vibrant, rational world.

Or, imagine looking at yourself in the mirror. And in your reflection, you see a confident person—someone who knows that they're making the best decisions possible. You're free from worry and second-guessing. And you know that if something terrible happens, you'll stand up and deal with it with the calm and control of James Bond.

That's the power of a mental model.

In this episode of Mentally Unscripted, Paul and Scott discuss their top mental models.

You'll notice that Scott's mental models are foundational principles. As such, they're helpful in many situations. Paul's, meanwhile, are less ubiquitous but more powerful. You may not use them as often, but they pack more of a punch.

After listening to this episode, you'll understand the power of mental models.

What did you think of our mental models? Agree with our choices or disagree? Any mental models you think we missed? Let us know in the comments.

Resources mentioned in this episode:

• Thinking Fast and Slow
• Harrison Bergeron

Mental models, biases, and fallacies mentioned in this episode:

• Confirmation bias
• Fundamental attribution error
• False consensus effect
• Illusion of control
• Unintended consequences
• Entropy
• Inertia
• System 1 / system 2 thinking
• Second-order thinking
• Opportunity costs

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In this episode of Mentally Unscripted, Paul and Scott critique Stephanie Kelton's The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy.

When it's over, you'll understand better MMT's basic concepts. And you'll hear arguments about why it's not the cure-all its proponents claim.

Does it seem that the last several elections were a contest to see which candidate can promise more free stuff? If so, you're not alone.

Free healthcare, education, and money dominated recent elections.

In the past, one central question concerned us when it came to such promises. That is, "how is the government going to pay for all this free stuff?"

Then, Modern Monetary Theory, known as MMT, exploded onto the scene. And when it did, it pushed that fundamental question to the back burner. The reason is the central principle of MMT: the U.S. federal government can print as much money as it needs. You see, under MMT, the government can support massive spending programs. All with no concern for pesky things like deficits and debt.

No doubt you have friends and family who like the idea of the government paying for healthcare and education. And they may not know anything about MMT. But they likely heard politicians like Bernie Sanders, Elizabeth Warren, and Alexandria Ocasio-Cortez claiming that the U.S. can afford these massive programs. And it sounds good. After all, everyone has the right to healthcare, education, and a living wage.

But your argument that the U.S. government needs to operate its finances the same as a household doesn't convince them. "Deficits don't matter," is all your friends and family say.

Armed with the knowledge from this episode, you'll have better conversations with friends and family about MMT. You'll understand its shortcomings and where we need more explanation. And you'll know why we can't use economics to solve moral problems.

Resources mentioned in this episode:

• The Deficit Myth, by Stephanie Kelton

Mental models, biases, and fallacies mentioned in this episode:

• Falsifiability
• Reversibility
• Root Cause Analysis / Don’t Only Treat the Symptoms

Image by Markus Winkler from Pixabay

What exactly are these two idiots trying to do here? In this episode, Paul and Scott discuss their higher purpose. In other words, why they're doing this podcast.

Paul and Scott explain their approach to critical thinking using the accusations that Tom Brady is racist for winning the Super Bowl as an example.

Resources mentioned in this episode:

• Idiocracy: People Now Calling Tom Brady “Racist” For Winning Super Bowl During Black History Month
• Tom Brady Called ‘Racist’ on Social Media for Winning Super Bowl During Black History Month

Mental models, biases, and fallacies mentioned in this episode:

• Falsifiability
• Cause and Effect
• Second Order Consequences
• Hanlon’s Razor
• Ad Hominem

Image by Gerd Altmann from Pixabay

Paul and Scott dive into the World Economic Forum’s “Great Reset.” We discover what they want to achieve, the cost of change, and possible risks of adopting these policies. 

Resources mentioned in this episode:

• Davos 2021
• World Economic Forum
• The Great Reset
• The Tom Woods Show ep. 1814
• What Is the Great Reset? Part I: Reduced Expectations and Bio-techno-feudalism
• The Great Reset, Part II: Corporate Socialism
• The Great Reset, Part III: Capitalism with Chinese Characteristics
• The Great Reset, Part IV: “Stakeholder Capitalism” vs. “Neoliberalism”
• The Great Reset for Dummies
• World Economic Forum’s Great Reset is raising eyebrows
• From Lockdowns to “The Great Reset”
• Rationalizing “The Great Reset”
• Introducing the ‘Great Reset,’ World Leaders’ Radical Plan to Transform the Economy

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Paul and Scott attempt to make sense of the “Big Tech Censorship” debate. In this episode, they discuss the nature of censorship, why it’s difficult to moderate speech in the digital age, and ways of making it better.

Resources mentioned in this episode:

• Manhattan Community Access Corp. v. Halleck
• Knight First Amendment Institute v. Trump
• Trump v. Knight First Amendment Institute – SCOTUS Blog
• Regulate Tech Like a Utility
• Stratechery Article on Moderation
• David Sacks Digital Bill of Rights
• Charles Hoskinson Discussion on Big Tech Censorship

Image by Gerd Altmann from Pixabay

In the second part of Mentally Unscripted’s “Should I vote?” series, Paul and Scott explore alternatives to physical voting and discover the technology – from online to blockchain – just isn’t ready for prime time.

Resources mentioned in this episode:

• Voting in Taiwan
• Going from Bad to Worse: From Internet Voting to Blockchain Voting
• Microsoft Open Source Voting
• Charles Hoskinson review of MIT whitepaper

Image by mohamed Hassan from Pixabay

Should I vote? That’s a question more people are asking themselves in the United States. Paul and Scott discuss the utility of voting and how the U.S. can improve its current election model.

Resources mentioned in this episode:

• Economics in One Lesson, by Henry Hazlitt
• Democracy: the God that Failed, by Hans Herman Hoppe
• The Bob Murphy Show, Ep 142 Explaining John Nash’s Dissertation and Why Russell Crowe Got It Backwards Media censors Ron Paul Iowa Caucus results
• History of US Voting
• Manufacturing Consent: The Political Economy of the Mass Media, by Edward S. Herman and Noam Chomsky
• Hate Inc.: Why Today’s Media Makes Us Despise One Another, by Matt Taibbi

Image by Tumisu from Pixabay

Paul and Scott discuss their love of the scientific process, different ways of identifying the good kind of science (TY Farnam Street!), the seductive allure of bad science, and why we hate yard signs that read “I believe in science.” 

Resources mentioned in this episode:

• How To Spot Bad Science
• The Distrust of Intellectual Authority

Image by Gerd Altmann from Pixabay