The mainstream media has created a pasteurized and homogenized version of Martin Luther King, Jr, befitting the neoliberal cultural bell jar. That being said, our friend Mathew Forstater reminds us that Dr King had a laser-like focus on economics and unemployment. The massively successful August 1963 march was called The March on Washington for Jobs and Freedom for a reason. Without economic security, the social and political advances of the civil rights movement cannot take hold. Steve kicks off the interview by asking Mat to speak about MLK in the context of today’s debate about a Universal Basic Income versus the Federal Job Guarantee. Dr King and other civil rights leaders promoted an economic bill of rights that was specifically and intentionally not a UBI. The three-part platform demanded a job for anyone willing to work, an income guarantee for those who cannot work, and a raise in the minimum wage sufficient to lift the working poor out of poverty. All three prongs are necessary -- a job guarantee alone doesn’t help those who cannot work; raising the minimum wage doesn’t help the working poor. Dr King’s vision of a job guarantee encompasses four vital components:     1. The development of education and skills must be outcomes of the program and not prerequisites. Rather than being trained for nonexistent jobs, people are to be hired first and trained while they’re being paid.     2. Any jobs should produce community services -- the public and social services that are in short supply and benefit the neediest communities. Labor is directed to our most pressing demands, including environmental and social justice.     3. The program generates income for families that have unmet basic needs. There must be an improvement in basic standards.     4. Acknowledge that there are numerous psychological and social benefits for individuals, families, communities, and the nation as a whole. This is based on MLK's recognition of the social and economic costs of unemployment. Research outside the field of economics (anthropology, social psychology, sociology) confirms the importance of work. In contrast, a UBI provides no development of skills and no production of public services to benefit the community. In a UBI only the income piece is addressed. Supporters of the UBI tend to look at work or human labor not as it was meant to be -- a pursuit of one’s life mission. They're looking at dead-end low-paying jobs with horrible working conditions. It's understandable that they would oppose that kind of work. We have always distinguished our version of a job guarantee from draconian workfare -- the kind that forces welfare mothers to take underpaid jobs where they'll develop no skills or knowledge. Our plan is built around the understanding that people enjoy contributing, working with others, and developing their talents. For models, we look to successful programs of the past like the WPA, CCC, and Argentina’s Plan Jefes. In the rest of the interview, Mat explains that Dr King was not alone in advocating for a JG. He talks about the history of the Humphrey-Hawkins Act, which was originally intended as full-employment legislation but ultimately was gutted. From 1946 to 1978 virtually every major African American leader and organization came out for full employment, including James Farmer of CORE, Bayard Rustin of the AFL-CIO’s A. Philip Randolph Institute, and Oliver C. Cox, who wrote a number of Marxist critiques of capitalism. The second demand of the Black Panther Party’s 10 Point Program was that the government provide “full employment for our people.” We know our Macro n Cheese audience will appreciate this fascinating history of the intersection of the civil rights movement and the ongoing fight for a Federal Job Guarantee. Mathew Forstater is a Professor of Economics...

In the midst of the chaos of the campaign season, it’s important to remember that there’s a whole world out there, where people are suffering in large part due to the actions of the US. Our guest Ajamu Baraka is never far from that reality and his global perspective is woven throughout this interview. He is an internationally recognized leader of the emerging human rights movement in the U.S. and has been at the forefront of efforts to apply the international human rights framework to social justice advocacy in the U.S. for more than 25 years. Ajamu is co-chair of the Embassy Protectors Defense Committee. The Washington, DC, trial will begin on February 11th, and he tells Steve the story of the events leading up to it. Many Americans are unaware of the extent of the international sanctions that have been put in place - by both parties - over the last decade or so. It’s not just Iraq and Iran; there are now around 33 nations under sanctions. Ajamu wants us to understand that US sanctions aren’t simply geared towards top officials but are structured to bring real pain to innocent civilians in hopes that they will rise up against their leaders and achieve the regime change that is the true agenda of the US elite. The problem is that sanctions don’t merely cause discomfort. People are dying. In Venezuela alone, over 40,000 have died as a consequence of US sanctions since 2017. To understand the situation in Venezuela, one must consider the history of colonialism in Latin America and the liberation struggles that emerged in the post-World War II era. Over the last few years, progressive efforts have been undermined in Bolivia, Ecuador. and Brazil. In Venezuela, a phony election in the Senate resulted in the sham “presidency” of Juan Guaidó. Despite the fact that his position is not recognized by the UN nor the majority of the world’s nations, US support for him is steadfast. Against this backdrop, a group of activists occupied the Venezuelan Embassy in Washington, DC, with the support of the legitimate (Maduro) government. They stayed for 37 days until they were forcibly removed by federal and DC police. Ajamu and Steve talk about the stepped-up repression of progressive movements domestically as well as abroad. They discuss our need to recognize and oppose the expansion of the American empire that savages the lives of millions. Given that Ajamu was the Vice Presidential candidate for the Green Party in the 2016 election, Steve wanted to get his take on Bernie, the current campaign season, and whether it’s possible to enact a progressive agenda while the country is hamstrung by the two-party system. Ajamu continues to build support for the Embassy Protectors and is working to organize resistance to aggression towards Iran. Refusal to withdraw forces from Iraq exposes how the US has become a rogue state. Ajamu is raising awareness on the domestic front as well: A few months ago, Drumpf announced what is in effect a domestic military "surge." Under the guise of fighting crime, they will start with the infusion of federal dollars and military assistance to the first seven cities. The prime targets? The brown and black working class. Ajamu Baraka is a human rights defender, member of the leadership, US Peace Council, national spokesperson for Black Alliance for Peace, a geopolitical analyst, United Antiwar Coalition member, and co-chair of the Venezuelan Embassy Defense Committee. He is the former vice presidential candidate for the Green Party. https://www.ajamubaraka.com/about @ajamubaraka on Twitter

The post-war years are widely trumpeted as the golden era for America’s middle class. This is when we became a nation of suburban homeowners. Most would agree that federal programs - like the GI Bill and the FHA - contributed to this prosperity. Where some will differ is the extent to which the government is responsible. Our guest, David Freund, sets us straight.    David pierces through the propaganda and exposes the reality behind the sunny fantasy of the post-war economy. His book, Colored Property: State Policy & White Racial Politics in Suburban America, reveals the mechanics of the federal programs and the institutional racism built into them.    The racial politics of redlining are known to many of us, but there were also significant changes in municipal politics during this era. Among these was the rise in municipal zoning, giving local governments the actual power to legislate those decisions.  There was simultaneous growth of the planning profession and real estate industry. Taken altogether, David argues that these developments created the very familiar late 20th-century US landscape, where the majority of white people own their homes and where most growth is focused in suburban rather than urban areas, with remarkable disparities in wealth.   Interestingly, enormous effort was made to obscure this history from the people living it. There has been a specific political narrative intended to distort our understanding of the federal government’s role in creating segregation and wealth disparity. The mechanics are important to understand and those mechanics help us see why particular narratives were popularized.   The white beneficiaries of the boom became invested in a falsehood: that it was the free enterprise system that was producing the post-war prosperity and literally remaking the nation. It was the golden age of celebrating free-market capitalism. This was the cultural and political landscape. The image is one of bustling economic prosperity with a little bit of assistance from government programs. But the reality was something else entirely.   Prior to the boom, people were afraid of going into debt. A 30-year mortgage was seen as incredibly risky; bankers didn’t want to lend and borrowers didn’t want to borrow. The FHA needed to prime the pump so they applied aggressive marketing techniques. They did extensive groundwork educating the real estate and banking industries. They produced film reels and literature, and FHA officials went on speaking tours to professional conferences. They took their pamphlets door-to-door, contacting millions of households.  In the end, they successfully convinced banks to become debtors and consumers to go into debt. This was no small campaign; it went on for a quarter of a century -- all while insisting that these federal programs were not distorting the free market. At the same time, they perpetuated the mythos of the American dream and fed the narrative that anyone could achieve it. The 2020 campaign season has us talking about what it would mean to have a job guarantee, to create a green new deal, and to properly fund public education. As we do, David Freund cautions us to learn the lessons of history - the real history - else we be doomed to repeat it. David M. P. Freund is Associate Professor in the Department of History, University of Maryland, College Park. He is the author of Colored Property: State Policy and White Racial Politics in Suburban America (University of Chicago Press, 2007), which received the 2008 Ellis W. Hawley Prize from the Organization of American Historians, the 2007 Kenneth Jackson Book Award from the Urban History Association, and the 2009 Urban Affairs Association Best Book Award. @MpeterF on Twitter https://www.press.uchicago.edu/ucp/books/book/chicago/C/bo5298959.html

On a podcast that’s primarily about macro, today we’re compelled to talk about the cheese. The last time Bob Hockett was here, he told a skeptical Macro & Cheese audience that Elizabeth Warren was genuinely progressive and, he believed, deserving of our trust. We’ve seen him on Twitter, getting into testy exchanges about her motives. Now he sadly acknowledges that those motives are less than pure. Last week on the debate stage, Warren called into question Bernie’s truthfulness. In apparent collusion with CNN, her campaign released a story alleging a negative attitude about the possibility of a female US president. Nobody who has followed Senator Sander’s career would believe this story but it succeeded in muddying the waters, diluting his message, and hijacking the news cycle. Bob examines all possible hypotheticals of Warren’s motives, sincerity, and beliefs -- and she comes up short. As he puts it, nobody who is serious about helping the working class would employ such a movement-splitting gambit. Even if she truly believes in the programs she proposes, her actions reveal a level of opportunism. In July she was on the same debate stage hugging Bernie, yet she claims that he made this dubious statement in 2018? Either she believes he is misogynous or she doesn’t. What changed last week other than a slip in her poll numbers? Steve and Bob spend much of the episode exploring the reality of political calculations and questioning the invisible hand of the party machine behind certain campaign tactics. They consider the different types of alliances - or “marriages of convenience” - debating how to engage without compromising one’s core principles. It’s a slippery slope for which there are no easy answers. Join us for this thoughtful discussion. Robert Hockett is the Edward Cornell Professor of Law at Cornell Law School, Visiting Professor of Finance at Georgetown University's McDonough School of Business, and Senior Counsel at Westwood Capital, LLC. He specializes in the law, economics, and philosophy of money, finance, and enterprise organization in their theoretical and practical, their positive and normative, and their local, national, and transnational dimensions. @rch371 on Twitter https://www.lawschool.cornell.edu/faculty/bio_robert_hockett.cfm

If you thought you understood the urgency of climate change, our guest, Professor Steve Keen, will shatter those illusions. We’ll be straight with you, this is not an easy episode to hear - but you need to listen anyway. How can we deal with the effects of climate change if we don’t understand the urgency? Professor Keen won’t sugar coat it but he can back up every statement with facts, figures, and astute analysis. Throughout the interview, he refers to - and debunks - the work of William Nordhaus, who won the Nobel Prize for Economics in 2018 “for integrating climate change into long-run macroeconomic analysis.” From Left Foot Forward: "When future generations ask why humanity delayed taking action against climate change for so long, Nordhaus’s model will be one of the prime suspects. The model, known as DICE – Dynamic Integrated model of Climate and the Economy – is a dangerous gamble for humanity’s future.  "Nordhaus’s transgressions are immense. His ‘damage function’ which he uses to estimate global warming damage is incorrect and uses data that has nothing to do with climate change. Despite this, the Intergovernmental Panel on Climate Change (IPCC) uses his model to advise governments about the economic impact of global warming." Nordhaus’s sins trace back to his attacks on 1972’s “Limits to Growth” study. The predecessors to our contemporary climate deniers dismissed its findings, yet it has been proven remarkably accurate. In this interview, Professor Keen compellingly compares facts to fancy. As his home country of Australia is ablaze, he explains why this was predictable. What you learn in this episode will enrage and probably depress you. We can’t afford to ignore it; ignorance is not an option. Professor Keen is a Distinguished Research Fellow at UCL, the author of Debunking Economics (2011) and Can We Avoid Another Financial Crisis? (2017), and one of the few economists to anticipate the Global Financial Crisis of 2008, for which he received the Revere Award from the Real World Economics Review. His main research interests are developing the complex systems approach to macroeconomics and the economics of climate change. @ProfSteveKeen on Twitter https://www.patreon.com/ProfSteveKeen

What are the mental roadblocks to achieving a system that creates prosperity for all? We often talk about the neoliberal narrative on this podcast, but this week’s guest, Lua Yuille, peels the onion a few more layers to reveal the structure beneath the story-telling -- what some may call brain-washing -- showing us how our minds have been colonized and need to be untrained. Our entire legal system is framed and structured to convince people that they are achieving or failing on their own. We frame certain types of support as supporting their initiatives. It’s deeper than storytelling; it’s a structure that exists to make invisible all of the ways the government props you up. If someone buys a house there are tax breaks for the homeowner. Estate laws allow you to inherit a house you didn’t pay for. In these ways you’re rewarded for being an autonomous individual (or being born to one). On the other hand, if you need housing assistance, you’re in public housing. It’s seen as largesse for losers. You can look at any tiny thing that happens in your life and see the ones that are coded positively and negatively. The government has made those choices. The government makes itself undetectable by coding things positively, and it highlights itself - and the people are denigrated - by coding negatively. When we call some support “welfare” but call other kinds of support “breaks” or “benefits” we’re teaching ourselves to see these things in a divisive way. It makes it hard to engage with one another and find solutions. Lua demands that we deal in actual reality. She says we need to engage in a clear-eyed process of “naming, claiming, blaming” -- calling things out for what they are. We must understand the way economic policy itself shapes our brain and convinces us what is possible and what is not. When our conversation about policy includes the “pay for” question we’re training the entire nation to understand that the necessary consideration is “how do we pay for it?” Steve and Lua use the latter part of the interview to talk about their own lives and delve into the complex questions of race and privilege. In the civil rights movement, Black people literally put their lives on the line because they felt they had nothing to lose. Will we reach the point where white people are willing to do the same? In a world of winners and losers -- where very few are winners -- what will it take for people to risk it all? This is a fascinating episode that will add nuance and clarity to your understanding of our social, political, and economic crisis. It may be that nothing short of a revolutionary movement will free us. Lua Kamál Yuille is an interdisciplinary scholar whose current work connects property theory, business law, economics, critical pedagogy, and group identity. She is Associate Professor in the School of Law and Core faculty in the Center for Latin American and Caribbean Studies at the University of Kansas. https://www.profyuille.com/ @ProfYuille on Twitter

The UK’s MMT Podcast has been an inspiration to us since well before we launched Macro n Cheese. As fellow MMT promoters from outside the academy, we consider the co-hosts, Patricia Pino and Christian Reilly, to be kindred spirits. So it’s always a treat to have them as guests on our show. This week, it’s Patricia’s turn to explain the behavior of our UK cousins as we seek to learn lessons from their most recent electoral debacle. When Steve spoke with Patricia, she was still feeling intense disappointment and frustration in the wake of the Tory victory. Many in the Labour Party were in shock, trying to make sense of it all. Unfortunately, the most dominant voices are the least likely to admit fault. Attempting to understand Labour’s loss requires considering a multitude of layers -- economic, cultural and political -- historic issues of democracy which have been ignored for a long time. Patricia believes that the issues of sovereignty and perhaps even national identity, may play a stronger role in the UK than they do in the US. Britain joining the European Union was a blatant step in the continued abandonment of the nation-state. The challenge to their national sovereignty may appear to be less significant to the UK than to the Eurozone nations because the British retained the use of their own currency. Patricia explains that while the UK has more autonomy than the Eurozone countries, the government portrays the neoliberal policies of the EU as if they were mandated or part of an international treaty. The EU has no means of enforcing rules regarding deficits or privatization, but it applies enough political pressure to direct policy in a certain direction, simultaneously providing cover so the government can avoid claiming responsibility for unpopular policies. In both the UK and the US, elements of the right have tapped into discontent felt by marginalized members of society and gained a new throng of voters. Patricia refers to Jeremy Corbyn as a “Euro-skeptic,” which may explain why he understood the voters’ discontent in a way that other members of Labour’s leadership did not. Just as in the US, the party that was supposed to represent the interests of working people has proven to be out of touch. Labour voters had chosen Brexit; the Labour leadership was perceived as blocking it. The rank and file stopped believing their promises. As is always the case with Steve and his guests, the discussion turns to solutions -- specifically, how to deal with those people who are supposed to be on our side yet are still spreading incorrect analysis based on ridiculous assumptions, when applying the lens of MMT would bring things into focus. In the UK, even the so-called leftwing economists engage in the same kind of fear-mongering as the most dedicated neoliberal ideologues. Patricia clarifies that not all MMTers are Brexiters, but knowledge of MMT clearly illuminates the ills of the EU and the consequences of interfering with national sovereignty. Understanding how power is wielded through control of the currency naturally leads one to be an advocate for democratic systems of government. She suggests that she’s ready to step out of the functional finance silo and plans to start working with groups who may not yet support MMT but whose causes will be advanced through knowledge of it. With 5 years of Conservative rule to look forward to, she can’t afford to sit on the sidelines. None of us can. Patricia Pino is a London-based engineer, artist, and activist. She is co-host of the MMT Podcast and a founder of the Gower Institute of Modern Money Studies.  @PatriciaNPino on Twitter https://pileusmmt.libsyn.com/ https://gimms.org.uk/

In April of 2018, Jacobin Magazine published “Why the Left Should Embrace Brexit,” which made the case for this radical break from neoliberalism. To gain perspective on Labour’s trouncing in the recent elections, we called upon our friend, Bill Mitchell, one of the co-authors. Bill has been writing and speaking about the UK’s entry into the Eurozone since the 1990s. As an outside economist, his warnings about the dangers of ceding fiscal control fell upon deaf ears. He addressed these issues in two books, Reclaiming the State -- co-authored with Thomas Fazi -- and Eurozone Dystopia. He recalls that as a young academic he was puzzled by the fact that social democratic political parties in the UK, Europe, and the US were supporting anti-labor policies and enabling the advance of the neoliberal agenda. Reclaiming the State traces the turning points -- those historical moments in the 1970s and 90s when Labour adopted monetarism, threw their support behind austerity politics and became apologists for globalization. Western governments were no longer mediators between workers and capital. The ruling elites created alternate media and think tanks while revamping the legislative structure. They reshaped the state in their own image, reflecting and serving their own needs -- and in the process the people lost the gains made in previous decades. In order to understand the recent UK elections and the significant role played by Brexit, it’s necessary to look back at the post-World War 2 era of nation-building and economic growth, the gains that were made by working people, and the point at which capital had had enough. Compared to the US, the UK maintained a fairly robust social safety network in spite of the capitulation by “New Labour” in the 1990s. When it comes to the question of British membership in the European Union, both Labour and the Tories have been conflicted. Ultimately, accession into the EU was pushed through as a consequence of the rising concepts of globalization and monetarism. After the great financial crisis, the hollowing out of the state proceeded apace in the UK. The Tories inflicted harsh austerity by de-funding local governments, thus shutting down the most basic services that people relied upon. Traditional Labour constituencies in the mining and industrial regions in the North and the Midlands were hard hit by the free trade treaties, deregulation, and the destruction of the manufacturing sector. Meanwhile, the increased financialization of the economy had turned London into a huge international hub which benefited the urban residents who enjoyed access to freedom of travel and relatively high paying jobs. If you’ve forgotten the history of the Brexit vote, Bill sums it up for us here. Both British parties underestimated the seething discontent brought about by membership in the European Union, but the divide within Labour turned out to be fatal. In the latter portion of the episode, Steve and Bill bring it around to the US presidential race, comparing the treatment of Jeremy Corbyn and Bernie Sanders -- not only by the mainstream media but by their own political parties. They speculate on Sanders’ chances for success and talk through potential strategies for future action. Are there lessons to be learned from what we’re seeing in the UK? Bill Mitchell is Professor of Economics at University of Newcastle, Melbourne, Australia, and creator of the first blog devoted to MMT. He is the co-author of Macroeconomics and Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World, and author of Eurozone Dystopia: Groupthink and Denial on a Grand Scale. http://bilbo.economicoutlook.net/blog/ Twitter @billy_blog https://www.jacobinmag.com/2018/04/brexit-labour-party-socialist-left-corbyn ...

We admit that Macro n Cheese can be quite wonky. We interview an impressive array of scholars and a typical episode looks at functional finance on a granular level. This episode is a treat for the rest of us, with a guest who makes a point of speaking in plain English. Clint Ballinger’s book, 1,000 Castaways: Fundamentals of Economics, is meant to be a primer, bringing macroeconomics to those with no special background in the subject. Its title - and dominant model - is a reaction to the Austrian school’s hypothetical society consisting of 10 people or Paul Krugman’s “babysitters co-operative.” Clint expanded his model to more accurately reflect reality. Let’s face it: 10 people is reductionism, not simplification. “A renegade band of Modern Monetary Theorists has overturned mainstream economics in part by emphasizing that there is not one, but two systems of modern money, the ‘vertical’ and the ‘horizontal.’ They conclusively demonstrate how unifying our understanding of these is crucial for grasping modern economics.” Clint’s jumping-off point for the book is Warren Mosler’s quote: “The key to understanding Modern Monetary Theory is this vertical-horizontal relationship” On his island of castaways, Clint creates simple scenarios that illustrate the need for, and development of, the two money systems. Horizontal money is bank credit, ideally used to provide capital to improve productivity. On the island, a fisherman realizes he could catch more fish by using bigger nets, so he hires others to help weave them. A primitive payment system develops into the use of IOUs, and eventually a ‘trusted group of citizens’ begin making those loans. The hypothetical community determines a need or desire for goods and projects that will add to the wellbeing of the citizens. For example, a road will improve access to lumber and a school will educate the children. Thus, vertical, or government-issued money, is born to fund projects that will directly improve their lives or will amplify private industry. To the citizens, it’s a seamless system: a dollar is a dollar. But in reality, the government-issued dollar remains in existence until it’s taxed out. Banks just operate as accounting ledgers, providing the promise to pay. In the private system, it nets to zero. Simple and elegant, it’s also crucial; Clint believes that voters, public servants, and students of economics need to understand how these basic systems operate. In the later chapters, 1,000 Castaways addresses how we can use these principles for real-world solutions. As Steve points out, it all comes down to real resources and the island is a great illustration because it’s a confined system where you easily see cause and effect. There is so much misinformation about economics. The mainstream uses confusing terms, leaving people ill-equipped to defend themselves. The narrative becomes the rule and the rule becomes how we structure society, rightly or wrongly. In Clint’s view, the problem that led to the 2008 recession was that the FIRE section (finance, insurance, real estate) was allowed to become too bloated. There’s a simple fix. We give public licenses to banks; we can take them away. Meaningful regulation would limit banks to funding productive enterprises and running our payment system. Period. Could combining a sensible, boring, banking system with robust funding for the public purpose turn our modern world into an ideal society? You decide. Clint Ballinger got his MA in Political Science at the University of North Carolina at Chapel Hill, where he focused on modern uneven economic development and went on to specialize in the interpretation of global econometric data for his PhD in Geography at Cambridge University. His interest in developing economies has led him to live in China, Costa Rica, and the former Soviet Republic of...

Steve’s guest, Emma Caterine, is a consumer rights attorney with special interest in predatory lenders like loan sharks and payday loan companies. She begins by talking about credit as a social construct, To fully grasp the causes of Great Recession we must understand the difference between consumer debt, with a high risk of default, and federal spending, which is new money and can never default. When our economy grows through private debt, it’s unsustainable and leads to crises like the Great Recession. MMT economists, including Wynn Godley, Stephanie Kelton, and L. Randall Wray, have shown that the idea that public “debt” and the deficit are inherently evil and to be avoided at all costs, or that financial crises are caused by “imbalance in the economy” are all myths. What we see then is that cutting public spending -- austerity -- is a political choice. Emma asserts that private household debt and private corporate debt have similar consequences on different scales, though the households bear more of the burden. Private equity firms load companies with tons of debt to be serviced by cutting labor and selling real estate holdings, which is detrimental to surrounding local communities -- people of color and the working poor in particular. This growth model based on private debt proves that lessons weren’t learnt from the Great Recession. It’s a more intense and modern version of basic capitalism. The data underscores how undemocratic it is. It’s actually about who gets the power to make these decisions. Emma boils down the increasingly neoliberal method: austerity politicians deregulate and cut funding, then the private financial sector fills the gap with privatization. Nearly everything in our lives has private equity behind it, prepared to strip all value with no regard to long-term sustainability. Emma expresses the hope that politicians like Warren and Sanders can and will stop the Wall Street looting. Steve and Emma then turn to the effects of austerity, from abandoned malls and virtual ghost towns to shorter, more brutish lives, and an ever-growing private debt bubble from payday and title loans -- death traps for the already suffering. The average family cannot afford a $400 emergency but are forced to turn to these predatory forms of credit. Steve, as someone who suffered the ill effects of the recession, and Emma, a consumer rights attorney whose clients are working-class and mostly people of color, discuss how we cannot simply talk about income inequality but must actively choose to reverse austerity and the neoliberal paradigm to end the punishment of poverty. Emma advocates increasing public investment, regulating private corporations and the financial industry. She supports the Loan Shark Prevention Act, putting a cap on interest rates. This regulation would counter any inflationary risks of the Green New Deal and Medicare For All. Plans are not enough here; an organized, people-led movement is essential for any paradigm shift. Emma doesn’t trust “professional middle-class experts” to solve the problem but instead focuses on community groups, agitation, organizing, and allying with labor. The movement needs to be people-powered, and groups like DSA are there to hand out the (metaphorical) torches and pitchforks. Emma Caterine is a consumer rights attorney on the board of the Modern Money Network, a decades-long writer and advocate of economic justice, LGBTQIA+ racial and feminist justice movements - and a proud member of Democratic Socialists of America. @EmmaCaterineDSA on Twitter Sign the manifesto at https://jobguaranteenow.org/ https://lpeblog.org/category/piercing-the-monetary-veil/

The Great Recession was a maelstrom that hit many Americans hard - lost jobs, lost homes, for some everything but the clothes on one’s back. Despite the stock market, real recovery has been glacial at best. Yet many don’t know just how deep the crisis' roots go when it comes to the Black community. Keeanga Yamahtta-Taylor explains the origins of the systemic discrimination behind the housing policies that skipped over, then exploited, Black families trying to find a safe, sound, and affordable place to raise their families.   Keeanga's newest book, Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership, evolved from her organizing and activist work as a tenant advocate to protect tenants from eviction. The Great Recession hit while she was in grad school and she saw the parallels between her research on the origins of segregation and the subprime lending market as she studied the relationship between the federal government and housing programs over the decades.   Steve notes the changes wrought by neoliberalism and the shift of power from public to private sector; Keeanga adds that though neoliberalism was always there in some form, it became a distinct and rising ideology during the late 60s to early 70s.   Contributing factors to “include” Black people in housing were a market opportunity that arose with white homeownership’s saturation of the market; demand that increased with the Black exodus from South to North, and their growing incomes; and urban uprisings like the Watts riots which pushed the federal government to find a solution to quell the rebellion - the idea was that if more Black people owned their homes, they’d be less likely to burn them down.   Between FHA guaranteed loans to blacks and a $2 billion pool raised by the top 300 insurance companies, cracks began to appear in redlining and housing discrimination, but the ensured inclusion of Blacks in the housing market instead became predatory, as real estate operatives and speculators jumped into the mix - buying houses for pennies on the dollar, quickly flipping them and selling them high. New methods of exploitation like these were developed to take advantage of Black people.   Conditions created by those decades of discrimination became "evidence of risk" to allow creditors, bankers, and realtors to devise a different set of rules for Black would-be homeowners and business owners. Black families went from being refused housing to bending over backward to get it - only to find conditions deplorable and forcing them to walk away, while real estate brokers and lenders got away with the loot between commissions, closing costs and the eventual foreclosure. One official called it “business in heaven - you can’t lose money.” A supposed step up for the Black community became a stumbling block and another source of corporate profit. Steve refers to Michelle Alexander, who called the situation “a horror story in racial capitalism” and Keeanga concurs: in the course of her research, it became ever clearer that "the issue is not the system failure of capitalism or American system of governance" but that the system works perfectly fine - just not for Black people.   In closing, Keeanga is inspired by the fact that thanks to Bernie Sanders and the Squad, housing as a human right is now being debated and discussed, which provides...

“How do you pay for The Green New Deal?” is a serious question in today’s political environs -- though as Nathan Tankus clarifies, not for the reasons you might think. In Part 3 of his interview with Steve Grumbine, he recognizes that MMT and the US Bond market don’t finance spending in financial terms but shows us how non-fiscal “pay-fors” can give the US economy resource room to reallocate workers and energy through financial and environmental regulation. This can be accomplished without interest rate management and raising taxes to appease those who still believe the US is constrained by debt.   The Green New Deal and a Job Guarantee will make it possible to identify which areas in the US need more resources allocated to them simply by analyzing how many citizens sign up for the program. While the state of the US economy is oft described as a whole, the number of people entering the job guarantee program can show what counties are affected more by poverty and unemployment and allow them to remain in their home regions rather than flock to major urban centers to seek employment.   He also notes that the largest American cities are coastal and would be first affected by the rising waters due to climate change. Rather than drive people to those regions, we should be planning escape routes when those cities become uninhabitable. Describing a recent video narrated by Alexandria Ocasio-Cortez, Nathan points out how an army of workers is going to be needed to help rebuild areas that are destroyed by natural or man-made disasters.   Using the example of how Syria endured years of drought which drove rural workers to city centers to find work, Nathan shows us how many poor & unemployed young people are now basically housed in prisons and argues that they should be emptied, primarily for moral reasons, but also to increase the productive capabilities of the United States. He cites the example of inmates being utilized as (unpaid) firefighters in California to show that we already do this to a limited extent and in an immoral way.   The remainder of the interview deals with Balance of Payments. Nathan explains that countries can have either a balance of payments deficit or surplus, depending on outflows such as payments for exports, interest payments and dividend payments netted with payment inflows. The addition of all balances of payments from all countries will, therefore, theoretically be zero. Monetary Sovereignty is a spectrum. Most countries in the world pay globally in US dollars because the large sums of debts and treaty obligations are denominated in dollars -- which in turn lead to exports and imports "invoiced" in dollars, which prevents countries from using their own currencies in payments. Thus, dollar exchange rates and interest rates are very important.   Nathan and Steve then examine the concept of the International currency hierarchy and the two elements that determine a country’s standing: Financial Strength and Physical Resources. A country can have a large current account deficit and a pegged currency but be rich in physical resources -- and be in equal or better standing than a country with a current account surplus and full monetary sovereignty but with few physical resources.   In closing, Nathan compares how US states have current account positions with one another, similar to those between Eurozone states. However, understanding this relationship is difficult because no records have been kept - and the data could be distorted to criticize states with large deficits as lazy or delinquent, simply because they have fewer jobs or lower incomes. Such data could be used by ‘bad actors’ who wish to divide people based on race.   Armed with this information, America could do some amazing things using the Green New Deal and the Federal Job Guarantee   Nathan Tankus is Research Director at Modern Money...

Public banking is a hot topic in progressive circles. We at Macro n Cheese support it as long as it serves the public purpose, but not all visions of public banking are equal. Luckily, we have Nathan Tankus to help us navigate the shoals. In this second episode of a three-part series, Nathan begins by addressing the overall question of banks as public institutions. All banks, whether private, public, or democratic cooperatives, are given government charters and must abide by regulations. There may be similarities in the structure of governance, but when it comes to incentives, they are very different creatures. Nathan compares the different kinds of banks, including China’s state-owned banking system and looks at possibilities for regulations and services. Steve brings up proposals for infrastructure banks and the concept of financing public spending through a network of public banks. Some of these ideas don’t necessarily jibe with the MMT perspective; Nathan, Raul Carrillo and Andres Bernal recently wrote an article in Business Insider making the case that the federal government must pay for the Green New Deal. Full stop. The power of the federal purse is far superior to public-private partnerships or, worse, nudging the private sector to finance local public projects. Public banks can and should provide much-needed services -- at present, state and local governments keep their funds in, and make payments through, private banks that charge astronomical fees for the privilege. (We’re looking at you, Wells Fargo.) Nathan explains what it means to be “unbanked” or “underbanked,” as with individuals and communities who are denied services by the private banking industry. Much of this is taken for granted by those who have always had access. Banks provide a place to cash a check or receive automatic deposits from one’s employer, not to mention mortgages and car loans. In the US, the poor are crowded out of the banks and pushed towards predatory actors like check-cashing and payday lenders -- the high cost of poverty. Public and postal banks would provide normal banking services for those who are traditionally excluded. Nathan suggests that rather than simply making loans, public banks should award grants and emergency funds to individuals. In the second half of the episode, Steve and Nathan turn to a positive vision of the future. Steve refers to the combination of the Green New Deal, Medicare for All, a Federal Job Guarantee and a universal right to housing as an end-to-end, 360-degree plan to address inequality. Nathan looks at different aspects of each and how they are interconnected. For example, right now people migrate to a handful of metropolitan areas because that’s where they can find employment. With the job guarantee, previously abandoned communities can be revitalized, housing can be refurbished and retrofitted, and choices can be made based on preference rather than necessity. Nathan points out that a minimum wage is a leaky wage floor; it’s meaningless for those who don’t have a job. The FJG provides a true floor, forcing employers to compete with wages and benefits. Creating a “just transition” for unemployed coal miners will require more than FJG jobs. With the other social insurance in place, compensation will more nearly approximate their lost salaries. They will need childcare, supplemental income through an expanded Social Security or basic income, affordable housing, and free education. In the heat of this presidential campaign season, candidates are competing for our attention with complicated proposals. After listening to this episode you’ll be equipped to unpack their promises and assess them through a true MMT lens. https://www.businessinsider.com/green-new-deal-climate-change-government-spending-no-private-money-2019-9 Nathan Tankus is Research Director at Modern Money Network. @NathanTankus on Twitter

If you follow the financial press you’ve probably noticed some recent hysteria about the “repo market.” Since this involves the dealings of the Federal Reserve, it falls under our purview here at Macro ‘n Cheese. Because unraveling the strands of this dense subject requires someone more knowledgeable than we are, we called upon friend-of-the-podcast Nathan Tankus to help us out. Nathan is Research Director at Modern Money Network and can often be found on Twitter, educating the world about MMT. “Repo” simply refers to the repurchase of bonds. Banks and bond traders sell Treasury bonds back to the Federal Reserve with the understanding that they (the banks) will buy them back the following day. As Nathan points out, this is always spoken of from the point of view of the central bank as buyer; it could just as well be called the resale market. Why does this matter? Why do the banks sell back their Treasurys for such a brief period of time? When banks buy them back the price is higher due to the interest charged. So why do it at all? It turns out to be the mechanism by which banks ensure that they have enough balance reserves to ensure that their payments clear. To do this they need to deal with liquid assets, which can quickly be bought and sold and converted to "money" (or at least change the balance in their account). Nothing is more liquid than a Treasury bond. See? Perhaps the banking industry isn’t just lawlessness and anarchy after all? Well, they certainly want us to believe the system is self-regulating so we won’t demand that the lawmakers rein them in and protect the public. As Nathan explains it, concern about the repo market is much ado about nothing. The central bank has been doing these repurchase agreements since 1917 and during some periods they are a normal part of the Fed’s toolbox. But the 2008 financial crisis put a halt to the practice for a while. In response to the liquidity crisis (ie, the lack of liquid assets), the Fed created trillions of dollars of what most of us think of as bail-out money, which was distributed to all the banks. At that point, banks didn’t need to sell bonds to meet their reserve balances because they all had plenty. Thus, no need for repo. When repo agreements started up again, some in the media thought that, since it hadn’t been done since 2008, it must be a sign that there’s a new crisis at hand. It doesn’t help that the FDIC, headed by Trump appointee Jelena McWilliams, is investigating the central bank, insisting that the repo market is actually another bank bailout by the Fed. Somehow, people have forgotten that these have historically been normal activities. In this interview we learn the meaning of the liquidity trap -- and liquidity itself. We learn about settlement balances, quantitative easing, and overnight interest rates. We learn of regulations like Dodd-Frank and international banking agreements like Basel III. We learn how these things are connected to such far-flung historical events as Bretton Woods, the Yom Kippur War, and German postwar reparations. We learn why MMT economists have promoted a detailed understanding of monetary operations and argue that the banking system does not serve the public purpose. The next time you get spooked by a headline in the financial press, tune into this episode again. It all makes so much sense when explained by someone who knows what he’s talking about.  Nathan Tankus is Research Director at Modern Money Network. modernmoneynetwork.org @NathanTankus on Twitter

This 2017 interview features a younger Steve Grumbine speaking with a younger-still Brad Voracek. Brad was in the first graduating class of the masters’ program at the Levy Economics Institute of Bard College. His real-world experience as a teacher and mentor in Arizona is vastly different from Steve’s, a father of nine in Pennsylvania, who has had to cope with the medical challenges and expenses faced by his late father -- and now, his own.   It’s refreshing to hear a young person explain how MMT makes sense based on his own observations and point of view. Rather than engaging in arguments about politics and economics, Brad tells us that he approaches each issue with simple questions: what is our purpose/what do we want? In his view, rather than battling over a basic income, let’s determine how to meet people’s basic needs -- after all, we already know how to pay for it.   Steve and Brad take the discussion of a job guarantee away from the usual talk of a transitional buffer stock of labor and delve instead into a broader range of human values. In redefining work we can find a kind of fulfillment that we don’t always associate with minimum wage jobs. Whether we find that fulfillment in creative fields, caring for the vulnerable, or public service in general, the possibilities are endless.   Brad is less riled by anti-MMT cynics than some of our older colleagues. This may be because of his early exposure to the concept of sectoral balances. It boils down to basic double-entry accounting; a debit on one side is a credit on the other. It’s always a two-sided transaction between humans. A government deficit means a private surplus.   Join us for this intergenerational conversation. You might see something in a whole new light!   Brad Voracek got his master’s degree at the Levy Economics Institute of Bard College. In 2017 he worked in AmeriCorps VISTA, observing how direct job creation programs work in practice. Now he is a high school teacher at Phoenix Coding Academy and lead mentor for the robotics team. @bradvoracek on Twitter

Modern Monetary Theory is often accused of only being relevant to the US. While this is a ridiculous claim, some of us might be a bit guilty of lacking in-depth knowledge about Africa and developing nations. That ends today. We’re excited to introduce our listeners to Ndongo Samba Sylla, whom we met at the 3rd International MMT Conference where he delivered the keynote on “Money, Imperialism, and Development.” Fadhel, an old friend of this podcast, needs no introduction. Ndongo is an expert on the CFA Franc, a currency imposed on the former French colonies in Africa, who cannot achieve monetary sovereignty until they rid themselves of it. To provide context, he and Fadhel talk about the meaning of monetary sovereignty from an MMT perspective. It is important not to confuse it with political sovereignty. Political independence is limited without it. For full monetary sovereignty, a country must issue its own currency, tax the population in its own currency, be able to issue debt in the national currency (in other words, they don’t have to borrow and repay in another currency), and they don’t fix their exchange rate to gold, or dollars, or any other nation’s money. Not all countries are equal. There are those with full monetary sovereignty, like the US, Japan, or China, and there are countries that have given up their national currency. Some, like the 14 nations that use the CFA Franc, did so involuntarily. Others gave it up willingly. Most developing nations fall somewhere in this spectrum. Developing nations have structural weaknesses, like the inability to produce enough food or energy to meet the population’s needs. They tend to import, in addition to food and energy, capital goods, and export low value-added content, like manufactured consumer goods. Thus, they have trade deficits, placing downward pressure on the exchange rate of their currency. If their money is devalued, everything they import will be more expensive. In a very real sense, they’re importing inflation. When prices go up on essentials such as food, energy, and medical resources, it leads to social and political unrest. When discussing the economic problems of developing nations, we must look at the role of international institutions like the IMF and the World Bank, set up between World War I and World War II, to manage global financial activities. Remember that in 1945 when they were created, there were no developing nations; they were still colonies. Their economic concerns were not considered. But in the 1950s and 60s, as these countries achieved independence, economic problems began to emerge between the developing and developed nations. In the ensuing half-century, solutions prescribed by the IMF and World Bank have proven to be spectacularly harmful to the developing world. MMT focuses on the reality of econ activity, unlike the global financial institutions. When a country exports, these resources don’t go to the citizens. When looking at trade surpluses and deficits, the IMF and World Bank do not consider quality but limit their attention to monetary value. MMT allows us to consider root causes and craft solutions that address them. To that end, Ndongo and Fadhel announce an upcoming conference in Tunisia, November 6-9. “The Quest for Economic & Monetary Sovereignty in 21 Century Africa: Lessons to be Learned and the Way Forward” (see link below) will assemble economists, historians, Marxists, political scientists, to build on the advances of MMT in developing a plan to benefit Africa and the developing world. MES-Africa.org live-tweeting: @mon_sovereignty Dr. Ndongo Samba Sylla, a Senegalese development economist, is a Senior Research and Programme manager at the West Africa office of the Rosa Luxemburg Foundation in Dakar  @nssylla on Twitter Dr. Fadhel...

For non-economists to learn essentials such as the balance of payments, currency exchange, and trade between nations, presentation matters. The brilliant Bill Mitchell, as always, distills complex concepts in such a way that everyone comes away with valuable knowledge. He doesn’t simplify, but presents them as common sense. We recently came across this gem from Steve’s interview with him last year and immediately saw that it’s too valuable to gather dust in the library. Bill begins by addressing a criticism of MMT that has confronted him since the 1990s: "it only applies to the large, closed economy of the US." He explains MMT’s relevance to his home country of Australia - a small, open economy - as well as to developing nations. Material conditions and availability of resources will differ, affecting the balance of imports vs exports, and their respective standards of living reflect these realities. Regardless, the insights afforded by MMT are just as legitimate. MMT economists start with real-world behavior. Financial flows associated with trade can easily be traced. You go into a car dealership, buy an import, write a check or hand over your credit card, and ultimately your account is debited. But where do those numbers go? Some believe that when you buy foreign goods the money leaves the country and those dollars simply disappear. Bill points out that they can all be traced. “It’s not high intellectual stuff, it’s just detail” -- careful analysis of accounting conventions in real-time existence. By looking at interactions between commercial banks and central banks - and interactions across currencies through international exchange markets - one can clarify the process and solve the mystery. With a similar appeal to common sense, he punctures the mystique of the petrodollar, a favorite bug-a-bear of MMT critics. He talks about the changing role of central banks and the IMF from World War II until the present. The conversation veers to the philosophical when Steve expresses frustration with naysayers and merchants of doom. Bill reminds him -- and us -- that most of us are ignorant outside of our limited realm of knowledge. We extemporize our own experience which is narrow, ill-informed and emotional. We take advice from experts, relying on them to actually know what they’re talking about. He finds the "experts" in his own field to be a disgrace. In economic matters, we are guided by our individual life experience and that of our friends: debt is a matter of concern in our own household budget, so it must be the same on the national level. Then, we hear the “experts” reinforcing that view. It’s no surprise that we’re operating out of a fog of ignorance that reflects the dominant view. It’s heartening to hear Bill Mitchell’s take on the cynics and pessimists who predict failure for the Job Guarantee, for they have “such a negative view of human capacity.” Imagine the complex physics, astronomy, and engineering that was required to put a human on the moon 50 years ago -- yet they’re saying we can’t put together a few jobs? The limitations aren’t financial.  Whatever logistical constraints might exist will require foresight, planning, and imagination. Certainly we can rustle up a sufficient amount to make big changes. Bill Mitchell is Professor of Economics at University of Newcastle, Melbourne, Australia and creator of the first blog devoted to MMT. http://bilbo.economicoutlook.net/blog/ Twitter @billy_blog https://www.macmillanihe.com/page/detail/Macroeconomics/?K=9781137610669

Regulatory agencies taking on Savings & Loan fraud may not be everyone’s idea of a swashbuckling tale, but for us nerdy types at Macro N Cheese it’s pure gold. It has villains like Charles Keating and the Keating 5. (No, that’s not an English rock group from the 70's.) It has unsung heroes whose names aren’t known to most Americans, including our special guest, Bill Black, and the cofounders of Bank Whistleblowers United. Had people like them been allowed to do their job, the Great Financial Crisis of 2008 might have been prevented, along with the economic devastation of millions of people. Financial fraud is somehow beyond the ken of neoclassical economists whose assumptions about the behavior of corporations render them blind to reality. They are left baffled and unable to explain the S&L debacle and the GFC. But, as Bill reminds us, seeking profit is risky; it’s a gamble. “Why would you think the CEOs are gambling when fraud is a sure thing?”   In the 1980s and 90s, regulators noticed that S&Ls were behaving in a way that made no sense under traditional economic models but made sense if they were engaging in what was called “control fraud.” The explicit targeting of Blacks, Latinos and the elderly became known to the rest of us during the subprime mortgage crisis - there have even been movies about it - but regulators saw it even then. “Control predation” functioned under the assumption that people who were less likely to be economically sophisticated would be easy marks. The history Bill relates is long enough to write a book about. And he did -- The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry. This interview begins with the tale of Long Beach Savings, which morphed into Ameriquest, the Johnny Appleseed of fraud and predation. Through successful manipulation of the system it managed to avoid prosecution, the fate of numerous other financial institutions in the early 90s. It landed outside the jurisdiction of the federal regulators and was allowed to grow for 13 years, pumping out 75 billion dollars in tainted loans. Ameriquest served as a blueprint for the other frauds and predators in that industry. Another stream of this narrative takes us through what Bill Mitchell might call “capturing the state.” It involves increasingly outrageous political appointments, placing industry foxes in the regulatory henhouse. With Reagan appointees diverting prosecutions from within, and lobbyists and Senators applying pressure from without, a whole lot of criminal activity was allowed to flourish in the most powerful financial institutions in the world. Bill Clinton and George W. Bush took the axe to legislation, like Glass Steagall, designed to protect consumers. The industry used its power to launch a smear campaign against the regulators at a time when anti-government ideology was taking hold throughout conservative and “New Democratic” politics. Our listeners will recognize the names of a number of the players, such as Alan Greenspan, appearing here as a lobbyist assigned to recruit Senators in support of Charles Keating. Keating, the CEO of Lincoln Savings, will be forever linked with the Keating 5, a group of US Senators, including John McCain, to whom he made huge political contributions and from whom he received outrageous favors. Greenspan and the Senators insisted that Lincoln Savings had a clean bill of health. The fact that it ended up with a loss of 3.4 billion dollars -- the largest failure in US banking history until the GFC -- didn’t deter Clinton from appointing him as Chairman of the Fed. Bill Black is an Associate Professor of Economics and Law at the University of Missouri-Kansas City.  He is also a white-collar criminologist, a former financial regulator, former banker, and serial whistleblower.  He is a co-founder of Bank Whistleblowers United...

Mitch Green joins host Steve Grumbine to talk about his work with Democratic Socialists of America in Portland, OR, and the role Modern Monetary Theory can play in DSA. As an eco-socialist, Mitch’s focus is on the climate crisis, and as an economist, he uses MMT to answer the ubiquitous question concerning solutions: “how will you pay for it?” Even when people are not open to accepting MMT, he finds it effective to simply ask them the price of continuing to live like this. The standard posture is to simply “tax the rich” but given the political climate, that probably won’t fly. So, what should we do? The clock is ticking. If we consider the costs of catastrophe, even standard cost-benefit analysis will tell us we must act and take what he refers to as a moon-shot approach, opening up the spigot of federal money creation. None of this is to say we shouldn’t tax the rich. But we need not rely on their money to implement the necessary policies. We can apply the levers of the state. People can be taught that the laws of economics are not immutable; they are social phenomena -- of human creation. Mitch sees the Green New Deal as something bigger and bolder than any list of traditional policy objectives. It is a bold statement that says we want to change every aspect of our society. It takes the threat of ecological collapse and uses it as a way to galvanize many interests into one organized body of action. The GND is an opportunity to change how, where, and for whom we produce things, irrespective of financial price tag. We’ll do it in such a way that protects and respects the people who are immediately affected by the transition. When Steve asks him about the challenges we face, Mitch talks about the need to get money out of politics. (Fans of this podcast may remember Scott Ferguson insisting that we only need to get private money out of politics and, in fact, should have an injection of public money into the process!) The truth is that most Americans don’t “do” democracy very well. We must have a theory of democracy that understands power. If we’re naïve about power in politics we’ll be frustrated by the inability to change. Mitch expresses optimism for the future. His experience working with DSA has shown that people have a proclivity for community and stewardship. Organizing with a rights-based framework is inspiring and powerful. We see that conservatives are animated by the fear of losing their rights, and while this is mainly concerned with their right to own guns, everyone wants the right to a dignified life. It is up to us to seize control of the narrative and tie it to the right to a job, a clean environment, health care and housing. This is where our power stems from. The discussion goes into the difference between micro and macroeconomics. They talk about Steve’s view of the job guarantee as a democracy enhancer. And they go into greater detail about the possibilities arising from the Green New Deal. Mitch Green is a Research Scholar at the Global Institute for Sustainable Prosperity. He has taught courses in political economy, economic statistics and applied microeconomics at Franklin & Marshall College and currently moonlights as an adjunct economics instructor at Portland Community College. https://www.salon.com/2019/09/02/this-economist-debunked-all-the-right-wing-talking-points-about-the-green-new-deal/

In 1946, Beardsley Ruml, chairman of the NY Federal Reserve, published an article entitled “Taxes for Revenue are Obsolete.” According to Randall Wray this was consistent with the thinking of the time. In the 1930s and 40s, politicians and economists understood that taxes did not finance the federal budget. In fact, during World War II the government ran a deficit that was 25% of the GDP and a national debt equal to 100% of GDP.   This 2017 interview begins with Wray giving credit to Warren Mosler for the MMT insight that, in short, “taxes drive money.” We need only to look at colonial America for the basic facts. The colonies passed, simultaneously, the laws allowing for issuance of currency simultaneously and allowing the government to levy taxes in that currency. The purpose of that tax was to redeem those notes and burn them, a low-tech way of achieving the same effect as today’s keystrokes debiting our accounts when we pay taxes.   During the postwar years, the understanding that tax revenue does not fund federal spending was lost. It is politically expedient for those opposed to relying on government to solve social problems. They argue that we cannot expand spending on social programs unless we “find” more money somewhere. They claim that raising taxes will cause a reduction in private investment, thus stunting economic growth. There is not much daylight between the positions of conservatives and liberals. Whether they’re opposed to or in favor of government social programs, both sides believe that the money would have to come from taxpayers and, more specifically, from taxing the rich. Wray maintains that by tying these programs to taxing the rich, progressives are defeating their own policy.   In this episode, L. Randall Wray and Steve Grumbine discuss the difference between “good” and “bad” taxes, the role of the Federal Reserve and how it could be reformed, and the historic connection between attempts to repay the national debt and the onset of periods of economic depression. Finally they look at the connection between state and federal economies, and how taxes serve each. In the past, states were given block grants to make up the shortfall in their budgets. There is no reason not to do this again. Wray concludes with the observation that it is possible to create all the jobs that we need, providing income on the one hand and necessary services on the other.   Isn’t it interesting how nearly all discussions among proponents of Modern Monetary Theory lead to a federal job guarantee? This is not a coincidence.   L. Randall Wray is Senior Scholar at the Levy Economics Institute and Professor of Economics at Bard College   Papers: www.levyinstitute.org/publications/?auth=287   Co-editor Journal of Post Keynesian Economics ISSN 0160-3477 (Print), 1557-7821 (Online) www.tandfonline.com/toc/mpke20/current   New Book: Why Minsky Matters: An Introduction to the work of a maverick economist, Princeton University Press http://press.princeton.edu/titles/10575.html   New Book: Modern Money Theory: a primer on macroeconomics for sovereign monetary systems, Palgrave Macmillan http://www.palgrave.com/page/detail/modern-money-theory-l-randall-wray/?isb=9781137539908

When we talk about debt, it’s not just what someone owes, it’s also that someone has something owed to them. That’s the absurdity of the World Debt Clock. If the entire planet is in debt, who will we pay? Jupiter?   In the second half of our interview with Rohan Grey, he begins with the fact that all money is debt, but the cash in our pockets is not recorded as part of the national debt, which is concerned with debt instruments. He compares a $100 bill and a Treasury note to a checking account and a savings account. Only the latter pays interest.   When Rohan goes through the realities of this secondary market for government debt -- wholly a creature of the Fed -- it is clear that all worries are for naught. Most T bonds are rolled over, and if someone wants to cash out, there’s always someone else who wants them. If there arises a situation in which nobody wants to buy them, the central bank itself will do so.   The question of government debt comes up whenever there’s talk of the Green New Deal. Some have suggested it be financed by public banks, either because of political calculations or because those proposing it do not understand how money is created and believe we should take advantage of the huge pools of private wealth. Rohan points out the danger of both of those approaches. Lending rather than spending is a trap. If you need to be convinced of that, look no further than the student debt crisis. Rather than fund higher education, we said “let them eat loans!” As for the second option, well, the marrying of corporate financing and the public purpose is a good definition of fascism.   Asking the Green New Deal to give a return on the investment is entirely misguided. Do we ask school children to pay back the cost of their education by the time they turn 18? Do we insist that the military to turn a profit? When we try to turn public service into a revenue-generating endeavor, we distort the entire industry. Profit itself becomes the motive force, and the actual service takes a back seat.   Nowadays it’s impossible to have a conversation with a Modern Money Theorist without talking about the ubiquitous Yang gang and the UBI. Our objection can be summed up in the words of C. H. Douglas, an early creator of the UBI. His goal was to create “a democracy of consumers and an aristocracy of producers.” That says it all, doesn’t it? In their debate with Matt Bruenig in “In These Times,” Raul Carrillo and Rohan Grey expressed the demand for a world where the production process is as democratic and empowering for workers and average people as the consumption process.   Steve Grumbine often speaks of the job guarantee as a democracy enhancer. The community determines which work needs to be done. Democracy at the workplace is just as important as at the ballot box. Steve and Rohan talk about democratizing the fruits of intellectual labor as well as more traditional concepts of work. They address the hysteria about robots replacing all the workers. Certain jobs can be automated, however any job that requires human beings to interact with other human beings, by definition cannot be automated.   <span...

Surely Rohan Grey is one of the smartest guys in the world. It’s not just that he possesses an impressive amount of knowledge. He has a unique way of using analogies and metaphors to give shape to an idea. He illustrates his points with references to popular films, folklore and lyrical poets. With his experience in the realms of music, early childhood education, political economy, and jurisprudence, he brings Modern Monetary Theory to life in unexpected ways. Throughout this two-part interview he frequently correlates economics and the law by making connections and illustrating subtle conceptual parallels.   The episode begins where any discussion of macroeconomics should begin — talking about money. Instead of thinking of it as a “thing,” or a store of value, Rohan asks us to think of money as a series of relationships, structured by law. He calls it a web of invisible filaments. The MMT story starts with state-created money. While the original logic had to do with tax obligations, the desire for money takes on a life of its own. We don’t wake up thinking about wanting money to pay taxes. We want it for all those other goods and services  we need and desire.   Steve asks Rohan to discuss talk about the Federal Reserve, an institution often misunderstood by even the sharpest political minds. The rest of this episode takes us through its history and before, beginning with the earliest years of the American colonies, when states were developing their own economies. This was a time when local governments were still relatively accountable to their constituents and the democratic process was vibrant. The constitution was designed in large part to move monetary powers from the state level up to the federal level. In fact, Rohan says that, in contrast to the American revolution, the creation of the US Constitution was a counter-revolution.   There’s far too much history to recount here. Rohan takes us through Lincoln’s creation of greenback dollars, the Federal Reserve Act of 1913, FDR, and the decades-long bitter political battle for supremacy between the Department of Treasury and the Fed culminating in the Treasury-Fed Accord of 1951.   The struggle to create a central bank was basically a power grab by the capitalist class. Throughout its history, the Fed has zealously guarded its autonomy just as the Supreme Court has done; each determined to remain unaccountable to democratic forces. Both institutions employ the same tactic, convincing the public that they alone have the unique expertise to deal with complex matters. Ultimately Rohan maintains that the Federal Reserve adds no real value to the government or the economy. Our listeners will surely agree.   Rohan Grey is the founder and president of the Modern Money Network, a research scholar at the Global Institute for Sustainable Prosperity, and a J.S.D. candidate at Cornell Law School, where his research focuses on the law of money in the internet society.   https://modernmoneynetwork.org/   https://www.lawschool.cornell.edu/admissions/degrees/graduate-legal-studies/JSD-Student-Profiles-Rohan-Grey.cfm

With climate catastrophes in the news on a regular basis, we thought this 2017 interview was worth revisiting. Drs Philip Lawn and Steven Hail are Australian modern monetary theorists who focus much of their work on the economics of resolving the climate crisis. As an ecological economist, Lawn believes that the economy cannot grow forever because growth requires continual use of resources and constantly generates waste. He claims that a non-growing economy can still improve and likens it to a human being. The body stops growing around age 20, but one can continue to develop as a person. Hail calls himself an agnostic regarding growth, but believes we need to have the discussion. He is interested in looking at people’s levels of life satisfaction and well-being and how this relates to GDP. It is interesting to find that these two are not in lock step regarding growth. There’s something reassuring about knowing that MMT has reached the point where such differences can exist. Both Lawn and Hail say that the good news is that governments can afford to deficit spend for the purposes of creating full employment. Perhaps countries like the US and Australia do not need to grow their GDP; perhaps it’s a question of distribution. This fascinating three-way interview goes on to look at differences and similarities between the US and Australia and other, less developed, economies. They delve into complex questions that have no simple solutions. But, as Dr. Hail says, we must begin the discussion. Dr. Philip Lawn is a Research Officer at the Southgate Institute for Health, Society and Equity at Flinders University. In addition, he is a Visiting Lecturer in the School of Economics at the University of Adelaide, a Research Scholar at the Global Institute for Sustainable Prosperity, and a member of the Wakefield Futures Group of Concerned Scientists. Dr. Steven Hail is a Lecturer in Economics at the University of Adelaide, where he has lectured in financial and macroeconomic since 2002. He is also a Research Scholar at the Institute for Sustainable Prosperity. @StevenHailAus on Twitter

We’re fortunate to have a close friend and advisor of Alexandria Ocasio Cortez as our guest for this episode. Andrés Bernal’s optimistic and expansive point of view is contagious and inspiring.  Explaining the source of his optimism in this terrifying time, Andrés says he is influenced by historical struggles for justice: the Black struggle, from abolition to the civil rights movement and beyond, the struggle of indigenous communities, and the liberation movements of colonized nations. In seemingly impossible situations, against all odds, people persevered. What emerged are the most beautiful examples of solidarity.   Andrés was a philosophy major, with concern for deconstructing knowledge, questioning what we know and how we know we know it. Perhaps this explains the direction his life has taken. Whether his boundless curiosity is innate or epistemological, his passion for humanity is palpable. He believes that cynicism is the fastest way to destruction and the antidote is a genuine search for knowledge.   He has managed to combine his disciplined pursuit of greater understanding with a belief that we can build a society of abundance that’s grounded in human creativity and based in a caring economy. In this interview he has the same reasoned enthusiasm when explaining the Green New Deal, a federal job guarantee, or public banks.   Andrés relates the story of his long friendship with AOC and how her political evolution coincided with his developing understanding of Modern Monetary Theory, which he shared with her. This magical confluence has had history-altering consequences; she is a major reason MMT has broken through the surface, and the ripples have not yet been stilled. She put the job guarantee on her platform and told a reporter that MMT should be part of the national discussion. She challenged the accepted wisdom that there’s a natural rate of unemployment, below which society will collapse, or face some calamitous fate. The chairman of the Federal Reserve was forced to agree with her, publicly.   This interview covers enough wonky material to satisfy regular fans of Macro N Cheese. But Andrés also inspires us to unleash our imagination, reconsider the nature of work, and plan for a future that meets all our needs.   Andrés Bernal is Lecturer of Urban Studies at CUNY Queens College, Doctoral student in Public & Urban Policy at The New School, and policy advisor, political organizer and Green New Deal scholar.   https://www.huffpost.com/entry/opinion-green-new-deal-cost_n_5c0042b2e4b027f1097bda5b   Andrés-Bernal.com   @andresintheory on Twitter

Have you seen Eric Tymoigne’s recent tweet destroying the top myths about Modern Monetary Theory? If not, listen to this episode and hear the myths evaporate. Tymoigne begins by giving an elegant explanation of MMT as a theoretical framework explaining how governments issuing their own currency, or monetarily sovereign, operate in the economy.  Understand that and you understand the importance of government policies in promoting full employment and price stability. And now, the myths: #1 MMT ignores Minskian financial instability. Listen to Eric’s explanation of Minsky's Financial Instability Hypothesis.  He describes why, in the last financial crisis, people took on mortgages they were unable to afford, giving them no choice but to borrow more, default or attempt to sell their assets.  #2 MMT ignores capital controls. Capital controls regulate the flow of money into and out of a country. Ideally, you only allow money that is productive and limit speculative activity through taxes or other barriers. #3 MMT only applies to the US. Wrong. MMT applies to any country with monetary sovereignty. What does that mean? When a country issues its own currency it is monetarily sovereign. Similarly when it issues debt only denominated in own currency, imposes taxes only in own currency, and makes payments using its own currency, it satisfies the definition of monetary sovereignty.  Plenty of nations do that.   Eric explains what’s special about the US is having foreign demand for the US dollar. When the   foreign sector wants to save in US dollars, the federal deficit must increase.  But even the US has constraints making it appear not to have sovereignty. The public debt ceiling, which has been used for political gain, has created disruptions and self-inflicted constraints. #4 MMT says nothing about developing economies. (Editor’s note: anyone who has listened to Fadhel Kaboub knows that this is patently false.) Development involves complex decisions regarding how to develop production and provide for the needs of the people in housing, education and healthcare. Monetary sovereignty gives you some freedom to work through these issues.   #5 MMT doesn’t recognize there can be tradeoffs. MMT economists are constantly confronted with examples of hyperinflation in Zimbabwe and the Weimar Republic. They understand these were unique circumstances; when spending runs close to a nation’s productive capacity, there are potential inflationary pressures. In the US and other developed, monetarily sovereign countries, we are far from full productive capacity today. #6 MMT is for monetary financing of government spending. Eric explains the complex relationship between the central bank and the Treasury. This is a complicated issue, coordinated in an extremely refined manner. #7 MMT says deficits don’t matter. Eric explains that deficits matter quite a bit because deficits inject income into the private sector. The government can always afford to deficit spend. MMT is concerned with the availability of real resources. Eric Tymoigne is an Associate Professor of Economics at Lewis and Clark College, Portland, Oregon; and Research Associate at the Levy Economics Institute of Bard College. His areas of teaching and research include macroeconomics, money and banking, and monetary economics. https://college.lclark.edu/live/profiles/51-eric-tymoigne https://www.tandfonline.com/doi/abs/10.1080/05775132.2019.1639412?journalCode=mcha20&

Our guest this week is John Harvey, the alter-ego of everybody’s favorite Cowboy Economist.  While this cowboy would be at home in any MAGA rally, we find that behind his homespun wisdom is a great deal of planning and analysis. John talks to Steve about his approach to framing macroeconomics in such a way as to break through our preconceived notions.   In response to recent attacks on Modern Monetary Theory as a radical plan, John’s aim is to show that there’s nothing radical about it. It’s been with us all along. Who better than a cowboy to carry this message?   In explaining the Green New Deal and federal job guarantee, John’s first step is to point out that it’s not in the private sector’s best interest to hire everyone who is willing to work. The private sector minimizes the use of labor because labor is a cost, so there’s no reason to expect them to hire everyone who wants to work. This isn’t necessarily a bad thing; when businesses automate, it saves us money as consumers, but it puts people out of work.   So, on the one hand there’s a pool of labor that private sector won’t hire, and on the other hand there are services that our communities require. The police and fire departments are obvious examples and from there it’s not such a leap to think of others, like child protective services or environmental cleanup.  None of these are profitable industries, so we can’t expect the private sector to meet those needs.   On to the big question: how will we pay for it? To answer this, John takes us back to World War II. When the US entered the war, after the bombing of Pearl Harbor, there was still massive unemployment. The government didn’t borrow money by selling bonds, then build factories and hire the workers. The sequence of events was pretty much the opposite. They spent the money, creating it in the process. They built the factories, activating idle resources and taking resources from the private sector. In John’s narrative, they took steel that would have been used to build Fords and used it to build Shermans. The role of war bonds was never to finance the war. Their main purpose was to deter people from spending the newly earned income that was burning a hole in their pockets on products that were no longer available due to the shifting of production priorities.   This episode will interest anyone new to MMT, as well as those who hope to introduce others to the concepts.    John T. Harvey is a professor of Economics at Texas Christian University http://personal.tcu.edu/jharvey/cowboyeconomist/index.html   Follow him on YouTube https://www.youtube.com/channel/UCL9PHjlPQ5wq0CD6vAibxYg/featured   Twitter @John_T_Harvey   Read his blog https://www.forbes.com/sites/johntharvey/#5935884b685c

It turns out that cryptocurrency is both more complex and more simple-minded than one would have thought. Or are we missing something profound? Is bitcoin just another speculative asset or will it soon be replacing money as we know it? Steve’s guest Brett Scott dispels the myths about bitcoin and gives us a brief history lesson on the development and uses of fintech (which simply means financial technology), blockchain, and cryptocurrencies, including bitcoin. Some of the misconceptions about bitcoin can be traced to the way it’s explained by the mainstream media. It’s treated as a radical new ‘stateless’ currency. But the bitcoin community itself is also guilty of doublethink and contradictory language. Predictions of bitcoin replacing fiat currency are not grounded in reality. How can it take the place of the US dollar when it is, in fact, priced in US dollars? Scott’s explanations are blessedly clear, coherent, and consistent with MMT. Even listeners unfamiliar with blockchain technology and cryptocurrencies will find this episode illuminating. Brett Scott is a journalist, campaigner and the author of The Heretic’s Guide to Global Finance: Hacking the Future of Money. He is a Senior Fellow at the Finance Innovation Lab in London. Follow him on Twitter @suitpossum

Trump keeps telling us that unemployment is at an all-time low. Even if that were true, it wouldn’t stay that way. As our guest Scott Fullwiler explains, the private sector isn’t about creating jobs; it’s about profitability. So even if there were enough jobs for everybody who wants one, it would be a coincidence. And how can we design an economic policy around a coincidence?&nbsp;In this special interview with host Steve Grumbine, Fullwiler says that we have a choice whether to have a buffer stock of the involuntarily unemployed or a buffer stock of the employed. He says that this is one of the revelations in Randall Wray’s seminal 1998 book, Understanding Modern Money: The Key to Full Employment and Price Stability. Another revolutionary concept was that the central bank is about interest rates, not the money supply, while government deficits are about money, not interest rates. &nbsp;&nbsp;In a wide ranging conversation, Grumbine and Fullwiler revisit some of the key moments in MMT history -- what Fullwiler calls the “hockey stick moments” -- including Dr. Stephanie Kelton’s position as Chief Economist on the Senate Budget Committee, and Alexandria Ocasio Cortez’s public utterance of the phrase “Modern Monetary Theory.” As we all remember, after this was reported it was referred to in one article after another, carrying MMT, in name at least, into the public square.&nbsp;Grumbine brings up the ongoing conflict between supporters of the Federal Job Guarantee and a Universal Basic Income. Fullwiler insists the two are not in competition. And because the UBI doesn’t have a solution for the guy who still wants to work but doesn’t have a job, we’re back at square one, with the choice of having an unemployed buffer stock or an employed buffer stock.&nbsp;&nbsp;Professor Scott Fullwiler is in UMKC’s interdisciplinary program and a Research Scholar at the Global Institute for Sustainable Prosperity&nbsp;&nbsp;Follow him on Twitter @stf18&nbsp;https://ftalphaville.ft.com/2019/03/01/1551434402000/An-MMT-response-on-what-causes-inflation/&nbsp;http://www.global-isp.org/scott-fullwiler/

It’s not such a stretch to have Mark Blyth as a guest on our podcast. Although we normally feature proponents of Modern Monetary Theory, our interests are, above all, in the health of the planet and the social, physical, and economic health of our fellow citizens.   In this episode, host Steve Grumbine and Professor Blyth find that they share two concerns of utmost import: austerity, as both an economic as well as an ideological system, and the climate crisis.   Blyth is known for his pop culture references and his fantastic sense of humor. “A Lannister always pays his debts” leads to an illustration of the difference between public and private debt. Hint: the first is intergenerational. Grumbine may not agree that generations of private individuals are actually responsible for repaying the government’s commitments, but they both know that when wages are stagnant, personal debt is likely to be devastating and never-ending.   We think our listeners will get a kick out of Blyth’s irreverence as much as Grumbine clearly does. When Steve challenges Blyth’s comparison of Venezuela’s sovereign currency to that of the United States, Blyth retorts that it’s all “smoke and mirrors and bullshit.”    Professor Blyth is concerned that MMT proponents haven’t faced up to the reality of political obstacles. “Have you met Republicans?” They’re not going to agree to “just take the Fed, write a big check, stick a golden penny in the Fed, and we’ll do a green new deal.” Well, we can’t argue with that.   You’re going to enjoy this conversation that takes us back to 1315, revealing that there has been a downward trend in interest rates for 700 years. (Did we mention that Grumbine and Blyth agree that the threat of inflation is vastly overblown?) Whether you’re interested in Westeros or Brexit or the Grateful Dead, it’s an episode you won’t want to miss.   Mark Blyth is The William R. Rhodes ’57 Professor of International Economics, Professor of Political Science and International and Public Affairs at Brown University.   Follow him on Twitter @MkBlyth   https://global.oup.com/academic/product/austerity-9780199389445?q=mark%20blyth&lang=en&cc=us   https://global.oup.com/academic/product/the-future-of-the-euro-9780190233242?q=mark%20blyth&lang=en&cc=us

Who better to explain the Federal Job Guarantee than Pavlina Tcherneva, who wrote her first paper on the subject in 1996, when it was called the Employer of Last Resort? This was at the height of the Clinton “Goldilocks economy,” which boasted of full employment. Needless to say, the ELR did not capture the popular imagination. Now, almost a quarter of a century later, the conversation has shifted. The FJG is getting noticed. With the campaign season heating up, we are re-releasing this interview from 2018, in which Tcherneva talks about her newest working paper. She talks to Steve about the wide-ranging effects of chronic unemployment and defines the essential components of the solution.   The Job Guarantee is not just a policy for full employment, but for structural reform. It takes on macroeconomic, socio-economic, and labor market problems and shifts the paradigm for stabilization. We have a choice: we can stabilize the economy with a pool of unemployed workers, or it can be stabilized with a pool of the employed. The public sector is the only one that can serve this countercyclical function, through the power of the public purse.   Tcherneva points out that the government has price supports for commodities like dairy, soybeans and corn. The most important commodity is neglected: Wage labor. She reminds us that economists, going back to Adam Smith, have always recognized that labor is a special input of production -- unlike machinery, factories, or raw material. Labor is the one commodity that reproduces the economy and the social reality. Yet it is the one commodity that is not supported by public policy.   Now that the Job Guarantee has come out of the closet, there are plenty of distorted, diminished proposals that miss the mark. According to Tcherneva there are three essential components for a Job Guarantee that will serve its full macroeconomic function: 1. It must be a permanent program 2. It must be universal 3. It must establish a wage floor   The wonks in our audience will appreciate the discussion of the JG as a preventive program, going much farther than merely preventing unemployment. It will prevent crashes in the labor market and the collapse of aggregate demand. There’s a marked difference in the way workers spend into the economy when they’re receiving unemployment insurance versus when they have guaranteed employment, even at a minimum wage. It’s the difference between retrenchment and full economic engagement. The less wonky will be grateful for Tcherneva’s clear, direct illustration of these concepts.   This interview covers a wide range of related issues, from the three most common arguments against the Job Guarantee, to the faux Keynesians, serving up crank schemes for economic growth. After listening to this episode you will be armed and ready for the onslaught of lies and misconceptions the candidates will be slinging.   https://www.pavlina-tcherneva.net/ Twitter @ptcherneva

Here in the Macro ‘n Cheese clubhouse, whenever we think we fully comprehend neoliberalism, a guest comes along with a whole new range of insights. Scott Ferguson is just that kind of guest. His main area of interest is culture and he makes some surprising observations about our ingrained misunderstanding of money and how it relates to politics, art, and our very experience of modern life. Neoliberalism structures our innermost thoughts, feelings, and desires.   Ferguson traces the roots of neoliberalism back through what he calls the “big L” liberalism of Adam Smith and the class warfare waged against the aristocracy by the merchant and industrial class. The “small L” liberalism of FDR and post WWII mid-century America played a role as well. By the 1970s, neoliberalism grew as a reaction to the gains made by the civil rights, labor, and anti-war movements. Power needed to be locked down and consolidated. The neoliberal narrative of scarcity flourished.   Money can be legitimately seen as our oxygen. It is the centralized medium that connects us to one another. But we don’t have a culture that affirms this view. In songs and films, money is related to greed and, whether this is seen as a positive or negative quality, it is always portrayed as a zero sum game. There must be winners and losers. This is as true of our popular culture as our political rhetoric.   Despite the enormity of the problem, Ferguson sees this as an exciting time. The current paradigm crisis is exposing cracks in the neoliberal foundation. Activist groups are aligning with the modern money movement and, for the first time in decades, rejecting the mythology of scarcity. The clarity of focus and purpose in proposals like the Green New Deal and the federal job guarantee can ultimately change the debate so it is about abundance rather privation.   Scott Ferguson is Associate Professor of Film and Media Studies in the Department of Humanities and Cultural Studies at the University of South Florida, Research Scholar at the Global Institute for Sustainable Prosperity, co-director of The Modern Money Network Humanities Division, and producer of the Money on the Left podcast.   Follow him on Twitter @videotroph Money on the Left Podcast  https://www.buzzsprout.com/172776   Check out his book, Declaration of Dependence https://www.nebraskapress.unl.edu/university-of-nebraska-press/9781496201928/

Steve is joined by Thomas Fazi, co-author of Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World.  Fazi believes there’s an undeniable connection between the historic defeat of the left over the past thirty years and the dissolving of national sovereign power as we’ve transferred the tools of economic policy to supranational organizations which are outside the control of citizens.    The first part of the 20th century saw the gradual integration of the masses into the democratic processes of western political systems. This posed a great threat to capital, auguring the possibility of its power being curtailed.    Universal suffrage had been hard won in these nations, so the neoliberal solution was to hollow out the power of the ballot box. Formal political rights could be kept in place but by separating the mechanisms for democratic policy making from economic policy, they were able to render worthless traditional means of affecting change.   The Eurozone is the most extreme example, but other western democracies were similarly disemboweled through the shifting role of so-called independent central banks as well as bilateral and multilateral trade treaties which increasingly prohibit progressive government intervention in the economy.   Fazi maintains there is nothing free about the free market, which continues to need state intervention in the economy to forward the interests of capital, which could still make it vulnerable to mass democracy. He believes the left should acknowledge that our political, economic and social rights were all won within the context of the nation-state. And that is where power must be reclaimed.   https://www.plutobooks.com/9780745337326/reclaiming-the-state/   Follow Thomas Fazi on Twitter @battleforeurope and Facebook https://www.facebook.com/thomasfazi

We’re excited to welcome back the metabolically optimistic Robert Hockett, advisor to Senators Bernie Sanders and Elizabeth Warren and Representative Alexandria Ocasio Cortez. Bob talks with Steve about a wide range of subjects that will thrill political junkies and educate those interested in exploring the depths of Modern Monetary Theory.   They engage in the popular sport of punditry, looking at the recent Democratic Presidential Debates and surmising the calculations behind our favorite candidates’ messaging. Hockett makes the tantalizing suggestion that Senator Warren is more accepting of MMT than is commonly believed.   Addressing the ubiquitous question of how to pay for progressive political programs, they turn to Hockett’s article in Forbes that asserts “how we will pay for it isn’t ‘a thing.’ Kicking off from the basic tenet that our only constraint is the availability of resources, he explains why inflation is not “a thing” either. Newcomers to MMT will find the depth of this discussion illuminating.   Steve asks about the hoopla surrounding Libra and other cryptocurrencies which prompts Bob to talk about the need to understand money as credit. He makes the compelling case that credit allocation severely affects inequality and suggests a new, public institution which would make capital available to small businesses and individuals. He outlines what we want a central bank to do, comparing it to what the Federal Reserve actually does, and talks about future legislation to transform it.    Robert Hockett is a Professor of Law and Professor of Public Policy at Cornell. He writes about law, justice, money, finance and economics for Forbes.   https://www.forbes.com/sites/rhockett/2019/01/16/the-green-new-deal-how-we-will-pay-for-it-isnt-a-thing-and-inflation-isnt-either/#485baf94d7fe

The evening news has stories of children in cages on the US-Mexican border. Again. Fadhel Kaboub, President of the Global Institute of Sustainable Prosperity, asks us to imagine the conditions that would make someone desperate enough to send their kids off to seek safety in a foreign land.   The root causes of the refugee crisis are the same all over the world. Decades of neoliberal policies, climate chaos, the exigencies of empire, and unsustainable trade deficits have destabilized the economies of developing nations. Kaboub explores examples from the Middle East to South America. Then, using the lens of Modern Monetary Theory, he proposes an alternative to austerity and explains how a job guarantee would relieve the financial insecurity of every worker, citizen or not.   http://www.global-isp.org/president/

There was a time when Mathew Forstater & Warren Mosler would conduct regular counts of MMT believers. There were 11 or 12, and they knew them all well. In this interview, Forstater takes us back to the late 1990s, when Modern Monetary Theory first took root in academia.   Today he is Research Director of the Global Institute for Sustainable Prosperity, but his story begins with his first post-doctorate teaching job. He secured a summer internship for an undergrad named Pavlina Tcherneva. Her assignment: write a critical review of Mosler’s first book.   The relationships they formed resulted in the creation of a research institute, the Center for Full Employment and Price Stability at the Levy Institute. Randall Wray and Stephanie Kelton descended upon it. After a couple of years, the MMT nucleus moved to UMKC, where they established an interdisciplinary program. Today it’s an international movement with a reach into other disciplines and far beyond the walls of universities.    Forstater emphasizes the importance of keeping policy discussion on the table. What distinguishes them from mainstream economics is they recognize the need to be grounded in reality. MMT is not just theoretical.   Steve asks him to talk about some of the specific policies associated with MMT. Forstater believes that the Job Guarantee should be a central piece of Green New Deal by demanding only sustainable jobs, or jobs with minimal negative effect. The federal government isn’t subject to the pressures of the private sector which, by the very nature of the capitalist economy, must minimize production costs regardless of environmental impact. The JG can be a vehicle for other policies as well, establishing a minimum wage and standards for health care coverage.   Global Institute for Sustainable Prosperity   http://www.global-isp.org/research-director/

“We’ve been given the wrong answers to the right questions,” says Steve’s guest Reverend Delman Coates, founder of the new organization, Our Money. “As a faith leader, it’s time to reclaim a theology of economics.”     Rev Coates recounts that being a pastor, he sees too many people who follow all the rules yet find themselves dislocated and struggling. Understanding that money can be distorted and manipulated, and its relationship to pain and poverty in the world today, he set out to learn the structural and systemic causes. It led him to Modern Monetary Theory.    Beyond the perceived differences between communities in SE Washington DC, Appalachia, or Ohio, the one thing that unites us is the reliance on money to buy goods and services, to keep a roof over our heads, and to provide for our families. Our Money advocates for more government investment in society’s priorities, preferring the creation of currency through public spending rather than private lending by banks.   “As a faith leader, it’s time to reclaim a theology of economics.” Rev Coates believes we can move towards a moral economy that works for us and not against us. His eloquence and clarity makes believers of us all.    

Rent control, redux. Back in 2017, Steve interviewed Nathan Tankus, of the Modern Money Network, shortly after the 1st MMT conference where Nathan spoke of the heterodox approach to planning housing affordability. With renters now the majority in major US cities, and homelessness on the rise throughout, we are re-releasing this as a podcast to introduce it to a whole new audience.   The US is plagued with problems of housing insecurity, gentrification, and rents that are too damn high. Nathan guides us through the ins and outs of the faux rent control laws in urban centers like New York, where landlords avail themselves of more loopholes than a crochet needle.   Modern Monetary Theory allows us the policy space to deal with unemployment, public health, and student debt. But how do we navigate the labyrinth of federal, state, and municipal issues that affect the cost of housing? US cities and states cannot literally create dollars but they can come surprisingly close by creating monetary value through zoning policies that can elevate or reduce trillions of dollars of land value overnight.     Peering through the lens of MMT, Nathan lays out the two major types of obligations that governments impose. The first is familiar to fans of this podcast: the direct monetary obligation to pay taxes, fines and fees. The second is the obligation to respect property rights. In the US this refers almost entirely to private property. So, if the lack of sufficient federal spending and planning are responsible for both joblessness and homelessness, then the government has a dual obligation to the public. Just as a job guarantee will eliminate unemployment, using the public planning and regulatory apparatus can eliminate housing insecurity and homelessness.   Nathan Tankus is Research Director at the Modern Money Network and Research Fellow at Clarke Business Law Institute at Cornell.   https://modernmoneynetwork.org/

Back by popular demand! Ellis Winningham, MMT guru and educator with acerbic wit and acute intellect, joins Steve to dissect the federal job guarantee. Together they set the record straight on the myths and realities of the UBI then go on to explain how and why the federal job guarantee is more than mere policy. It is both a price anchor and economic stabilizer, making it an intrinsic component at the core of Modern Monetary Theory.   Confused about NAIRU versus NAIBER? Don’t know the difference between a pool of unemployed labor and a buffer stock of the employed? Press “play.”   http://elliswinningham.net/    https://www.facebook.com/ellis.winningham

The reality and repercussions of racial oppression are mostly absent from political discourse in the US. Steve and his guest Darrick Hamilton address it head-on in this thoughtful and detailed 2018 discussion of the range of solutions.   Hamilton, professor of policy, economics and sociology at OSU, explains why reparations cannot be simply about handing out cash. The first requirement is a detailed acknowledgment of the harm done, which must be specific to the victimized group. When talking of reparations to Native Americans, for example, that unique history of oppression must be spelled out.   Redress in the form of individual payments could have unintended consequences, exacerbating class divisions, so some form of ownership might be included. The nation needs a Marshall plan for building black institutions as a further means of redistribution and reparations.   A federal job guarantee, while separate from reparations, is also crucial for mitigating inequality. It’s not only an economic benefit, but a psychological one, which doesn’t get emphasized enough in the debate.   Finally, Professor Hamilton explains the principles of baby bonds, which address the mechanism by which Americans build wealth. Each child would be given a trust fund at birth, calibrated to the family’s wealth. The concept goes back to Thomas Paine, who spoke of a “stakeholder society.”   Darrick Hamilton is Executive Director of the Kirwan Institute for the Study of Race and Ethnicity, Professor in the Glenn College for Public Affairs, and Professor, Departments of Economics and Sociology, College of Arts and Sciences (by courtesy) at The Ohio State University.  http://kirwaninstitute.osu.edu/about/#staff   https://www.jacobinmag.com/2017/02/federal-job-guarantee-universal-basic-income-investment-jobs-unemployment/   https://theconversation.com/why-wealth-equality-remains-out-of-reach-for-black-americans-111483   https://www.ted.com/talks/darrick_hamilton_how_baby_bonds_could_help_close_the_wealth_gap?language=en   https://bidenforum.org/racial-equality-is-economic-equality-64fca8e8bfc0

Steve’s guest is Brian Romanchuk, founder of the blog bondeconomics.com., He is known for, among other things, his detailed technical rebuttals to critics of Modern Monetary Theory. Brian became interested in MMT because, as a data analyst in the bond market, it was the first macroeconomic theory that made sense. It actually matched what he saw, on a daily basis, in the real world.    After a look at the history of post-Keynesian thought, Steve asks him to delve into the nuts and bolts of bonds. Those familiar with MMT understand the role of Treasury bonds, but Brian gives us an overview of other types of public and private bonds. Along the way, he compares US state and Canadian provincial governments & municipalities, and their relative power over the local economies.    And we can’t talk with a Canadian without discussing single-payer health care. Brian shares his thoughts on the economic impact of removing private insurers from the equation.   Brian Romanchuk was a fixed income quantitative analyst in Quebec.  His writings can be found on: www.BondEconomics.com   https://www.goodreads.com/author/show/14055811.Brian_Romanchuk

Steve’s guest, Ivan Invernizzi, co-founder of Rete MMT in Italy, explains that currency has an “exchange rate” within a nation’s borders.  In fact it has several, because there are different levels of discrimination in access to currency.  With geographical and class differences, the balance of power shifts because of the way the state organizes banking, and who the state supplies with currency.    The corporations and individuals who receive payments directly from the government are in a stronger position than those a few rungs down.  Ivan refers to this as filtering; we call it subcontracting.  The farther from the currency issuer, the weaker the economic position.  This is true of both employer and worker.  A job guarantee would eliminate the filter, putting workers on equal footing.   Ivan widens the discussion to include the role of foreign exchange.  Does trade determine the exchange rate or is the state still in control?   Ivan Invernizzi is co-founder of ReteMMT Italia and MMT France.  He is working toward his MS in Economics and Global Markets at the University of Bergamo, Italy   www.retemmt.it www.mmt-france.org

Professor William A. Darity, Jr. also known as 'Sandy' is an American economist and researcher. He is currently the Samuel DuBois Cook Professor of Public Policy, African and African American Studies, and Economics and the director of the Samuel DuBois Cook Center on Social Equity at Duke University. Darity maintains that people are out of work in the US not because of personal defects but because the economy doesn’t generate enough jobs. He tells Steve why we need a federal job guarantee, covering the 5 main points from the Jacobin article of that name which he co-authored with Mark Paul and Darrick Hamilton. He also shows how the FJG is superior to a universal basic income. This interview is as important today as it was when it was first aired in 2017.   https://sanford.duke.edu/people/faculty/darity-jr-william

Steve Grumbine’s guest is Raul Carrillo of the New Economy Project and Modern Money Network.  As an anti-poverty & economic justice attorney he has a unique perspective on the monetary system. Raul talks about his seminal article, “The Dangerous Myth of Taxpayer Money,” and the legal history of taxation, citing the Supreme Court ruling that the gov’t has power to issue money backed only by the full faith & credit of the US gov’t - not backed by gold, taxes, or bonds.  He reveals some startling facts about the connection between taxation and the civil rights struggle for public education. Raul & Steve discuss the scramble to find truncated ways to present complex ideas.   Progressives must attack false scarcity, which is at the core of both conservative & liberal thinking.  Raul says that fighting for the Job Guarantee brings people to understand the concentration of power.  It’s an awareness that can create the momentum to take on the system itself.   Racial Taxation: Schools, Segregation, and Taxpayer Citizenship, 1869-1973, by Camille Walsh https://www.uncpress.org/book/9781469638942/racial-taxation/ https://splinternews.com/the-dangerous-myth-of-taxpayer-money-1819658902 @RaulACarrillo on Twitter Modern Money Network https://modernmoneynetwork.org/ New Economy Project https://www.neweconomynyc.org/   Special Thanks to Geoffrey Ginter for the excellent intro song! And of course special thanks to our guest Christian Reilly, the donors of Real Progressives and our excellent staff of volunteers.

Steve's guest is L. Randall Wray, a professor of Economics at Bard College and Senior Scholar at the Levy Economics Institute.  In this 2017 interview, Wray looks at the Global Financial Crisis from both sides now. The celebrated economist tells Steve how the rise of shadow banking led to banking deregulation, opening the door for massive fraud, leading to the global financial crisis. He then explains in detail how globalism affected average Americans, suppressing their wages for 40 years and forcing them to amass unsustainable personal debt.  These two threads led to the GFC.   Wray compares the federal government’s response to the banking crisis with the reaction to the real economy’s crisis, the jobs crisis, and the consumer spending crisis. Is it any wonder that Wall St recovered, but the rest of the economy did not?   He maintains that only a federal job guarantee will prevent more pain. Manufacturing jobs are not coming back to the US any time soon.  He goes on to address both the myths and reality of Social Security and Medicare.  And finally, he offers a simple but truthful description of the relationship & interaction between the central bank, or Federal Reserve, and the Treasury.   http://www.levyinstitute.org/scholars/l-randall-wray http://neweconomicperspectives.org/about.html

Alan Nasser joins Steve to discuss his new book Overripe Economy: American Capitalism and the Crisis of Democracy.  Alan is Professor Emeritus of Political Economy & Philosophy at The Evergreen State College. His prediction of a new economic crisis is substantiated by a thorough exploration of the history of capital development as it passed from its most productive stage, the “Golden Age” from 1949 to 1973, into this new financialized economy, where massive profits are no longer invested in growth, but are used for stock buybacks and price manipulation. He speaks of “disaccumulation” and maintains that capital’s only job is to increase itself. Nasser insists we must look to the government for investments that support the public purpose.   AlanNasser.org

Steve’s guest is Warren Mosler, the originator of Modern Monetary Theory and author of The 7 Deadly Innocent Frauds and  Soft Currency Economics II.   Mosler contends that the labor market is an unfair game.  Real wages gravitate towards subsistence level and remain there, even when unemployment comes down.  It’s a systemic problem that can only be addressed through government intervention.  An immediate and universal job guarantee will level the playing field & support wages from the bottom up.  However, he charges that the MMT community is explaining the program incorrectly.  The clarity and precision with which he lays it out will be a revelation.   Mosler touches on other ways to address the huge gap in distribution.  He insists that we get rid of the Fed’s “trillion dollar cottage industry,” by forbidding the sale of treasury bills with greater than 3 months maturity.  He also wants the government to get out of the corporate liability business, because corporations should suffer the consequences of their actions.   @wbmosler on Twitter Warren Mosler's Website - http://moslereconomics.com/ (has links for his books!)

UK economic activist, musical comedian and co-host of the MMT Podcast Christian Reilly joins Steve to talk about their joint mission to spread MMT to the international activist community. Reilly explains the motivation that led him to create the seven point MMT Manifesto. They agree that the debate about including the Job Guarantee as an intrinsic component of MMT has been settled; it's not a political plank, it's an economic necessity. In a wide ranging discussion, they look at ways to use MMT to bridge the divide between conservatives, progressives and libertarians.   Christian's Website - https://christreilly.com/ @christreilly & @MMTpodcast on Twitter The MMT Podcast - https://pileusmmt.libsyn.com/   Special Thanks to Geoffrey Ginter for the excellent intro song! And of course special thanks to our guest Christian Reilly, the donors of Real Progressives and our excellent staff of volunteers.

Steve’s guest, straight from the UK, is Patricia Pino, a founder of the Gower Institute for Modern Money Studies and host of the MMT Podcast. The topic of the day is Brexit, and Patricia explains why it can be as confusing to citizens of the UK as it is to those of us on the outside. Understanding how the eurozone furthers the neo-liberal agenda goes a long way toward untangling the political posturing and mainstream media coverage. With MMT, the UK can avoid Brexit's pitfalls and control their own fate.   @PatriciaNPino on Twitter   https://pileusmmt.libsyn.com/   https://gimms.org.uk/