Episodios

  • This week’s guest is a bit of a departure for us. We don’t usually interview political candidates but Lauren Ashcraft is a stand-up comedian, a Democratic Socialist, and an ardent proponent of MMT, so how could we resist? She was introduced to us by our friend Andrés Bernal, who must have recognized how well all these attributes would serve her in the US Congress.

    When someone’s convictions are born of their lived experiences, the roots run deep. Corporate greed literally killed her grandfather who was a victim of a notorious coal mining accident. Her grandmother could not have survived without Social Security.

    Ironically Lauren became radicalized from working in the belly of the capitalist beast. She worked for one of the huge financial institutions where she received daily messages about profits being down. Staff was constantly being laid off or forced to relocate, at a time when these companies were receiving billions of dollars in incentives. And somehow the compensation to those at the very top continued to grow. She was witnessing the “socialism at the top, rugged capitalism for the rest of us” that Bernie Sanders talks about.

    Lauren is running as a Democrat in New York’s 12th Congressional district, challenging incumbent Carolyn Maloney. The district includes some of the wealthiest neighborhoods in the country (we’ve all heard of NY’s Upper East Side, right?), but also extends to the Queensbridge Houses, the nation’s largest public housing development.

    Steve and Lauren debate whether it will be possible to change the Democratic Party from within, and agree that it’s really not about Democratic vs Republican. They talk about strategies to continue expanding the movement, breaking away from partisanship, and how the COVID-19 pandemic is shining a light on - and exacerbating - the need for the very policies in Lauren’s platform.

    There’s much more to her story, including her journey to becoming a stand-up comedian. Let’s just say it began with a Groupon coupon -- you’ll have to listen to the episode to hear the rest.

    Lauren Ashcraft is a candidate for New York’s 12th Congressional District. She has been endorsed by Brand New Congress, Marianne Williamson, and Shahid Buttar, among others.

    https://laurenashcraft.com/

    @voteAshcraft on Twitter

  • Sometimes it seems like economists forget that economics is a social science which is why we’re excited to bring the new generation of MMT to Macro n Cheese. Matthew Robinson is a doctoral student at UMKC, which has been an academic home base to many friends of this podcast, including Mat Forstater who brought Matthew to our attention.

    Matthew talks to Steve about the personal and academic journey that led to his current work. As an undergrad at Fresno State, he saw a disconnect between what he was being taught and what he was seeing as a volunteer in the community. The west side of Fresno was a segregated neighborhood, with as much as 20% unemployment -- a reality that wasn’t reflected in the textbooks.

    At UMKC’s Center for Economic information, there’s a group working on health issues, recognizing that minority neighborhoods experience the worst cases of childhood asthma, lead poisoning, and a myriad of other problems, exacerbated by years of poor housing conditions and inadequate healthcare facilities. Matthew’s area of focus is violent crime, with the understanding that people make certain choices out of necessity.

    Reaching out to the community is a great use of economists’ time. It’s a field that isn't known for advocating for the people most in need. There’s a lot of theory but the least served populations aren’t included in the conversation. Matthew talks about what it means to serve as a support role for those on the front lines.

    He is also involved in bringing MMT to the HBCU’s -- Historically Black Colleges and Universities. Before the coronavirus pandemic brought things to a standstill, he had been to Morehouse, the alma mater of Dr. Martin Luther King, Jr, who advocated for a job guarantee more than half a century ago.

    There’s no doubt of the value of a federal job guarantee but Matthew talks about the level of skepticism in the Black community. There have been so many promises made, matched only by the numbers of failed results.

    In these pessimistic times, our listeners will be encouraged by hearing a voice from this new generation of activist-scholars.

    Matthew Robinson is getting his PhD in Economics at the University of Missouri, Kansas City. He went to Fresno State and got his master's degree at the University of Denver.

    @econ_robinson on Twitter

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  • When asked to talk about public health needs during the current coronavirus pandemic, Fadhel Kaboub immediately brings up climate change and expands the concept of public health to a degree that some will find surprising. After giving it a moment’s thought you can’t help but agree.

    Even if COVID-19 isn’t related to climate change, the effects of the climate crisis will accelerate in the coming years and we’ll see more pandemics and other disasters. We were caught flat-footed this time, but our inexcusable lack of preparedness cannot happen again. As Fadhel warns, there can be no “return to normal.”

    This pandemic illustrates why it’s impossible to think of public health needs in narrow medical terms. This kind of crisis requires massive intervention early on. Clearly we need the infrastructure and medical capabilities to handle screening, testing, treatment, and hospitalization of huge numbers of patients all over the world.

    To slow the spread of the virus requires decreasing the intensity of human contact by working and shopping from home. Businesses and their customers, schools or universities and their students, all will need broadband internet access as a public utility. Privatization and deregulation of the telecommunications industry will have to be reversed, which means going up against entrenched interests and their representatives in the government.

    Everyone deserves paid sick days and universal medical coverage. We need contingency plans across the system, including efficient means of providing goods and services during the crisis. We have to keep the supply chain moving as much as possible, keep the quality of life maintained -- these are enormously complex problems, as Fadhel explains.

    An overarching impediment to this level of emergency planning is the fact that the market considers it a waste. To have enough hospital rooms, ventilators, ambulances and test kits during the crisis, they must be constructed beforehand. Capitalism doesn’t produce excess goods out of a sense of civic duty. Only the federal government can afford to do this.

    The pandemic demonstrates what MMT has been emphasizing all along: that it's not about having the money. To transform our system to handle public health emergencies, what matters is the real productive capacity of the economy -- the physical and technical resources, human capabilities, and knowhow.

    Fadhel says it’s time to reframe our current crisis within the economic policy agenda that we've been talking about for years. Understanding the monetary sovereignty of the US government, we need a three-point program:

    1 - Universal public services: education, childcare, healthcare, and broadband access. It’s the responsibility of the federal government to guarantee these things as human rights.
    2 - Job guarantee for people who want to work. The program should be resilient and flexible enough that you don't have to be physically present.
    3 - Generous income support for people who cannot or should not work.

    As always with Fadhel, the discussion covers too much to recount here. He tells us how to address the “cost” of the Green New Deal and what to say to someone who thinks the federal budget should be treated like that of a corporation. He reveals a serious flaw in our understanding of the GDP.

    It’s easy to forget that we’re still in the throes of the political primary season, but Steve had to ask him to weigh in on that. Fadhel leaves us with a reason for optimism. Bernie Sanders and his supporters have proven that there’s an alternative to rule by super-PACs and corporate interests. People believe in the transformational nature of the movement and many dozens have been inspired to run for office with a progressive agenda.

    Dr. Fadhel Kaboub is an Associate Professor of Economics at Denison and President of the Global Institute for Sustainable Prosperity.

    http://www.global-isp.org/president/

    @FadhelKaboub and @GISP_tweets

  • Recent presidential primary results have been disappointing for supporters of Bernie Sanders. The corporate media and mainstream pundits say that Bernie’s weakness is his failure to attract Black voters. Steve’s guest, Glen Ford, executive editor of Black Agenda Report, tells us that, in fact, Bernie’s agenda is quite popular among blacks, especially the younger generation. The problem lies elsewhere.

    Our two-party system of governing reflects the realities of our capitalist and racist nation. One side of the duopoly is always the party of white supremacists -- the white man’s party -- which must be kept out of power. In the past the Democrats had been the white man’s party, switching roles in 1968.

    For Black voters, the presidential primaries are about choosing the candidate who can defeat the Republican. Most Blacks understand Joe Biden’s culpability in the murder and mayhem caused by police in their communities. They know the part he played in the passing of the crime bill. Many would prefer a Sanders presidency, but they see that Biden has the support of the corporate media and the ruling class. Under capitalism, that means that Biden will be the nominee. The powerful elite will oppose Sanders; if he were to be nominated they would undermine his candidacy, making way for another term with the white man’s party in power.

    Glen talks about the Blacks who hold elite positions within the Democratic party and serve as gate-keepers between the Black community and the corridors of power. He refers to them as the “mis-leadership” class, calling them a profoundly reactionary element within the community. Their fortunes are tied to the party establishment, making them unwilling to upset the status quo. Consider the effects of Representative Jim Clyburn’s endorsement of Biden prior to the S. Carolina primaries.

    “We have two governance parties,” Glen says, “and both are capitalist.” People are pressured to fashion their politics accordingly.

    Electoral politics can be important; politicians pass laws and enact programs. However, the duopoly serves as a cage for Black America because of the critical need to oppose the white man’s party. In fact, the duopoly suppresses all anti-corporate politics, making it difficult to build a left movement via the electoral route.

    Glen and Steve look at the acute crisis in capitalism. Young people of all races know this, which is why they favor Bernie. The contradictions are evident all around them, as reality butts up against the false narrative of neoliberalism.

    There has been a 40-year race to the bottom as wages, working conditions, and security are being systematically degraded by the oligarchy. The youth, especially, have no illusions about their bleak future under capitalism.

    Without mentioning MMT, Glen is crystal clear on the reasons behind the shredding of the social safety net. It has nothing to do with affordability or budget deficits. Destroying social programs serve the capitalist class by creating desperation and precarity among the working class, so they will be forced to accept lower-quality jobs and paltry wages. They are deprived of all other options.

    Bernie's platform is the antithesis of the race to the bottom -- universal childcare, a minimum wage, affordable housing, and national healthcare, all create conditions in which workers can turn down inadequate jobs. He has been the biggest threat to the ruling duopoly in the postwar era.

    Glen has fascinating insights into the real reasons behind Mike Bloomberg’s recent candidacy. It had nothing to do with buying the presidency. Listen to the episode for more on this as well as the catch-22 in the handling of the coronavirus!

    Glen Ford is the Founder and Executive Editor of Black Agenda Report.

    See his full bio here:
    https://blackagendareport.com/about-us

    @GlenFordBAR on Twitter

  • Our guest is the OG of MMT. Listeners always appreciate Warren Mosler’s ability to slice through to the clear and practical fiscal implication of any policy consideration. Today he talks to Steve about the deflationary bias of Medicare for All, the countercyclical effects of a federal job guarantee, how to apportion the resources that will be freed up by M4A, and why it makes sense to replace the income tax with some kind of asset tax.

    You don’t need a degree in economics to understand why expanding Medicare’s coverage from age 65 to age zero will result in an immediate reduction in overall spending on healthcare. Warren estimates $600 billion in savings. Meanwhile at least 5 million jobs will be lost. Economists call it a massive “positive productivity shock.” Whenever you can produce the same amount of goods or services for less money, it’s good for the economy, despite the job loss. Now those people can be deployed for something more useful than the advertising, marketing, and administrative tasks of private insurance companies.

    With M4A, the costs for private firms drop because they’re no longer buying medical coverage for their employees. This is another good thing. There’s no sensible reason for the cost of healthcare to be built into the cost of products; business expenses go down substantially, putting downward pressure on prices. It’s a deflationary event.

    The two things described above - increased unemployment and downward pressure on prices - work together to reduce inflation. As Warren says, “when you have that kind of impulse you don’t raise taxes or cut spending to offset it. That’s nonsensical. It just makes it worse.”

    Eventually moving to M4A could have inflationary effects, but Warren explains the importance of timing. We have to think about what happens on “day one.” People and firms will have more money in their pockets because they don’t have to buy healthcare. Ultimately they’ll begin spending some of it. Increased consumer demand will cause prices to rise; corporations might increase production. But these effects don’t play out immediately. So, again, it’s ridiculous to start with a huge tax to offset the inflation that hasn’t yet occurred. There will be time to decide what’s needed.

    In light of the number of people who will become unemployed from M4A, Steve asks whether it makes more sense to have the Federal Job Guarantee in place first. This leads to a broader discussion of the FJG. Warren compares it to the joke that says, to avoid being eaten “I don’t have to outrun the bear; I only have to outrun you.” The FJG doesn’t have to be perfect; it only has to be better than unemployment. There are no economic criteria where it's worse than unemployment, so even if it's merely equal, economically, we should do it because by every other measure it's superior.

    Mosler has always maintained that it must be transitional, while some MMT proponents see it as a chance to expand the public sector workforce, including within a Green New Deal. Despite some disagreements, the conversation has brought MMT awareness into the mainstream. This is a huge plus.

    Once we get past the household analogy for the federal budget we can begin determining priorities for allocating resources, including labor. The US needs less than 1% of the population to grow all the food and 7% for manufacturing. Our productivity gains give us the luxury of allowing more time to be spent taking care of each other - with education, research, healthcare, and infrastructure, for example. In assessing the value of government expenditure, we aren’t limited to old notions of productivity. Solar energy requires more man-hours to produce than an equal amount of energy from coal, but that’s no reason to continue using coal. When planning for the public purpose we can take the greater good into account.

    Warren Mosler’s books are available on his website:
    http://moslereconomics.com/

    @wbmosler on Twitter

  • It’s always a treat to welcome L. Randall Wray, one of our favorite economists and guests, to Macro n Cheese. This episode is an added treat because, in a bit of a departure, Randy talks to Steve about politics and policy, looking through the lens of MMT while putting today’s issues in a historical context. Who better to bring that perspective than someone who lived through it? Maybe he wasn’t around for the Great Depression or World War II, but as a baby boomer, he witnessed first hand much of the massive growth and expansion of the postwar years and talks about what made America great and not-so-great during that period.

    Randy states the only reason the policies proposed by Bernie Sanders seem so far outside the mainstream is because the mainstream has become so regressive. The ideas aren’t radical -- the Democratic Party is conservative.

    Steve asks him why our society is so regressive. Much of the answer lies in the rise of finance capital -- the financialization of the economy. Wall Street has its fingers in every aspect of society, yet it doesn't produce anything, so the net value added to the economy is massively negative. Randy likens them to the rentier class. They take a percentage of corporate profit right off the top. A percentage of one’s paycheck goes to the FIRE sector -- finance, insurance, and real estate. (Obamacare is a recent example that furthered the process.) Obviously they’re not going to support democracy.

    Randy says that in order to assess a policy proposal we shouldn’t ask how much it will cost. The correct questions are: do we know how to do it and do we have the resources. He and Steve go down the list, from free college and daycare, to Medicare for All, to the greening of the economy and public ownership of utilities -- the answer to those questions is “yes.” We have historical examples of some major successes. We also have examples of failures, like JFK’s “war on poverty,” from which to learn and craft more systemic approaches.

    They consider the likely deflationary bias of Medicare for All and Randy explains why economists are talking about offsets. This is an episode that will interest everyone who’s interested in real possibilities for shared prosperity.

    L. Randall Wray is a Senior Scholar at the Levy Economics Institute of Bard College.

    http://www.levyinstitute.org/scholars/l-randall-wray

    https://www.goodreads.com/book/show/33657496-macroeconomics

  • Our guest, Alexandra Scaggs, is a senior writer at Barron’s, where she covers markets and fixed income. The episode begins as an interview about financial journalism and dealing head-on with the neoliberal economic narrative, but evolves into a conversation that is both personal and political in which she and Steve share their experiences with everything from sobriety to learning about MMT.

    As Alexandra tells it, news organizations maintain the mainstream narrative through ways both subtle and direct. In her career, she hasn’t faced overt censorship. Financial publications often hire young journalists who don’t yet have a sophisticated understanding of functional finance or economics. They tend to respect credentials and positions of authority, thus are likely to accept the word of those in positions of power. Reporters are also dealing with deadlines, leaving them no time to investigate other explanations. Austerity begets austerity; the publication doesn’t hire enough journalists, so each of them are doing the work of several. Sounds like the conditions most workers face, doesn’t it?

    Steve likes to ask his guests about the “aha moment” -- that point in time when the veil was lifted, the haze cleared, and Modern Monetary Theory pointed them toward the truth. Alexandra remembers that shortly after the 2016 election there were a number of Democrats writing op-eds that sounded the alarm about the economic devastation that the Drumpf presidency would surely cause, driving our fiscal health into the ground, plunging the US into bankruptcy. She was struck by the disingenuousness of it. The political parties don and remove their cloak of fiscal responsibility depending on whose team is in power. She had also been aware that interest rates continue to be low regardless of the size of national debt or deficit.

    Alexandra credits friend-of-the-podcast Rohan Grey with teaching her about MMT. She was covering the treasury market where certain facts weren’t making sense. She met Rohan, “a very effective advocate, who sat me down and shouted at me until I understood it,” she says, “and I’m so glad he did.”

    The scarcity mindset pits us against each other in a zero-sum game. If the pie is small, we must scratch and scramble to secure our own little slice. With everyone competing for scraps there's little time to think of an alternative and yet Alexandra’s experience in the recovery community inspires her to imagine a broader collaboration that rejects the neoliberal imperative. She believes we can construct an economic reality in which all are valued and her optimism, in turn, inspires us.

    Alexandra Scaggs is a senior writer at Barron's covering markets, with a focus on fixed income. She previously wrote news and commentary about markets, the economy, and social issues for the Financial Times and FT Alphaville. Before that, she covered markets for Bloomberg and The Wall Street Journal.

    https://www.barrons.com/authors/8576

    @alexandrascaggs on Twitter

  • 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 at the University of Missouri–Kansas City and Research Director at the Global Institute for Sustainable Prosperity.

    http://www.global-isp.org/research-director/

    @mattybram on Twitter

  • 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

    https://www.macmillanihe.com/page/detail/Macroeconomics/?K=9781137610669

  • 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 Georgia.

    https://clintballinger.wordpress.com/2019/01/14/1000-castaways-fundamentals-of-economics/

    @ClintBalllinger on Twitter

  • 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 another shot to do things right this time. There must be boots on the ground to force the Republicans and centrist Democrats to do the will of the people they’re elected to serve.

    Keeanga-Yamahtta Taylor is Assistant Professor of African-American Studies at Princeton University. She writes and speaks on Black politics, social movements and racial inequality in the US.

    http://www.keeangataylor.com/

    https://uncpress.org/book/9781469653662/race-for-profit/

    @KeeangaYamahtta on Twitter

  • “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 Network.

    @NathanTankus on Twitter

  • 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