Ep 327 - Isolation with Bill Mitchell

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May 10, 2025

Bill Mitchell, an Australian economist and founder of Modern Monetary Theory, joins the conversation to tackle the chaotic landscape of American politics. He discusses the irrationality behind Trump's policies and critiques the failure of tariffs to revive manufacturing. The dialogue unveils how disillusionment with traditional political parties is fueling right-wing populism and reactionary extremism. Mitchell also examines the global repercussions of U.S. economic policies and the dark influence of social media on political discourse.

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INSIGHT

US Isolation Accelerates Globally

The USA under Trump is accelerating toward isolation due to irrational policy and undermining of state institutions.
Other countries are forming new alliances bypassing the US, seeing it as an unreliable partner.

INSIGHT

Trump's Policies Lack Strategy

Trump's actions don't represent a coherent neoliberal strategy but a deep irrationality lacking clear planning.
His tariffs and bullying tactics against countries miscalculate global dynamics, especially with China.

INSIGHT

Tariff Impact and US Manufacturing

US tariffs raise domestic import prices but hope currency appreciation offsets this for consumers.
However, global trending sell-off of US Treasuries shows this assumption is flawed and tariffs won't revive US manufacturing.

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As difficult as it is to get a handle on the chaos and confusion of Trump’s shifting policies, we continue to ask wise friends for their perspective. This week Steve is speaking with Australian economist Bill Mitchell, a founder of MMT and a regular guest of this podcast. Bill helps us unpack the capitalist contradictions driving global instability.

Steve asks if we should be looking at Trump’s actions as a continuation of the neoliberal trajectory as described in Bill’s book, Reclaiming the State. Bill replies that he doesn't even see it as a natural extension of neoliberalism:

“Neoliberalism is about co-opting the state to pursue advantage for selected groups in the society, the top end of town, as I call them. So there's an element of that, but there's sort of a deep irrationality going on here. Neoliberalism is a systematic, contrived pattern of behavior and strategy, whereas it's hard to assess whether there is anything systematic and strategic going on here.”

Bill elaborates on the irrational policy decisions like tariffs and their failure to revive American manufacturing, as well as the repercussions of reduced public investment in education and infrastructure. He talks about international reactions and global repercussions.

He and Steve also critique the role of social media and the dangerous effects of the dominant ideological bias. Bill suggests that the disillusionment with traditional political parties is driving many towards reactionary extremism. They discuss the severe decline in education and the move to control universities through ideological audits.

Bill Mitchell is a Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the University of Newcastle, NSW, Australia. His most recent books are Modern Monetary Theory: BIll and Warren’s Excellent Adventure, co-authored with Warren Mosler (2024), and the Modern Monetary Theory textbook, Macroeconomics, co-authored with L. Randall Wray and Martin Watts (2019).

Follow Bill’s work at https://billmitchell.org/blog/