Macro N Cheese

MMT seems like a natural fit for Marxists so why has there been some resistance to it? MMT explains the monetary system. Period. If we build a post-capitalist society we’ll need to understand how currency works. If we want to discuss getting rid of money altogether, we’ll still need to understand it. In this episode, Steve called upon Nathan Tankus to break it down and explain the objections to MMT among some on the left, particularly Marxists. Along the way, he tries to dispel some of the fears and objections. Marx devoted himself to studying and developing a theory of capitalism. He left a huge body of work and, occasionally, some parts of it contradict other parts. There’s a strand of Marxist tradition that influenced Post-Keynesians, Chartalists, and MMTers, so it’s hard to make the case of incompatibility. A criticism of MMT from the left is that it is only relevant to a monetary sovereign nation, especially one, like the US, that doesn’t hold foreign-denominated debt. MMT is explicit about the perils of holding debt in a foreign currency, whether in the Weimar Republic, Zimbabwe, or the Eurozone. In fact, Stephanie Kelton made an early call on the unsustainability of the Euro. (For an in-depth discussion of the economic problems of the post-colonial world, listen to our episode “The Spectrum of Monetary Sovereignty in developing Nations with Ndongo Samba Sylla and Fadhel Kaboub.”) Steve brings up the specter of capital flight, which Nathan describes as a non-Marxist issue that Marxists argue about. Marx demanded clarity; to understand an issue, one must look at what is really going on. In the case of capital flight, Nathan asks what kind of capital they’re worried about. Is it commodity capital? Variable capital? Constant capital? We must understand which processes and mechanisms apply. What are the underlying biophysical relationships, ownership relations, and payment systems? By tracing various hypothetical cases of capital flight, Nathan demystifies this often exaggerated problem. It’s practically canon among leftists that we prioritize raising taxes on the rich. Our listeners know that MMTers are sometimes criticized for decoupling “taxing the rich” from our demand for social programs. Nathan and Steve discuss the irony in the fact that raising the marginal tax rates on billionaires may decrease their household wealth, but it does nothing to change the fundamentals -- the ownership and control of the means of production. Universal healthcare will immediately save lives. A Green New Deal will immediately save the planet, thus saving lives. Free college education will improve lives, as will student debt forgiveness. A federal job guarantee will transform the social fabric, benefiting communities, families, and individual lives. What do we gain from increasing taxes on the 1%? It’s not a Marxist proposition: he never suggested that taxes would alleviate exploitation. Nathan makes the point that tying these vital programs to the collection of taxes implies that capitalists fund the government with their tax dollars and it limits us to what we can squeeze out of them. This interview is packed with important ideas and facts. They consider the irrational fear of robots replacing human labor. They look at some of the endless possibilities opened up by a job guarantee, including as a way to finance workers’ coops, creating laboratories for other means of organizing labor. Nathan explains the bathtub analogy for understanding stocks and flows. And there’s much, much more. Nathan Tankus is the Research Director of the Modern Money Network and Research Scholar at the Global Institute for Sustainable Prosperity. He has written for the Financial Times, Business Insider, Naked Capitalism, The Appeal and JSTOR Daily, and currently has a blog, Notes on the Crises, at NathanTankus.substack.com

This week we’re bringing back a conversation Steve had with journalist and researcher Claire Connelly in 2017, which explores all the best arguments in the job guarantee vs universal basic income debate. Claire says that the American nostalgia for a more prosperous era supports the case for government involvement in employment even beyond the New Deal. The fact that the US had almost full employment during WW2 is largely responsible for much of the prosperity in the postwar era. Even today, it could be said that the military is the closest we have to an employer of last resort. Conservatives object to government involvement in the economy - but Claire points out all the ways in which the government subsidizes large corporations and enriches the lives of those at the top. Since the government creates the currency, a job guarantee wouldn’t require a tax increase that would decrease anyone’s stash of money. We’ve given the government permission to abdicate its responsibility for employment and both sides of the political aisle are comfortable with the idea. That being the case, Claire asks why not dissolve government entirely and elect the CEO of Goldman Sachs? The implications are directly responsible for the situation in the Eurozone. The EU, IMF, and World Bank have more power than the national governments themselves. Most of those countries have not benefited from the arrangement. Even the Greek bailout did more for the German banks more than the people of Greece. One of our objections to a UBI is the fact that it doesn’t set a price anchor or a wage floor. It simply serves to funnel more money to these same corporations and rentiers. Claire talks about the rentier economy being one of the largest detriments to economic growth. The level of personal debt in the developed nations implies that income derived from a UBI will simply go to the rentiers - in the form of mortgages, rents, payment of credit card or other debts - doing little to improve the lives of the citizens and possibly making it worse by effecting a rise in prices. Elsewhere in this episode, Steve and Claire discuss a range of topics from Georgian land value taxes to autism, all within the context of the jobs and income. Anyone who gets involved in arguments about the UBI and FJG will want to listen.

April was the 33rd anniversary of the Keating 5 Savings & Loan scandal, so we brought back our favorite former bank-regulator, Bill Black, to talk about it. It turns out that Bill has been involved in a documentary series about banking fraud and suggested that we should also hear from the directors, Patrick Lovell and Eric Vaughan. He calls them “the Coen brothers of documentaries.” The Con is a 4-part series that was inspired by Patrick’s own experience during the 2008 Great Financial Crisis. He was a successful producer and entrepreneur who had built a business and owned a home for his young family. The financial crisis wiped him out. Listeners to our podcast will be struck by the similarities to Steve Grumbine’s story. People who were hurt by the crisis say that they were struck by the disconnect between the media portrayal and their own real-life experiences. The victims were said to have been greedy and irresponsible, trying to “use their homes as ATMs.” The perpetrators were dismissed as a few bad apples. Patrick and Eric set out to uncover the true story behind 2008 and other financial crises. They were fortunate to find Bill Black. To produce a financial crisis, Bill says there must be two crucial components: elite crimes at the very top of the private sector and corruption by their political allies in the public sector. The Keating 5, in fact, were US Senators who got together with the specific purpose of pressuring S&L regulators to go easy on Charles Keating, the owner of Lincoln Savings & Loan. Bill calls it the first act in the three-act tragedy that produced the GFC. In making The Con, Patrick and Eric began looking for a top-down explanation of the financial deception that trickled down to ordinary people and caused tens of millions to lose their homes. But when they heard Bill Black say that the targets of people like Keating were “the meek, the weak, and the ignorant” it opened a new lane of investigation for them. Whether being conned into taking a risky mortgage or putting their life savings into uninsured junk bonds, the scams were carefully orchestrated to target the most vulnerable among us. The Con tells their stories as well. The series is made in the style of a true-crime documentary, which seems like a good way to emphasize that these were not just boardroom shenanigans. They were crimes, perpetrated by criminals on real-life, flesh-and-blood victims. The people who tried to do the right thing were also victimized; they were silenced and, for many of them, their careers were ended. Bill Black always has important lessons for us. It’s fascinating to hear what these two film-makers learned from him; they clearly value him as much as we do. The Con should be released sometime this summer. We hope they’ll come back then to talk about it. Bill Black is a professor of Economics and Law at the University of Missouri – Kansas City (UMKC) and the Distinguished Scholar in Residence for Financial Regulation at the University of Minnesota Law School. He is a serial whistleblower and authored The Best Way to Rob a Bank is to Own One. Patrick S. Lovell is a 30 year veteran of media production. He is producer and protagonist of the upcoming documentary limited series: The Con. Eric S.Vaughan is an award-winning commercial director/producer with extensive experience in leading-edge media production from narrative films to VR/immersive experiences. Eric has recently completed his long-form documentary series directorial debut, THE CON.

The progressive movement is still coming to terms with the suspension of Bernie Sanders’ campaign and his endorsement of Joe Biden. We decided to check in with one of our favorite people in independent media, Jamarl Thomas of Progressive Soapbox.  Steve and Jamarl spend an hour (give or take a few minutes) addressing the two questions that seem to be on everyone’s mind: what went wrong and where do we go from here?  Jamarl’s critique of Sanders is fairly straight-forward -- he went to war against a powerful enemy with no powder in his gun. Would it have helped if Bernie had allowed his team to use opposition research against Joe Biden and others? Jamarl thinks that's part of what the campaign lacked. We’ll never know.  To understand 2020 we have to understand that the Democrats’ number one priority was beating Sanders. His movement was a threat to the oligarchy. When they picked Biden they understood all his defects, but in their calculations, they figured that he could get the Black vote, which was enough to beat Sanders. Whether it’s enough to beat Drumpf is secondary. Jamarl makes the case that none of the Democrats in power are actually hurt by Drumpf; they may find him distasteful, but their material interests are not threatened.  They know if that if Sanders were to win, they’d lose the party for a generation. They’d be exposed for they truly are. Despite paying lip service to identity politics and concern for the poor, they don’t fight to materially improve people’s lives.  They were threatened by Sanders but couldn’t mount an effective attack on him due to his long history of authenticity and consistency. So they went after his supporters. They made the same accusations of racism and sexism against Bernie’s supporters as against Drumpf’s.  In Jamarl’s view, the left has been weak and cowardly for 30-40 years. The Democratic Party can neglect and ignore them because they continue to get away with it. In the end, the opposition always buckles.  To succeed the movement has to be willing to withstand the accusation that they’re the reason Donald Drumpf was elected. Steve brings up the question of building a third party but Jamarl insists that the left has to unite around policy, not party. Everyone needs to agree on some basic demands and stand up to the Democrats. That’s playing hardball.  The conversation goes well beyond campaign politics. Jamarl and Steve talk about the Labour Party’s bungling of Brexit, and how the lack of monetary sovereignty is crippling the economies of the Eurozone. Jamarl explains why African Americans always vote Democratic, and whether it’s possible to make a change. They look at FDR’s deft use of the New Deal to ward off the imminent threat of socialism in the 30’s and visit a number of other issues, domestic and international -- past, present, and future.  For more from Steve and Jamarl, check out Steve’s appearance on Political Misfits: https://www.facebook.com/SputnikNews/videos/586423068641351  Find Jamarl and the Progressive Soap Box on YouTube: https://www.youtube.com/user/jamarl31  On Twitter: @theProgSoapbox @JamarlThomas

If you missed our recent episode with Professor Steve Keen, you’ll want to go back and listen to it soon. In January he spoke of the inevitability of disastrous climate crises. Now here we are, a few months later: different crisis, same chaos, inescapable tragedy. Although there is much agreement between Steve Keen and our friends in the MMT community, there are a couple of areas where the views diverge. At Macro n Cheese, we’re not afraid of a little disagreement. In fact, we welcome it. We’re all on the same side. Keen believes that during a crisis -- climate or pandemic -- we need a centralized authority to take over and maintain civilization. We've been following the advice of neoclassical economists for about half a century. During the stagflation of the 1970s, Milton Friedman vanquished the last remnants of the Keynesian approach. Thus began the unshakable belief in deregulation, privatization, and globalization. Reduce the size of government and let the market take control. This ideology ignores the crucial fact that the economy exists inside the ecology; without the ecology, there is no economy. Without the ecology, there are no humans. Steve Grumbine brings up Warren Mosler’s assertion that imports are a real value, exports are a real cost. As Mosler asks: which would we rather have, the little green pieces of paper or the cars, phones, and cheap goods we can buy from other countries? Steve Keen vehemently disagrees with this premise. It certainly doesn’t hold up during the kind of crisis we’re facing with the coronavirus. The supply chain is broken and the US is unable to get its hands on an adequate number of ventilators, masks, food and other necessities. He says that we need regional production capability for essential goods. Loopholes in US export tariff laws make it cheaper for companies to spread manufacturing across the globe, wherever they find the cheapest labor and resources. 43 countries are involved in producing the iPhone, for example. During the pandemic, 20 of these nations aren’t shipping to the US. While we can survive without iPhones, some products can be a matter of life and death. Keen and Grumbine discuss the unavoidable comprehensive solutions required in the face of a widespread crisis like this one and debate the concept of a universal basic income. The episode gives us a lot to think about. Professor Keen is a Distinguished Research Fellow at UCL and the author of “Debunking Economics” and “Can We Avoid Another Financial Crisis?” He is one of the few economists to anticipate the Global Financial Crisis of 2008, for which he received a 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 Most of his content on Patreon is free. Subscribe: https://www.patreon.com/ProfSteveKeen https://www.wiley.com/en-us/Can+We+Avoid+Another+Financial+Crisis%3F-p-9781509513727 https://www.zedbooks.net/shop/book/debunking-economics/

As The Intercept’s DC Bureau Chief, Ryan Grim is well-positioned to assess the American political scene. This interview took place a few days before Bernie Sanders suspended his presidential campaign, but the writing was already on the wall. We all know that the movement still has work to do, but we're faced with different possible strategies now that we no longer have Bernie to shine a light and bring media attention to it. Steve and Ryan discuss where to go from here. Between the energy and attention generated by Bernie’s campaign and the coronavirus pandemic, the people have never been more open to progressive policies. For the first time, the idea of public health is taking hold. The US handling of the COVID-19 crisis is worse than anywhere else in the world. There’s an inescapable connection between that and the fact that we don’t have a real public health system in place. The patchwork quilt of private healthcare simply doesn’t work. The mainstream media joined Bernie’s opponents in insisting we can’t afford universal single-payer healthcare -- and they’re all now exposed as economic illiterates. Those who claimed that 165 million people who are insured through their employers “love their insurance companies” now look like clowns. The left has a real opportunity to expose these things and rethink what is possible. Ironically, most Democrats agree on the issues much more than Republicans do and yet are unable to build an effectual coalition. How did we end up with a candidate who represents almost none of the policies that the constituents want? Steve and Ryan analyze what went wrong with the presidential campaign and speculate on what the next steps might be. What will the left do to make sure this revolutionary moment turns into something serious and long-lasting? They look at Alexandria Ocasio-Cortez and the “Squad.” Have their tactics changed? Will coalition-building be more effective than a more aggressive approach? For the first time, the left has been able to envision itself with an inexorable voice. Now we have to ask ourselves whether we are simply here to engage in the conversation or if we want real power. Ryan points out that historically the success of a third party is contingent upon one of the two main parties failing. The Whigs were torn apart by the issue of slavery. Ryan is unconvinced that big money and corporate power will rise to that level. People won’t fight over capitalism the way they fought over slavery. The conversation ranges from the very real threat of climate change to the very realistic depiction of contemporary dystopia in the film “Joker.” We’re not saying we have the answers, but you’ll certainly come away with a lot to think about. Ryan Grim is The Intercept’s D.C. Bureau Chief and author of the book “We’ve Got People: From Jesse Jackson to Alexandria Ocasio-Cortez, the End of Big Money and the Rise of a Movement.” @RyanGrim on Twitter https://theintercept.com/staff/ryangrim/ https://strongarmpress.com/catalog/weve-got-people/

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

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