Macro N Cheese

Not all of our listeners are anti-capitalist but it’s safe to say that most of us object to the accumulation of massive wealth solely by virtue of inactive, unproductive ownership. Sitting on idle property is a particularly egregious way of accruing riches, often to the detriment of surrounding communities that are forced to tolerate eyesores in their midst for decades on end. Depreciation has been a windfall for the ruling elite.  Our guests, Joshua Vincent and Rich Nymoen, are proponents of the land value tax, or LVT, associated with 19th-century political economist and journalist Henry George. The term "Georgist philosophy" refers to the economic analysis and social philosophy he advanced.  Neither Josh nor Rich promote the confiscation of property. Value is derived by different means:  ...it's the rental value, not the actual land itself that belongs to the community. And most of that wealth is publicly created, is community-created. If you look at a city, almost all of its value - some comes through the location - but most of the value comes from the investments that have been made into that city: infrastructure, sewers, schools, fire protection, that kind of thing. And so I think it's our view that none of that wealth should be short-stopped by private operators, private players, rent-seekers.  In this country, property taxes fall equally on land and buildings. When landowners improve or develop their holdings, their taxes go up, serving as a disincentive to improvement. Josh and Rich explain how communities can use the land value tax to encourage productive use of property and collect revenue benefitting the locality. The LVT applies pressure to develop vacant or unused sites by dramatically increasing the taxes on these properties, while improved lots will see significant reductions.  Josh and Rich describe some remarkable successes, particularly in Pennsylvania, as well as the challenges they face when first attempting to introduce these concepts to recalcitrant officials. They find that they need to use both the carrot and the stick.  The LVT has supporters as diverse as Joseph Stiglitz, Milton Friedman, and our recent guest, Michael Hudson. The financial industry’s connection to land is of critical importance. Most bank lending is tied to real estate. Since people borrow from a bank in order to purchase land, they’re essentially paying the land rent to the bank.  So that's really how the 1% is being created: by all these land rentals and natural resource rentals being paid to the finance industry. Whereas if you were paying it to the community, it would be shared more equally than being funneled to the top. You may be aware that the board game, Monopoly was originally intended to teach these principles?  This interview contains a good balance of the micro- and macroeconomics of Georgism, some strategies for applying them, and the community benefits that ensue.  Josh Vincent is Executive Director of the Center for the Studies of Economics, a 501(c)3 organization dating back to 1926.  One of the group’s endeavors is the Center for Property Tax Reforms. urbantoolsconsult.org centerforpropertytaxreform.org @JoshuaRVincent @urbantools Rich Nymoen is the President of Common Ground USA, a 501(c)4 affirming that “all persons have equal and common rights in the earth and its resources.” He is on the board of the Robert Schalkenbach Foundation.  commonground-usa.net  schalkenbach.org  @rnymoen2  @Schalkenbach

At Real Progressives, we get daily messages from people who are still recovering from Bernie’s trouncing in the primaries. They remain distraught, disillusioned, and discouraged - convinced that he was robbed.  Last week Rohan Grey explained Rashida Tlaib and AOC’s Public Banking Act. This week we asked him to take off his MMT hat and talk to our wounded volunteers. To help them put the recent political past in perspective and move forward, they first must accept a sobering dose of reality. Rohan wasn’t surprised by Sanders’ loss.   ...I think at least for me, as someone who tries to be a committed leftist revolutionary, whatever, the odds are always extremely small. The odds are extremely small right up until the point that you win. And they continue to be very small the next day for the next thing you try to win. And I don't think that the history of progress is the history of always inevitably having a good shot. It's the history of very, very difficult things, somehow managing to eke through as much as it is.   The idea of continuity expressed above is repeated throughout the episode. He constantly suggests we ask ourselves what we’re going to do next. The social media battles for and against voting for Biden didn’t alter the need to fight for a Green New Deal and a job guarantee.  For those who may still be reeling, Rohan reminds us: political action neither begins nor ends at the ballot box. Electoral politics can play a role in a left agenda, but the size and scope of its importance will vary, and shouldn’t be exaggerated. We could use a more nuanced appreciation of it as a cultural and political institution among many, just as there are many legitimate roles and actions for any of us to undertake.   And most importantly, hopefully, you can develop a nose where you can say, OK, this opportunity is coming down the line, and it's one that has the potential to do something. Today we're out in the streets, tomorrow we're talking about a political candidate, the next day we're in the labor unions, the next day we're on social media, the next day we're writing a fiction novel that's going to spark a new social imagination. All of those are legitimate and valid. The only question is in what context and to what extent?   To be effective, we need to be informed. Ideas don’t arise in a vacuum; they’re shaped by material conditions, but they also have an impact on those material forces. Rohan’s advice echoes that of some other podcast guests, like Esha Krishnaswamy, who suggested we read theory, especially Lenin. Rohan, unsurprisingly, thinks those who care about economic issues should understand the history of political economy, how it’s handled in academia, and how those ideas get refracted back through popular culture and media. We should work towards understanding human and social psychology. Armed with these tools we’re more adept at assessing the value of political resources and the usefulness of various strategies and tactics.  The interview isn’t all advice and therapy, and it isn’t all Bernie. Steve asks about presidential politics because, well, we can’t help but be interested. Rohan calls it parlor gossip. After all, these are the celebrities of our time. He has an interesting take on the outcome of the election and suggests that a Biden presidency might be better for the left than the Obama years were or a Hillary Clinton victory would have been in 2016. His explanation might surprise you.  Rohan Grey is an Assistant Professor of Law at Willamette University, the president of the Modern Money Network, and a director of the National Jobs for All Network, whose research focuses on the law of money in the internet society.  rohangrey.net  modernmoneynetwork.org  @rohangrey on Twitter

On October 31st, Rohan Grey posted a 31-part Twitter thread about Rashida Tlaib’s and Alexandria Ocasio Cortez’s new Public Banking Act, which he helped craft. We immediately reached out and arranged for Steve to interview him, ending up with not one, but two episodes of Macro N Cheese. This week he answers our questions about the Public Banking Act. Next week he and Steve will venture into the swampland of politics. By the time the episode airs the election will truly - finally - be over. So, has anything changed? How does Rohan see the road going forward? But back to the Public Banking Act…   "It's long past time to open doors for people who have been systematically shut out and provide a better option for those grappling with the costs of simply trying to participate in an economy they have every right to—but has been rigged against them," Tlaib said in a statement. "The COVID-19 pandemic has also plunged city and state governments into a financial crisis unlike any other they've ever experienced—and public banks could offer a much more tenable option for dealing with their debts at a time when they need it most.” -- Newsweek   Instead of attempting to describe this interview, we’re going to let Rohan’s Twitter thread speak for itself:   First, some big picture comments about the bill  a) It does *not* create any new public banks. Rather, it *enables & encourages* the creation of public banks by establishing a comprehensive federal regulatory framework, grant programs, & supporting financial infrastructure.  b) It is designed to foster *state & local public banks*, not establish a federal public bank. In contrast to the federal govt, which issues the $US dollar, state & local govts face unique financial & monetary constraints that public banks can help alleviate.  c) It *complements, rather than competes with,* other progressive financial reforms, such as postal banking, FedAccounts, & eCash (on latter, see @RashidaTlaib’s #ABCAct). Together, they envision a new financial system that serves the people & promotes public purpose.  d) It does not make the mistake of treating public banks as an alternative to/substitute for federal spending & investment. Rather, it provides “top-down” support for “bottom-up” local initiatives, even while recognizing the critical need for more direct federal action.  e) Finally, it does not take a one-size-fits-all approach to the kinds of public banks eligible for federal support. Rather, it accommodates a wide variety of institutional structures and activities, from basic payments to consumer lending to public investment.  Okay, now let’s look at what the bill says...   The rest of the thread is published as an article on Real Progressives website. If you listen to Macro N Cheese on the website, don’t miss the EXTRAS section for each episode. This week it’s full of links leading to the complete text of the Public Banking Act, press releases, and articles. Rohan Grey is an Assistant Professor of Law at Willamette University, the president of the Modern Money Network, and a director of the National Jobs for All Network. His research focuses on the law of money in the internet society.  modernmoneynetwork.org/  @rohangrey on Twitter

Esha Krishnaswamy, host of the historic.ly podcast, joins Steve to talk about the frustrating political miasma of centrism. Centrism. So vapid and insubstantial, how does one grab ahold? It’s a wispy dandelion head (aptly named the capitulum) - one slight *poof* and it’s gone. But we’re not fooled. As soon as the left gets behind a popular policy or candidate, the center reveals itself to be a mighty, unstoppable force in the service of the ruling class. In today’s world, the US centrist home turf is the Democratic Party.  Esha’s jam is history and throughout the episode she calls on instances from the past, from John Locke’s justification of inherited land wealth to E. Belfort Bax on liberalism and socialism in 1890. Through the lens of historical materialism, events can be progressive or reactionary, depending on the conditions of their time. She likes reading Lenin because “he’s hilarious and insults everyone.” If he were around now he would be “the worst Twitter troll ever.”  She compares the DNC to Russia’s Constitutional Democrats and reads Lenin’s 1906 description, summed up nicely with:  They want to ransom themselves from the revolution. They long for a deal with the old authorities. They are afraid of independent revolutionary activity by the people. The more this party develops its public political activities, the more marked it becomes in its inconsistency and instability.  Steve and Esha talk about the failure of electoral politics. In the US we’ve seen Bernie-like suppression of progressive candidates like Eugene V Debs, Henry Wallace, and Jesse Jackson. Whatever our democratic achievements, they were not won at the ballot box, but through political organizing and strikes. Esha points out that class awareness existed in the US up until the 1970s or 80s, when somehow it vanished. In Venezuela and Bolivia, radical change occurred through elections, but only with the groundswell of massive popular movements.  Esha sums up her indictment of centrists: “Their entire grift is to convince you that if they had the power, they'd totally do it,” but their hands are tied because they have no power - “which is always a lie.”  Esha Krishnaswamy is the host of the historic.ly  podcast. She is a lawyer, writer, and media critic, whose focus is on history, foreign policy, and Modern Monetary Theory.  @eshaLegal and @historic_ly on Twitter  historicly.substack.com

This second part of Steve’s conversation with Warren Mosler was to be about the government response to the pandemic, but first Warren talks about disagreements with some in the MMT community. We here at Macro N Cheese believe in healthy debate and want to bring a range of viewpoints to our listeners.  The federal job guarantee is one area in which Warren disagrees with certain prominent MMTers. He sees the JG as a transitional program to be used during downturns in the business cycle with the goal of getting people hired by the private sector when the economy rebounds. A number of advocates see the job guarantee as a door to more spending on the public purpose. Warren’s position on public purpose jobs is simple: “if you need them, hire them.” We’re all in agreement that skilled workers shouldn’t be working minimum wage jobs, even at the more reasonable rate of a job guarantee minimum, but there’s a vast need for public services that won’t be met by private firms. Mosler says that some MMT proponents feel his position is politically naive; he goes so far as to suggest there’s an ideological war going on. We agree. Real Progressives is fiercely committed to radical systemic change extending beyond the seeming neutrality of MMT.  Whether it’s naive or not, Warren wants to rely on the democratic process and an informed electorate. Steve brings up the reality of fraud within the system and the overwhelming imbalance of power, to which Warren expresses optimism about electing better candidates and brings up his “60-40 plan” to take the money out of politics. This would dilute the power of the 1% but, of course, it would have to be passed into law… by those in power.  Warren is consistent in taking a straightforward approach to federal spending, and expresses skepticism about proposals to “mint the coin” or take advantage of swap lines through the Fed.  ...well yeah, that's fiscal spending and that's the realm of Congress. You know, if Congress wants to support full employment in Mexico or Bangladesh or Canada or New York, you know, they can do it. They don't need the Fed to come up with subterfuge of using swap lines for financial assets to get redirected into goods or services.  When the interview gets to COVID, Warren talks about the uniqueness of both the supply shock and demand shock we’re experiencing. They primarily involve non-essentials. Combine this understanding with the fact that the pandemic has resulted in a massive cut in our energy consumption, and there are lessons to be learned that should lead to significant changes in the way we live and do business.  Warren Mosler is an American economist and theorist, and one of the leading voices in the field of Modern Monetary Theory (MMT). Presently, Warren resides on St. Croix, US Virgin Islands, where he owns and operates Valance Co., Inc. He is the author of “The Seven Deadly Innocent Frauds of Economic Policy” and “Soft Currency Economics,” which are available on his website.  moslereconomics.com/  @wbmosler on Twitter

Talking to Warren Mosler reminds us just how far MMT has come since the days he traveled from conference to conference, peddling his intellectual wares. Well, they no longer laugh at Mosler Economics, AKA Modern Monetary Theory. It’s a well-known part of MMT history that Stephanie Kelton, fresh out of grad school, set out to disprove his assertions, point by point, and ended up making MMT her life’s work. Today, in Warren’s view, she’s arguably the most influential economist in the world, because all of the powerful economic advisors have read The Deficit Myth. Of course, he gives credit to Randy Wray, Bill Mitchell, Mat Forstater, and those who came after, but, he says, her book saved the world.  That we get this deficit spending is just great, you know, that we've had recently. You could say MMT has saved the world. Whether it knows it or not. There's no way they would have done three trillion and now talking another two trillion. And there hasn't been a single mention of a tax.  In this first episode of a two-part interview, Steve decided it’s a good time to revisit the money story. This podcast always has new listeners and, for those also new to MMT, who better to go to than Warren Mosler for the money story? If you haven’t heard how he flummoxed a tour guide in Pompeii, you’re in for a treat. To further illustrate the order of operations, he includes the tale of British colonists in Africa, imposing a hut tax in order to create - or coerce - a labor force for their coffee plantations.  Talking to Warren brings to light some of the differences among MMT proponents. They seem to be pretty much in agreement on the facts or core principles, although you might say proposals for the federal job guarantee are a significant departure from his “employer of last resort”. For the most part, however, Warren only expresses frustration with choices of emphasis, especially when it comes to the Fed’s inadequate analysis of some basics, like the rate of inflation.  What is the rate of inflation? Well, how is it defined academically? Academically, inflation is the continuous change in the price level that's happening right now. It's faced by people in the real economy. What's the continuous change in the price level they're facing right now? That they're dealing with? That's affecting their business, their purchases, their sales.  What the Fed doesn’t grasp is when they set interest rates, they are setting the inflation rate for the economy.  Throughout the interview, Warren details some of the most significant contributions of MMT, including a tax liability’s function, the national debt, and the cause of unemployment. He explains that the Fed’s use of “easing” (lowering rates) and “tightening” (raising rates) are exactly backwards. Even those who don’t understand the Federal Reserve’s operations should be able to see that when they raise interest rates, it’s mainly a boost of interest to the wealthy. Warren calls it a “basic income” for people who already have money.  Warren Mosler is an American economist and theorist, and one of the leading voices in the field of Modern Monetary Theory (MMT). Presently, Warren resides on St. Croix, US Virgin Islands, where he owns and operates Valance Co., Inc. He is the author of “The Seven Deadly Innocent Frauds of Economic Policy” and “Soft Currency Economics,” which are available on his website.  moslereconomics.com/  @wbmosler on Twitter

Bill Mitchell joins us this week to discuss a plethora of American misconceptions… perceived exceptionalism, obvious neoliberalism, and a dysfunctional electoral system, as we approach the culmination of perhaps the most absurd and disheartening presidential election in history. The interview covers the consequences of neoliberalism in Europe, the UK, Australia, and the US, both in the rightward march of political parties and the ticking clock of catastrophic climate change. They discuss the attraction to the Universal Basic Income by some on the left who can’t see its underlying agenda and the perils of turning us all into consumption units. Bill Mitchell is the guest we need to hear from as the ugly campaign season winds down. Our Australian friend’s vantage point, as well as his astute grasp of political economy, combine with his level-headedness to bring a message of understated optimism. When Steve gives in to a rare bout of despair about the future, Bill talks about the early days of the MMT movement, when Warren Mosler and the others would count the number of MMTers on their fingers. MMT is becoming mainstream. Everybody's hearing about it in the Australian press as regular articles now. I write op-eds in the Murdoch press about MMT. Critics or supporters are getting articles published regularly. Central bankers are talking about it. They're giving evidence before government committees about it. The financial markets are increasingly getting me to run workshops to teach them MMT - all around the world, not just in Australia - because they want to know about it, and they also now have finally worked out that an adherence to mainstream economics has cost them money. So I wouldn't be as despairing about the spread of the ideas just yet. Bill sees a cautionary tale in the subversion of Keynes’s ideas during the Great Depression. The mainstream economists hijacked his substantial insights into what’s called the neoclassical synthesis, which essentially watered his ideas down to only be applied in a special case. He sees today’s orthodoxy normalizing MMT within their own skillset when, in fact, the work of MMT economists has demonstrated the catastrophic failure of mainstream macroeconomics. He refers to the German physicist Max Planck, who said “Science advances one funeral at a time.” Bill adds that paradigms shift the same way. As for navigating through these final weeks of the US presidential election, Bill suggests we focus on and accelerate the education process and the organization of grassroots resistance. He says our challenge is to start rebuilding the sense of collective responsibility to society. ...And hope to hell that we've got some climate space that we can do that education, and that organization, and we can save the planet. But I'd focus on the positive and wouldn't get tied up too much in the dilemma you're facing with Biden and Trump. I mean, it's a no-win, isn't it? So try to move beyond that sort of angst, not tear yourselves apart about that, but move beyond it. And basically, I'm an optimist. I just, every day, get up and pursue the education agenda in hopes that little bit each day moves us in a positive way. It’s clear that with either electoral outcome we're not going to get a fantastic response to the climate emergency, new public infrastructure investments, and we’re certainly not going to fix our dysfunctional healthcare system, so if we're not going to get anything we want from either of these two, it’s time to move on. Professor Bill Mitchell holds the Chair in Economics and is the Director of the Centre of Full Employment and Equity (CofFEE), an official research centre at the University of Newcastle. He also is a Visiting Professor at Maastricht University, The Netherlands, and is on the management board of CofFEE-Europe, a sister centre located at that university. @billy_blog on Twitter http://www.billmitchell.org/ “Macroeconomics” ordering information on bilbo.economicoutlook.net/

Some of us Macro N Cheesers first heard the term “rentier class” from Michael Hudson’s interviews and YouTube talks. In today’s episode, he and Steve discuss the idea of economic rent as a remnant of feudalism. Bankers have replaced the feudal lords as the parasites who extract most of the wealth from the economy. The financial, insurance and real estate (FIRE) sector comprise the contemporary kleptocracy. They have manipulated the system to such an extent, it is impossible to get an accurate measure of our society’s economic health or pain.  Michael delves into the history of debt and its role in our ever-changing economic structure. He references classical economists like Smith, Mills, Ricardo, and Marx, with their concept of economic rent as unearned income. They believed that industrial capitalism would eliminate the entire legacy of feudalism and dissolve the landlord class by taxing away rent or nationalizing the land. Since most governments were subsidizing education and health care, it seemed counterproductive to allow privatization of health, education, or land rent monopolies. They also saw ‘credit’ as a public utility, expecting banks to lend for socially worthwhile and productive purposes. Ultimately, instead of banking being industrialized, industry was financialized.  Debt deflation is the idea that the more people pay in debt service — i.e. mortgages, credit card interest, fines, and fees — the less they can spend on goods and services; so money is sucked out of the production/consumption economy, and siphoned off into the wealth economy. This demand for debt service pillages the domestic market, destroys employment, and drives the population to emigrate, suffer, or die.  Since we’re still mired in the “silly season” of US elections, Steve asks Michael whether he holds out any hope for finding solutions through electoral politics. Michael says it’s not possible to vote ourselves out of the mess we’re in due to the nature of the two-party system in the US.  It's basically the same party with a little ethnic difference between them, but economically it's the same party, and there cannot be any alternative to this monolithic - we'll call it the Republican Party with Democratic cheerleaders - there cannot be any progress made until you break up the Democratic Party.  Looking at their success in keeping the Green Party off the ballot in most states, the Democrats and Republicans have sent the message of virtual impossibility for third party wins. They’ve gimmicked the system, leaving Wall Street in charge of the economy and our lives. The elected officials haven’t been captured by the kleptocracy; they are its front men. They’ve been nurtured and groomed for that role.  I think most people who have to work for a paycheck realize that they're being squeezed, but that's not what the politicians say. You know, "hope and change"... and, of course, their real job is to prevent change and to smash hope.  Michael Hudson is President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City and author of J is for Junk Economics (2017), Killing the Host (2015), The Bubble and Beyond (2012), Super-Imperialism: The Economic Strategy of American Empire (1968 & 2003), Trade, Development and Foreign Debt (1992 & 2009) and of The Myth of Aid (1971), amongst many others.  For access to his books, articles, and interviews:michael-hudson.com

Our guest, Cindy Banyai, is exactly the kind of person we want representing us wherever policy is made. She has the life experience of a working woman raising three kids, runs her own consulting business, and has lived and traveled all over the world. Did we forget to mention she knows MMT and supports the Green New Deal, universal health care, and a federal jobs program to ensure a basic minimum wage, worker protections, and benefits? When Cindy happened upon Modern Monetary Theory, it made sense of much of what she already believed. She had been a longtime proponent of participatory budgeting and says that being freed from economic shackles in policy-making is revolutionary. When people in her district come with complaints, she can truthfully say she knows what to do. She talks with Steve about the conservatives from both parties who place roadblocks in programs like Social Security and then criticize them for having those very complications. They use terms like “accountability,” “efficiency,” and “effectiveness.” Cindy tells us that her consulting firm is all about evaluation: I eat, sleep, breathe, effectiveness, and efficiency. There is not a single one of these hucksters that's going to be able to put a program in front of me, put a policy in front of me, and say, "We're working on efficiency." If that doesn't have the metrics in it and that doesn't have the right kind of measures to actually get these things accomplished and not just be these stupid barriers for access, then I'm going to call him out on it. And I will probably be the only one doing it. Because I'm going to be the first evaluator elected to Congress. As parents, Steve and Cindy have a shared, gut-level understanding of the need to fix a broken healthcare system. Cindy’s three-year-old daughter spent her first two years fighting a rare blood disease; while she was in the hospital fighting for her life, Cindy was fighting the insurance companies. She knows that there’s an alternative to medical bankruptcies and treatments determined by somebody else’s bottom line. She has done research and comparative analysis between the Japanese national health care model and the US model. As we move to universal healthcare she wants us to consider adapting features of the Japanese model, including cost-setting by the central government and decentralized implementation at the state level. One of Steve’s favorite components of the job guarantee is the way in which it is a democracy enhancer. It will revitalize local democracy by having it funded by the currency-issuing federal government but locally administered. Communities will determine which jobs to create based on which services are needed. This is an invitation for citizens to become involved in designing their very own local program. The discussion ignites Cindy’s enthusiasm for rethinking the way that we do governance. She talks about participatory governance - and the participatory budgeting component of it - having been a major component of her life’s work and research around the world. She describes the amplifying effects of civic engagement: people are more invested in their community, they meet their neighbors, some develop joint projects or business ventures together. We here at Macro N Cheese cannot endorse a specific candidate, but we can urge our listeners to pay attention and ask questions of your future representatives. We hope everyone finds candidates as well-informed and passionate as this one. Dr. Cindy Banyai is a Democrat running for Florida Congressional District 19, spanning coastal Southwest Florida from Boca Grande to Marco Island. She is a mom of 3 native Floridians, a small business owner, and part of the faculty of Political Science and Public Administration at Florida Gulf Coast University. @SWFLMom2020 https://www.cindybanyai.com/ https://www.news-press.com/story/news/2020/08/14/social-security-florida-protecting-our-seniors-cindy-banyai-congress/3343662001/

We here at Macro N Cheese are immersed in the world of MMT, but that doesn’t mean we don’t appreciate people who aren’t yet on board. As long as they’re not pushing an austerity agenda, we welcome them. Today’s guest, Margaret Kimberley, of Black Agenda Report, is just such an ally. Her book, Prejudential: Black America and the Presidents, was published earlier this year.  This interview takes place as one region of the US is ablaze in wildfires and the pandemic is no closer to being resolved. Margaret sees the inadequate handling of COVID19 as confirmation that we live in a failed state. Countries that have responded best to the virus are either fully socialist or have robust public funding of their healthcare system. The climate crisis is further proof that capitalism is in crisis and neither of our two major political parties has plans to protect us from the fallout. Barack Obama illustrates the hypocrisy as he tweets dramatic images of the orange fire-lit skies and urges people to “vote like your life depends on it.” During his term as president, he bragged about increasing oil production and fracking. The Governor of California, another Democrat, has given more fracking permits this year than he did in 2019.  The point is, we have these two parties who come together more often than not. Margaret reminds us that Democrats used to go through the motions of being the working people's party, and have been living off this reputation for decades. Yet when Kamala Harris was announced as Biden’s running mate, the headlines announced: "Wall Street Breathes a Sigh of Relief." "Silicon Valley is Happy."  It’s impossible to have a conversation nowadays without debating the current presidential elections. Steve brings up his fear that a Biden win will cause Democrats to relax and go to brunch. Any energy built up in the resistance to Trump will die out. He asks whether she sees more possibilities for revolutionary change arising from a Biden or Trump victory. Margaret, who votes Green, believes they’re about equal, but doesn’t want to focus on electoral politics. Our job is to build the movement, taking a lesson from the civil rights era:  During those years, people made concrete demands and they stuck with them. And they knew that they had an adversarial relationship with politicians and they didn't care. They knew that when they demanded the right to vote, or an end to segregation, or an end to housing discrimination, they knew that politicians didn't want to do what they were demanding. But they demanded it anyway. They worked cohesively en masse for years. And that is how those changes came about. I think the problem with electoral politics is that it should be what comes last. It's the movement that has to come first to create the political crisis, to move politicians, because that is the only way they move.  That's true not only of civil rights legislation, it's true of the environment. Nixon gave us the EPA, the Environmental Protection Agency. Why he gave it is because people were in the streets, there were millions of people.  Steve and Margaret talk about the differences and similarities between Malcolm X and Martin Luther King, Jr. By the end of King’s life he had broken with Lyndon Johnson, who was seen as an ally of the civil rights movement. This could be a model for working with elected officials; you don’t have to sell out your principles.  The interview goes over many of the crucial issues affecting our lives in 2020, from Bernie Sanders to the actions of the Democratic Party elite; from Black Lives Matter to Antifa; from the Green Party to the need to end the duopoly.  Margaret Kimberley is a co-founder and Editor and Senior Columnist for Black Agenda Report. Her first book, “Prejudential: Black America and the Presidents” was published in February.  @freedomrideblog on Twitter  http://steerforth.com/titles/prejudential/  https://bookshop.org/books/prejudential-black-america-and-the-presidents/9781586422486

Back in 2018, Steve invited Robert Hockett to come on to talk about shadow banking and explain its role in the 2008 financial crisis. We’re bringing back this interview because shadow banks are still around and people still have a hard time grasping exactly what they do. This is partly because many don’t understand what banks themselves actually do. The popular vision is that banks borrow and lend and that they make loans based on what they have in the vault; we MMTers know that they make loans based on profitability.  Banks are policed with a view to their liquidity risk, while shadow banks are behaving the same way, without the policing.  In order for us to unpack this issue, we need to know the meaning of “endogenous” and “exogenous” money. Bob defines endogenous as the credit-money generated by private banks and lending institutions, while exogenous is the sovereign element, created by the Fed or central bank. As in most cases, there’s always an element of public involvement in the private. This is usually overlooked. To better illustrate this, Bob uses the metaphor of franchising, where the Fed is the franchisor and the private financial institutions are the franchisees, charged with distributing a public resource which Bob defines as “the sovereign’s monetized full faith and credit.”   When the Fed recognizes a bank loan or loan extended by a financial institution, it is effectively turning a private liability into a public liability. But if it's not fully cognizant that it's meant to be exercising quality control, you can get a defective product. That certainly happened in the lead up to 2008.  In this interview, Bob points out that everyone operates under the false premise that there’s a shortage of capital. He also distinguishes between capital meant for productive use and that meant for speculation and gambling. The market for speculation - ie, the neverending quest for new ways to generate profit - leads to the creation of new and twisted kinds of financial instruments, such as the disastrous subprime mortgage packaging that led up the financial crisis.  Bob’s proposal to insulate us, the public, from the kind of harm that arises from speculative mania is to separate the two kinds of financial institutions. Those that actually extend primary credit to homebuyers, small businesses, producers of goods and services should be separated from those that create credit for speculation. In other words, one institution would not be able to perform both functions.  For a true solution, he suggests we look to the past, to the Reconstruction Finance Corporation of the 1930s and ‘40s:  The RFC in its day was by far the largest financial institution in the entire world. Its balance sheet dwarfed all of the combined balance sheets of the Wall Street institutions. It was by far the largest credit-generating institution, credit-extending institution in the world, and it extended loans as small as $20 or $30 to African American barbershops in certain Los Angeles neighborhoods to giant mega-million or even billion-dollar loans for large public infrastructure projects like the Hoover dam or what have you. And this institution was a public institution. It was a government institution.  After all, it’s our credit anyway, isn’t it?   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

Our guest this week is long-time friend of the podcast, Fadhel Kaboub. The Macro N Cheese audience will remember when Fadhel and Ndongo Samba Sylla visited with us last October on their way to the conference on African Monetary and Economic Sovereignty in Tunis, Tunisia. In that episode, we learned about the CFA franc, a vestige of colonialism, a symbol of the lack of true sovereignty in the post-colonial world, and a tool of economic oppression by international financial powers.  The conference in Tunis was an unqualified success and plans for a second one were underway until COVID19 interfered. To keep the conversation alive, Fadhel and his colleagues from Senegal, Tunisia, and Germany wrote An Open Letter on African Economic and Monetary Sovereignty. Having it translated into 50 languages and creating audio recordings in each, makes it accessible at the grassroots level. There are more than 500 signatures of scholars, economists, activists, and political figures from developing and former colonial nations. (See link below) Ironically the pandemic turned a spotlight on the systemic problems of most countries, including those of the developed world. Hardest hit are the former colonies, especially those on the African continent, who are adversely affected by the extractive nature of the global supply chain. Fadhel uses the MMT lens to explain the interconnectedness of the lack of monetary sovereignty, lack of food and energy independence, and lack of political power. In building a coherent economic development alternative for the developing world, we need to understand how the interests of the IMF and World Bank, in conjunction with those of private importers, trap poorer nations in external debt and prevent the development of a strong national economy. There’s an illusion that richer countries send money to poorer countries when in actuality the US (and others) extract more wealth than they inject; it’s a recurring global pyramid scheme.  Fadhel lays out the myriad ways this is accomplished and looks at the kind of investments, both financial and resource-based, required for achieving sovereignty and reliable growth. In the second part of the interview, Steve and Fadhel talk about the Green New Deal. Too often the discussion of combating climate change focuses on plans and obligations of the developed world. When we ask what it would mean to look at it from the point of view of the poorer nations, it’s clear that we need to consider a global reparations agenda. Fadhel says: I use reparations in the broadest sense of the term. That includes reparations for slavery, reparations for colonialism, reparations for post-colonial abuse, reparations for climate debt. And reparations are not one country to another alone; it's also within countries because countries have abused their own native people and have abused their own environment... So we're talking about a global reparations model that goes beyond the United States. To read the Open Letter on African Economic and Monetary Sovereignty, visit the website: mes-africa.org/ @Mon_Sovereignty on Twitter If you’d like to hear more from Fadhel, with Q&A, you’re invited to attend the Real Progressives National Outreach Call. September 16, 2020, at 9pm EDT/6pm PDT.Register here: https://www.bigmarker.com/real-progressives2/September-National-Outreach-Call-w-Dr-Fadhel-Kaboub Dr. Fadhel Kaboub is an Associate Professor of Economics at Denison University and President of the Global Institute for Sustainable Prosperity.  global-isp.org  @FadhelKaboub and @GISP_Tweets on Twitter

This week Brett Scott brings us a report from the war zone. He’s based in the UK but the war on cash serves the same global interests and employs the same sort of weapons in the US. The interview begins with Steve asking about the role of COVID19. Brett tells of the huge British supermarkets, at the start of the pandemic, blasting the message that cash is dangerous; warning that passing cash from hand to hand is likely to carry the virus along with it. The CDC as well as major financial institutions have published that there is evidence to the contrary. They say, in fact, that credit cards and pin pads are far more likely to transmit the coronavirus. But the message persists: cash is dirty. The mainstream narrative has it that the move to a digital economy is happening organically, from the bottom up. As if people are simply drifting away from cash and migrating towards digital payment systems. In reality the opposite is true. You could say the war on cash is a war on class, from the top down. Working-class and poor communities are highly suspicious of banks and digital finance. Once you have your dollars in your pocket, nobody has to know what you do with it, where you go, how you spend it… which is why the banks hate cash. Clearly then, the extension of that mainstream bottom-up narrative is also untrue. This is the part bemoaning the fact that certain marginalized communities have been left behind. (“If only we could plug them into digital payment systems, everyone would be on the same level.”) Cash is a public utility. Brett calls it a nonjudgmental form of money in this potentially dystopian brave new world. Without physical forms of money, you’re absorbed into a panopticon banking system which we have reason to mistrust. It’s not just the finance sector that’s waging war against cash. Huge companies like Facebook need to sell ads. How can they prove to advertisers that the ads are effective if they don’t know what you’re buying? How do they know when they can stop flooding your pages with ads for certain products? Behemoths like Amazon and Uber profit from being automated and efficient. When big tech marries big finance, they seamlessly integrate on a huge scale. This is why they are able to annihilate small businesses and independent operators. The international aid community has usually handed out cash in disaster areas. It not only helps the refugee or survivor, it typically gets spent in the local community, serving as a boost to the economy. Now they’re moving to digital transfers of funds via prepaid cards. Digital payments are designed for web commerce, not local development. Brett has spent the past 18 months working on a book that will be published late next year. We expect it to be full of the kind of insights about cash and class he has shared with us today. The book will also look at cryptocurrency (if you’re still unsure about bitcoin, you won’t be after this episode) and another area of Brett’s expertise: alternative monetary systems. In the rest of the interview, Brett teaches Steve, and the rest of us by extension, about mutual credit systems and ripple credit systems. It’s rare that a guest talks about something that’s completely new to us. We found it exciting and we know our listeners will too. Brett Scott is a journalist, campaigner, former derivatives broker, and author of The Heretics Guide to Global Finance: Hacking the Future of Money. @suitpossom on Twitter Subscribe to his new newsletter: BrettScott.substack.com

Whenever Steve's guest is a lawyer, we know we're going to learn something new. Rohan Grey told us it's like the saying: “when you're a hammer, everything looks like a nail.” When you're a lawyer, you look at any issue and see a network of laws. This is why we're so grateful for the lawyers on Macro & Cheese - they teach us about that underlying legal framework. Camille Walsh isn't just a lawyer, she's a historian. We've been hearing about her book, Racial Taxation: Schools, Segregation, and Taxpayer Citizenship, 1869-1973, for a long time. Interestingly, she never intended to write about taxation, but her research led her there, and decided it for her. The notion of identifying as “taxpayer” is entwined with presumptions of entitlement which, in the US, date back to the founding principles, determining who has the right to be a citizen, who's qualified to vote, claim property, or own other human beings. The bottom line: it was a privileged group of white males back then and little has changed. Ultimately a group’s identity as taxpayers decides whether they’ll get some tiny amount of financial support, be it by federal, state, or local governments. After the Civil War, the taxpayers’ status was firmly established. All power was concentrated in their hands; they wrote all the laws and accrued all the benefits. It was during this period -- Reconstruction -- that there was a boom in the founding of schools. The fact that they were funded by local property taxes determined something as basic as whether a school was a one-room shack or a schoolhouse supplied with books. To this day, we have a stark disparity in resource distribution between schools in white and minority districts, with white men predominantly staffing the school boards and unevenly allocating funding based on this false sense of entitlement. The burden of educational funding remains squarely on the shoulders of revenue-constrained states and communities, creating a sense of scarcity and subsequent resentment toward nonwhites as “others,” allowing racist and classist biases to guide the outcome. Underfunded schools lead to under-educated citizens -- poor whites as well as minorities -- relegating them to low-income employment in a vicious cycle that traces back to the rigged educational system. Camille talks to Steve about the shocking number of rights that are assumed to be in the Constitution but aren’t actually spelled out until there’s a legal challenge, in which case the court’s ruling sets them in stone -- for better or worse. For example, the right to interstate travel didn’t exist until California attempted to limit settlers from other states. People assumed that Brown v Board of Education settled the issue of an equal right to education. In the 1954 ruling, Earl Warren said “education is possibly the most important function of state and local governments." What many of us weren’t aware of, though, was the 1973 decision in San Antonio v Rodriguez. It’s a little known case -- one out of many that dealt with education and segregation. In a 5-4 decision, it shot down the right to equal funding of schools. Unequal funding means unequal education. The argument leaned heavily on anti-communism, warning that once we start funding schools equally, we’ll be on the slippery slope to becoming Stalin’s Russia or Mao’s China. Justice Powell, that great hero of neoliberals everywhere, wrote the majority decision. In this particular moment in time, as extraordinary and unprecedented things are intersecting and coalescing, we need to understand the consequences of our history. This episode gives us much to consider. Camille Walsh is an Associate Professor of Law, Economics, and Public Policy at the University of Washington Bothell. She doesn’t spend much time on social media.Racial Taxation: Schools, Segregation, and Taxpayer Citizenship, 1869-1973https://bookshop.org/books/racial-taxation-schools-segregation-and-taxpayer-citizenship-1869-1973/9781469638942

World-renowned economics professor and accomplished author/podcaster/speaker Mark Blyth joins us this week to discuss MMT, the variants of capitalism, and the current culmination of the populist anger outlined in his new book Angrynomics, co-authored by Eric Lonergan. The book, in brief, is a revolutionary, yet practical solution for an economically unjust world brought into clear focus by the Covid19 pandemic. Mark has been a consistent ally to the progressive movement over the years, using his broad reach to advocate for economic literacy and justice. Although he hasn't fully embraced MMT as his lord and savior, he calls himself a fellow traveler with no doubt that when they round up the MMTers, he'll be thrown in the back of the van with them all. His sharp wit and finely honed sense of the absurd make his social and political observations as interesting as his economic ones. An underlying theme the authors encountered consistently throughout the research for Angrynomics was - you guessed it - anger. It arises from the disconnect between our experience of the world and how it's explained to us. About anger, Mark says, “you assume you know what it is, but don’t necessarily think about it.” He talks about public and private anger, distinguishing righteous anger from tribal anger which is, inevitably, weaponized. The economic portion of the discussion touches on the variants of capitalism throughout our history, and the benefits or drawbacks of each. He also focuses on how, when the government spends at the bottom through wages and public purpose spending, the wealth trickles up, but when spent at the top, it most certainly does NOT trickle down. There’s no lack of good ideas and policy prescriptions; there’s a lack of political courage to implement them. Mark and Steve look at the social and political differences between “boomers” and the generations that came after. Mark attributes it to their incomes. The boomers’ income is asset-based, making it stable and secure, while the others rely on income drawn from wages, uncertain and insecure. These younger and poorer Americans are expected to be the shock absorbers of a volatile and unpredictable economy. The current pandemic is revealing the gaping flaws in our economy and waking up many normally comfortable and apathetic folks to the reality millions of Americans have been living every day -- being left behind by an economy built by, for, and of the oligarchs. It’s capitalism… and the people are angry. We cannot nudge the system back to stability. We need radical economic reform to create a bottom-up economy now. Mark Blyth is Professor of International Political Economy in the Department of Political Science at Brown University and a Faculty Fellow at Brown's Watson Institute for International Studies. He is co-author, with Eric Lonergan, of Angrynomics, and author of Austerity: The History of a Dangerous Idea. Check out his podcast https://watson.brown.edu/rhodes/podcasts, including a recent interview with Stephanie Kelton http://markblyth.com/ @MkBlyth on Twitter https://www.goodreads.com/book/show/48908670-angrynomics

The Covid19 pandemic is much more than a public health catastrophe; it has highlighted and exacerbated economic, social, and environmental crises on an unprecedented scale. While Congress sits on their hands, a learning-by-doing experiment is already underway at the Federal Reserve. With more than 40 million Americans out of work, the Fed appears ready to fulfill its congressional mandate to both maximize employment and promote stable prices. Indeed, the strongest signal that this time things can be different is the opening of the Fed’s new Municipal Liquidity Facility (MLF), which promises to buy both existing and future state and municipal debt. -- from “Overcoming Covid19 Requires Rethinking University Finance” (see article link below) Our guests, Ben Wilson and Scott Ferguson, are working with others in the MMT community to develop the plan for a new university-issued currency, the Uni, with backing by the Federal Reserve. Universities are not unlike small states or municipalities. They provide jobs and living quarters, engage in commerce both on- and off-campus. They collect rent on their vast real estate holdings. They also behave like banks, providing students with accounts for purchasing books and supplies. The university’s stated mission is to contribute to the greater good, produce educated citizens, and be cooperative partners with the surrounding communities. According to our guests, the Uni’s value extends beyond immediate financial practicalities. The project can use the university as a proxy for reformulating the macro economy on a micro-scale, creating real-world experience pushing the modern money agenda forward. We can ask ourselves what we want money to do for us and how it can meet the needs of our communities. Rather than wait for the federal government to act, we can structure it on our own terms. Benjamin C. Wilson is an Associate Professor of Economics at the State University of New York at Cortland and a research scholar at the Global Institute for Sustainable Prosperity. @autogestion77 on Twitter Scott Ferguson is an Associate Professor of Film & Media Studies in the Department of Humanities & Cultural Studies at the University of South Florida and a Research Scholar at the Global Institute for Sustainable Prosperity. He is co-host of Money on the Left podcast featured by Monthly Review Online. @videotroph on Twitter https://www.boundary2.org/2020/07/scott-ferguson-benjamin-wilson-william-saas-maxximilian-seijo-overcoming-covid-19-requires-rethinking-university-finance/ Read about the Uni in the demands issued by the Resident Assistant/Peer Mentor union at UMass Amherst. https://docs.google.com/document/d/1psWUI4PGVVYOJ9flQiwsWKWHK9qhdLPFjonToNo4R7M/mobilebasic?fbclid=IwAR2pKwOHzggugNSJsrrQGFtm1Bl7D-1eYJDfQNgzD4s5yIfnu2VgmkJCTkc The Global Institute for Sustainable Prosperity http://www.global-isp.org/

This week we welcome Richard Dien Winfield, a rare candidate for national office who is running on the Federal Job Guarantee and Medicare for All. It’s no surprise, then, that Richard is fully onboard with Modern Monetary Theory and spoke at the MMT Conference in Stonybrook last September. Steve talks with him about his new book, Democracy Unchained: How We Should Fulfill Our Social Rights and Save Self-Government, and the platform for his current campaign. Richard is running in Georgia’s special election for the US Senate. His campaign is founded on correcting the failure to recognize and enforce our social rights, which he sees as the key to remedy blockages of opportunity that hobble our democracy. Throughout this interview, he frequently returns to the concept of social rights as the rights that are not in our constitution but should be. These include the right to a decent livelihood, healthcare, education at all levels, the right to balance work and family, and to level the playing field between employer and employee. Martin Luther King said that without a job and income, one can have neither life, liberty, nor the opportunity to pursue happiness. Richard eloquently connects the dots between our social rights, demonstrating their interdependence. How can you solve homelessness without a job guarantee, which will require a higher minimum wage than the $15-an-hour we normally hear about. The job guarantee would, of course, include full benefits of pension and healthcare -- though we wouldn’t need the latter if we had Medicare for All, which is another necessary social right: without health, we can’t exercise our freedoms. There are two exacerbating factors disempowering employees. The first is globalization and free trade, due to the ease with which companies can find the lowest wages and relocate. The second factor is the rise of the gig economy. Employers can use technological advancements so that workers are on their own and scattered around the globe; the employer doesn’t have to provide overhead or face worker solidarity. Richard describes the UBI as setting up a 2-tiered society: those condemned to the poverty income of the UBI alone, and those who receive the UBI plus wages from their jobs. Instead of eliminating economic disadvantage, it sanctions it. Considering the threat of fascism, we look again to an FJG. For all the praise given to the social democracies of northern Europe, the fact that they don't have a job guarantee has left them vulnerable to the kind of xenophobia and bigotry that has caused workers in other countries to vote for extreme right-wingers. When there aren't enough jobs, a wave of immigrants is seen as a threat. Universal healthcare and generous unemployment insurance do not replace the need for jobs. Richard and Steve go through all the social rights in depth and, sometimes, from a new angle. Listeners will hear something they might not have considered about racism, sexual harassment, unionization, corporate compensation, reparations, the needs of families, and much more. Have you ever heard a candidate demanding legal care for all? Listen to the episode! Richard Dien Winfield is an American philosopher and Distinguished Research Professor of Philosophy at the University of Georgia. He has supported striking workers, organized sugarcane laborers, and joined unionizing efforts at UGA. Winfield was a candidate for U.S. Representative from Georgia's 10th Congressional District in 2018 and has declared his candidacy for the 2020 United States Senate special election in Georgia. WinfieldforSenate.com @WinfieldForUS on Twitter https://bookshop.org/books/democracy-unchained-how-we-should-fulfill-our-social-rights-and-save-self-government/9781950794133 Find his books on Amazonhttps://www.amazon.com/Richard-Dien-Winfield/e/B001HP3FH2?ref_=dbs_p_pbk_r00_abau_000000

J.D. ALT is an architect who has spent much of his career researching, inventing, and visualizing things that he hoped might improve the quality-of-life and prosperity of collective society. Gradually, he came to two realizations: first, the kinds of things he was envisioning (free-to-ride downtown people-movers and affordable housing strategies) would never be undertaken by a profit-oriented corporate business model and, second, the only other possible financier--the federal government--was "broke" and hopelessly in debt. Alarmed and discouraged by these realizations, he stopped thinking about new things to build and started investigating how--and why--it could possibly be true that collective society was, "for lack of money," so helplessly unable to build things it both needed and could dramatically benefit from. So begins J.D. Alt’s biography on Amazon. This week he joins Steve to talk about his new book, Paying Ourselves to Save the Planet: A Layman's Explanation of Modern Monetary Theory. The interview begins with J.D. describing the insights he gained once he understood that fiat money actually refers to reserves and the other money we use, bank-created money and cash money, are claims on those reserves which are held in the reserve banking system and never leave. They are digital entries on a score sheet. One method for creating reserves is when banks make loans (creating bank-money). This is a claim on that bank’s reserves at the central bank and is how money for private enterprise is created. Since private corporations only engage in producing goods and services generating profits, it’s safe to say that bank-money is only created for profitable endeavors. Therefore, the myriad of things we need as a society that don't bring in a profit must be created by public enterprise. Where does the money for public enterprise come from? This leads to the heart of MMT, and J.D. breaks down the distinction between it and the standard theory of money. In his book, J.D. tallies up the public enterprise goods and services we require and puts together a projection of what they’ll cost. When compared to how much the standard money theory believes the government can either collect in taxes or borrow, it becomes clear that we must look at a different way to finance the public needs. Steve and J.D. discuss just a few examples of the cost of the climate crisis. Much of it involves paying people to mitigate and adapt to climate change, which includes the expense for farmers to sequester carbon in their soil and workers to build machines that scrub carbon out of the atmosphere. Ironically, the bottom line is instead of costing the people a lot of money, a lot of people will be getting paid. J.D. Alt is an architect who writes about the economy, the climate crisis, housing, and the needs of humanity. His books include Paying Ourselves to Save the Planet, The Millennials’ Money, The Architect Who Couldn’t Sing, Low Earth Orbit, and Housing for the Masses, Dwellings for the Soul. Find him and his books at JDAlt.com @JD_ALT on Twitter

A discussion of racial taxation and private digital currency may seem like two disparate subjects. Raúl Carrillo’s genius is his ability to explain these things in such a way that their intrinsic connections are unmistakable. Just as there is racialized taxation, we also have racialized surveillance, and private digital currency is definitely in the surveillance business. Previous episodes have spoken of the effects of racial taxation, creating a disparity in public schools due to the inequities in local property tax funding schemes that pay for education. The same kind of taxpayer pressures that have defunded the schools have combined with the starving of federal support for the states, making it hard for local governments to provision themselves. States and municipalities resort to collecting fines and fees through petty crime designation, using the courts and incarceration as a funding source. The burden falls heavily on poor and oppressed minorities. These problems come from neoliberalism’s core embrace of austerity. Mass unemployment results in near-mass incarceration. A theme running through Raúl’s scholarship and our collective activism is that if something is a right, or is integral to due process and constitutional safeguards, then it should be funded by the federal government. Otherwise, what does it mean to have fundamental rights in this country? The government is willing to spend unquantifiable sums defending the rights of property while insisting it’s too expensive to provide jobs, healthcare, and housing. When the government doesn’t meet the people’s needs, it creates a vacuum that forces them into debt, turning to the predatory lenders who have built an industry on the backs of the needy. And now Wall Street is increasingly serving fewer kinds of investors. When Wall Street decides it’s no longer profitable to prey on the poor, Silicon Valley is offering an alternative that is predatory in its own way. Raúl recently produced a Black Paper on Libra, Facebook’s foray into the digital currency market. Most cryptocurrency doesn’t have retail value, so much of the activity is through speculation. Libra is an attempt to create a stabilized private money, which introduces a new set of dangers. Steve and Raúl devote a good portion of the interview looking at the different levels of threats that are posed by turning over the reins of currency creation to tech corporations. Libra is connected to Facebook and Uber, but Google and Amazon can’t be far behind with their own projects. Silicon Valley is now in the debt game. With public money, we can still demand some degree of protection for our privacy rights. Facebook’s entire business model is based on surveillance; it knows what you’ve bought, where you’ve been, what you like, and who you hang out with. Police have been using Facebook’s facial recognition to identify Black Lives Matter protesters. It’s hard to imagine enforcing legal protections when Facebook has been breaking promises to (defanged) regulators for years. For the US, public-private partnerships have crowded out government spending on social needs. For us MMTers, using the public purse for the public purpose is of seminal importance. A private currency, spying on us all, cannot be tolerated. We need to multi-task - wed the anti-racist, decarceration, and abolitionist fights with a vision of public money spent in a way that allows people to flourish. Raúl Carrillo is the Board Chair of the Modern Money Network and a Research Scholar at the Global Institute for Sustainable Prosperity. He sits on the boards of the National Jobs for all Network and the Our Money campaign. @RaulACarrillo on Twitter Reflections: Challenging Monetary Sanctions in the Era of Racial Taxation https://escholarship.org/uc/item/7rp8g89c Banking on Surveillance: The Libra Black Paper: https://ourfinancialsecurity.org/wp-content/uploads/2020/06/Libra-Black-Paper-FINAL-2.pdf?fbclid=IwAR1qqjecm45wHuNUljezfm19qCLg034VqgL2rQAwjqsr__B_Zfulzt0OKLs

Our guest is Jengis Osman, an activist and labor organizer who was led to Modern Monetary Theory through his life experiences and those of his family and the people he works with. After graduating from university, he struggled to find work and questioned why it had been easier for his grandparents who had immigrated to Australia from wartorn Cyprus in the 1970s. When he taught English to new immigrants, they asked the same question: why aren’t there enough jobs? Jengis now lives in the Northern Territory, a remote section of Australia. The effects of austerity are always harshest on the most vulnerable groups, but the living conditions of Australia’s indigenous population also reflect that country’s unique history of brutal colonial oppression. Before colonization the people had an abundance of food and water; their kinship systems worked for them. The colonizers tore communities apart with forced relocation to different regions with different customs and a foreign language. Children were uprooted and sent to mission schools far from their families. Colonialism effectively made slaves of the indigenous people and austerity assured their continued suffering. When Jengis discovered Bill Mitchell’s blog (http://bilbo.economicoutlook.net/blog/), the pieces began falling into place. Much of this interview takes us through the MMT fundamentals that brought reality into focus for so many of us, starting with the difference between a currency creator and a currency user. Jengis talks about Pavlina Tcherneva’s example of the “hut tax” imposed by the British in Malawi as a coercive measure that provided the colonists with a labor force by creating a need for the pound sterling. Understanding that taxes don’t fund government expenditures at the national level leads to awareness of the vast array of unnecessary political choices that cause pain at every level, including unemployment and homelessness. Fracking in the Northern Territory will damage the water supply and prolongs the negative impact of fossil fuels. Yet when the central government doesn’t spend enough in the territories and states, regional governments are forced to find private investors whose interests don’t align with that of the community. This brings us back to the difference between a currency creator and a currency user. Steve often asks our podcast guests how they introduce MMT to the uninitiated. Jengis talks about money as akin to points on a scoreboard -- the referee cannot run out of them. Money is a measure, like an inch or a mile. Those numbers are a statistical artifact and without a context, they make no sense. The economy isn't an abstraction that sits above us and is not a “thing” we should be working to serve. The economy is us. We want to focus on achieving real outcomes, like employment opportunities, tackling climate change, and creating the kind of world we want to live in. Jengis Osman currently works as a union organizer. He has had many occupations over the years including a substantial time unemployed as neoliberalism has decimated the idea of secure employment, providing sufficient work for all and forced education and training onto the individual rather than a collective responsibility. These jobs include a terrible stint in the retail sector, a call center as a researcher, a garbage man, and an ELICOS teacher. Check out his blog: https://jengis.org/ @JengisO on Twitter