Activist #MMT - podcast

John Harvey reads the FINAL chapter of his book, Contending Perspectives.

Here's the original video from where this audio came.

Here's a list of links to John reading every chapter (released so far) in his 2021 book Contending Perspectives.

I have edited both the video and audio to eliminate mistakes, coughs, interruptions, and etc.

Sections in this chapter These timestamps are exact for the audio. For the video, you'll need to add around seven seconds in order to get to the precise spot. (This is because of the opening credits, which occur over around seven seconds of silence.)

5:10 - The big reveal

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John Harvey reads the next chapter of his book, Contending Perspectives.

Here's the original video from where this audio came.

Here's a list of links to John reading every chapter (released so far) in his 2021 book Contending Perspectives.

I have edited both the video and audio to eliminate mistakes, coughs, interruptions, and etc.

5:23 - Common ground
7:02 - Environmental economics
9:19 - Ecological economics
18:18 - Theoretically agnostic economics of sustainability
20:44 - Ecological economics: policy
28:30 - Method
32:38 - Views of human nature and justice
33:22 - Standards: primary and secondary
35:03 - Contemporary activities
35:52 - Criticisms
36:29 - Final rejoinder
37:15 - Further reading

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John Harvey reads the next chapter of his book, Contending Perspectives.

Here's the original video from where this audio came.

Here's a list of links to John reading every chapter (released so far) in his 2021 book Contending Perspectives.

I have edited both the video and audio to eliminate mistakes, coughs, interruptions, and etc.

1:03 - Economics for what?
11:08 - Paradigmatic approaches to feminist economics
12:31 - Neoclassical influences
19:41 - Marxist influences
22:37 - Institutionalist influences
29:21 - Method
30:49 - Views of human nature and justice
31:43 - Standards of behavior: primary and secondary
32:43 - Contemporary activities
33:44 - Criticisms
34:11 - Final rejoinder
35:41 - Further reading

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John Harvey reads the next chapter of his book, Contending Perspectives.

Here's the original video from where this audio came.

Here's a list of links to John reading every chapter (released so far) in his 2021 book Contending Perspectives.

I have edited both the video and audio to eliminate mistakes, coughs, interruptions, and etc.

7:26- Application: The financial crises of 1763 and 2007-08
13:16- Method
14:17- Views of human nature and justice
15:08- Standards: Primary and secondary
16:57- Contemporary activities
17:31- Criticisms
18:48- Final rejoinder
20:09- Further reading

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John Harvey reads the next chapter of his book, Contending Perspectives.

Here's the original video from where this audio came.

Here's a list of links to John reading every chapter (released so far) in his 2021 book Contending Perspectives.

I have edited both the video and audio to eliminate mistakes, coughs, interruptions, and etc.

Note: At around 10:40, there is a weird cut in the audio when John says "...part of being human -- ceremonial values." This is an error in the original raw audio, not in the editing. It's unfixable.

9:15 - Section: The Institutionalist approach
18:03 - Section: Application
21:30 - Section: Method
24:21 - Section: Views of human nature and justice
25:23 - Section: Standards of behavior, primary and secondary
27:55 - Section: Contemporary activities
28:50 - Section: Criticisms
29:52 - Section: Final rejoinder
31:43 - Section: Further reading

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John Harvey reads the next chapter of his book, Contending Perspectives.

Here's the original video from where this audio came.

Here's a list of links to John reading every chapter (released so far) in his 2021 book Contending Perspectives.

I have edited both the video and audio to eliminate mistakes, coughs, interruptions, and etc.

1:04 - Section: The Great Depression and Keynes' General Theory
4:08 - Section: Uncertainty, animal spirits, and demand
21:12 - Section: Investment and the business cycle
26:26 - Section: Financial markets and money
35:17 - Section: Method
41:14 - Section: Views of human nature and justice
43:05 - Section: Standards of behavior - primary and secondary
50:30 - Section: Criticisms
51:33 - Section: Final rejoinder
53:12 - Section: Further reading

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Welcome to episode 154 of Activist #MMT. Today's part two with German MMT economist Dirk Ehnts.

(Here's a link to part one.)

Above is the episode in audio form. Below is the episode in video form:

In addition to talking about Dirk's books, we discuss two major concepts. First is the idea that a major characteristic of human beings is they really don't like saying "I want to" do something horrible. They want to instead be able to say "I must." Conversely, instead of saying "I don't want to" do something good and necessary they will do whatever it takes to say "I can't."

A simple example is when you ask a friend to join you for lunch. Today they just don't feel like going out. They don't want to say something like "I just don't want to go out with you today. I still like you a whole lot, but I'm just feeling like staying at home and vegging with my TV." They'd rather say "I can't", such as due to a family obligation or sickness ("I'm really not feeling well today").

A bigger example is those in power denying healthcare to the masses. They want to profit, but even more, they want the power. "If you quit, you'll lose healthcare for not just you, but your entire family." Instead of admitting this, they would rather be able to point to the taxpayer myth and say "I must deny you healthcare because how're you gonna pay for it?".

Understanding how the economy actually works makes it impossible to use these kinds of excuses.

The other concept we discuss is how value is decided on by those in power. I'm a full-time singer is senior centers. It disgusts me to have to discuss money. When asked what my fee is, I always respond "the best you can do, such that I can keep returning in the long term." I never give a specific number.

Some facilities have small budgets, some have large. I don't want to take advantage of them, they (at least, the activities director whom I know personally) doesn't want to take advantage of me. All I ask for is the best you can do. It's worked out well enough. I maintain good relationships and it's turned out to be financially viable, if not lucrative.

The real value of singing for seniors is far removed from money. But because I must pay taxes and bills in order to survive, that non-financial value must be translated into financial terms. The very fact that I must do this negotiation with every activities director at every facility, and that I must use great effort to confirm I've received payment after every performance (which sometimes takes a couple months to arrive), is a testament to the fact that my job makes no rich person richer. If it did, there would be systems in place to greatly reduce these burdens.

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Welcome to episode 153 of Activist #MMT. Today I talk with German MMT economist Dirk Ehnts. He discusses his books, and the courses he teaches, including one called "Equity, Equality, and Employment" at Torrens University.

(This is part one of a two part episode. Here's a link to PART TWO.)

Above is the episode in audio form. Below is the episode in video form:

We then talk about concepts related to individualism versus community, and how society imposes individualism on all of us in many ways. One example I experience personally is how, in my home state of New Jersey, it is virtually impossible to exist without a car. Public transportation and bicycle riding is inconvenient. Everyone having a car means more cars must be produced, shipped, maintained, monitored, and etc (roads, parking, and on and on). Although this provides jobs to those who do these things, what else could all those people be doing?

Another example: Just like everyone must have a car, every homeowner is expected to have, for example, their own lawn mower. This means almost all of those mowers sit unused for most of the year, and the burden of maintaining those mowers is on every individual owner. A more community-based solution would be to share a single mower among everyone on the block. This would let the mower be heavily used all the time (but within its design limits!), and the burden of maintaining would be distributed among all those neighbors.

Having more public transportation and a community mower would eliminate jobs, but that's a good thing! These people should be doing other things! We currently have an excess of cars and mowers in order to give people jobs. As if these are the only kinds of jobs possible.

Excessive individualism, as we currently have, requires excessive resource and energy use and, ultimately, perpetual growth. This is unsustainable. It is indeed possible to employ everyone with much less resource use, but it takes imagination and a paradigm shift.

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Here's the original video from where this audio came.

Here's a list of links to John reading every chapter (released so far) in his 2021 book Contending Perspectives.

I have edited both the video and audio to eliminate mistakes, coughs, interruptions, and etc.

Sections in this chapter * 1:58 - Methodological individualism, praxeology, and subjectivism * 9:46 - Market process * 12:24 - Austrian business cycle theory * 16:27 - Method * 17:28 - Views of human nature and justice * 18:35 - Standards * 20:46 - Contemporary activities * 21:48 - Criticisms * 23:51 - Final rejoinder * 25:15 - Further reading

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Here's the original video from where this audio came.

Here's a list of links to John reading every chapter (released so far) in his 2021 book Contending Perspectives.

I have edited both the video and audio to eliminate mistakes, coughs, interruptions, and etc.

View Details

Here's the original video from where this audio came.

Here's a list of links to John reading every chapter (released so far) in his 2021 book Contending Perspectives.

I have edited both the video and audio to eliminate obvious mistakes, coughs, interruptions, and etc.

View Details

Here's the original video from where this audio came.

Here's a list of links to John reading every chapter (released so far) in his 2021 book Contending Perspectives.

Note the original video is unedited, but the audio has been edited to eliminate obvious mistakes, coughs, interruptions, and etc.

Audio chapters Use the below timestamps to navigate to each major section and occurrence in this section:

1:35 - Page 8: Chapter 2: Economics as a scientific discipline
3:25 - Page 8: Section: What is science?
4:40 - Page 9
10:03 - Page 10: A realistic version of science
17:39 - Page 13
30:13 - Page 17: Economics: Training and apprenticeship
44:01 - Page 22
58:38 - Page 27: Economics: Schools of thought
1:06:32 - Page 30: Economics: Primary and secondary standards of behavior
1:09:30 - Summary of table 2.1 on 32 (then skipping page 31, paragraph 2 through page 34, paragraph 2 – all of which is covered in future chapters)
1:10:43 - Page 34, paragraph 2
1:13:10 - Page 35: Conclusions
1:14:55 - Final comments

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Welcome to episode 152 of Activist #MMT. Today's part two of my conversation with five of my Torrens classmates, this time about the job guarantee, from a now-much more educated point of view, given our experience at Torrens. We are also joined by John's wife, Martha, who is highly educated on topics related to the job guarantee.

(Here's a link to part one.)

But for now, let's get right back to our conversation.

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Welcome to episode 151 of Activist #MMT. Today I talk with five of my Torrens classmates about our first year in the new graduate program – its importance, some fond memories, and a few improvements we hope to see. In part two we discuss the job guarantee from a now-much more educated point of view.

(Here's a link to part 2. A list of the audio chapters in this episode can be found right below.)

My guests are Gabie Bond who, along with Professor Steven Hail is the program's administrator, and all-around wonderful person. Susan Borden is the student-matriarch who is taking classes faster than anybody else, and may very well be the first graduate of the Master's program, in a class, literally, all by herself. Tom Foster is an insightful classmate who convinced me to change a major aspect of my view of the job guarantee, as discussed in part two. John Haly is a classmate and very good friend with whom, along with Susan, I've spent many a virtual hour talking and just quietly getting work done. Jackson Winter is a longtime collaborator on many different projects, from audio production to administering the primary private social platform (Discord) for our Torrens classmates, and creating major resources for current and future classmates to take advantage of. He's also a former guest on my podcast.

This episode was recorded in late July of last year. Its release was delayed by my taking a demanding course at Torrens, switching careers, and by having to prioritize the release of the Steve Keen and Maren Poitras episodes. Thanks to all my guests for their patience.

And now, onto our conversation.

Audio chapters ---

Here's a link to part one.

But for now, let's get right back to our conversation.

Audio chapters * 2:40 - Hellos * 5:38 - Susan first impressions * 8:17 - What have you taken? What will you take? starting with Tom * 11:35 - John * 12:20 - Conflict between microeconomics and ecological economics * 16:06 - John's classes * 17:31 - Jackson classes * 19:49 - Susan classes and response to John * 23:18 - Susan and micro response, upcoming classes * 23:57 - Steven and Gabie visiting the US * 25:37 - Gabie's perspective of the first year as administrator. * 28:17 - When will the final class of the initial set begin? * 30:22 - Considering project-oriented electives * 31:32 - The extra-curricular activities taken on by Torrens students (download directory, framing discussions) * 37:27 - Framing discussions * 38:42 - Between-trimester ideas * 40:03 - Download directory, ramping-up advice, modern money lab resource repository * 42:45 - Susan: Framing, messaging, and etc. * 47:29 - Susan: Integrating Mazzucato's "Mission" * 48:33 - Gregory Hayden's taxonomy * 53:36 - Hayden's taxonomy final point * 54:00 - Tom: more interactivity with classmates * 55:34 - Final thoughts * 57:09 - John: final thoughts * 1:01:42 - Duplicate of introduction, with no background music (for those with sensitive ears)

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THIS IS A BACKUP OF A GREAT INTERVIEW I DID IN 2019. IT TOUCHES ON MMT, BUT IS MOSTLY NON-MMT.

A fascinating and insightful conversation on black history, music, religion, politics, economics, and more.

More here: https://citizensmedia.tv/2019/07/07/kem/

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Welcome to episode 150 of Activist #MMT. Today I talk with Maren Poitras, the creator and director of the MMT documentary, Finding the Money. I had the pleasure of seeing this film on October 1st, 2023, in New York City, with my Torrens professor Steven Hail, Torrens administrator Gabie Bond, and Torrens classmate Susan Borden. After the film, we all went to a nearby bar-restaurant, and I got to meet and speak with Maren at length.

(A list of the audio chapters in this episode can be found below.)

In today's episode, Maren and I talk about how she came to the film and how it's informed by her background in ecological economics. We talk about the trials and tribulations of film-making, including the tortures of creating the intricate and subtle graphics used in the film. We also talk about her interactions with the non-MMTers as seen in the film. At the end, she says what you as a supporter can do to help this film be seen by others.

In my view, the film is the most important milestone in the MMT movement since Stephanie Kelton's 2020 book The Deficit Myth (which was the most important milestone since US Representative Alexandria Ocasio Cortez said "MMT" out loud in 2018). The film has the power to change how we talk about some major concepts.

It will be available to stream in early May.

And now, on to my conversation with Maren Poitras. Enjoy.

Audio chapters * 3:35 - Hellos, European premiere * 14:47 - When did the idea for the film happen and what is your background in film-making? * 20:15 - MMT is the child in the Emperor's New Clothes. MMT forces people to question many deep fundamental assumptions about their lives. * 38:59 - Printing fiasco * 39:17 - Did feedback from the academics result in any major changes? * 43:10 - Graphics (ripping open a wound) * 47:46 - Non-MMTers in the film (attempts at critique) * 55:35 - The film is unfortunately US-centric, due to time and resource constraints * 57:18 - What can people do to help the film be seen? * 1:01:00 - You never know where secret MMT people are lurking. * 1:06:57 - Duplicate of introduction, but with no background music (for listeners with sensitive ears)

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Here's a preview of my soon-to-be-released interview with Finding the Money director, Maren Poitras. It's a four-minute segment where Maren describes what YOU can do to help Finding the Money be seen by others.

The big launch is less than three weeks away. This means the most important thing is to get people to buy tickets for screenings. The documentary's website (findingmoneyfilm.com) is the best place to go for this, and especially the "where to watch" page.

Here are the major upcoming screenings:

This Tuesday, April 16, is the New York City premiere with "DOC NYC" at IFC Center at 7 pm. Get your tickets here./
New York City: May 3-9, each followed by a Q&A
Washington, DC: May 9th at AFI Silver Theater, followed by a Q&A with Stephanie Kelton and Sara Nelson
LA May 14-16 followed by a Q&A with Stephanie Kelton, Cory Doctorow, and Harry Shearer (Harry Shearer!)
Other dates in Seattle, Portland, and San Francisco are coming

The film will be available On Demand nationwide wherever you rent movies on May 3!

(I'm going to stream it with my family as soon as it's available. I'm pretty sure my boys, 14 and 17, will sit through the whole thing, but I have carrots (homemade popcorn) and sticks (threat of no bed to sleep in) at the ready.)

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Welcome to episode 149 of Activist #MMT. Today's part two with post-Keynesian economist Steve Keen. Today's an hour-and-a-half-long video interview, where Steve walks me through the basics of his Minsky modeling software, and why it's an important tool for MMTers.

(Here's a link to part 1. A list of the audio chapters in this episode can be found at the bottom of this post.)

(The episode description continues below.)

The full episode link to video

Our process starts by creating a definition of the economy in what he calls Godley tables. Godley tables are not accounting, but meta-accounting. They define the possible accounting for an entity. The top line is a snapshot (the stock), and every line below it, all the possible flows. If that definition is a realistic version of the real world – although necessarily simplified – then running the models should reflect what will happen in the real world.

(A crucial difference between the models created by Minsky and many neoclassical models, is that nothing is hidden. Everything is there for you, directly accessible via the Minsky tables. The software will not let you proceed until every loose end is resolved. Not to mention, you created it yourself!)

Starting at the six-minute mark and going all the way through the 46-minute mark, we walk-through a very specific neoclassical model called the loanable funds theory of investment. For those studying neoclassical economics and this model specifically, it's a valuable discussion. For the general listener, I recommend starting at the beginning, then once you pass the six minute mark, continue only as long as it holds your interest. After that, you should skip ahead to the 46-minute mark. That's when we start all over again with a fresh and realistic model the economy.

I put many of my observations into the show notes, each with a timestamp of where it's discussed.

As Steve mentions, he's just finished writing a new book, called Rebuilding Economics from the Top Down. The specific publishing date has not yet been determined, but the book will be released to his patrons on a chapter-by-chapter basis. Become a patron of Steve's by going to Patreon.com/ProfSteveKeen or profstevekeen.substack.com.

Finally, as I mentioned in part one, Steve and I had an in-person musical encounter last year. A brief audio highlight from it can be found after the closing theme in part one. At the end of this part, you can see that same thing in video form.

And now, on part two of my interview with Steve Keen. Enjoy.

Audio chapters * 3:47 - Hellos and my initial thoughts on the basic concepts and intentions of economic modeling. Loanable Funds Theory of Investment: John Harvey describing the world in which the model exists made the model itself come to life for me. * 10:07 - LFTI model: setting it up in the Godley table, starting with banks * 16:37 - The LFTI has no money creation at all – not even the interest. * 18:47 - adding savers and borrowers to the Godley table * 28:17 - The LFTI results in ludicrous situations if you think it through. One example: Banks have no accounts for themselves. The interest interest goes immediately back to the lenders – households. But if that's true, then what does it even mean for a bank "to be profitable", which indeed is needed in order to survive? (Definitions: A term deposit is an account you don't have access to four a certain amount of time predetermined amount of time (also called a certificate of deposit or CD). However the bank can use these funds as they please in order to make loans. This is as opposed to a demand deposit which has no term. You can get it on demand.) * 34:17 - Introducing charts/graphs. * 36:17 - Causing changes over time by changing parameters * 39:17 - The LFTI is boring on paper. The real world must bend and break in order to keep that paper boring. * 39:47 - Transitioning from unrealistic LFTI, step-by-step to the real world. Changing them from being intermediaries of the money in other peoples accounts (lenders and borrowers), to having their own accounts. Also introduces money creation. In the real world, loans are not an asset of the saver, they are an asset of the bank. * 45:47 - Adding in the government and it's spending * 50:47 - Starting all over, in the real world, and with a completely new model. * 56:47 - Creating relevance for myself, partially to repeat: We are defining a realistic economy. We know these things to be true. Therefore, when the model is run, we know its predictions are realistic. "That's what creates meaning for this learning. Linking this abstract to the world." * 57:32 - Fred Lee's History of Heterodox Economics. Orthodox economics (backed by the powerful) is shiny fancy and glossy, heterodox economics (backed by real people) is paper hand-bound and printed in copy shops. * 59:47 - Adding in the Treasury view (Minsky table). (Color commentary normally adds depth. My color commentary dumbs it down.) * 1:02:47 - We now have a minimally realistic model – definition – of the economy. * 1:03:47 - A godly table is not an accounting table. It's the current state, and the definition of all possible actions. It is the meta of accounting for that entity. The top row is a stock, everything below it are all the possible flows. * 1:10:17 - Our model is defined. Now let's do something with it. Running a model via a graph. Some other examples. * 1:14:47 - Minsky forces you to define the entire economy before anything can be run. Nothing is hidden. * 1:18:17 - Regarding graphs, how can values go backwards in time? (To the left.) How is it possible to create odd shapes such as circles. The answer is by changing the X (horizontal) axis. It's defaulted to be time (so every tick to the right is usually a year passing). But this could be changed to anything. It doesn't have to be time at all. * 1:24:47 - Closing thoughts and review. "If you disagree with MMT (regarding how banks and governments spend), you don't understand accounting." * 1:27:47 - Nothing is hidden. Everything is visible in our definition. You created that definition! Friedman and his assumptions. Mixing assumption types: pretending that assumptions are temporarily relaxed only for pedagogy, in reality is permanent deception. "Assume things that contradict my desires are simply false." * 1:27:51 - Nothing is hidden. Everything is visible in our definition. You created that definition! Friedman and his assumptions. Mixing assumption types: pretending that assumptions are temporarily relaxed only for pedagogy, in reality is permanent deception. "Assume things that contradict my desires are simply false." * 1:32:21 - In-person music encounter in Princeton, NJ.

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Welcome to episode 148 of Activist #MMT. Today I talk with post-Keynesian economist Steve Keen about his decades-long fight against mainstream economics, what MMT convinced him of, and the couple parts of MMT he still disagrees with. This first part is a half-hour long audio interview, which will be followed next month by an hour-and-a-half-long video interview, where Steve walks me through the basics of his Minsky modeling software, and why he believes it's an important tool for MMTers.

(Here's a link to PART TWO. A list of the audio chapters in this episode can be found right below.)

MMT and Steve are in complete agreement with how banks spend (lend money into existence). After reading Stephanie Kelton's book in 2020, Steve realized that government spending also creates money. National governments don't tax in order to spend, they spend in order to tax. Steve quickly created a Minsky model convincing himself that MMT is indeed correct regarding this. This insight is also completely compatible with his understanding of bank spending.

As far as Steve's disagreements with MMT, they are important, and Steve lays them out in detail in the last ten-or-so minutes of this episode. But let it be known that they are far from core issues. In other words, the amount of agreement is far greater. It's good to understand what these disagreements are, but as Steve says, we have much bigger fish to fry.

This is the first main episode of Activist #MMT since August. Although I've released three chapters from John Harvey's readings of his book Contending Perspectives (with lots more to come!), the past six months have been all consuming, starting with my third Torrens course – which was coincidentally taught by John on that very book. It was both incredibly enlightening and unbelievably exhausting.

I've also become a full-time musician. I now sing several times each week at retirement communities and related facilities (independent living, assisted-living, nursing homes, etc.). Coincidentally, back in July, I met Steve in person for dinner in Princeton, New Jersey, which is about an hour north of my home. After dinner and conversation, Steve gave me an initial walk-through of Minsky. We ended the night with me singing a few songs on the sidewalk – just me, my phone, and a little Bluetooth speaker. At the very end of today's episode, after the closing theme music, you'll hear a small highlight from that experience. You can check out my singing website at seejeffsing.com.

And now, onto my conversation with Steve Keen. Enjoy.

Audio chapters * 4:24 - Hellos, and the plan * 5:53 - His journey fighting mainstream, and, in 2020, to MMT * 8:19 - Marx's view of money, Steve's PhD, Minsky's financial instability hypothesis, double entry bookkeeping, thinking of government spending differently * 9:43 - Modeling money properly with double entry bookkeeping * 10:49 - Discovering MMT in 2020, which changed his view on government spending * 12:56 - Mild criticism of MMT's consolidated view * 14:29 - Money creation is the expansion of balance sheets. The same thing happens on both the asset and liability side. If it ONLY happens on the liability side, it's a liability swap it. If it ONLY happens on the asset side, it's an asset swap. * 16:42 - Regarding government money creation, how does your model distinguish between money creation and the supposed recycling of collected money? * 19:12 - The only insight MMT gave Steve was that government spending creates money. All his work on banking is exactly compatible. * 20:09 - Steve's two disagreements with MMT * 21:31 - Disagreement 1: MMT says that in general, imports are a benefit and experts are a cost. * 25:48 - Disagreement 2: The JG and UBI are actually complementary * 27:59 - A dangerous follow up question: danger of UBI is that it could undermine the job guarantees Price anchor. Steve's response: the UBI would need to be below the job guarantee wage * 30:25 - Have you modeled these disagreements in Minsky to confirm your view? Answer: no. There are simply much bigger fish to fry. * 31:16 - Goodbyes for audio portion, transitioning to video * 34:38 - Singing for Steve on a sidewalk in Princeton * 36:01 - Duplicate of introduction, with no background music (for those with sensitive ears)

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John Harvey reads the introduction to (chapter one of) his book, Contending Perspectives. Here's the original video from where this audio came.

Here's a list of links to John reading every chapter (released so far) in his 2021 book Contending Perspectives.

Note the original video is unedited, but the audio has been edited to eliminate obvious mistakes, coughs, interruptions, and etc.

Audio chapters Use the below timestamps to navigate to each major section and occurrence in this section:

0:00 - The Cowboy Economist's cousin, John Harvey, introduces himself
0:41 - Page 1: Introduction
8:56 - Page 4
14:35 - Page 6

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Here's the original video from where this audio came.

Here's a list of links to John reading every chapter (released so far) in his 2021 book Contending Perspectives.

Note the original video is unedited, but the audio has been edited to eliminate obvious mistakes, coughs, interruptions, and etc.

Audio chapters Use the below timestamps to navigate to each major section and occurrence in this section:

0:00 - Opening thoughts by John's cousin, the Cowboy Economist
6:37 - Page vi: Acknowledgements

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Welcome to episode 147 of Activist #MMT. Today's the second in my two-part conversation with author, mathematician, and bond analyst Brian Romanchuk (Twitter/RomanchukBrian), on the basics of the secondary market and how it relates to the primary market. Today in part two, Brian continues describing the participants in the secondary market, why they do what they do, and shares several anecdotes from his many years of experience as a bond analyst for fixed income recipients in Canada.

A fuller introduction can be found before part one. But for now, let's get right back to my conversation with Brian Romanchuk. Enjoy.

A fuller introduction can be found at the beginning of part one, but for now, let's get right back to my conversation with Brian Romanchuk. Enjoy.

Audio chapters * 4:03 - The internet allows you to do a large quantity of small transactions BUT everyone can see it (it's publicly viewable) * 4:47 - "Reallocation between bonds and equities." * 8:19 - What is the population of who purchases bonds? * 26:24 - The rich don't just buy bonds themselves, as individuals. * 28:22 - Municipal bonds don't play a large role in the macro economy * 30:01 - Z-1 document from the Federal Reserve * 32:11 - Who exactly are the supposed bond vigilantes? (The really powerful bond purchasers would never say anything publicly. It would be a breach of their fiduciary duty! Anyone talking on the news is only talking for themselves.) * 33:57 - The most important players keep their mouth shut * 36:07 - Speaking publicly is marketing and manipulation * 41:40 - Anthropomorphic * 45:08 - What people say, when not under legal obligation to be truthful, is sometimes manipulation and marketing. * 49:03 - Reasonable people know the national government isn't really going to default * 55:28 - Bringing it back to the beginning: The three core reasons why the government, not the market, is in control * 58:47 - How would everything we've discussed change is we lived in a ZIRP world? * 1:03:12 - ZIRP is bad only in the sense that * 1:15:15 - Duplicate of introduction, with no background music (for those with sensitive ears)

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Welcome to episode 146 of Activist #MMT. Today I talk with author, mathematician, and bond analyst Brian Romanchuk, on the basics of the secondary market and how it relates to the primary market. Brian starts with a brief tutorial of how bonds are priced, which is seen very differently from the points of view of the primary and secondary markets. For an in-depth treatment of this topic, you can listen to episodes 30 and 31 of MMT Podcast with Steven Hail.

(Here's a link to part two. A list of the audio chapters in this episode can be found right below [above the full-question list].)

Brian then describes bonds (and more broadly, securities) in general, the population of who buys and sells them, some of the reasons why they are bought and sold, and several anecdotes of how it all happens.

What can be said is this: rich people rarely if ever buy US treasuries on their own, as individuals. Additionally, the biggest players in securities trading never speak publicly in order to prevent jeopardizing their advantage – they keep their mouths shut. These two facts alone put a huge hole in the idea of so-called bond vigilantes. Although I'm not necessarily interested in the idea of bond vigilantes, it's one of the most obvious and common myths that comes up regarding the secondary market.

Whatever the case, the idea that the market can somehow overrule the national government is clearly false. This is for at least the following three reasons:

only the national government can create and delete its own bonds.
Only the national government can create and delete its own money – which is required to purchase those bonds.
And the national government (for countries such as the United States, UK, Australia, Japan, and Canada) have little to no foreign denominated debt, which means they do not offer to convert their money into anything else.

What this means is that the national government, through the collective action of its citizens (US!), has the power to stand up to the market even if they somehow object to the actions of that government.

The only way the market can overpower the national government is if the government chooses for it to be that way – such as when representatives and regulators are bought off by the biggest players in that market. This is further bolstered by the populace being sufficiently duped into believing it all to be "unfortunate, but necessary." This is a primary battle-front in the centuries-long war between rich and poor, which, unfortunately, the rich have all but won.

And now, onto my conversation with Brian Romanchuk. This is part one of a two-part conversation. Enjoy.

In order to preserve both my podcast and my sanity as I proceed through Torrens University and Modern Money Lab's graduate program in MMT and ecological economics (🦉🤝🌍), I've slowed my podcast from one episode a week, to once a month. For as little as a dollar a month, patrons of Activist #MMT can hear all three parts with Brian right now. You can start by going to patreon.com/activistmmt.

Resources * The Federal Reserve's Z1 document * Brian's July 2023 Q&A with Torrens University students

Audio chapters 1. 5:33 - I don't care about bond vigilantes per es, it's just the most common (mythical!) topic discussed. 2. 7:43 - The core reasons why the government, not the market, is in charge. 3. 11:18 - The definition of money. Even a pizza coupon is money, but not as understood by the general public. 4. 12:04 - A government bond is a security, governed by securities laws. 5. 12:49 - The basics of price and yield 6. 21:41 - Price and yield versus par value and coupon rate – terms as used in the primary versus secondary market 7. 24:45 - Computer era versus pre-computer era 8. 29:48 - despite lots of corruption and instability, he will always get $100 back from that. 9. 33:14 - Primary market 10. 36:05 - "Basis points" 11. 44:34 - Your company benefitted fixed-income earners 12. 47:11 - Does your company know when bonds are purchased from primary or secondary dealers? Does the distinction matter? 13. 52:21 - John Harvey: the internet ended personal connection in trading 14. 1:00:21 - The internet allows you to do a large quantity of small transactions BUT everyone can see it (it's publicly viewable) 15. 1:01:06 - "Reallocation between bonds and equities." 16. 1:04:24 - Duplicate of introduction, with no background music (for those with sensitive ears)

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Welcome to episode 142 of Activist #MMT. Today's the final part of my three-part conversation with Emily Ruhl, on his 2008 paper, Religiously-defensible, divinely-supported genocide. Today we discuss principles seven to ten. My full and detailed question and summary list can be found in the show notes to part one. Also, be sure to see the list "audio chapters" in all three parts (look below!) to find exactly where each topic is discussed.

You can financially support this podcast by going to Patreon.com/ActivistMMT. For as little as a dollar a month, all patrons get exclusive, super-early access to several full episodes and some unique patron-only opportunities, like asking my academic guests questions (like my episodes with Dirk Ehnts, John Harvey, and Warren Mosler). In addition to this podcast, patrons also support the development of my large and growing collection of learn-MMT resources, and my journey through the Torrens graduate program. To become a patron, you can start by going to Patreon.com/ActivistMMT. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, let's get right back to my conversation with Emily Ruhl. Enjoy.

Audio chapters * 3:01 - Different levels of Nazis: killing versus deciding who to kill (doctors, commandants, soldiers) * 6:44 - Symbols as an expression and reminder of power (pledge of allegiance) * 8:02 - Charismatization: The charisma of the individual, and of the world (institutions) around him — including reactions to him. * 18:17 - Calmly stirring up the crowd into a frenzy, and further into genocide. * 19:03 - The pursuit of Atlantis and the holy grail (Indians Jones) * 28:10 - Nazi pseudo-religion is a tool to justify genocide. False economics is a tool to justify mass neglect and exploitation. * 34:44 - Connecting false economics and Nazi Germany's pseudo-religion * 38:47 - In the national context, there is no such thing as "finding money" Their decision to do something IS the the funding. * 41:38 - Final question: Polanyi, "latent anti-Semetism" versus venting frustrations from a lifetime of mass neglect and exploitation * 51:00 - Reality of hyperinflation, the treaty of Versailles * 52:28 - Final comments * 54:44 - Goodbyes

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Welcome to episode 144 of Activist #MMT. Today's part two of a three-part conversation with historian, author, and Harvard master's graduate, Emily Ruhl, on her new paper and master's thesis, In League with the Devine: How Religion Influenced Nazi Perpetrators of the Holocaust. You will find my detailed question list at the bottom of the show notes for part one. Also, be sure to see the list "audio chapters" in all three parts (look below!) to find exactly where each topic is discussed.

A full introduction can be found at the beginning of part one, but for now, let's get right back to my conversation with Emily Ruhl. Enjoy.

Audio chapters * 2:43 - German pseudo-religion: three parts: anti-Semitism, Blut und Boden (blood and soil), and Volksgemeinschaf (the German worldview) * 3:50 - Racism is an impossible concept. The only way to preserve the German Aryan theory is to exterminate anyone not "definitely" Aryan. * 7:21 - The order in which you kill changes it from murder to sanctioned by God * 11:12 - Religion is both coercion and a salve once what they were coerced to do is done. * 20:31 - The biggest bias in sources is the power of those who created (wrote, filmed, etc.) it. * 29:21 - "No punishment" for those refusing to kill, but only if they didn't threaten the regime. * 30:12 - Religious symbols: pins (SS lightning bolts), belt buckles, architecture, white doctors coats. * 44:28 - Symbols in architecture * 48:59 - Different levels of Nazis: killing versus deciding who to kill (doctors, commandants, soldiers) * 55:30 - Duplicate of introduction, with no background music (for those with sensitive ears)

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Welcome to episode 143 of Activist #MMT. Today I talk with historian, author, and Harvard master's graduate, Emily Ruhl, on her new paper and master's thesis, In League with the Devine: How Religion Influenced Nazi Perpetrators of the Holocaust. This is the first of a three-part episode. You will find my full and detailed question list at the bottom of today's show notes. Also, be sure to see the list "audio chapters" in all three parts to find exactly where each topic is discussed.

(Here are links to parts two and three. A list of the audio chapters in this episode can be found right below [above the full-question list].)

(In order to preserve both my podcast and sanity as I proceed through the Torrens graduate program, I've decided to slow my podcast from one episode a week to once a month.)

The Nazi Party started by trying to resist and reject all religion, but soon, religion became a fundamental part of the Party's strategy of coercing and propagandizing everybody, from members of the public, to the highest ranking figures in both religious and political institutions, into accepting the brutal and systematic murder of eleven-million souls. The Nazi religion took elements of Christianity, Protestantism, and Paganism, to make one geared not to brotherly love, but primarily to erasing non-Aryans from the Earth.

This Nazi pseudo-religion served both as coercion – you must kill the unworthy, or at least stand back while others do – and also as a salve, to come to terms with what you've just done. As you'll hear in the cool quote for part two (the first minute before the opening music), that salve can make the difference between sanity and insanity, and life and death.

The Nazi's didn't want to murder eleven million people, they had to, because God said they had to. It was "unfortunate, but necessary." My primary goal for this interview is to demonstrate how this is parallel to mainstream economics, which is also a tool to justify suffering, this time in the form of austerity. Instead of a gun to the head at point blank range, austerity is mass deprivation and exploitation, resulting in a slow and torturous death by despair, starvation, exposure, and untreated sickness and injury – not to mention wasted potential.

We currently have the ability to provide all with what they desperately need, including healthcare, education, decent food and shelter, un-poisoned water, and breathable air. As illuminated by Kate Raworth's doughnut, if we are to continue existing as a species, then we must provide the desperate with what they most desperately need. At the same time, we also have to stop the very few on top from using the vast majority of our precious and limited resources to needlessly lavish themselves.

Unfortunately, we are instead digging ourselves into an even deeper ecological crisis, when we should be getting off fossil fuels entirely, and restructuring society so we don't require as much. On our current path, in the not-too-distant future, it may indeed become unfortunate but necessary to choose who must be deprived in order for the rest to live. Of course, given our obscene and still growing inequality, the most powerful few will be the ones to make those decisions, and the least powerful many will be the sacrificed. This is the lifeboat economics of the tragedy of the tragedy of the commons. Instead of the around eleven million murdered by the Nazi Party, mainstream economics is little more than a religion to justify what may ultimately result in the death of not millions, but billions. Austerity is genocide at a slower pace.

As if riding in a bus hurtling towards a cliff, we as a species currently face a binary choice, between having a terrible accident, and plunging off into oblivion. As Mark Twain said, "History never repeats itself, but it does often rhyme." There is still time to learn from that history. We can choose another path.

On a completely unrelated side note, while attending her master's program, writing her master's thesis and working full time, Emily also wrote… an entire fantasy novel. You can find out more about it, and read the entire first chapter, at her website, emilyruhlbooks.com.

In order to preserve both my podcast and my sanity as I proceed through Torrens University and Modern Money Lab's graduate program in MMT and ecological economics (🦉🤝🌍), I've slowed my podcast from one episode a week, to once a month. For as little as a dollar a month, patrons of Activist #MMT can hear all three parts with Emily right now. You can start by going to patreon.com/activistmmt.

And now, onto my conversation with Emily Ruhl. Enjoy.

Resources * Dirk Ehnts 2017 book, Modern Monetary Theory and European Macroeconomics, from the introduction: The crash of 1929 was a direct consequence of weak financial sector regulation in the US, and it had world-historical consequences. It caused the economies not only of the US and Canada to melt down, but also those of many other nations financially linked to the US – including the German economy, whose deflationary collapse in 1929 led to the election of Adolf Hitler by a desperate electorate in 1933, the same year Glass–Steagall was passed. Had Glass–Steagall been legislated ten years earlier, the Second World War would most likely never have happened. * Asad Zaman 2016 lecture entitled Macroeconomics, at around the 33-minute mark, states that had the right economic theories been implemented by those in power, that the Great Depression would have never occurred. * My post summarizing Polanyi’s 1941 book (2001 edition), The Great Transformation * My interview with Asad Zaman on Polanyi. See especially the eight-minute, 35-seconds mark in part one (see the audio chapters at the bottom of the show notes) * 2016 book by Christopher Browning, Ordinary Men * Daniel Goldhoggen Hitler's Willing Executioners * Calvin University online archives - start with this Google search for Calvin University online archives nazi

Audio chapters 1. 7:12 - Hellos 2. 8:49 - Overview of the paper 3. 10:46 - Elaborating on the gap in the literature 4. 15:30 - Harvard online masters degree 5. 16:40 - Her experience writing the paper, the major sources, and the consequences of the pandemic 6. 20:12 - Structuralist approach to writing the paper (interconnectness) 7. 25:04 - The bias in even primary sources (the art of bias) 8. 30:02 - Lebensunwertes Leben: Life unworthy of living 9. 37:06 - Three theories why Jews are lebensunwertes leben 10. 44:56 - Christian verses Catholic 11. 45:45 - Nazi party desired to be non-religious. Religion became critical. 12. 54:07 - German pseudo-religion: three parts: anti-Semitism, Blut und Boden (blood and soil), and Volksgemeinschaf (the German worldview) 13. 59:40 - Racism is an impossible concept. The only way to preserve the German Aryan theory is to exterminate anyone not "definitely" Aryan. 14. 1:04:30 - Duplicate of introduction, with no background music (for those with sensitive ears)

Resources ...to come...

My full question list META QUESTIONS 1. Introduce yourself. Your background and interests that led you to this paper. How it applies to your masters and career goals. (Be careful with what you want reveal to protect your job.) 2. Can you give an overview of your paper? 3. What research already exists related to this topic and what gap does your paper fill? 4. Describe your experience writing the paper. The sources you used, the limitations of doing much of it during the pandemic, what would have been different if there wasn't a pandemic, the fact that you read German. 5. You used a structuralist approach in your paper. Can you define that term and how it affected your paper and approach? 6. Your evidence was primary sources such as diaries, testimonies, journals, books, documentaries, and propaganda movies. All these things however, were written in a certain context. For example, trial testimony captures the words of someone whose primary goal is to avoid legal consequences. Propaganda videos were obviously to manipulate in favor of those on top. Even a personal journal could be written in such a way to preserve their sanity such as by avoiding suicidal thoughts and actual suicide. How do you filter through that bias and understand reality? How do you trust even primary sources?

THE PAPER ITSELF Some questions to answer, some summaries and insights to elaborate on.

(I'm a classically trained singer learned how to pronounce German, SOUND like I can read it/speak :) Lebensunwertes leben means "life unworthy of life." We're going to talk about Jews in the next question, but in general, what lives were deemed unworthy by Nazis, and why? Conversely, how was a worthy life defined? (Aryan, and specifically German Aryan.) Who and what defines these things? Can you also talk about the history of these concepts? These definitions weren't invented in Nazi Germany.
There are three major theories of why Jews are considered unworthy of life: the Christian view was that Jews killed Christ (even though Christ was Jewish; his final supper was a Passover seder!) The protestant view is from Martin Luther who just simply said that Jews are devils and they should be killed and their homes destroyed (resulting in Kristallnacht). It was also strongly asserted that all of Germany's ills were primarily caused by Jews. Can you elaborate on this? How were three such disparate theories used in concert?
The Nazi party originally intended to be secular (non-religious) but ended up having to tolerate some of it for political expediency. If they didn't, they would have alienated a large part of the population. In other words, the Party accepted what they didn't want to accept, in order to not be destroyed. Conversely, religious institutions, from churches, all the way through the Vatican, had to accept Nazi pseudo-religion, in order for the church to survive.
German pseudo-religion is built on three foundations: Above all is anti-Semitism, and also blut und boden (blood and soil), and volksgemenschaft weltanschauung (the German world-view). Can you define and discuss each of these?
On page 1 of the introduction, you introduce someone named Franz Stangl who was a police superintendent at the Euthanasia Institute at Hartheim (a heck of an institution!). He explained how he only shot children who were motherless, saying it was "soothing to my conscience to release children unable to live without their mothers." As you point out, the word "release" means redeem or save in a religious sense. Therefore, his killing the child made him a savior or redeemer in the eyes of God. What shocked me about this was that he only killed children after their mothers were first killed by one of his comrades. So by simply REVERSING THE ORDER in which you kill a mother and her child, it changes from an immoral act of murder to an act of mercy sanctioned by God.
Stangl also talks about how a Catholic clergy advocated for this "mercy killing" of the motherless child (that Stangl and his partner MADE motherless!). Stangl said in a 1971 interview, "Here was a Catholic nun, a mother superior, and a priest. And they thought it was right. Who was I then, to doubt what was being done?" So religion, even God himself, was utilized as a tool to justify and encourage mass murder. In addition, religion was also the excuse given to the murderer so they could clear their conscience after the act.
Building on the previous question and returning to biases in primary sources: One of the biggest biases of all is power. It is REQUIRED to say that killing the unworthy is necessary (and commanded by God) in order to not be killed yourself. Even saying that someone is unworthy is required in order to not become unworthy yourself! This is true for average people, all the way through highest levels in both religion and government. How much did the clergy mentioned by Stangl really believe what they were saying, and how much of it was that they were protecting themselves and the church from being destroyed by the Nazi party? How threatened did the clergy feel? In other words, the fact that Stengel felt permission from the clergy is really his being COERCED by religion, because those religious figures in turn were coerced by the most powerful figures in Germany and the Nazi party.
It turns out that religion and religious symbols became a core element of its strategy to propagandize the public. Can you talk about the religious symbolism in architecture, clothing, belt buckles, pins, and how these things come from both the pagan and Christian religions. (Paganism is basically NOT Christian. NOT one of the dominant religions. This is equivalent to the term heterodox in economics, which is the economics that is NOT mainstream.) Another important religious symbol was the white outfits worn especially by concentration camp doctors, and secondarily by commandants.
Before the next question: I want to say a haunting quote I'm reminded of by the white outfits and the purity and moral and religious authority it gave to doctors and commandants, by Zygmunt Bauman in his book, Modernity and the Holocaust: "It was not illiterate savages, but graduates of the finest educational systems of the West who designed the gas chambers used to burn millions of innocent men, women and children in Germany." White outfits symbolizes these people as gods, because they alone decide who lives and who dies (and who is tortured and not tortured). There were different levels, such as how doctors killed people directly AND made the decision to do so; how commandants decided who should be killed but didn't do it themselves; and soldiers killed people but only under the command of an authority figure.
In footnote 75 on page 26, someone named Albert Speer said he found "Hitler to be "deeply exciting" as a result of the "intermingling of frenzy and rationality" with which he spoke. In the footnote, it says, "listening to Hitler's speeches convinced him to commit himself to the party." The speech he watched almost certainly included the crowd's responses to it. Not unlike the Beatles and their crowds of fawning women. Can you speak about the concept of charismatization, of both Hitler the individual and the party and its institutions, and how all this was an important part of manipulating and propagandizing the public, to achieve the Party's goals?
A tangent but a purposeful and important tangent for the Party. A major goal of the SS was dedicated to finding places and objects that could prove "the genetic and geographic roots of Aryans." Two major examples being Atlantis and the Holy Grail. The entire Indiana Jones movie series was based on this concept, especially part three, which was precisely a race to find the Holy Grail before the Nazis could. As you say in the paper, "the Aryan race… was believed to be descended from the deities who once lived in Atlantis." This is all complete fiction (they obviously never succeeded), yet the very pursuit validated and reinforced their beliefs in the eyes of the public (surely they wouldn't waste THAT many resources and THAT much time on utter nonsense!). The Holy Grail in particular was pursued not just as justification of their beliefs but also as a weapon to "repel the darkness" of those to be considered unholy. "If the SS found the Holy Grail, it would have appeared as though God himself had guided the Nazis to its location, thus implying that the Nazis had the approval of Heaven. This, in turn, would have depicted the actions of the Nazis including the genocide they initiated--as being morally correct and aligned with the desires of God." Can you elaborate on this?
Mainstream economics is, like religion, a tool to justify genocide, albeit in a much less direct and overt fashion. This is especially true as our ecological crisis looms. That's the parallel I want to draw with this interview. (Mainstream economics, really, IS a religion, and Harvard's president is one of its leading acolytes.) You did a bit of reading on MMT, I wanted to get your thoughts on MMT in general, compare that to what you believed to be true before we met, and if it relates in any way to your paper.
The other connection between our two topics is that, if the New Deal were implemented in the late 1800s, then WWI and the rise of Hitler and the Nazi party would have never happened. I've heard this from two PhD economists: the first is Dirk Ehnts in his book MMT and the European Monetary Union, and the second is Asad Zaman in his macroeconomics lecture, both of which will be linked in the show notes. A point made in Karl Polanyi's 1942 book, The Great Transformation, is that fascism is not a movement unto itself. There's no "strength" in fascism or fascists. Rather, fascism only exists to fill the vacuum left by the suffering wrought by neoliberalism (and more generally, the centuries of mass neglect and exploitation by the obscenely rich). So, the hatred by regular Germans of Jews (and other "unworthy" people) is in fact largely a response to the neglect and abuse they've experienced at the hands of those on top. They've just been deceived into thinking that society's ills are PRIMARILY caused by those with the least money and power. This gives those on top protection, because it provides their victims with an outlet for venting their rage, but in a way that allows them to remain in power. Citizens are: deceived into hurting themselves, so those on top don't have to. I say this, because it's both suggested and directly asserted by some of the figures in your paper that hatred of Jews and other "unworthies" was always lurking in the hearts of Germans, and I don't think that's true.

Modern Monetary Theory and European Macroeconomics (Routledge International Studies in Money and Banking)

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Welcome to to the audio of season 3, episode 3 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. In series 3 of Modern Money Doughnuts, we meet some of the students from the Modern Money Lab and Torrens University Australia Masters Degree in the Economics of Sustainability.

Today we talk to Susan Borden, one of our amazing students, about what she's learning in the course, what we're discussing and working on, and what motivated her to take up this challenge. Plus we'll ask our guests about their working life and activism and what they do for fun and regeneration.

What have Doughnuts to do with modern money? Quite a lot as it turns out. In Modern Money Doughnuts, Gabrielle Bond and Steven Hail explore the relationships between #MMT and doughnut economics.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

Here's the video from which this audio comes from. (The audio is unedited.)

MMD is hosted by Modern Money Lab, and the audio podcast is produced and hosted by Activist #MMT. So if you'd like to be automatically notified of each new MMD episode, then subscribe to Activist #MMT on your favorite podcast platform.

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Welcome to episode 142 of Activist #MMT. Today's the final part of my three-part conversation with Scott Fullwiler, on his 2008 paper, Modern Central Bank Operations: The General Principles. Today we discuss principles seven to ten. My full and detailed question and summary list can be found in the show notes to part one. Also, be sure to check out the list of audio chapters at the bottom of today's show notes, to find precisely where each principle, and otherwise, can be found.

(A list of the audio chapters in today's episode can be found at the bottom of this post.)

Principal seven, which refers to a world without a floor system (QE is an example of a floor system), is that a central bank can change its target interest rate by simply announcing it. This is contrary to the false idea that the central bank can only set a new target rate by overwhelming the system with reserves in order to push the rate higher, or push it lower by starving the system by selling a very large amount of bonds. This implies the central bank and its government to be little more than a very large currency user. Also, the "liquidity effect" is the false idea that the mere existence of reserves makes banks want more of them, and that this in turn results in more lending to customers. (This is essentially Say's law, which is the false idea that supply causes demand.)

Principal eight is that the amount of total reserves in the system is primarily due to the central banks method of interest rate management. If a central bank chooses a floor system like QE, then there will be a whole lot of reserves in the system. If they also choose restrictive reserve requirements, then there will be even more as banks demand more in order to meet them. If there was no floor system or reserve requirements at all, then the total amount in the system will be greatly reduced. In this case, once again, the aggregate level will be controlled endogenously – by the rigidness of banks needing to settle payments each day, which is primarily dependent on the behavior of actual humans in the real economy (the non-government sector).

Principles nine and ten basically assert that the central bank is in the unique position of being a currency issuer. Only the central bank, via the execution of fiscal policy, can create net financial assets – which is money we don't have to pay back. Commercial banks can only create credit, which must always be paid back, plus interest. Commercial banks – and indeed the entire financial system and economy – depends on the central bank because: we have to pay taxes which can, ultimately, only be paid with reserves, which can only be done through the banking system.

Also, banks are legal franchises of the state. If a commercial bank tried to bypass the central banking system entirely, it wouldn't be a bank for long. In the same way, you could try and call yourself a bank, but unless you're legally sanctioned and accepted as one by the central bank, you wouldn't get very far.

And now, let's get right back to my conversation with Scott Fullwiler. Enjoy.

Audio chapters * 5:42 - It would mean they could buy reserves for low interest (penalty rate) and then earn high interest for holding it (IOR) * 7:59 - Principle 7: There is no "liquidity effect" associated with central bank changes to its operating target. (Apologies for the very long question! I got it wrong at first, and scrambled to rewrite it at the last minute.) * 20:40 - Principle 8: The quantity of reserve balances in circulation is primarily determined by the central bank's METHOD of interest-rate maintenance. * 27:50 - Principle 9: Under current operating procedures, the central bank's balance sheet expands and contracts endogenously while these changes neither create nor destroy net financial assets for the non-government sector. (The banks can't create or delete reserves, only the central bank can.) * 30:01 - Clarifying this sentence in principle 9: Outside of a floor (QE) system, the monetary base can only be determined endogenously (by commercial banks and potential borrowers). * 31:10 - Thoughts on his approach to principle ten. * 32:32 - Principle 10: The central bank's interest rate target "matters" because banks use reserve balances to settle payments. (The central bank is a currency issuer. Commercial banks are currency users.) * 36:52 - Reservations about the final paragraph in principle ten. (Also, assuming away everything that disagrees with you, and equating sharing sources that refute you with "appealing to authority.") * 39:52 - If you could, who would you appoint to government positions (Treasury, Federal Reserve, etc)? * 41:48 - Assuming they're there, what changes would we see? (Your favorite policy plus the job guarantee, or your favorite policy plus the involuntary unemployment) * 42:46 - Assuming they're there, what changes would we see in monetary policy? * 47:08 - Macro-prudential regulation instead of one target interest rate. * 49:31 - Scott will be teaching macroeconomics at Torrens University (for my MMT-plus-ecological economics masters program) starting February. I'll be taking it June 2023. How he's designing the course. * 53:48 - Goodbyes * 56:51 - Duplicate of introduction, with no background music (for those with sensitive ears)

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Welcome to the audio of season 2, episode 2 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. In series 3 of Modern Money Doughnuts, we meet some of the students from the Modern Money Lab and Torrens University Australia Masters Degree in the Economics of Sustainability.

Today we talk to Nathan McMillan, one of our amazing students, about what he's learning in the course, what we're discussing and working on, and what motivated him to take up this challenge. Plus we'll ask our guests about their working life and activism and what they do for fun and regeneration.

What have Doughnuts to do with modern money? Quite a lot as it turns out. In Modern Money Doughnuts, Gabrielle Bond and Steven Hail explore the relationships between #MMT and doughnut economics.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

Here's the video from which this audio comes from. (The audio is unedited.)

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Welcome to episode 141 of Activist #MMT. Today's part two of my three-part conversation with Scott Fullwiler, on his 2008 paper, Modern Central Bank Operations: The General Principles. Last time in part one, we discussed some generic but related topics, and then principles one and two. Today in part two, we discuss principles three to six. Next time in part three, we discuss seven through ten. My full and detailed question and summary list can be found in the show notes to part one. Also, be sure to check out the list of audio chapters at the bottom of today's show notes, to find precisely where each principle, and otherwise, can be found.

(A list of the audio chapters in today's episode can be found at the bottom of this post.)

Principal three is that, outside of a floor system, it's not possible for the central bank to target the quantity of reserves. This is for two reasons: first, as in principle one, banks need reserves to settle payments and meet reserve requirements. Both of these are rigid needs. They need exactly that amount, no more no less. In other words, banks' demand for reserves is always vertical. Any less, and the payment system, and consequently society, breaks down. Any more and the reserves sit around unused. (The excess may earn a bit of interest, but, outside of a Volcker shock, where rates are set up around 20%, it's not much.) This means the amount of reserves in the system is determined by commercial banks (that is, it's endogenous) not the central-bank (which would be exogenous).

The other reason the central bank can't set the quantity of reserves (outside a floor system), is because many transactions occur that are outside the central bank's control. A few examples are government spending and taxation (both of which the central bank must do), and calendar factors such as more cash being desired by the public as each weekend and vacation day approaches.

Related is principle four, which is that all of these extra transactions must be offset. This is required if banks' demands for reserves is to be met, which is required to manage the payment system, which is required to have a stable society. Specifically, these extra transactions result in reserves entering and leaving the system in an uncontrollable and volatile fashion, making it less likely that banks' needs will be met. Therefore, the central bank must buy and sell bonds in order to keep reserve levels sufficient.

Principal five is that reserve requirements are not for controlling reserve aggregates (which as in the previous principal, isn't possible anyway), but rather are an additional tool for reducing interest rate volatility. Although nothing changes what the central bank has to do, correctly designed reserve requirements allow the actions to occur at a more measured pace. They also provide some foresight and notification before some actions become urgent.

(Think of it in terms of the tickets and doors at a sports stadium. Everyone with a ticket needs to get inside before the game starts and outside after it ends. The doors and the tickets make it such that the crowd enters and exits in a controlled fashion, distributed over time.)

Finally, principle six is that volatility in the target rate can only exist within the central bank's corridor, meaning interest on reserves at the minimum and the discount window's penalty rate at a maximum. The decision to not regulate, or not enforce existing regulations, is just another form of regulation. When there is no deliberate floor or ceiling, as is our current reality, it means the highs will be dangerously high and lows dangerously low.

In the same way, Minsky's financial instability hypothesis is only true within the ceiling and floor set by governments. We could set a rigid floor and ceiling such as with a job guarantee, but then, as Kalecki says in his 1942 paper, Political Aspects of Full Employment, if the government governs, then the rich and their feelings can't. This is why the rich pay our legislators to not legislate, especially when it comes to employment.

Principals seven through ten come in part three, but for now, let's get right back to my conversation with Scott Fullwiler. Enjoy.

Audio chapters * 6:07 - Relation between fractional reserve banking and money multiplier * 9:10 - Principle 3: Outside a floor system, it's impossible for the central bank to target the quantity of reserves. * 15:12 - Another comment regarding the Fed being in charge of the government (not) * 15:54 - Principle 4: The CB must offset many things out of its control, and government spending is mind-twisting! * 28:21 - Principle 5: Unless using a floor system, it's impossible for the CB to control the amount of reserves. It can only control the price of those reserves (the interest rate). Also, reserve requirements (and TT&L accounts) are to BUFFER. * 34:51 - Using the target rate to manage inflation is a terrible thing to do (it has real-world consequences) but does not limit the ability of the central bank to manage the stability of the payment system. * 38:28 - Liar, Liar reference * 39:18 - Principle 6: How does the CB defend a precise target, as opposed to only ensuring it's remains within the corridor? * 48:38 - What if the penalty rate was intentionally set below interest on reserves (IOR)? * 52:16 - It would mean they could buy reserves for low interest (penalty rate) and then earn high interest for holding it (IOR) * 54:33 - Principle 7: There is no "liquidity effect" associated with central bank changes to its operating target. (Apologies for the very long question! I got it wrong at first, and scrambled to rewrite it at the last minute.) * 58:36 - Duplicate of introduction, with no background music (for those with sensitive ears)

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Welcome to episode 139 of Activist #MMT, which is part two of a special video episode series. I'm your guest host, Jonathan Wilson, and today I'll be interviewing Sam Levey. Sam is currently studying to get his PhD in economics at the University of Missouri at Kansas City. In this episode, we'll be discussing in detail Sam's 2022 paper Optimization in a Neo-chartalist Model of the Determination of the Price Level. The paper contains some rather advanced math, but I'll be asking Sam questions from the perspective of a non-math expert for the benefit of the audience.

(Here's a link to part one in this special video series, on the "math" in economics, with Jeff and Sam. A list of the audio chapters in this episode can be found at the bottom of this post.)

In the first section, we introduce the purpose of the paper and explain some basic assumptions in mainstream economic models and the advantages and disadvantages of using the mainstream approach.

In the second section, we start looking at the text of Sam's paper. It contains six variants of the model, and we spend this section of the video looking at the basic, one-period model.

In the third section, we go on to the multiple-period model. About fourteen minutes into discussing the multiple period model, we shift from looking at the paper to viewing an interactive modeling software that allows Sam to show in real time how the model reacts to changing various inputs.

In the final section, we conclude by discussing more of Sam's concerns with the underlying assumptions behind mainstream economic models, including:

the economic definition of rational behavior and the trouble applying it to the real world;
whether we need formal models to validate the existence of behavior that can be directly observed, such as precautionary saving;
whether markets clear and what models with non-clearing markets look like; and
whether the Lucas Critique, which argued that models need optimization, actually improved economic scholarship.

Let's get started.

Audio chapters * 3:43 - Section 1 - The purpose of Sam's paper * 26:22 - Section 2 - The one period model * 1:14:49 - Modern Money Lab sponsors Kerberos/KRTD media (1 minute, 20 seconds) * 1:16:22 - Section 2 continued * 1:53:33 - Section 3 - The multiple period models * 2:19:43 - Section 4 - Interactive representations of the model * 2:27:44 - Section 5 - Discussing the implications of the model * 2:27:45 - Section 5 - Discussing the implications of the model * 2:27:47 - Section 5 - Discussing the implications of the model * 2:49:40 - Final thoughts and goodbyes

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Welcome to season 3, episode 1 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. In series 3 of Modern Money Doughnuts, we meet some of the students from the Modern Money Lab and Torrens University Australia Masters Degree in the Economics of Sustainability.

Today we talk to Activist #MMT Jeff Epstein, one of our amazing students, about what he's learning in the course, what we're discussing and working on, and what motivated him to take up this challenge. Plus we'll ask our guests about their working life and activism and what they do for fun and regeneration.

What have Doughnuts to do with modern money? Quite a lot as it turns out. In Modern Money Doughnuts, Gabrielle Bond and Steven Hail explore the relationships between MMT and doughnut economics.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

Here's the video from which this audio comes from. (The audio is unedited.)

MMD is hosted by Kerberos Media, and the audio podcast is produced and hosted by Activist #MMT. So if you'd like to be automatically notified of each new MMD episode, then subscribe to Activist #MMT on your favorite podcast platform.

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Welcome to episode 140 of Activist #MMT. Today I talk with Scott Fullwiler on his 2008 paper, Modern Central Bank Operations: The General Principles. Today's part one of a three-part conversation. Today in part one we discuss some generic but related topics, and then principles one and two. Next time in part two we cover principles three to six, and then in part three, principles seven to ten. My full and detailed question and summary list can be found at the bottom of these show notes (look below!). Also, be sure to check out the list of audio chapters to find precisely where each principle, and otherwise, can be found.

(Here are links to parts two and three. A list of the audio chapters in this episode can be found right below the resources section in this post.)

Today's principles one and two.

Principle one is that reserves can only be used for two purposes: Settling payments between banks, and meeting reserve requirements. (There's actually a third purpose, which is it's the only thing that can ultimately settle tax obligations to the state.) Knowing these are its only possible uses, when you hear, for example, that more reserves somehow increase a bank's liquidity, and that this in turn encourages banks to lend more to customers, which then in turn increases economic activity in general… you know they're wrong. The same is true with the reverse: that less reserves somehow discourages lending and reduces economic activity.

Principal two says that, because the central bank is the only entity capable of creating and deleting reserves, it has "a fundamental, legal obligation to promote the smooth functioning of the national payment system." Without a functioning payment system, society would, without exaggeration, break down. If a bank can't settle its payments with another bank, then everyone expecting a payment won't receive it, and everyone expecting payment from them also won't receive it. And on and on.

Trillions of dollars go through the federal reserve system every day. More goes through this system in the United States each week then an entire year's worth of GDP. Not to mention, the US payment system is central to most of the payments for the entire world, and so the US payment system breaking down would have global implications.

(As a brief side note, this latter point is leveraged by the United States to surveil and manipulate most nations around the globe. One example is how, when Iraq threaten to eject all US troops, the US responded by threatening to forbid Iraq from using its payment system, thereby potentially disconnecting it from the entire world. This is the big story that lurks behind the so-called petrodollar. Here is a fascinating video on this by the Wall Street Journal.)

And now, onto my conversation with Scott Fullwiler. Enjoy.

Resources * Daily Treasury statement (original location) * 2017 paper by Rohan Grey, Banking in a Digital Fiat Currency Regime * 2015 paper by Perry Mehrling, Elasticity and Discipline in the Global Swap Network * 2000 paper by Stephanie Bell (now Kelton), Do Taxes and Bonds Finance Government Spending? * The updated version of this paper, from 2009, consolidates the original ten principles into around seven, and then adds some more. It's much longer, and is a chapter in the book (as co-edited by Scott) called Institutional Analysis and Praxis: The Social Fabric Matrix Approach.

Audio chapters * 5:06 - Hellos * 6:55 - My boys * 8:49 - Our meeting, and Twitter * 11:27 - The plan * 12:17 - The Federal Reserve and the banks are in charge of the government (not) * 16:58 - How do you know what you know? * 19:52 - How the paper came to be * 23:08 - What would change about your paper if you could write it again? * 25:25 - The horizontalists versus structuralists debate (plus circuitists and chartalism) * 27:54 - MMT agrees more with horizontalists, but Randy Wray had one unexpected element of agreement with structuralists. * 30:34 - Steve Keen's Debunking Economics opens with the false labor supply-demand curve * 31:37 - Principle 1: Reserves can only be used for settling payments and meeting reserve requirements. * 35:57 - Aside from banks and other central banks what other institutions and entities have reserve accounts? * 38:24 - Principle 2: The primary directive of central banks is to preserve the stability of the payment system (which is necessary to have a functioning society) * 40:54 - Principle 2 continued: parenting analogy * 43:22 - Principle 2 is almost the most important one * 44:23 - Relation between fractional reserve banking and money multiplier * 47:27 - Principle 3: Outside a floor system, it's impossible for the central bank to target the quantity of reserves. * 50:48 - Duplicate of introduction, with no background music (for those with sensitive ears)

My full question and summary list I have some questions before we get into the ten principals:

Pre-1: First, I'd like to start with a general question mostly unrelated to your paper: A common online theory is that the central bank doesn't answer to the government. Rather, the government answers to the central bank – and according to some, even directly to commercial banks. This means the government must borrow (in the personal sense!) from the CB or banks, which means the national debt and deficit, and bond vigilantes, are indeed a big deal. This also completely undermines MMT.

We're going to get into lots of details, but in general, how would you respond to that person? (Assuming they really want to know better.) Is there any instance in history where, when it really came down to it, the central bank didn't do what Congress or Parliament demanded of it?

Having a stable society requires a stable payment system, which, under our current institutional set up, only the central bank can do. Is it possible to have a stable society/payment system, and a dollar worth the same on both sides of the country, if the government had to answer to the central bank in that way?

Pre-2: Your paper, written in 2008, is called Modern Central Bank Operations: The General Principles. Can you tell the backstory of how the paper came to be, as you briefly mentioned in email?

Pre-3: As I understand it, horizontalists and structuralists agree that loans create deposits, but disagree on the how, where, and dwhy the reserves are obtained afterwards. Can you summarize the differences and the debate between the two camps, and also relate it to the chartalist view?

Pre-4: How do you know what you know? You interviewed CB employees? Looked at their balance sheets? Just logically it must be true?

Pre-5: It's been fourteen years and two major crises since you wrote your paper. How well do the ten principles stand up? If you wrote the paper again today, would there be any major changes?

THE PRINCIPLES

I'm going to summarize the ten principles in your paper as best I can, and describe some of their implications. Then I'll ask you to correct and elaborate as necessary. I'll also use some of the principles as an excuse to ask a question.

PRINCIPLE ONE

Reserves only serve two purposes: settling payments and meeting reserve requirements. Regarding the latter, there could be an arbitrary requirement that, for example, a bank must always hold an amount of reserves equal to 10% of the amount it has in deposits (perhaps immediately, or with a lag). In the absence of reserve requirements, the amount of deposits held by a bank is only very distantly related to the amount of reserves banks need to make settlement. This is because a newly created deposit for a newly created loan (or from new government spending):

may not be spent right away,
may not be spent in its entirety,
at least some of it may be spent at (a company that banks at) the same bank.
If it is spent at (a company that's a customer of) another bank, it's only one of many transactions taking place between those two banks. The net transactions between those banks may be small, or even in the opposite direction. (A simple example: if I owe you $1000 and you owe me $1050, then the net transaction to settle the whole thing is… you just give me 50 bucks.)
Finally, the bank may already have sufficient reserves, or can cheaply borrow them from another bank.

So again, the existence or creation of new deposits is only very indirectly related to the need for more reserves.

A minor follow up: Banks require reserves to transact with entities other than itself. These other entities include other banks, and the government at all levels. What other institutions/entities require reserves for settlement? Foreign banks and governments?

PRINCIPLE TWO

As the only institution capable of creating and deleting reserves, the central bank has "a fundamental, legal obligation to promote the smooth functioning of the national payment system." As you say in the paper, "a nation's payment system is at the core of the infrastructure of the modern business world." According to the Federal Reserve's Board of Governors in 1990: "A reliable payments system is crucial to the economic growth and stability of the nation. The smooth functioning of markets for virtually every good and service is dependent upon the smooth functioning of banking in the financial markets, which in turn is dependent upon the integrity of the nation's payment system."

The amount of transactions settled each day is enormous. In the US in 2005 it was $2.1 trillion. Today I believe it's closer to $5 trillion. So, a sixth of the annual GDP of the United States, is processed each day by the central bank. Further, this is only a portion of the nation's transactions, because more are directly settled between banks through side agreements and internal systems.

The central bank is the only institution that can create reserves, and so, if we are to have a functioning society, it will provide the reserves needed by the banks, because it's the only thing that can settle those transactions. If a bank abuses these privileges (such as, they keep demanding more and more, because they keep committing crimes) then they could be shut down.

An analogy is how parents are the only ones capable of providing their children with food. Ultimately, it's provided based on the needs of the children. Parents will provide enough food in order for their children to remain healthy and not dead (and so they don't have to go to jail). It also implies a power struggle, such as when the children whine about being hungry, not out of actual need but as a form of manipulation. Of course, unlike the banks and their central bank, in most normal families, the children haven't paid off their parents. Also unlike banks, a child can't be shut down if they consistently misbehave – unless the parent really wants to go to jail and lose all their children!

PRINCIPLE THREE

Before I summarize this principle, can you talk about how the money multiplier view and fractional reserve banking are two sides of the same thing?

The principle:

The money multiplier not only doesn't limit bank lending, it's impossible for the central bank to directly target reserve levels, or the monetary base, at all. It's only possible to directly target the price of that money – the interest rate. The monetary aggregate can only be indirectly targeted, which is inherently unreliable. Even if the central bank could magically manage the levels of reserves, since banks are not reserve constrained, it wouldn't have any direct effect on bank lending anyway.

It's impossible for the central bank to control the level of reserves because there are many factors out of its direct control. This includes:

fiscal policy (the government spending it's compelled to execute),
taxation which is collected through the banking system
foreign policy and foreign exchange,
the public's desires for cash and coins, loans, and foreign products,
calendar factors, such as paychecks at the end of each week and more cash spending on the weekends and vacation national holidays,
crises,
the trillions in daily transactions which must be settled, and
the fact that the central bank doesn't just manage the payment system, it also manages "inflation" and "maximum employment"!

As we're about to discuss in principle four, all these activities must be continually offset. Attempting to target specific reserve levels can only serve to degrade its ability to manage these offsets, and so its target rate, and ultimately, the payment system.

PRINCIPLE FOUR

As in the previous question, the central bank does many things unrelated to interest rate targeting, and many other things happen out in the world that aren't directly in its control. This results in reserve levels moving in an unpredictable fashion, all of which must be offset if the target rate is to be maintained.

One of the things out of the central bank's control is government spending. The way the government spends occurs is mind twisting, and understanding it is key to understanding national accounting specifically and modern money in general.

The government itself has a checking account at its central bank, which in the United States is called the Treasury's general account, or TGA. This is the account where a number is raised in response to new spending voted on via the passage of a new law. [CORRECTION: As (needlessly!) required by law, the TGA is not raised except after tax and bond revenue is received.] When that money is distributed to someone in the real economy, that same number is lowered once again. This is a very nature of government spending.

Here's another example of this mind twisting: When the government sells a bond, it's paid for by the government. The government does this by withdrawing $1000 from its account, the TGA, and handing it to the central bank. So, to pay the bank – it's bank – it withdraws $1000 from that bank and hands it right back to the bank! Further, at some future date, the bank must then pay its profit to its shareholders, which is the government. How do they do this? By putting that money right back into that same government account! (Of course, no money is actually passed around, it's just a number going down there and going up here.)

(Also, the government's account can go deeply negative without much real-world consequence, but since negative numbers stress uninformed people out, we cater to (and leverage) that ignorance by making sure it stays positive.)

PRINCIPLE FIVE

Reserve requirements are related to interest rate targets, not control of monetary aggregates.

In one sense, what's having the purpose of having rules at all when it's guaranteed that the rule maker will do whatever it takes to ensure the rule followers always follow the rules?

It seems reserve requirements are a tool to buffer against sudden volatility, in the same way that TT&L accounts (as stated on page 607 in Stephanie Kelton's 2000 paper, Do Taxes and Bonds Finance Government Spending?) are used to buffer against volatility from government spending and redemption. These things don't stop the need for offsetting these activities (as in principle four), but it does make it possible to not have to do it at such quick, extreme, and unpredictable levels. In other words, these buffers don't change what the the central bank needs to do but it helps them see it coming.

I'm going to ask a mostly unrelated question:

Interest rates are for managing the target rate, which is for managing the stability of the payment system, which is for maintaining the stability of the entire nation.

Yet, at the same time, the CB is also mandated to manage (some definition of!) inflation, and the only way it knows how to do this is by adjusting interest rates. How can these tasks not conflict? If it's critical to keep interest rates stable (near the target, ideally zero from our MMT points of view), then during the Volcker shock, how could you possibly keep interest rates stable at such a high level? In that situation, it seems that banks simply settling their payments each day would be so expensive, they would have to pass much of that cost onto their customers through higher interest rates.

Raising interest rates:

increases interest income on new bonds, further enriching the rich
raises interbank borrowing costs for banks, which are passed onto its customers. The results in its business customers raising prices for its customers, which is just another way to further lower real wages.
Anyone with a variable rate loan, whether the borrower is in or out of the country, suddenly has much greater difficulty paying it off. This includes global south countries colonized by powerful nations, such as via the IMF.

PRINCIPLE SIX

Volatility in the target rate is only possible between the discount window's penalty rate at a maximum and the interest rate paid on reserves at a minimum. The way you say it in your paper is, "Potential volatility is determined by the width of the corridor."

Here's a question about the target rate and its corridor or band (with thanks to Andrew Chirgwin):

Let's assume a corridor with a width of .5%. So the minimum, the interest on reserves (IOR), is 1.75%. The target rate is 2%, and the penalty/discount rate is 2.25%. So, they're all different values.

If a bank is in need of reserves, it first turns to another bank. It may be a bank it needs to settle with, but maybe not. It may try to get all the reserves from one bank, or maybe a little from several.

In order to turn a profit, the banks with excess will make an interest-rate offer to the bank-in-need. That rate will be somewhere within the band. It won't be higher than the penalty rate, because the bank-in-need could just turn to the central bank's discount window and pay less interest. It won't be lower than IOR, because no bank would deliberately choose to lose money (that is, make less from the bank-in-need, than they would from interest paid directly on their reserves).

Within this narrow band, banks with excess may compete with one another in an attempt to get the business of the bank-in-need. So, although a bank may offer an interest rate of, say, 2.24%, which is just under the penalty rate, another could easily steal their business by offering 2.20%. The central bank is okay with this competition, because they know the interest rates will remain within the band.

What I don't understand is, the CB defends that band so that it remains within the minimum and maximum. So, why is there a precise target at all – and consequently, what's the point of potentially setting it equal to IOR? Clearly I'm missing something, because it's stated at several points in your paper that setting the target rate equal to IOR does make an important difference.

How does the central bank defend the precise target rate?

A somewhat related thought experiment, which may just be absurd:

What would some of the major consequences be if the discount window/penalty rate was set below IOR? (With the target rate between the two.)

PRINCIPLE SEVEN

In the context of monetary policy, the concept of "liquidity effect" is that extra reserves in the interbank market pushes down interest rates, which then stimulates banks to make more loans, which in turn increases economic activity. In other words, it's the false view that the interest rate is not something the central bank can arbitrarily decide, but rather something it can only control or defend by offsetting the effects of "market forces". Luckily, since the central bank is the largest currency user, it at least has a decent chance of success. (I know that's not what they mean but it's not far off!)

Specifically, the "liquidity effect" is the false belief that the only way for the central bank to "choose", or defend, its target rate, is to inject a potentially vast amount of reserves into the banks' balances. This will encourage banks to increase lending, which in turn will increase economic activity. This is called "easing". (QE is just a ridiculous amount of easing.) Removing a large amount, called "tightening", will discourage lending and economic activity.

In reality, the target rate is an arbitrary decision (a "policy variable") of the voting members of the central bank. The consolidated government has the infinite capacity to create and delete its own money and to sell and purchase its own bonds. This means it can effectively choose an interest rate for any bond at any maturity.

The false "liquidity effect" view also asserts the mere existence of more reserves in a bank's account makes banks suddenly need them; makes them want to use them. It strongly suggests that reserves can be directly lent to customers, or can be used for some purpose beyond settlement (and meeting reserve requirements). If my bank dramatically increased my personal checking account, then sure, that would indeed cause me to pay off my mortgage and probably hire some contractors to do fixes and upgrades to my house that at the moment, we can only dream about. But that's only because, for average people, deposits can be used for almost any purpose. [CORRECTION: Me getting money in my bank account, outside a loan, is net financial asset – a grant. The back being reserved is always an even swap. That's totally different.]

Beyond reserve requirements, the only possible use of bank reserves is to settle transactions – transactions that happened at some point in the past. It means the mere existence of more reserves has no direct influence on a bank's behavior. In other words, settlement – and therefore the amount of reserves needed – is endogenous. A bank's demand for reserves is vertical. It's decided on not by the government but by actual people choosing to take out a loan and a bank choosing to give them one

A final point: The false idea of the "liquidity effect", that the mere existence of new reserves incentivizes banks to issue more loans, evokes the concept of Say's law. Say's law is the false idea that supply causes demand, as if a new product appearing on a store shelf magically and magnetically attracts a new customer – who didn't even know the product was existed – to want to go to that store and want to purchase that product. (As if consumers are unthinking puppets and businesses their puppeteers!)

In reality, demand causes supply. In reality, loans create deposits. Those deposits will at some point likely result in some transactions with another bank, which the bank will need to settle. If they don't have enough in reserves, only then will they request more.

PRINCIPLE EIGHT

The quantity of reserve balances in circulation is primarily determined by the central bank's method of interest rate management.

The only uses for reserves are to settle payments and meet reserve requirements. If there are no reserve requirements, then there's clearly less reasons to hold them. As a simple example, if the central bank chooses to penalize overdrafts severely at the end of each day, then banks will demand much more reserves in order to buffer against that possibility.

If there were no reserve requirements, and both IOR and the penalty rate (and the target) were set to zero, then it seems there would be little to no uncertainty for banks. It would be free to purchase reserves from the discount window whenever needed. This seems close to, if not exactly, MMT's ZIRP.

If all three were equal but set above zero, then banks would make a profit on their reserves, and when in need of more reserves for settlement (again assuming no reserves requirements), they would pay that same rate at the discount window. (There would be little need for banks to lend to each other, because they could do no better.) So, again, it seems there would be little concerns from banks to make settlement or fear overdrafts. The only difference is the perpetual risk-free, effort-free interest income!

These are different methods the central bank can choose to manage the interest rate. What are some other important scenarios/methods and their practical differences, both from the banks and the central bank's points of view?

PRINCIPLE NINE

Under current operating procedures, the central bank's balance sheet expands and contracts endogenously while these changes neither create nor destroy net financial assets for the non-government sector.

In your paper, you say: "neither reserve balances nor the monetary base can be expanded or contracted exogenously by the central bank as long as the central bank's target rate is above the rate paid on reserve balances."

With our previous questions as background, can you elaborate on this?

PRINCIPLE TEN

This principle is basically distinguishing between the currency issuer and users

Central banks interest rate "matters" because banks use reserve balances to settle payments.

Banks and "market forces" do not control the interest rate. This is for the simple fact that banks must settle their transactions at the end of each day, those transactions can only be settled with reserves, and those reserves can only be supplied (created and deleted) by the central bank.

Also:

There's no use for reserves beyond settlement and reserve requirements,
settling payments with anything other than risk-free reserves is obviously riskier than settling them with risk-free reserves,
reserves are also the only thing that can settle tax obligations to the state; which can only be done through the banking system, and
banks are legal extensions (franchises) of the state. If they tried to bypass the state (and its central bank) by entirely settling amongst themselves, the state would not take this lying down!

The banks don't control the central bank and its interest rate any more than average people control the commercial banks at which they have a deposit. Even the most powerful currency user has no power over the currency issuer, because their power largely comes from that issuer! (They were issued a lot, while the rest were issued less.) Any power the user has over the issuer is only because the issuer chooses for it to be that way.

FINAL QUESTIONS

If you could have your dream government, what economic and financial appointments would you make? What position would you want?

If those people got appointed, then what are some of the big changes we would see, particularly regarding monetary policy?

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This video episode was produced by KRTD Media and can be viewed in full on their YouTube channel, here.

Welcome to episode 138 of Activist #MMT. Today's a special video episode with UMKC PhD student Sam Levey on the basics of "math" in economics. This is basically Sam handholding me through the opening chapters of Wynne Godley and Marc Lavoie's 2016 book, Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth.

(A detailed list of the audio chapters in this episode – plus notes and observations – can be found at the bottom of this post.)

This episode was produced by KRTD Media. You can follow KRTD Media on YouTube, Twitter, and Facebook. A special thanks to KRTD's Amber Griego – who I interviewed in episode 51.

The specific paper we focus on today is the 2006 paper by Godley and Lavoie called, A simple model of three economies with two currencies: the Eurozone and the USA. The longer-term goal is to understand the concepts in this paper via its math. For this conversation, however, the much more important goal is to use this paper as an excuse to learn the basics. In other words, I'm not reading to learn, I'm learning to read.

This is actually the first in a two-part video series with Sam on math in economics. The second is guest-hosted by Johnathan Wilson. Jonathon and Sam go much farther and deeper, and it's centered around Sam's most recent paper. They also bridge the gap between the math used by MMT and post-Keynesianism, and that used by mainstream economists.

A final note: my conversation with Sam was originally intended to be only a half-hour long and in private. Thanks to Sam's generosity and blessing, it's turned into something much more. A big thanks to Sam for all his time and patience.

And now, onto our conversation. Enjoy.

Audio Chapters * 2:41 - Hellos and graduate school course load * 4:35 - My attempt, formulas 1-15 * 5:52 - I walk through the first few formulas as I understand them * 8:27 - Back to the beginning: Balance sheet and transactions flow matrix * 19:44 - Godley and Lavoie's Monetary Economics book * 20:17 - Transactions flow matrix * 21:01 - Bills, notes, and bonds * 22:46 - Delta rows in transactions table: The bridge between the balance sheet (stock) and transactions table (flows) * 36:05 - Equations 4-6: Disable income for Americans equals US GDP [interest * bonds for each country] plus [exchange rate * foreign bonds] * 37:18 - Supply of bills versus demand for bills: The same bill but from another country's point of view (priced in ITS currency) * 42:36 - Equations 7-12: Theta is the tax rate. Disposable income equals taxes minus income * 44:52 - Equations 16-18. First Greek letter: consumption function, common parameters, exogenous variables. I'm * 52:16 - Equations 16-18 continued * 52:50 - Equations 16a-18a: Propensity to consume IMPLIES a target level of wealth * 1:05:47 - Equations 19-25, Greek letter mu: propensity to import for a county: [They always import SOMETHING, regardless conditions] plus [the amount they want to import based of the country's total spending (as defined in formula 25)] plus [the amount they want to import based on the strength of the domestic currency versus the foreign country's currency] * 1:13:37 - Mapping the formulas back to the transactions matrix, and translating the formulas to real world conditions. Each of these formulas, and pieces therein, represents a real world conditions. * 1:16:01 - A comment on what's odd in the final ("xr") elements in formulas 19-21 and 23: It is the exchange rate but from the other point of view. * 1:19:43 - Many different perspectives to sort through, and then natural logs, which is the inverse of an exponential. The short version is that natural logs are kind of the same as percentages. * 1:23:41 - Equations 28-33: 28 specifically: Exports TO the US and imports INTO the US. Different perspectives of the same thing! One measured in dollars (from the US point of view), the other in euros (from the euro point of view). Speaking about the same transaction from the OTHER COUNTRY'S point of view. (The exchange rate in 31 and 33 is 1.0.) * 1:29:11 - Equations 34-39. 37: I'm in the US. Total imports into the US are equal to imports from euro country one plus euro country two. The difference between two country symbols versus one country symbol (a sign convention used by this paper only.) * 1:34:19 - Equations 49a (which is not a typo) and 40-42, 50a and 43-45, and 51a and 46-48. This expresses the demand for money. "Out of all of your savings/wealth, how much of it do you want to hold in money (cash)?" And of that, how much do you want to hold in each type of currency? (More generically, bills, bonds, notes, cash. Or even more generically, ASSETS of each country.) In this section, is determining how the interest rate in each country affects the demand for that country's money. * 1:35:05 - The two-digit subscript is not a two digit number, it's just two separate digits to express a coordinate in a 4x4 grid (00 is top left, 33 is bottom right). (Note each country's equations in this section is called an array.) * 1:39:18 - Relating these formulas to the consumption function, and the target level of wealth. There are real world conditions for wanting a certain amount of cash. * 1:48:06 - Defining coefficient. In [lambda*r], the lambda portion is the coefficient. It's the less important part (determined outside the model) in a product/multiplication problem. * 1:50:08 - Jumping ahead a bit: The real world conditions behind these coefficients/parameters. Example: & is Greece, # is France. Greece is less powerful, so my Greece coefficient is lower because I'll always want relatively more French bonds. So Greece interest rate changes will not affects my desire as much as French interest rate changes. * 1:52:09 - Assuming only the first term (the constant) is non-zero. Looking at formula 43, if I desire 1/10 off my wealth to be in #bonds, then the first term [lambda ] will equal 0.1. Also, looking only at the left side of 50a and 43-45, what does H# + B## + B#$ + B#& equal? It equals V#. The whole fraction is 1, such as 50/50. [I live in #. H# is my country's CASH. B## is my country's BONDS (bills). B#$ is the US's bills, B#& is &'s bills.] * 1:56:19 - Still assuming the final three terms are all zero (not there). Now let's discuss the first term (the one with no interest rate, only a coefficient). (In real-world terms, this means I just don't care at all about interest rates.) Note let's bring back the other three terms one at a time. Example question this brings up in equation 44: If the # interest rate goes up, how does that affect my desire FOR US BONDS? Note the different signs (+ or -) before each term. * 2:02:56 - Final topic: The COLUMNS in these same twelve equations, but considering only the coefficients. (02 through 32 is one column.) * 2:10:30 - Reviewing these twelve formulas, and closing everything out. "This is the bulk of the model." Final comments.

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Here's the original video from where this audio came.

Here's a list of links to John reading every chapter in his 2021 book Contending Perspectives.

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Welcome to episode 137 of activist #MMT. Today I talk with Steve Kelsey, about what money and money issuance, and our entire money system, should and could be, if we could start over and design it from scratch. You'll find two of his papers linked below (in the Resources section). Before that, we discuss Steve's Twitter thread, which is one of the most viral MMT tweet threads of all time more than 3000 retweets and nearly 7000 likes.

The topic of his thread is the big lies told by former UK Prime Minister Margaret Thatcher. The first big lie is "TINA" which stands for "there is no alternative." This is how those already on top tell the rest to sit down, shut up, and take what you can get. The second big lie is "there is no government money, there is only taxpayer money." This is a statement by those who have taken control of government that they will do whatever it takes to prevent its powers from being used for regular people. This is true even for things desperately needed and obviously within its capabilities. The third big lie is that the government is nothing more than a gigantic household or company, and so must balance its spending with revenue. This is basically the justification used by those in power to deceive the rest into thinking that deliberate mass neglect is "unfortunate, but necessary."

The fourth big lie, despite not being included in Steve's Twitter thread, is most closely related to today's conversation. That is, "there's no such thing as society, there's only household individuals and families." This is just another version of, "you're on your own. We could help you (and we're the only institution that can help you!) but we're not gonna do that. So, good luck!"

If healthcare had no cost, then rising healthcare costs, obscene pharmaceutical prices, and medical debt, would become an impossibility. If education had no cost, then student debt – and the faux concern that canceling it is regressive and will cause terrible inflation – would also be impossible. Finally, if everyone who wanted a job, could have a job, then "the sack" could no longer be used as a tool to discipline workers.

Much of these things boil down to what Michael Kalecki describes in his 1942 paper, The Political Aspects of Full Employment: the rich pay legislators to not legislate. When the government doesn't govern, who's left to control our lives but those who pay legislators the most? Those on top cannot remain on top unless they exploit the rest. They will not stop until they are stopped.

Needless to say, overhauling our current system is a daunting task. But what if we could? Even if unlikely, you can't achieve a goal if you don't first dream and design it. Today's conversation with Steve is a thought experiment to dream about what a new system could be.

Steve's idea is to replace national money issuance with community-based money issuance. Importantly, these communities don't have to be limited to small geographical regions. They could be trans-jurisdictional, meaning they could span multiple national borders, even dispersed across the world, coordinated by tools such as the internet. Something that spans borders cannot be conquered without the cooperation of all the nations in which the community exists. One historical example of mass collective action is the hole in the ozone layer, which took the cooperation of nations from around the world to reduce chlorofluorocarbons (CFCs) and greatly reduce the hole.

We currently have a society where the vast majority are not cared for. This drives us apart and into the arms of precisely those who pay our legislators to not care for us. Let's replace that with caring for each other, which would drive us together, making it possible to ignore those who personally benefit from mass exploitation and neglect.

There's much more to Steve's idea but I'll leave it there. As a reminder, you'll find two of his papers linked in the show notes.

Sadly, Steve's mother passed away a week before this episode was released. Here is Steve's tribute to her on Twitter.

And now, onto my conversation with Steve Kelsey. Enjoy.

Resources * Steve Kelsey's Physical Money Propositions v1.5 * Steve Kelsey's Transactional Logic v3.0 * Milton Friedman on inflation

Audio chapters * 6:28 - Viral Twitter thread on Thatcher's Great lies * 10:48 - New era of my podcast because of Torrens * 12:53 - Introducing himself and his ideas * 24:05 - My one big question: Once we get there, how do we stay there? * 44:47 - Follow ups by me * 50:54 - His responses * 1:09:02 - Final comments by me * 1:13:28 - Goodbyes * 1:17:12 - Duplicate of introduction with no background music (for listeners with sensitive ears)

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Dennison University economics professor Fadhel Kaboub discusses the reality of inflation.

Dr. Kaboub has recently been appointed as Under-Secretary-General for Financing for Development of the OEC. See: https://oec-oce.org/en/secretary-general-appoints-fadhel-kaboub-under-secretary-general-for-financing-for-development/

Here's the video of this snippet, with thanks to KRTD Media: https://youtu.be/obSc-Ddcpwc

It was extracted from this video, starting at around the seventeen-minute mark: https://youtu.be/ggcsd08LXFA

This video was curated by Activist #MMT - the podcast, and produced by KRTD Media.

Follow Fadhel Kaboub on Twitter at @FadhelKaboub
Follow Activist #MMT at @ActivistMMT
Follow Kerberos Media at @KRTDMedia

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Here's the original video from where this audio came.

Here's a list of links to John reading every chapter in his 2021 book Contending Perspectives.

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Here's the original video from where this audio came.

Here's a list of links to John reading every chapter in his 2021 book Contending Perspectives.

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Welcome to episode 136 of Activist #MMT. Today's part two of my two-part conversation with Gabie Bond. Last month, in part one, we talked not about economics, but all about music. Gabie's a classically trained violist and I'm a classically trained singer. Today in part two, we talk about MMT, Torrens University, climate change, and the job guarantee. The Sustainable Prosperity Action Group has written a twenty-five-page report geared to introducing the job guarantee to the general public, and advocating for its implementation in national policy. Since recording this interview, a second version of this report has been released.

Gabie is CEO of Modern Money Lab, which is the owner of the intellectual property – the academic content – of the Torrens graduate program. When another university or organization expresses interest in the program, it's Gabie who receives the call. She talks about her role in how the Torrens program came to be and in its day-to-day operations. Ever since considering applying to the program early this year, up until my most recent class meeting last night, Gabie has been there every step of the way.

Regarding the job guarantee, Gabie and I have come to the conclusion that people should be allowed to choose to not participate, and should receive full benefits such as healthcare and childcare, and a check about half the size of the job guarantee wage. Even if people are legally allowed to not participate, I believe there will be social pressure applied (onto those who are capable of doing so), to participate. Clearly, everyone in the community benefits from the output of the job guarantee program, whether or not they individually participate. Someone has to make the stuff!

That said, I want to clarify that I expect that most of those not wanting to participate in the job guarantee do in fact want to be productive, but are concerned the program would forbid their definition of what it means to be productive. After fifty years of vicious and brutal neoliberalism, it's an understandable concern. (Also, to be clear, Gabie and I both have more to learn, and the most important thing is that the job guarantee's wage and price anchor is not undermined.)Finally, I believe the skepticism of the job guarantee comes from a deep cynicism in the human condition, and the very possibility of the collective us. This has been terribly eroded by a lifetime of abuse at the hands of neoliberalism. Gabie's experience in orchestras and my own in choirs is an example of how it is indeed possible for people to come together and do beautiful things. It is possible to be vulnerable, and to open ourselves to being controlled by others, in a very limited and appropriate fashion. In fact, this kind of collectivism is necessary if we are to survive as a species.

You can financially support this podcast by going to Patreon.com/ActivistMMT. For as little as a dollar a month, all patrons get exclusive, super-early access to several full episodes, they can watch and ask questions live on weekly patron streams with my Torrens classmates, and they also have the opportunity to ask my academic guests questions (like these recent episodes with Dirk Ehnts, John Harvey, and Warren Mosler. In addition to this podcast, patrons also support the development of my large and growing collection of learn-MMT resources, and my journey through the Torrens graduate program. To become a patron, you can start by going to Patreon.com/ActivistMMT. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, let's get right back to my conversation with Gabie Bond. Enjoy.

Audio chapters * 4:28 - Climate change and not wanting to fly- mass travel (and the Levy Summer Session) * 12:38 - Join an Activist group * 13:41 - Her role in the new Torrens University MMT + ecological economics graduate program * 19:08 - Apply to Torrens! * 20:19 - How Gabie discovered MMT * 25:17 - How Jeff discovered MMT * 30:52 - Job guarantee report * 36:44 - The unbearably cynical criticisms of a job guarantee * 41:24 - Should people get a check if they CHOOSE not to work? * 51:36 - Final thoughts and goodbyes * 59:18 - Duplicate of introduction, with no background music (for those with sensitive ears)

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Welcome to episode 135 of Activist #MMT. Today I talk with Gabie Bond. In part two, we talk about MMT, Torrens University, climate change, and the job guarantee. In hour one, however, we talk all about music. (To be clear, this first hour has little to do with economics.) As you heard before the opening music, Gabie is a classically trained violist. (Her accompanist and partner is a classically trained pianist.) I'm a classically trained singer, and for the past year have been learning guitar.

Gabie and I talk about various topics, such as how the guitar has frets and the viola doesn't, and the consequences that has on our approach to the instrument and the notes. We talk about the differences between perfect and relative pitch, and how neither of us have the former. We also share some of our own experiences learning from, and teaching others. Gabie ends by describing how and why she let much of her professional music career go in order to become an activist, something which is greatly informed by MMT and ecological economics, which she learned thanks to meeting Steven Hail and Phil Lawn.

In the show notes, you'll find several links to the things we mention, plus some examples of our playing. Out of my almost 140 episodes, this is the third entirely or substantially dedicated to music. Links to the other two, with Andy Berkeley and Derek Ross, can be found in the show notes. Getting to know MMTers outside of MMT, is important. It's basically an anthropological look at the background of MMTs adherents, which provides important context on the theory and movement as a whole. I was inspired to do this by Fred Lee in his 2011 book, A History of Heterodox Economics

Next month in part two, Gabie and I transition to discuss MMT, Torrens University, climate change, and a job guarantee. Gabie is CEO of Modern Money Lab, which is the owner of the intellectual property – the academic content – of the Torrens graduate program. She talks about her role in the program coming to life and in its day-to-day operations.

And now, onto my conversation with Gabie Bond. Enjoy.

Resources * Version two of the job guarantee report by the Sustainable Prosperity Action Group. Here's an overview. * Examples of Gabie's playing viola: + Piece played before the opening music: Carl Stamitz viola concerto, accompanied by Alexander Hanysz + Performing with the Australian Discovery Orchestra: Tuscany from 17 songs + Performing with the Australian Discovery Orchestra: The Tender Land (Suite) Aaron Copland * Gabie's partner is pianist Alexander Hanysz. His website, which includes music and digital art * Gabie's sister Annie is a scientist and part of Scientist's Rebellion. She recently glued her hand to the front-door window of a fossil fuel company headquarters, as mentioned by Steven and covered by ABC TV and radio. * Examples of my singing: + Me singing Weekend In New England by Barry Manilow + Me singing every part except the lead vocal, of an a cappella arrangement I wrote of slave song called Wayfaring Stranger. I created the theme of a train to represent the slave's journey from earth to heaven, where he is finally free of his suffering.

(Here's a link to part two. A list of the audio chapters in this episode can be found at the bottom of this post.)

And now, onto my conversation with Gabie Bond. Enjoy.

Audio chapters * 5:25 - Hellos, summer here, winter there * 7:24 - Music! * 8:32 - Listened to each others' music * 13:58 - Traveling by plane to rehearsal and reservations about it * 15:46 - Jeff learning guitar, ambitious pieces like Maple Leaf Rag * 21:29 - Learning an instrument as an adult (and teaching adults) * 23:34 - Guitars have frets, violas don't * 27:46 - Perfect pitch versus relative pitch * 31:44 - Gabie's partner is a classical pianist, Flinders Street school of music * 36:47 - Jeff playing a couple minutes of When She Loved Me on the guitar * 40:18 - Jeff- finger-style versus strumming * 42:36 - Why Gabie stopped being a musician and became an activist * 52:31 - Do you choose to listen in your own time to the (classic) music that you play? * 57:04 - Climate change and not wanting to fly- mass travel (and Levy Summer Session) * 1:04:18 - Duplicate of introduction, with no background music (for those with sensitive ears)

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This is the full audio from the Cowboy Economist video #23: Is we is or is we ain't in a recession?

Here is the link to the full video

A link to the full audio of all Cowboy Economist videos can be found in the show notes to part one.

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Welcome to episode 134 of Activist #MMT. Today's part two of my two-part conversation with Charles Hayden. In part one, Charles described how he created at least three important milestones in MMT history, and how Warren Mosler played a integral role his journey to understanding and accepting MMT. Today in part two, we discuss some of the many varied realistic views of inflation, and how each of them is connected by the fact that the national government is the monopoly price setter for the entire economy – whether they know it or not. This is one of the unique contributions of Modern Money Theory.

The first realistic view of inflation is how it's not a disease or a symptom, but rather a measurement of some prices going up somewhere in the economy for some reason. It's not possible to know what the problem is without going out into the real world and discovering them for yourself. If you address those real-world problems, then those prices will naturally go down, which will in turn result in a lower measurement of inflation.

This is not unlike how a thermometer measures the temperature of a sick person. The rabid desire to "lower inflation" is not unlike dunking the thermometer into a cup of ice, and ignoring the actual sickness of the actual patient, and doing nothing to help them. This is the idea behind lowering inflation by raising interest rates – if we lock all the starving people out of the kitchen, then we can truthfully say that "everyone who enters this kitchen gets a good meal." These are all examples of how real costs are pushed by those with the most onto those with the least – and subsequently onto the families and communities in which those people exist.

A second realistic view is the class conflict theory of inflation. This is as originated by Marx and adopted by MMT. Inflation is essentially a battle between business owners and their workers, where one side fights to increase their profits, and the other fights to increase their wages. A wage-price spiral can only happen if we allow it to happen. The only way it can stop is if one side is empowered enough to prevent the other from pushing back.

More broadly, this is a centuries-long battle between rich and poor to increase their power over the other. In all the above cases, outside of natural catastrophe, the government must be complicit in order for the inflation to persist. Currently, the government is essentially entirely on the side of the rich, business owners, and capitalists. So, in almost all cases, all real and financial costs are borne by workers and the poor.

The idea that the government is the monopoly price setter, essentially means to me that: We as a collective are in control of our own destiny. The government is us as a collective. We have let it decay into the morass that it currently is. We've let the leash out way too far and now it's going to take a whole lot of effort in order to reign it back in. Regardless, no matter how unlikely or even impossible that task may be, if we are to survive, there is a no alternative.

Outside of natural disaster, everything we do and don't do is a choice. We are choosing to go extinct. We could choose to not do that.

And now, let's get right back to my conversation with Charles Hayden. Enjoy.

Audio chapters * 6:23 - Inflation- first thoughts * 7:24 - Inflation is to the real world like a thermometer is to sickness (also, inflation the boogeyman) * 12:34 - Government is the monopoly price setter. This is behind every other (valid) view of inflation * 20:10 - Government is dog walker * 24:07 - Foreign demand for a currency * 26:40 - The government passively delegates its price setting powers (plus neglect and suppression) * 38:29 - Inflation affects peoples lives * 40:54 - Fortunate to learn MMT directly from Warren Mosler * 42:34 - The language of Warren, versus other academics, versus activists, versus * 46:08 - Warren's extreme examples as thought experiments * 47:21 - MMT was all over TV (trying to do to MMT what they did to CRT) * 49:43 - Dennis Kucinich and my monetary reform article * 50:54 - Inflation is an area of concern MMT * 53:33 - The first MMT Activist * 56:24 - Inflation and the real world, grades and children, temperature and sickness * 1:01:46 - Raising interest rates (to 100%!) * 1:04:03 - Street protester (there's power in protest) * 1:08:30 - MMTers in Texas * 1:09:45 - Campaigning * 1:13:18 - Vote blue no matter who * 1:14:59 - Goodbyes * 1:18:44 - Duplicate of introduction, with no background music (for those with sensitive ears)

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Welcome to season 2, episode 12 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week, Steven and Gabie talk to Fadhel Kaboub, the President of the Global Institute for Sustainable Prosperity and consultant to Modern Money Lab , is one of the world's leading MMT economists and an expert on sustainability, and the global south. We asked Fadhel about what has been driving global food prices, about his role in climate change discussions among African politicians and diplomats.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

Here's the video from which this audio comes from. (The audio is unedited.)

MMD is hosted by Kerberos Media, and the audio podcast is, for now, hosted by Activist #MMT. So if you'd like to be automatically notified of each new MMD episode, then subscribe to Activist #MMT on your favorite podcast platform.

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Welcome to episode 133 of Activist #MMT. Today I talk with Charles Hayden about his role in creating at least three important milestones in MMT history, and how Warren Mosler played a integral role his journey to understanding and accepting MMT. The first milestone, as hinted at in the cool quote (what you heard at the very beginning), is the 2013 debate between Warren and Austrian economist Robert Murphy. The second is the 2020 conversation between MMT economist Pavlina Tcherneva and billionaire Mark Cuban, as hosted by Real Progressives. The third is a three-and-a-half-hour long talk and Q&A Warren gave in 2012 at a Texas church. This event was a personal milestone for a previous guest of mine, although I've not yet determined who.

(Here's a link to part two. A list of the audio chapters in this episode can be found at the bottom of this post.)

In part two, Charles and I discuss the many different realistic views of inflation, and how they're all connected by the fact that the national government is the monopoly price setter for the entire economy – whether they know it or not. This is one of the unique contributions of Modern Money Theory.

As Charles told me, he wouldn't choose to be so public, or to have to fight so hard as an activist. He'd rather just enjoy his family, home, and backyard. There's not much hope in doing those things, however, without a stable, and not-blazingly hot, world in which to do it. Helping the general public understand the reality of our economic and financial systems is an important prerequisite in consolidating the power we need, in order to stand against those who benefit from instability and inequality – and who, most unfortunately, are exactly those who currently stand at nearly all the levers of power.

If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons have exclusive access to several full-length episodes, right now. A full list is here, each with a brief highlight. Patrons also get the opportunity to ask my academic guests questions, like in recent episodes with Dirk Ehnts, John Harvey, and Warren Mosler. They also support the development of my large and growing collection of learn MMT resources. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, onto my conversation with Charles Hayden. Enjoy.

Audio chapters * 4:22 - Hellos, radiant barriers, time, and Stranger Things * 6:10 - How he discovered MMT * 14:56 - Warren talks for 3 1/2 hours at a Dallas church in 2012 * 23:45 - Mark Cuban * 31:47 - MMT during COVID * 35:20 - Frederic Lee - "Prices begin with Warren's monopolist." * 38:57 - Mistaking Mark Cuban for Nick Hanauer * 39:51 - You need to start from scratch (Mosler's business card story.) * 50:08 - John Harvey * 54:24 - Inflation- first thoughts * 55:25 - Inflation is to the real world like a thermometer is to sickness (also, inflation the boogeyman) * 1:01:01 - Duplicate of introduction, with no background music (for those with sensitive ears)

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Welcome to episode 132 of Activist #MMT. Today's the final part of a six-part series with Texas Christian University (TCU) economics professor and Cowboy Economist John Harvey. Parts four through six are also the first main interview of Activist #MMT hosted by someone other than me. Today's guest host is my own former guest, MMT researcher, Texas lawyer, and pmpecon.com author, Jonathan Wilson. Jonathan and I spoke in episodes 106 and 107.

(A list of the audio chapters in this episode can be found at the bottom of this post. Here's a link to part one in this six-part series with John, which contains a link to all other parts. For a link to every Activist #MMT interview with John – plus the full audio of every Cowboy Economist video (!) – go here.)

Today in part six, they focus on some of the core assumptions and ideology of mainstream economists. They also discuss how some assume inflation to always be caused by too much demand and too high wages, despite clear empirical evidence that it's caused by something else.

You'll find links to many resources, as mentioned by John and Jonathan throughout these final three parts, in the show notes to part four.

But for now, let's get right back to Jonathan's conversation with John Harvey. Enjoy.

Audio chapters * 3:57 - What if the price of diamond jewelry goes up? Should we care? * 6:09 - Josh Barro, if it wasn't inflation in used cars, it'd just be somewhere else. (victim blaming) * 9:38 - GDP can be dominated by financial speculation. * 13:26 - At the rank-and-file level, neoclassicism is not a conspiracy * 17:16 - What neoclassicals really believe * 21:47 - Thomas Oberlechner and balancing trusting what test subjects say and their biases * 25:10 - Paul Davidson- it is better to be approximately right than precisely wrong. (accuracy versus precision) * 30:34 - Complicated models for complexity sake, or because it needs to be? * 32:32 - Policy based on children's building blocks * 35:31 - South Africa COVID loan program (worry for "over investment", for investment in what the economy really doesn't need) * 41:39 - How much of the resistance against intervention is ideology? * 43:43 - Where did initially believing in no intervention, come from inside you? * 46:58 - Do you think MMT needs to be more upfront about its political economy aspect? * 49:53 - Warren Mosler's banking proposals * 52:41 - Jonathan recaps * 55:41 - Goodbyes * 58:53 - Duplicate of introduction, with no background music (for those with sensitive ears)

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Welcome to episode 131 of Activist #MMT. Today's part five of a six-part series with Texas Christian University (TCU) economics professor and Cowboy Economist John Harvey. Parts four through six are also the first main interview of Activist #MMT hosted by someone other than me. Today's guest host is my own former guest, MMT researcher, Texas lawyer, and pmpecon.com author, Jonathan Wilson. Jonathan and I spoke in episodes 106 and 107.

Today in part five, they continue their conversation regarding exchange rates from different points of view and in different contexts. In the second half, John gives his extended thoughts on a recent critique of MMT by Drumetz and Pfister. Next week, they focus on some of the core assumptions and ideology of mainstream economists. They also discuss how some assume inflation to always caused by too much demand and too high wages, despite clear empirical evidence that it's caused by something else.

You'll find links to many resources, as mentioned by John and Jonathan throughout these three parts, in the show notes to part four, which is the first with Jonathan.

But for now, let's get right back to Jonathan's conversation with John Harvey. Enjoy.

Audio chapters * 5:19 - Currency markets are driven by financial capital flows, not trade flows. * 8:27 - "I feel like a liar when I talk about the mainstream theories of exchange rate." * 11:35 - How crises made it into John's textbook and class * 13:44 - 1990's Mexican and East Asian currency crises * 17:38 - If Mexico had more advanced industry at the time of the crisis, could it have done differently? (Brazil and capital controls) * 20:58 - Ilene Grabel's books and concepts * 22:17 - Russian interest rates and hot money, versus unsustainable returns for crypto * 25:27 - The game of musical chairs * 28:37 - Turkey and becoming stuck with short-run strategies * 30:55 - Is it harder to build a cold money economy, or boot out the IMF from a hot money economy? * 34:45 - Barney Miller and revolution, and bouncers who check facial structure * 38:52 - Jamie Galbraith's bi-annual conference at the university of Texas * 40:12 - Drumetz and Pfister MMT critique - the setup * 41:20 - How John learned about MMT * 44:17 - Initial comments on Drumetz and Pfister- tone and rhetoric * 46:15 - Drumetz and Pfister- unstated assumptions * 47:16 - Drumetz and Pfister- what they get right about MMT (and try to present as an indictment) * 54:20 - "MMT doesn't do any formal modeling" - General equilibrium modeling * 56:30 - Simultaneous equations can't model time * 1:10:39 - What if the price of diamond jewelry goes up? Should we care? * 1:15:27 - Duplicate of introduction, with no background music (for those with sensitive ears)

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Welcome to season 2, episode 11 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week, Steven and Gabie talk to Professor Matthew Rimmer, an expert in intellectual property and innovation law at the Queensland University of Technology. Matthew has recently written about the Right to Repair movement and how we must do more to incentivise the repair and re-use of existing products to move towards something like a circular economy.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

Here's the video from which this audio comes from. (The audio is unedited.)

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Welcome to episode 130 of Activist #MMT. Today's part four of a six-part series with Texas Christian University (TCU) economics professor and Cowboy Economist John Harvey. Parts four through six are also the first main interview of Activist #MMT hosted by someone other than me. Today's guest host is my own former guest, MMT researcher, Texas lawyer, and pmpecon.com author, Jonathan Wilson. (Jonathan and I spoke in episodes 106 and 107.)

This three-part interview with John and Jonathan is wide ranging and in-depth. They start by discussing the difficulties nations face managing their currencies, such as during major conflicts, natural or man-made disasters, and in the global south. They also discuss these things from the perspectives of holders of various currencies, both in and out of a country.

In part two, they continue this conversation. In the second half of part two, John gives his extended thoughts on a recent critique of MMT by Drumetz and Pfister.

Finally, in part three, they focus on some of the core assumptions and ideology of mainstream economists. They also discuss how some assume inflation to always caused by too much demand and too high wages, despite clear empirical evidence that it's caused by something else.

You'll find links to many resources, as mentioned by John and Jonathan throughout these three parts, in the show notes.

And now, onto Jonathan's conversation with John Harvey. Enjoy.

Resources * 2004 book by Ilene Grabel and Ha-Joon Chang: Reclaiming Development: An alternative economic policy manual * 2017 book by Ilene Grabel: When Things Don't Fall Apart * John Harvey, intermediate macro, 30 lectures (discusses problems with general equilibrium models) * Paul Romer "post-real" paper, The Trouble with Macroeconomics and Trouble with Macroeconomics, Update - Paul Romer * George DeMartino (Ilene Graebel's husband) 2013 , Professional Economic Ethics: Why Heterodox Economists Should Care * Megacorp. an oligopoly by Alfred Eichner (John: somewhat outdated but still important) * Steve Keen 1995 paper in Journal of Post Keynesian Economics, Finance and economic breakdown: modeling Minsky's "financial instability hypothesis" * 2011 post by Warren Mosler, Proposals for the Banking System

Audio chapters * 3:30 - Video games * 7:12 - We need an MMT game * 10:58 - The plan * 11:31 - What happened to the ruble and domestic inflation in Russia this year? * 15:02 - How does Russia manage the price of the ruble through, Gasprom, which is a privately owned bank? * 17:00 - What are foreigners who held rubles before the war now doing? * 19:53 - Timeline of Russian management of the ruble through the conflict * 21:38 - Russian versus non-Russian holders of the ruble * 23:08 - Bank of International Settlements (BIS) tri-annual survey of international transactions * 26:07 - What might happen after the war? * 28:11 - Strong currency as a cause versus as an effect. * 33:24 - Ilene Grabel * 34:21 - Decrease in price drives demand up, but not enough to drive the price back up to the original level. (No perpetual motion machine) * 38:36 - Holding foreign currencies as a form of portfolio diversification. * 49:57 - Should countries force others to purchase things in their home currency? * 53:55 - Hierarchy of currencies, 1-5 * 58:59 - What is a low-value exporting country to do? * 1:04:35 - The deficit can be evidence of an external desire to save * 1:08:16 - Currency markets are driven by financial capital flows, not trade flows. * 1:12:00 - Duplicate of introduction, with no background music (for those with sensitive ears)

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Welcome to season 2, episode 10 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week, Steven and Gabie talk to Con Michalakis. Con is the Chief Investment Officer for Statewide Superannuation, South Australia's biggest retirement pension fund. He is also the Chair of Modern Money Lab. We will ask Con about how he came to understand MMT, and about his role in launching our suite of postgraduate courses with Torrens University.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

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Welcome to episode 129 of Activist #MMT. Today's part two of my two-part conversation with Dirk Ehnts. Last week in part one, Dirk described his journey from a PhD in mainstream economics, to discovering and accepting MMT. Today, I ask questions circling around his new co-authored piece for the Gower Initiative, called Raising interest rates is like blowing up the garden to weed it. It starts with some very basic questions about how and why the central bank maintains the stability of the payment system. I then ask the specific mechanics of the central bank's raising its overnight target rate, and how it ultimately results in millions more becoming unemployed – and therefore more exploitable. I continue to struggle with these concepts, but after this conversation, I feel like the questions have become more clear.

If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons have exclusive access to several full-length episode, right now. A full list is here, each with a brief highlight. Patrons also get the opportunity to ask my academic guests questions, like in last week's episode with Dirk, my previous interview with John Harvey, and my recent episode with Warren Mosler. They also support the development of my large and growing collection of learn MMT resources. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, let's get right back to my conversation with Dirk Ehnts. Enjoy.

Audio chapters * 5:13 - Start of academic questions * 5:35 - What is the nature of a catastrophic failure of the payment system? * 12:12 - Central bank versus Blockchain, a financial justice system * 14:59 - Warren Mosler story about company accidentally receiving millions extra from central bank. * 15:24 - Central banks and reserves, parents and food for the kids, power struggles * 21:36 - Increasing interest rates- the mechanics and its effects (dis-employing people) (transmission channels of monetary policy) * 29:07 - The MMT view of interest rate targeting * 36:53 - I try to restate * 44:44 - Germany are Greece are both currency issuers, but with different power * 50:48 - The difference in power between Germany and Greece * 56:23 - Goodbyes and Levy summer session * 1:01:02 - Duplicate of introduction, but with no background music (for listeners with sensitive ears)

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Welcome to episode 128 of Activist #MMT. Today I talk with Dirk Ehnts, about his personal journey to MMT, which happened only after obtaining a PhD in mainstream economics. One of Dirk's first hints that something was wrong, was discovering that Paul Krugman's 1991 new trade theory was not representative of the world in which we actually live. Here are Dirk's findings. He was also told by his professors that some of what is obviously true must be ignored, which only serves to further diverge the theory from the world it purports to explain. Only after receiving his PhD did he discover MMT which finally put all the pieces together. It did so in a way that is falsifiable, which means its main assertions are provable or disprovable by empirical evidence.

(Here's a link to part two. A list of the audio chapters in this episode can be found at the bottom of this post. I also interviewed Dirk in episodes 66 and 69 with Asker Voldsgaard.)

Today in part one, Dirk and I also talk about how microeconomics and macroeconomics relate and are ultimately inseparable. We end with a question from Activist #MMT patron Chiel Harmsen, on the problems of the Eurozone and how to address them. Next week in part two, I ask Dirk questions circling around his new co-authored piece for the Gower Initiative, called Raising Interest Rates Is Like Blowing Up The Garden To Weed It. I start with some very basic questions about how and why central banks maintain stability of the payment system. I then ask him to describe the specific mechanics of how the central bank raising the overnight interest rate target results in millions becoming unemployed – and ultimately more exploitable.

And now, onto my conversation with Dirk Ehnts. Enjoy.

Audio chapters * 3:49 - Hellos, terrible fives, new paper summarizing UK exchequer * 6:22 - Can you tell your personal story from mainstream to MMT? * 9:29 - Paul Krugman's new economic geography theory * 15:14 - Knapp's state theory of money and "reading between the lines" * 17:45 - The issuer is above, and creates, economic law * 20:54 - Did mainstream feel off while you were in school? * 25:29 - No macroeconomic accounting in mainstream macroeconomics * 28:31 - When did you read Keynes and how did it affect your education? * 30:47 - Did you have an instinct that something was off, or did something specific trigger your skepticism? * 32:12 - "I have to incorporate money", second time * 33:32 - MMT is falsifiable (where does money come from?) * 35:04 - Companies move where wages are (and demand is) high. (Fallacy of composition) * 37:14 - Macroeconomics is the study of the systemic effects of microeconomic behavior * 39:28 - The desire to lower wages is microeconomic but is so impactful it threatens our species. So how is that not macroeconomic? * 43:13 - The consequences of accepting MMT * 44:45 - Anti-MMT sentiment in Europe * 49:00 - Positive consequences of accepting MMT * 52:17 - Patron question from Chiel Harmsen: Problems in the EuroZone. * 1:00:35 - Start of academic questions * 1:04:06 - Duplicate of introduction, but with no background music (for listeners with sensitive ears)

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Welcome to episode 127 of Activist #MMT. Today's part three in a six-part series with Texas Christian University (TCU) economics professor and Cowboy Economist, John Harvey. The first three parts are hosted by me, the final three by MMT researcher, Texas lawyer, and my previous guest, Johnathan Wilson. Jonathan and John talk about how MMT can apply to nations outside the US, using Russia as an example, and also some of the core theoretical and ideological differences between MMTers and mainstream economists, focusing on a recent critique of MMT by Drumetz and Pfeister. (You can hear my own interview with Jonathan in episodes 106 and 107.)

(A list of the audio chapters in this episode can be found at the bottom of this post. Here's a link to part one, which contains a link to all six parts in the series. For a link to every Activist #MMT interview with John – plus the full audio of every Cowboy Economist video (!) – go here.)

Today in part three, John and I finish our conversation about his chapter in the upcoming book called Modern Monetary Theory: Key Insights, Leading Thinkers. The book will be published by the UK-based Gower Institute for Modern Money Studies, or GIMMS; it's edited by L. Randall Wray and GIMMS; and is scheduled for January 2023 release. John is one of 15 authors. John's chapter is called "Modern Monetary Theory, the UK, and pound sterling". It addresses the following criticism of MMT (this is a quote from the chapter): "MMT-inspired policies will cause high rates of price inflation which will, in turn, lower the international value of a domestic currency – perhaps catastrophically." This conversation discusses the three major false assumptions underlying this criticism.

We end on two mostly unrelated topics. The first is how, when it comes to those we directly interact with, on a day-to-day basis, mainstream economic theory is not in fact, a massive conspiracy. Therefore we should almost always err on the side of being diplomats instead of assassins. Or as I like to put it: rage against the system, be kind to individuals. Most who agree with mainstream theory genuinely believe it to be accurate. As I mention, I do believe it takes a lot of shutting out of dissenting views and of those that hold them, in order to enable this true belief. However, that filtering always occurs at the level above, starting with those who rank the economic journals and universities. Another important example relevant to my own experience, are those who moderate extremely large social media discussion groups, who prevent dissenting thought from ever appearing in the first place.

The second is the good and bad of math in economics. Basically, there's nothing wrong with math, just as there's nothing wrong with any tool. All that matters is how you use it.

If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons have exclusive access to several full-length episodes, right now. A full list is here, each with a brief highlight. Patrons also get the opportunity to ask my academic guests questions, such as my recent episode with Warren Mosler, last week's episode with John, and my next interview with John Harvey. They also support the development of my large and growing collection of learn MMT resources. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, let's get right back to my conversation with John Harvey. Enjoy.

Audio chapters * 5:43 - Purchasing Power Parity * 10:11 - Purchasing Power Parity: Follow-ups * 15:47 - "Mainstream economic theory is one big conspiracy." * 26:17 - Hans Visser and Keynes' gloomy view * 27:29 - Conspiracy, rage against the system, be kind to individuals. Every higher level shuts out dissenting thought * 34:53 - The good and bad of math in economics * 45:18 - My responses * 50:24 - Levy summer session and goodbyes * 57:26 - Duplicate of introduction, but with no background music

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Welcome to episode 126 of Activist #MMT. Today's part two in a six-part series with Texas Christian University (TCU) economics professor and Cowboy Economist, John Harvey. The first three parts are hosted by me, the final three by MMT researcher, Texas lawyer, and my previous guest, Johnathan Wilson. Jonathan and John talk about how MMT can apply to nations outside the US, using Russia as an example, and also some of the core theoretical and ideological differences between MMTers and mainstream economists, focusing on a recent critique of MMT by Drumetz and Pfeister. (You can hear my own interview with Jonathan in episodes 106 and 107.)

Today in part two, John and I continue our conversation about his chapter in the upcoming book called Modern Monetary Theory: Key Insights, Leading Thinkers. The book will be published by the UK-based Gower Institute for Modern Money Studies, or GIMMS; it's edited by L. Randall Wray and GIMMS; and is scheduled for January 2023 release. John is one of 15 authors. John's chapter is called "Modern Monetary Theory, the UK, and pound sterling". It addresses the following criticism of MMT (this is a quote from the chapter): "MMT-inspired policies will cause high rates of price inflation which will, in turn, lower the international value of a domestic currency – perhaps catastrophically." This conversation discusses the three major false assumptions underlying this criticism.

Surprisingly, however, my the main insight I take from this conversation with John is a much clearer understanding of inflation in general. As promised in the intro to part one, here's that insight:

Inflation is not a disease or even a symptom, but rather a potential measurement of some problem somewhere. Similarly, a thermometer says you have a fever. A fever means your body is fighting off something. Sure, you could take an ice bath to reduce your fever, but that will do little if anything to cure the underlying sickness.

Further, while a thermometer measures something simple and definitive – your body temperature – the measurement of inflation is, and can only be, socially defines and executed. As John says, if used cars are heavily weighted in the consumer price index (a primary survey used to measure inflation), then the price of used cars skyrocketing (such as for a shortage of microchips) will increase overall inflation. But for the majority who have no plans to buy a used car, this particular inflation means little to them in real terms. However, this same inflation is used to stoke fear in everyone, regardless what they want to buy or not buy.

Further still, inflation is a measurement. The idea of "reducing inflation" (such as by the Fed raising interest rates) is targeting something that serves as nothing more than a distraction from the real world and the underlying problems the measurement is referring to. Targeting low inflation is very similar to targeting a low deficit ("we must reduce deficit!"). This is targeting a measurement and sacrificing those at the bottom, in the real world, in order to do it. This is example of Goodhart's law: when a measurement becomes a target, it ceases to be a good measurement. The difference is that a deficit is never inherently a bad thing, where inflation is generally, genuinely referring to a real problem in real world. However, targeting only the inflation measurements itself, almost always results in the underlying problem(s) being ignored and exacerbated.

Basically, is your goal to lower the temperature on the thermometer, or to not be sick?

And now, let's get right back to my conversation with John Harvey. Enjoy.

Audio chapters * 6:28 - Back to inflation * 12:25 - Don't respond to market signals, make then go away * 18:34 - Critique: overview and mischaracterization of MMT (air is free!) * 24:23 - A currency can only depreciate against another * 25:52 - Why he wrote the paper, how he ended up speaking and Levy summer session * 30:33 - Answering the question * 33:28 - "I never listen to myself" * 34:47 - Free-market ideology requires balanced trade, and no leakages of any kind. * 39:38 - Financial flows are not leakages * 46:27 - Follow ups * 50:09 - Purchasing Power Parity * 54:37 - Purchasing Power Parity: Follow-ups * 57:46 - Duplicate of introduction, but with no background music (for listeners sensitive to the opening music)

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Welcome to season 2, episode 9 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week, Steven and Gabie talk to Dr. Dirk Ehnts, a leading European modern monetary theorist who recently published a paper titled Modern Monetary Theory: The Right Compass for Decision-Making. We ask him about what motivated him to write this paper and about its content.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

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Welcome to episode 125 of Activist #MMT. Today's the first in a six-part series with Texas Christian University (TCU) economics professor and Cowboy Economist, John Harvey. The first three parts are hosted by me, the final three by MMT researcher, Texas lawyer, and my previous guest, Johnathan Wilson. Jonathan and John talk about how MMT can apply to nations outside the US, using Russia as an example, and also some of the core theoretical and ideological differences between MMTers and mainstream economists, focusing on a recent critique of MMT by Drumetz and Pfeister. (You can hear my own interview with Jonathan in episodes 106 and 107.)

(A list of the audio chapters in this episode can be found at the bottom of this post. Here's a link to all six parts in this series: parts two and three with me, and parts four, five, and six with Jonathan. For a link to every Activist #MMT interview with John – plus the full audio of every Cowboy Economist video (!) – go here.)

Regarding parts one to three, John and I talk about his chapter in the upcoming book called Modern Monetary Theory: Key Insights, Leading Thinkers. The book will be published by the UK-based Gower Institute for Modern Money Studies, or GIMMS; it's edited by L. Randall Wray and GIMMS; and is scheduled for January 2023 release. John is one of 15 authors.

John's chapter is called "Modern Monetary Theory, the UK, and pound sterling". He was asked to write the chapter for two major reasons: First because there is not enough MMT-specific analysis on exchange rate determination, and second, to address the reality of the so-called sterling crisis in the United Kingdom. John and I don't specifically discuss the latter topic, but it is addressed in the paper.

It addresses the following criticism of MMT (this is a quote from the chapter): "MMT-inspired policies will cause high rates of price inflation which will, in turn, lower the international value of a domestic currency – perhaps catastrophically." Importantly, the critique is based on the following three assumptions:

The false idea that we are already, or soon will be, at full employment
A fantastical theory of exchange rate determination
A terrible and lazy mischaracterization of MMT

John and I spend most of our time discussing the reality of these three assumptions. Surprisingly, however, the main insight I take from this conversation is a much clearer understanding of inflation in general. I'm going to describe that insight in the introduction to part two.

The heart of our conversation is on the above three assumptions, but we start and end with mostly unrelated subjects. Part one begins with John describing his experience as chair of the economics department at TCU, he discusses the Russian-Ukrainian conflict only as it relates to exchange rate determination, and he also answers a question from an Activist #MMT patron, regarding his opinion of our possibility of experiencing a recession. At the end of part three, we talk about how, for most of those that most of us directly interact with, mainstream economic theory is not, in fact, a big conspiracy. We end by discussing the good and bad of math in economics.

Thanks to the recommendation of a patron, with every episode of Activist #MMT as of several months ago, you can pinpoint any part of this interview by referring to the full list of audio chapters, which can be found at the bottom of the show notes. So, for example, if you wanted to skip over this introduction and go right to the beginning of the interview proper, now you can know exactly what timestamp to go to.

And now, on to my conversation with John Harvey. Enjoy.

Resources * Books: + Fred Lee's A History of Heterodox Economics (2006) + Karl Polanyi's The Great Transformation (2001 edition, 1944) + Naomi Klein's The Shock Doctrine (2007) + Nancy MacLean's Democracy in Chains

Audio chapters * 6:02 - Attics, squeaky toys, dogs, and rats * 8:51 - Economics chairmanship * 16:21 - Being Post Keynesian chair in a mainstream department * 21:04 - Patron question: Recession coming? * 26:10 - Russia-Ukraine conflict * 31:31 - My lawn mower runs out of gas * 32:36 - Start of main questions * 33:20 - Demand-pull inflation * 44:39 - George Selgin * 47:35 - Back to inflation * 52:55 - Duplicate of introduction, but with no background music (for listeners sensitive to the opening music)

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This is the full audio from the Cowboy Economist video #22: Explaining Inflation

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A link to the full audio of all Cowboy Economist videos can be found in the show notes to part one.

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The full audio from the Cowboy Economist video #02: How the private sector finances its deficits.

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A link to the full audio of all Cowboy Economist videos can be found in the show notes to part one.

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The full audio from the Cowboy Economist video #20: The Ballad of MMT.

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A link to the full audio of all Cowboy Economist videos can be found in the show notes to part one.

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The full audio from the Cowboy Economist video #19a: A review of Dr. Stephanie Kelton's The Deficit Myth.

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A link to the full audio of all Cowboy Economist videos can be found in the show notes to part one.

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The full audio from the Cowboy Economist video #19: A review of Dr. Stephanie Kelton's The Deficit Myth

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A link to the full audio of all Cowboy Economist videos can be found in the show notes to part one.

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The full audio from the Cowboy Economist video #18: Paying COVID-19 to go away.

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The full audio from the Cowboy Economist video #17: M..m..m..my Corona!

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The full audio from the Cowboy Economist video #15: Universal Healthcare

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The full audio from the Cowboy Economist video #13: What actually causes inflation part two

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The full audio from the Cowboy Economist video #12: What actually causes inflation part one

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Welcome to season 2, episode 8 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week, Steven and Gabie talk to Dr. Kate Wylie is the founder of Climate Medicine, an organization dedicated to treating the health effects of climate change, to finding ways to reduce harm and to protect the health of humankind and of our planet. Dr. Wylie has completed the Climate Reality Leadership program with Al Gore and is a member of Doctors for the Environment Australia.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

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Welcome to season 2, episode 7 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week, Steven and Gabie talk to Professor Mark Diesendorf. Mark is an expert in renewable energy and how we can plan for a future that is ecologically sustainable and socially just. He has a long-standing interest in ecological economics. We will ask Mark about his upcoming book on planetary boundaries and our energy transition.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

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Welcome to episode 123 of Activist #MMT - podcast. Today's part two of my two-part conversation with Steven Hail, discussing the new and unprecedented graduate program in economics of sustainability. The program, which starts in September 2022, will be run by Torrens University, is backed by Modern Money Lab, and is primarily developed by Steven and Australia's leading ecological economist, Phil Lawn.

Last week in part one, Steven talked about how the program came to be, the resistance to be expected from neoclassical economics departments, and the basics of ecological economics. Today, he gives an overview of the program's curriculum, and the various degrees a student can pursue. I'm determined to earn a masters degree. After that then, well, we'll see.

Before we begin, a minor clarification: Near the end, I say my studies with Asad Zaman might be worthy of an elective. Although integrating a course into the curriculum I think would be great (and I believe to actually much more unique than is currently available), I only mean getting a potential credit for myself, for independent study.

If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons have exclusive access to several full-length episodes, right now. A full list is here, each with a brief highlight. Patrons also get the opportunity to ask my academic guests questions, such as my recent episode with Warren Mosler. They also support the development of my large and growing collection of learn MMT resources. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, let's get right back to my conversation Steven Hail. Enjoy.

Audio chapters * 4:13 - Torrens' curriculum, and how it overlaps with the knowledge of moderately experienced laypeople * 7:05 - Subject- Fundamentals of modern money * 8:18 - Subject- Foundations of 21st-century economics (Economy < society < planet) * 10:18 - Subject- Advanced Macro for master's students * 11:22 - Subject- International finance and MMT (International Minsky) * 14:59 - Subject- Ecological economics * 17:01 - Subject- Post-Keynesian microeconomics * 17:40 - Subject- Data analysis, message of empirical investigation * 18:25 - Subject- Professional economic writing * 19:18 - Subject- Inequality, equity, and employment * 19:45 - The various degrees to pursue * 21:02 - The unique requirements of the doctoral program * 27:16 - At what point does someone decide to continue onto the doctoral program? (Also- saving the world) * 30:47 - History of economic thought in contending perspectives * 31:54 - Only good maths and models. No bad math. * 34:38 - Historical context for real-world economics (Asad Zaman) * 43:33 - $2,200/per subject, then goodbyes * 47:26 - Duplicate of introduction, but with no background music

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Welcome to season 2, episode 6 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week, Steven and Gabie talk to South Australian activist Paul Willey about a campaign for our state to adopt stronger clean energy targets, more sustainable land use and biodiversity protection: in other words, living within the doughnut.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

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Welcome to episode 123 of Activist #MMT. Today I talk with Australian MMT economist Steven Hail, about the new and unprecedented graduate program in economics of sustainability. The program, which starts in September 2022, will be run by Torrens University, is backed by Modern Money Lab, and is primarily developed by Steven and Australia's leading ecological economist, Phil Lawn.

(Here's a link to part two. A list of the audio chapters in this episode can be found at the bottom of this post.)

Today in part one, Steven talks about how the program came to be, the potential resistance expected from the classical economics departments, and the basics of ecological economics. Next week in part two, Steven gives an overview of the curriculum and potential degrees students can pursue, from a graduate diploma to a PhD.

Until now, this podcast has served as my way to give myself, as close as possible, the education I convinced I would never be able to return to. This is because of the potential cost, student debt (again!), and the impossibility of forsaking income and uprooting my family. I have two little boys, my wife has a job as an elementary school teacher, and we just purchased our first home in summer 2021.

Torrens changes everything. At $2,200 of course (given the current AUS-US exchange rate), it's expensive, but an entire degree at Torrens is about the cost of a single year in the predatory education system in the United States. Also, Torrens provides online access for those outside of Australia, recording the lectures for those whose time zones and work hours are incompatible with an in-person schedule. This makes it possible for anyone, anywhere, with any work schedule, to take any and all of these courses. Direct in-person interaction with professors and fellow students will be scheduled multiple times each week, and there's always direct access to administrators when needed.

Needless to say, I am very excited.

You can find out more about the economics of sustainability graduate program in Torrens by going to modernmoneylab.org.au/courses/.

Finally, before we begin, I want to clarify: I very clumsily asked a question which Steven understandably misunderstood. What I mean to say was: Con (Costa) Michalakis is the second wealthy person that I'm aware of, to care enough about MMT, to use his own resources – and to encourage those in his network to pool theirs – in order to further develop and spread MMT. (I also meant to say that the truly elite benefit from the masses not understanding how the economy works.)

And now, onto my conversation with Steven Hail. Enjoy.

Resources Both these links are available via the courses website.

Modern Money Lab and Torrens University "Economics for a new era" brochure.
Fill out this form to express your interest in the program.

Audio chapters * 5:25 - Half time zones * 5:43 - How Torrens came to be (Con Michalakis and Stephanie Kelton) * 20:24 - Con Michalakis * 21:56 - Second wealthy person wants to help with MMT (clumsily stated) Question * 23:33 - MMT is popular in the finance sector * 24:16 - The Australian superannuation (retirement) system. * 27:02 - There is resistance in some quarters- mainstream economic profession (especially academia) * 30:18 - Mainstream economics is replete with myths * 33:25 - Putting a price on carbon as the EXTENT of government action * 34:14 - A very brief introduction to ecological economics * 42:27 - Torrens' curriculum, and how it overlaps with the knowledge of moderately experienced laypeople * 48:15 - Duplicate of introduction, but with no background music

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Welcome to episode 122 of Activist #MMT. Today, guest host Ramona Massachi (Twitter/@RamonaMassachi) talks with Neal Walia, who's running in Colorado's first Congressional district. He's accompanied by his economic advisor Andrés Bernal. This is our second conversation with Neal, the first was six months ago, near the start of his campaign. Today, we dive into Neal's policy platform.

(Here's a list of all MMT candidate interviews. A list of audio chapters for this episode can be found at the bottom of this post.)

The first policy we discuss is housing the un-housed, and how this can only be successful with an accurate accounting of the homeless population. Not so coincidentally, housing and the homeless was Neal's focus when he was a Congressional staffer for senator John Hickenlooper.

This policy is coupled with several others, as it must be, such as for mitigating the looming ecological crisis and reducing industrial pollution.

Another policy goal, standing up to the outsized influence of money in politics, is exemplified by two terrible quirks in Colorado state law. The first is an arbitrary limit on government spending to remain at 1990's levels. Today in 2022, when there is a much larger population, the law is needlessly suffocating. The second is a ban on rent caps, making it much more difficult for Coloradans to transition to homeownership. A criticism of rent caps is that it may result in not enough housing units for Colorado residents. The idea that the number of available units can only be increased by allowing property owners to increase costs to their occupants without limit, is highly suspect.

(A big thanks to Beyond the Spectrum for the "MMT Candidate" logo.)

Neal's primary is coming up on June 28th, and his campaign is on a roll. He's enjoyed big endorsements from people and organizations at all levels, and has appeared more than once on prominent independent media such as The Young Turks. His first in-person debate with his incumbent opponent is this Tuesday evening, May 24th.

You can support Neal's candidacy by visiting nealwaliaforcongress.com and NealforCD1 on Facebook, Twitter, and TikTok. You'll also find a link to donate to Neal's campaign in the show notes. Neal's Instagram is @neal_k_walia and his YouTube channel is Neal Walia for Congress

And now, onto our conversation with candidate for Colorado's first congressional district, Neal Walia. Enjoy.

Audio chapters * 4:05 - Andrés in Texas * 5:52 - Underestimating the homeless population with the "point in time count" * 12:54 - Give the homeless homes! * 26:34 - Polluting industries and energy generation * 34:41 - Community-owned utilities, false local-macro dichotomy * 41:16 - How has the IPCC report impacted your platform? * 43:28 - How's the campaign going? * 45:46 - Major endorsements and a strong start * 47:46 - Getting on the ballot, caucus versus signatures * 51:03 - In-person debate * 55:42 - Jeff's question- How has an understanding of real economics changed your candidacy? * 1:12:00 - How can people support Neal in this final stretch? * 1:14:37 - Goodbyes * 1:17:51 - Duplicate of intro, with no background music

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Welcome to season 2, episode 5 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week, Steven and Gabie talk to Dr. Tori Wade. Tori is a retired psychologist, medical researcher and a pioneer of e-health. She's a founding member of the Sustainable Prosperity Action Group and she regularly gives talks to community groups about Modern Monetary Theory. We'll ask Tori about what it's like to give talks and how anyone can do it.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

Here's the video from which this audio comes from. (The audio is unedited.)

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Welcome to episode 121 of Activist #MMT. Today's the second half of student debt horror story number two, with Sean McCoy. In part one, Sean described his background, his journey to decide on a university, the basics of his loans, and his experience and difficulties paying them off. Sean left school with nearly $150,000 in student debt. Now it's five years later and he's paid more than required each month, which has reduced it to around $120,000. At this rate, he will have fully paid off his loans around the year 2042. That's not a joke.

(A list of the audio chapters in this episode can be found at the bottom of this post.)

Today, we continue that discussion, and especially focus on Sean's responses to some of the terrible arguments against canceling student debt. These arguments are largely based on the false notion that "our individual tax dollars" are required to pay for the education – and debt – of others.

To learn more about Sean and his work, you can visit his website at seancmccoy.com.

If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons have exclusive access to several full-length episodes, right now. A full list is here, each with a brief highlight. Patrons also get the opportunity to ask my academic guests questions, such as my recent episode with Warren Mosler. They also support the development of my large and growing collection of learn MMT resources. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, let's get right back to my conversation with Sean McCoy. Enjoy.

Audio chapters * 6:05 - Milton Friedman and short-term thinking FOR WHO? * 11:53 - Growth for who (Retirement Heist) * 13:46 - Graduates add value to the economy! * 16:04 - Criticisms against canceling student debt: The anger behind them. * 22:32 - Criticism- You chose to take this loan, so pay it back. * 29:01 - Criticism- Canceling student debt punishes all those who already paid back their loans. ("I had to pay my loans but you don't have to pay back yours?!") * 32:50 - Criticism- If education didn't have a cost than everyone world get useless degrees. (Define useless.) * 39:33 - Did your brief introduction to MMT change your thinking about student debt? * 42:13 - How would your time in college have been different if it had no cost? * 48:45 - How would your life be different today if you didn't have student debt? * 52:44 - Final thoughts and goodbyes. * 57:07 - Duplicate of introduction, but with no background music

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Welcome to episode 120 of Activist #MMT. Today's student debt horror story number two, with Sean McCoy. Sean's a Virginia-based filmmaker who, outside his professional career, donates his skills and footage to progressive candidates and nonprofits. As a teenager, he was a professional actor who applied to theater programs at eleven different universities. He settled on Boston University, which is a private institution that offered to cover fifty percent of his costs through various grants and scholarships.

(Here's a link to part two. A list of the audio chapters in this episode can be found at the bottom of this post.)

Despite the deep discount, Sean left school with nearly $150,000 in student debt. Now it's five years later and he's paid more than required each month, which has reduced it to around $120,000. At this rate, he will have fully paid off his loans around the year 2042. That's not a joke.

Sean describes in detail how debt is a lever of power, and how that in turn is a tool used by the rich to enslave their workers. This despite the obvious fact that, even though chained down by debt, these workers create well more in value for the economy – for society – for these rich people! – than the amount they owe in debt. In the case of my previous student debt horror story, Dalton is a high school teacher who's spread that education to hundreds of students in his seven years' of teaching experience. Like all teachers, Dalton has created many times more in value for society than the $47,000 society has chosen to burden him with.

Even if "our individual tax dollars" really were needed to pay for the education of others, not burdening teachers with student debt would obviously be a good investment. How much more would they benefit society if they were let loose by never burdening them with student debt to begin with?

Student debt is nothing more needless future punishment for daring to aspire above your station.

In part two, Sean responds to some of the common criticisms of those who argue against canceling student debt; arguments almost entirely based on the false assumption that "our individual tax dollars" are required to pay for the education – and debt – of others.

To learn more about Sean and his work, you can visit his website at seancmccoy.com.

And now, onto our conversation. Enjoy.

Resources * 2022 New York Times article by David Dayen, Larry Summers Shares the Blame for Inflation (archive) * The interview with John Harvey, from which the inserted snippet (on the price of cotton increasing because of the emancipation of slaves) comes from. * Ilhan Omar shared his video.

Audio chapters * 4:43 - Where do you live? Viral tweet. * 5:42 - Sean introduces himself * 8:14 - Ilhan Omar shared his video. * 9:19 - That's how you live. How do you survive? * 10:47 - Back to the beginning. Planning on going to college. * 14:53 - What would you say now to that person who said all of this was normal? * 17:22 - Assuming false economics is true, would you do things differently if you could go back and start again? * 20:24 - How did you minimize or costs while in college? * 24:42 - The current state of all of his loans. * 35:50 - Why won't Biden cancel student debt? * 40:04 - tinfoil hat * 43:23 - Wage-price spiral. Only poor people cause inflation. * 45:24 - Larry Summers and the shiny ball. (John Harvey and the price of cotton.) * 50:58 - Milton Friedman and short-term thinking FOR WHO? * 54:59 - Duplicate of introduction, but with no background music

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Welcome to (the audio of) season 2, episode 4 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week, Steven and Gabie talk to Phil Lawn, who will talk about his educational work relating to Ecological Economics, Sustainable Development and Real-World Economics. He is a pioneer of the Genuine Progress Indicator (GPI) as an indicator of social well-being, and one of Australia's leading ecological and MMT economists. Here's a link to the full (audio-only) episode: https://activistmmt.libsyn.com/modern-money-doughnuts-seas2-ep4-phil-lawn Here's the original video from which the audio comes. (The above audio is unedited): https://youtu.be/eBIovH61bq8 All episodes of Modern Money Donuts can be found on this page by Modern Money Labs: https://modernmoneylab.org.au/events/podcast/ MMD is hosted by Kerberos Media, and the audio podcast is, for now, hosted by Activist #MMT. So if you'd like to be automatically notified of each new MMD episode, then subscribe to Activist #MMT on your favorite podcast platform. With thanks to Jimi Sunderland for the production assistance.

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Welcome to episode 119 of Activist #MMT. Today's the first in what I hope to be at least a modest series of student debt horror stories. This first story is with New Jersey high school technology teacher, Dalton. Dalton was the first in his family to attend a four-year college. He minimized his costs by attending an in-state school, living off campus, and working multiple jobs while talking classes.

(A list of the audio chapters in this episode can be found at the bottom of this post.)

Dalton graduated in 2015 with a bachelor's degree and $47,000 in debt. In the seven years since, he's paid back $36,000, but his loan principal has only been reduced by half of that amount: $18,000. His interest rate is currently above 5%.

Interviewing a teacher regarding the topic of student debt has been particularly illuminating. A teacher is educated, and they spread that education to their students, who then go out into the world and help businesses produce more, and more efficiently. You would think this has resulted in many times more in profit and wealth than $47,000, for someone. Why then, would you burden their teacher with a debt, when he's clearly produced many times more than that in value for the economy – in other words, society, or us!

Even if we pretend it truly is necessary for students to pay for their own education, it still makes no sense to put a crushing burden on someone who clearly generates many times more than that overall.

More than 90% of all student loans are owned by the US Department of Education. The US Department of Education is fully funded by the one institution that can only pay for things by creating more money. Our public money – not taxpayer money, our public money – can indeed pay for all of it, a reality that makes the burden of student debt particularly egregious. Whatever benefit the lenders get from doing this, it's got nothing to do with a measly $47,000 – it's also got nothing to do with money.

If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons have exclusive access to several full-length episodes (including parts two and three with Brian), right now. A full list is here, each with a brief highlight. Patrons also get the opportunity to ask my academic guests questions, such as my recent episode with Warren Mosler. They also support the development of my large and growing collection of learn MMT resources. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, onto my conversation with Dalton. Enjoy.

Audio chapters * 4:22 - Booker the dog * 5:07 - Sunshine by Johnathan Edwards (with a little performance by me!) * 7:38 - Dalton introduces himself * 8:43 - First impressions of MMT * 10:28 - The real reason for not having universal healthcare (and having student debt) * 12:57 - Deciding to go to college, and how to pay for it * 15:37 - Steadily increasing, but fixed interest rates * 18:16 - First in family to attend four-year college * 19:23 - What if you had no student debt? Purchasing a home. * 21:57 - Student debt is unfortunate but necessary. School must have a cost. * 23:18 - Looking back, now knowing MMT (paid back double) * 25:31 - A teacher creates productivity worth way more than the cost of their education * 28:09 - Permanent caste system * 30:19 - Goodbyes * 33:28 - Duplicate of introduction, but with no background music

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Welcome to season 2, episode 3 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week, Steven and Gabie talk to Professor Steve Keen. Steve is one of the world's very best economists. He will soon be standing as a candidate for the Senate in Australia's federal election. Gabie and Steven will be asking him why.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

Here's the video from which this audio comes from. (The audio is unedited.)

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Welcome to episode 118 of activist. Today's part three of my three-part conversation with author, financial analyst, and applied mathematician, Brian Romanchuk. In part one, we talked about his journey to MMT, and his 2021 book, Modern Monetary Theory and the Recovery. In part two and today in part three, we talk about the various techniques used by bad-faith critics of MMT. More broadly, these are some of the things simple bullies do, when they would prefer their followers think they're not bullies. This interview was inspired by chapter five of Brian's book, his recent appearance on MMT Podcast, and my own post of several good-faith critiques.

(A list of the audio chapters in today’s episode can be found at the bottom of this post.)

This interview inspired me to write a new post summarizing the techniques Brian and I discuss today, plus my own definition of a good-faith critique.

These techniques are not exclusive to MMT, of course, but Brian and I share several anecdotes, and link them to actual MMT critiques and critics.

And now, let's get right back to my conversation with Brian Romanchuk. Enjoy.

Audio chapters * 3:30 - I will only view a child through their report card. * 5:57 - Thomas Palley's household analogy * 8:11 - MMT is wrong, because if it were right, it would be bad. (Just don't like the politics.) * 13:45 - The unwashed masses are kept deliberately unwashed. * 15:15 - Killing the messenger * 21:38 - You don't define you, I define you. (Emmet Till) * 32:38 - The debate is not in the papers but in the world around them. * 33:23 - Final thoughts * 47:00 - Duplicate of introduction, but with no background music

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Welcome to season 2, episode 2 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week, Steven and Gabie talk about their Rethinking Capitalism weekend discussion group, plus their upcoming trip to Tasmania. In Rethinking Capitalism, we cover many topics including the deficit myth, a Job Guarantee, sustainability and the doughnut, inequality, grey corruption and international trade.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

Here's the video from which this audio comes from. (The audio is unedited.)

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Welcome to episode 117 of activist. Today's part two of my three-part conversation with author, financial analyst, and applied mathematician, Brian Romanchuk. Last week in part one, we talked about his journey to MMT, and his 2021 book, Modern Monetary Theory and the Recovery. Today, and next week in part three, we talk about the various techniques used by bad-faith critics of MMT. More broadly, these are some of the things simple bullies do, when they'd like their followers to think they're not bullies. This interview was inspired by chapter five of Brian's book, his recent appearance on MMT Podcast, and my own post of good-faith critiques.

(A list of the audio chapters in today's episode can be found at the bottom of this post.)

This interview inspired me to write a new post summarizing the techniques Brian and I discuss today, plus my own definition of a good-faith critique. These techniques are not exclusive to MMT, of course, but Brian and I share several anecdotes, and link them to actual MMT critiques and critics.

And now, let's get right back to my conversation with Brian Romanchuk. Enjoy.

Audio chapters * 3:17 - Trillion dollar coin, needle in a haystack, institutionalism * 6:43 - Good-faith critique- a definition * 12:26 - Critiques come from the overwhelmingly dominant school (hrespecs) * 14:48 - "MMTers ignore X" * 21:39 - An MMT supporter was wrong (or a jerk) * 27:40 - Newbies and "taxes don't fund spending". * 30:12 - MMTers are deliberately deceitful and they keep changing their positions. (Calvinball) * 39:42 - I will only view a child through their report card. * 42:09 - Thomas Palley's household analogy * 44:23 - MMT is wrong, because if it were right, it would be bad. (Just don't like the politics.) * 48:28 - Duplicate of introduction, but with no background music

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Welcome to Season 2, episode 2 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week Gabie and Steven talk again with Dr. Sherry Wise.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

Sherry is a Senior Economist with the US Department of Agriculture, as well as a Kerberos regular. She is also an expert in environmental economics. We'll continue our conversation about climate change and its impact on farming and food production and what could be done differently.

Here's the video from which this audio comes from. (The audio is unedited.)

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Welcome to episode 116 of Activist #MMT. Today I talk with author, financial analyst, and applied mathematician, Brian Romanchuk. We talk about his journey from mainstream economics, to Minsky, to MMT; and his experience writing the 2021 book Modern Monetary Theory and the Recovery. He also describes some of his concerns regarding the common MMT assertion that government spending always comes before taxation.

(Here are links to parts two and three. A list of the audio chapters in this episode can be found at the bottom of this post.)

This is part one of a three-part conversation. In parts two and three, we discuss the many varied techniques used by bad-faith critics of MMT, which more broadly are the techniques used by simple bullies who want their followers to think that they're not. The second two parts were inspired by chapter five in Brian's book, his recent appearance on MMT Podcast, and my own post documenting several good-faith critiques and the MMT responses to them [a link to which can be found in the show notes]: What are some good-faith criticisms of Modern Money Theory (MMT)?

Regarding the assertion that government spending always proceeds taxation, Brian's concerns are not related to its accuracy. In my view, it remains a valuable and important insight. Rather, the problem is that it's a cycle that can only be resolved by going back. in the words of Fadhel Kaboub, "to the beginning of the beginning." After that, it's so close to a chicken and egg question that, in the context of public conversations, it can sometimes cause more problems that it solves. Instead, Brian suggests asking why the assertion is so important. The answer is the assurance that the national government, the currency issuer, can never default on its obligations. In other words, regardless whether the chicken or the egg came first, the government can always pay its bills.

And now, onto my conversation with Brian Romanchuk. Enjoy.

Audio chapters * 4:19 - Hellos, curling * 7:24 - From mainstream, to Minsky, to MMT * 14:11 - Mainstream maths and DSGE * 17:46 - Did learning MMT change your trading? (No. It better validated my decisions.) * 22:37 - Chicken and egg, spending must come first; versus default risk * 30:08 - Trillion dollar coin, needle in a haystack, institutionalism * 41:47 - Good-faith critique- a definition * 47:32 - Duplicate of introduction, but with no background music

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Welcome to episode 115 of Activist #MMT. Today I talk with PhD political scientist, author, and MMTer, Joe Firestone about the many reasons why "printing money causes inflation" is wrong. The original and unedited video of this conversation can be found on YouTube/Kerberos media.

(A list of the audio chapters in this episode can be found at the bottom of this post.)

This conversation was inspired by the middle of episode 95 with Graham Elwood. Graham expresses concern with "all this money printing" during the coronavirus pandemic as the primary cause of "all this inflation". At the same time, he's a strong advocate for helping those who need it most, such as with healthcare, education, and union and worker rights.

These two things are contradictory. The government can only spend by creating more money, and there is little the government can do without spending as part of the process. The assertion that government money creation is inherently and always harmful, is very close to saying that the government doing anything for anyone is inherently and always harmful. When the government does less, who always gets the short end of the stick? The answer, of course, are those who already get the short end of the stick.

(The full segment with Graham, which is about ten-minutes long, can be found in full after today's closing music.)

This conversation with Joe, our sixth episode on my podcast, is, as always, enlightening. My biggest takeaways are the following: the only thing that can be inflationary is:

money that is created,
that goes into the hands of citizens (in the real economy),
who spend it,
in sectors of the economy that cannot increase production to meet that demand.

Much of the money created by the government never reaches those hands to begin with, such as bank reserves and as through QE (or quantitative easing), or a potential trillion dollar coin.

The money that does reach the real economy may be invested or spent overseas. Since taxes and debts are highly regressive, much of it isn't spent, but rather is used to pay off those debts and taxes. Much of the money that is spent, is done in sectors of the economy that can increase production to match the demand. The amount left over, that is indeed spent in potentially inflationary sectors, is very small.

My second take away from Joe is that the government can do bold things that can greatly reduce inflationary pressures. Some of it requires little-to-no money creation, such as by jailing corrupt CEOs, prosecuting and preventing price gouging, negotiating pharmaceutical prices, and increasing union and worker rights. Some of it may require lots of money creation, such as by providing healthcare, education, and a livable planet for all.

The world is not zero-sum, it's positive sum. Some kinds of government spending is desperately needed and obviously beneficial. Some kinds of current spending is terribly harmful. The idea that government spending can only be harmful is, in addition to being wrong, anti-government, and more precisely anti-poor, propaganda.

If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons have exclusive access to several full-length episodes, right now. {A full list is here, each with a brief highlight.} Patrons also get the opportunity to ask my academic guests questions, such as my recent episode with Warren Mosler. They also support the development of my large and growing collection of learn MMT resources. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, on to my conversation with Joe Firestone. Enjoy.

Resources * My new introduction to real-world economics, as mentioned at the start: A political introduction to real-world economics * Fadhel Kaboub’s interviews on inflation with Briahna Grey Joy, Sabby Saabs, and Modern Money Doughnuts * 2022 paper by Andrés Bernal: Inflationary Pressures in the Time of Covid-19: MMT as a Theory of Inflation * 2019 Financial Times post by Scott Fullwiler, Rohan Grey, and Nathan Tankus: An MMT Response on What Causes Inflation (alternate) * 2021 post by Jonathan Wilson, Why the Quantity Theory of Money is Wrong * 2011 post by John Harvey, Money Growth Does Not Cause Inflation!

Audio chapters * 6:39 - Hellos * 8:08 - My new introduction post- A political introduction to real-world economics * 8:59 - My current understanding of "printing money causes inflation". * 18:45 - How far can the central bank prop up banks and corporations? * 24:35 - Mark to market * 26:05 - "The national government purchases" * 28:22 - Back to "printing money causes inflation" * 52:29 - I review what I've learned. * 53:29 - Government spending can decrease and prevent inflation, and increase productivity and supply. * 1:00:35 - Goodbyes * 1:04:17 - Full segment with Graham * 1:14:14 - Duplicate of introduction, but with no background music

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Welcome to episode 114 of Activist #MMT. Today's part two of my two-part conversation with Gregg Stebben. In part one, I gave Gregg a broad introduction to MMT, its basic policy implications, and some of the major myths it shatters. Today in part two, we branch out to a wide-ranging conversation about the state of the world and how MMT does and does not relate to it.

(A list of the audio chapters in this episode can be found at the bottom of this post.)

And now, let's get right back to my conversation with Gregg Stebben. Enjoy.

Audio chapters * 8:22 - When Bernie Sanders ran for president * 12:33 - We are going to go extinct * 18:36 - What's the connection between MMT and climate change? * 21:21 - President Epstein * 23:37 - What do I tell my kids? * 28:53 - Mint the Coin * 36:08 - Healthcare for all is complicated * 47:36 - COVID checks and UBI * 51:51 - Obamacare and labels * 55:17 - The battle will be won with manipulation * 58:20 - Goodbyes * 1:01:58 - Duplicate of intro with no music

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Welcome to episode 113 of Activist #MMT. Today I introduce MMT to author, journalist, radio talker, podcaster, and friend, Gregg Stebben. Gregg is co-author of the 1999 book Everything You Need to Know about Economics, which is part of a four-book series called The Pocket Professor, on the topics of economics, physics, philosophy, and religion. Among several other books, Gregg also co-wrote the 2017 The Little Red Book of New York Wisdom with former mayor Ed Koch.

(Here's a link to part two. A list of the audio chapters in this episode can be found at the bottom of this post.)

This two-part episode is an unscripted conversation, but our starting-off point is a short introductory post I wrote for the purpose of this discussion. In part one, I give Gregg a broad introduction to MMT, its basic policy implications, and some of the major myths it shatters. In part two, we branch out to a wide-ranging conversation about the state of the world and how MMT does and does not relate to it.

This episode is also another step in my journey to creating a general introduction to MMT. It's actually my second recording with Gregg. The first, in May of last year, was never released. I ran through my introduction presentation, which I had been working on for several months. Although I got a lot out out of the experience, including some important analogies and insights, as a whole it just never came together. It was overwhelming. Even though only an hour, it probably contained somewhere between five hours and four years of information. After my experience with Gregg, I abandoned the presentation entirely. This was most upsetting to me because of how so many gave their time and feedback to improve it. As Gregg says, however, it was all a part of how I got to where I am today. The information is still there, just in a different form. Speaking of which, before listening to today's episode, you might want to consider reading my post. It's called A political introduction to real-world economics.

If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons have exclusive access to several full-length episodes, right now. A full list is here, each with a brief highlight. Patrons also get the opportunity to ask my academic guests questions, such as my recent episode with Warren Mosler. They also support the development of my large and growing collection of learn MMT resources. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, onto my conversation with Gregg Stebben. Enjoy.

Resources * Gregg's author page on Google Books. * 2007 book by Chip and Dan Heath, Made to Stick: Why Some Ideas Survive and Others Die

Audio chapters * 5:17 - Adam Smith * 5:35 - Macro automation software * 10:09 - Gregg introduces himself * 12:59 - My abandoned presentation * 19:04 - MMT is a map * 24:53 - It is impossible for the government to purchase anything except by creating more money. * 27:05 - Real versus false constraints * 32:23 - Then where does the money come from? * 34:41 - Going to the bathroom does not fund our eating * 38:10 - Give everyone a Tesla * 53:49 - What if we started discussing the goals and instead of the tool? (The portfolio on the table) * 1:03:46 - Duplicate of intro with no music

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Welcome to a special episode of Modern (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week, Steven and Gabie speak with Professor Stephanie Kelton to discuss her New York Times best-selling book, The Deficit Myth.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

Here's the video from which this audio comes from. (The audio is unedited.)

MMD is hosted by KRTD Media, and the audio podcast is, for now, hosted by Activist #MMT. So if you'd like to be automatically notified of each new MMD episode, then subscribe to Activist #MMT on your favorite podcast platform.

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Welcome to episode 112 of Activist #MMT. Today's part two of my two-part conversation with Asad Zaman, on the 2001 edition of Karl Polanyi's 1944 book, The Great Transformation. This is also the final part in a larger four-part series on the book. Parts one and two are with Jackson Winter. Jackson and I are two smart layperson MMTers trying to come to terms with the depth of what we just read, and connecting it to our lives and MMT. Parts three and four are with Professor Zaman, who is a PhD economist with many lectures, papers, and posts on the topic (all of which you can find in the show notes to part one with Professor Zaman).

(A link to all four parts in the series can be found in part one with Jackson. A list of the audio chapters in this episode can be found at the bottom of this post.)

Part one also contains a summary of the book. You think you understand the foundation of our economy and society, but as described in The Great Transformation, there's another foundation beneath it.

If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons have exclusive access to several full-length episodes, right now. A full list is here, each with a brief highlight. Patrons also get the opportunity to ask my academic guests questions (including my recent episode with Warren Mosler). They also support the development of my large and growing collection of learn MMT resources, and the course with Professor Zaman. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, let's get right back to my conversation with Asad Zaman. Enjoy.

Audio chapters * 4:11 - Mercantilism * 8:10 - Fascism is not something in and of itself, rather it's something to fill in the vacuum left by the wreckage of the self-regulating market * 10:58 - The ideology and religion of greed * 12:22 - Jane Austen- The poorest AMONG THE ARISTOCRACY (the movie Ever After) * 15:43 - The importance of history to the study of economics. * 22:28 - Those who benefit most from of capitalism want us to focus on the imaginary, not history. * 24:08 - Entanglement- The methodology of Polanyi (history shapes our ideas which shapes history) * 29:17 - "Government is bad", but the self-regulating market requires even more government to suppress the protestations of those suffering at the hand of the self-regulating market * 34:47 - Average people serve as gatekeepers for the exploiters (protecting privilege) * 39:21 - What do I tell my kids? * 48:43 - Goodbyes * 52:38 - Duplicate of introduction, but with no background music

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Welcome to episode eight of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics. This week, Steven and Gabie speak with Randeep Ramesh, award-winning journalist and Chief Leader Writer on The Guardian, which is the world's leading progressive newspaper. They talk about Modern Monetary Theory, politics, and Post Keynesian economics, among other things.

(All episodes of Modern Money Donuts can be found on this page by Modern Money Labs.)

Here's the video from which this audio comes from. (The audio is unedited.)

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Welcome to episode 111 of Activist #MMT. Today I talk with Asad Zaman about the 2001 edition of Karl Polanyi's 1944 book, The Great Transformation. Professor Zaman is a PhD economist based in Pakistan, with many lectures, papers, and posts on the topic. This is part one of a two-part episode, but it's also part three in a larger four-part series on Polanyi's book. Parts one and two are with Jackson Winter. Jackson and I are two smart layperson MMTers trying to come to terms with the depth of what we just read, and connecting it to our lives and MMT.

(A link to all four parts in the series can be found in part one with Jackson. A list of the audio chapters in this episode can be found at the bottom of this post.)

As I briefly describe in part one with Jackson, Professor Zaman and I are developing a free online course called "Historical Context for Real-World Economics". It's almost entirely through an MMT lens, but mostly, it's history, not directly MMT. However, it provides critical context for those who want to understand MMT better. The course is produced by Activist #MMT, and hosted by Bill Mitchell's MMTed and Esha Krishnaswamy's Historic-ly. There are five lecture chapters currently being developed, and I look forward to sharing them with you. The next seven lectures are all on Polanyi's Great Transformation. Links to the seven lectures, plus several related sources by Professor Zaman can be found [in the show notes.] in the "Resources" section at the bottom of this post.

(The below summary and resources have been collected into this post: A summary of Polanyi's Great Transformation (with many sources to learn more))

The Great Transformation reveals, essentially, that what we think to be a foundation of our economy and society is, in fact, an illusion. Specifically, Polanyi calls capitalism and its free or "self-regulating" market "a stark Utopia". By definition, a Utopia (an imagined place where everything is perfect) is impossible to achieve. However, the attempt to achieve it – to eliminate literally all market regulation – can result only in the complete destruction of all human life and the land they live on. This is evidenced by our increasingly likely extinction at the hands of a human-created ecological crisis, caused largely by unprecedented and still-growing levels of inequality and the mass exploitation of all natural resources, including most human beings.

Here's Polanyi, on the first page of the first chapter:

Our thesis is that the idea of a self-adjusting market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness.

Unfortunately, the only way to maintain the fiction of the self-regulating market, is to continue the mass exploitation of the poor. Instead of treating human beings as the infinitely precious and unique beings they are, they are rather treated as mere interchangeable and disposable cogs to run the Unending Greed Machines; most often under terrible conditions. Polanyi calls this grave maltreatment the commodification of labor.

The only way to get human beings to submit to these terrible conditions, is to threaten them with an even more terrible condition: starvation and death. As quoted in the book, starvation "can tame even the wildest beast". Not even the strongest man can overcome it.

How is this starvation made possible? By eliminating the possibility of self sufficiency. A major tool to do this was the invention of the concept of the private ownership of land. This justified the ejection of all former occupants, who must now, for example, in modern society, purchase our food at a distant store. We have to drive to that store, and the food, plus the car and its gas, must all be paid for with money, which in turn can only be obtained by laboring at the Greed Machines. What this all means is that the commodification of labor also requires the commodification of the land.

Those being potentially annihilated by the destruction of the self-regulating market resist that destruction. This results in what Polanyi calls the double movement. This is the ideological battle that has raged for centuries, where one side tries to eliminate all market regulation, while the other tries to protect itself by imposing some. When the amount of regulations are only enough to moderately reduce that destruction, as is unfortunately most often the case, then the resistance can only perpetuate and further enable the pursuit of that stark Utopia.

What underlies and justifies this horror is the most dominant religion in the world, which is greed. Without Polanyi's book and his work, this religion, and its byproducts of inequality and mass exploitation, are made to appear normal, inevitable, and unstoppable – in other words, natural. The truth that Polanyi's history reveals (and as is reinforced by my recent interview with Wesley Wiles)is that inequality, exploitation, and greed are not "unfortunate, but necessary", they're deliberate choices. Those who benefit most from the self-regulating market have incentive to deceive the rest of us into thinking that these terrible things are indeed natural. This is the role played by neoclassical economics: to provide that official, neutral, and natural-sounding justification.

The core problem in our society is not "capitalism" or "the free market", per se, but rather the mass exploitation of the poor. Therefore, the core solution is to empower the poor. The nature of this empowerment is simple: provide them with what they desperately need: like healthcare, education, a job, un-poisoned water, and a world that doesn't threaten to collapse around them. These things all serve to empower the poor which ultimately reduces inequality – of both wealth and income.

We will annihilate the fiction of the self-regulating market or it will annihilate us. There is no gray area. We will provide for those on the bottom or we will go extinct. The first step is to emancipate ourselves from the chains of false history and false economics, and from the idea that everything horrible is "unfortunate, but necessary". Only then can we take a step back and start thinking of alternatives.

As a final note, you'll hear some of Professor Zaman's thoughts on the potential form a sustainable future society might take. These are not ideas from the book but his own, in an attempt to start a discussion on one of the greatest questions of our time: how do we resist and annihilate the self-regulating market, and what can and will society be like when we do? Perhaps you have some ideas of your own. Let's start that discussion.

If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons have exclusive access to several full-length episodes, right now. A full list is here, each with a brief highlight. Patrons also get the opportunity to ask my academic guests questions, such as my recent patron-question episode with Warren Mosler. (A Patron question was also asked of Professor Zaman.) They also support the development of my large and growing collection of learn MMT resources, and the course with Professor Zaman. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, onto my conversation with Asad Zaman. Enjoy

Resources Bill Mitchell's 2022 blog post, To reclaim the state, we have to start with ourselves, which contains a substantial comment from Professor Zaman.

For a good, short and basic introduction to the flaws of capitalism and its economics, Professor Zaman recommends this 17-minute 2020 TED talk by Nick Hanauer.

Here are the seven lectures by Professor Zaman that will be used in the course :

Adv Micro L13: Entanglement of History with Social Theories
Adv Micro L14: Emergence of Economics Theories in Economic Context
Adv Micro L15: 19th Century European Economic Ideas In Historical Context.
Adv Micro L16: Economics from Hunter/Gatherer to World War 2
Adv Micro L17: Polanyi Great Transformation Part 2
Adv Micro L18: Polanyi TGT cont - part 3
Adv Micro L19: Polanyi TGT- Concluding Lecture

Here's the overall curriculum from which these lectures come: 21st Century Economics: An Islamic Approach

More on that in part three.

If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons of Activist #MMT have exclusive access to several full-length episodes (including part two with Warren), right now. A full list is here, each with a brief highlight.">If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons of Activist #MMT have exclusive access to several full-length episodes (including parts two and three with Jonathan), right now. A full list is here, each with a brief highlight.

Patrons also get the opportunity to ask my academic guests questions (like last week's episode with Warren), and they support the development of my large and growing collection of learn MMT resources – among other MMT things. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, let's get to part one of my conversation with Jonathan Wilson. Enjoy.

Resources * 2021 post by Jon that's very complementary to John Harvey's 2011 (former!) Forbes post on the topic: Why the Quantity Theory of Money is Wrong * 2021 post by Jon that he briefly summarized in our interview: What really happened during the Volcker years? * BANKING PAPER LINK? * Rick and Morty destroy the government by changing a one to a zero. * Sam Levey plays a one-stringed instrument in NYC

Audio chapters * 08:17 - First Hanukkah in the new house * 09:58 - Late for the interview * 10:14 - Jonathan introduces himself * 11:09 - MMT is correct despite commercial banks creating most money in the economy (upcoming paper) * 18:41 - Before MMT- Increasing the national debt can only result in global thermonuclear war * 23:08 - Learned MMT from Sam Levey (marching band) * 29:13 - Consuming MMT videos, papers and books * 30:41 - Starting a currency, the difficulties of the Confederacy * 33:21 - UBI, provisioning government * 34:10 - Timeline of his discovering MMT * 35:56 - First MMT books * 36:31 - Remembering The Deficit Myth * 39:24 - The Deficit Myth, simple language, reaches multiple audiences (music and movies) * 44:41 - Domestic versus international MMT, core versus peripheral MMT * 46:25 - Money is valuable because (post office stamps) * 49:05 - Cascade of liabilities (domestic) * 50:36 - Cascade of liabilities (international) * 52:20 - Jonathan's new post- The "Cool Stuff" hypothesis versus the petrodollar - summary * 56:02 - People want dollars because the United States has Cool Stuff * 58:11 - Struggle with terminology, multiple points of view * 1:02:19 - Floating versus pressed exchange rates (gold standard)

1000 Castaways: Fundamentals of Economics

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Jonathan describes the first MMT books he read, and how the accessible language in Stephanie Kelton's The Deficit Myth influenced him in his recent and enlightening "Cool Stuff" article, as we discuss in the main episode. I then connect this lesson to music and movies.

This snippet comes from episode 106 of Activist #MMT with Jonathan Wilson, called ""Cool Stuff" and the reality of the petrodollar (cascade of liabilities)", at around the 26-minute, 30-second mark of the interview proper.

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Welcome to episode three of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics.

(All episodes of Modern Money Donuts are listed on this page by Modern Money Labs.)

Today Steven and Gabie talk with Maren Poitras, Associate Producer with Codebreaker Films. Her current film in production, FINDING THE MONEY, won the Audience Award at DocLands film festival DocPitch 2021. FINDING THE MONEY is a movie about Modern Monetary Theory and some of its leading practitioners. We will talk to Maren about what motivated her to make the movie, about its content, and about the process of making it and when we can expect to see the finished movie.

Here's the video from which this audio comes from. The audio is unedited.

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Here is (the audio of) KRTD Media's second panel discussion of our New Year's Eve 24-hour livestream, concerning economics and Modern Monetary Theory (MMT). The panel is with Steven Hail, Andrés Bernal, Sherry Wise, Gabrielle Bond, Joe Firestone, Shane Coughlin, Neal Walia, Sandy Schoelles, Mat Waldie, PG of Virginia Progressives, and Sam Hollenbeck.

Here's a snippet from this episode: What is MMT?

(Here's a link to the first MMT panel.)

This audio is edited. For full context, see the original video from which it comes.

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What is MMT? Here's Andrés Bernal, Steven Hail, and Shane Coughlin to explain.

This snippet comes from (the audio of) KRTD Media's 2021-2022 NYE MMT Panel 2, with Steven Hail, Andrés Bernal, and friends, at around the seven-minute, thirty-second mark, of the audio-proper.

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Welcome to Activist #MMT candidate interview number seven, hosted by Ramona Massachi (Twitter/@RamonaMassachi) and co-hosted by me. Today, Ramona talks with John Swoboda, who's running to represent Oklahoma's first Congressional district.

(Here's a list of all MMT candidate interviews.)

John decided to run after moving to the Tulsa area and discovering a lack of progressive policy agenda, but, thankfully, also an active and supportive progressive community. As a whole however, the area is highly conservative. A major challenge for John is communicating ideas he believes strongly, without needlessly alienating those who strongly disagree.

John's views have only been further validated by MMT, which he specifically, and aggressively, learned for this interview. He started by reading The Deficit Myth, and then several academic papers, including Warren Mosler and Mat Forstater's 2005 The Natural Rate of Interest Is Zero, Stephanie Kelton's 1998 Hierarchy of Money, Abba Lerner's 1943 Functional Finance and the Federal Debt, and others as you'll find in this post: Several good first academic papers to learn MMT (for the layperson). Ramona and I are quite proud to not only support these candidates, but demand that they be better. We are grateful to John for being so open minded and enthusiastic.

You can support John's candidacy by visiting swobodaforcongress.com and @SwobodaOk on Facebook and Twitter. You'll also find a link to donate to his campaign in the show notes.

(A big thanks to Beyond the Spectrum for the "MMT Candidate" logo.)

There are three goals of this MMT candidate interview series:

the first is to support and give a platform to candidates who care about all people, and because of this, are ignored by the so-called news outlets that are, in reality, news of, by, and for the rich.
The second goal is to determine what these candidates need to beat corrupt opponents supported by a corrupt party in a corrupt campaign finance system, and especially, once in office, to avoid becoming corrupted themselves.
Finally, the third goal is to create a community of like minded, MMT-aware candidates who can support each other through their campaigns, and especially once in office. The latter is in order to remain focused on what really matters, which is all their constituents, in an environment where there is overwhelming pressure to focus only on the needs, favors, promises, and especially money of big donors – both in and out of their district.

And now, onto our conversation with candidate for Oklahoma's first Congressional district, John Swoboda. Enjoy.

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Welcome to episode 2 of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics.

(All episodes of Modern Money Donuts are listed on this page by Modern Money Labs.)

Today Steven and Gabie talk with Fadhel Kaboub, discussing the following questions: What is inflation, what causes it, what doesn't cause it and why has the inflation rate spiked in the USA and some other countries (not all – much less so in Australia and virtually not at all in Japan)? What are the best ways of managing inflation pressure points? What links the present inflation scare to the barriers to a Green New Deal and the problem of building a distributive and regenerative economy.

Here's the video from which this audio comes from. The audio is unedited.

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KRTD was honored to present the first panel discussion of the evening concerning economics and Modern Monetary Theory (MMT). We were joined by world famous MMT economist Stephanie Kelton and one of the original founders of MMT, Warren Mosler. We also spoke with Joe Firestone of the In-Depth show and #DumpTheIncumbents, Jeff Epstein of Activist #MMT - the podcast, Lisa Theobald of Knit The Revolution and the In-Depth show, Andy Kennedy of Macro and Cheese podcast, and long-time MMT activists and media contributors Ramona Massachi, Geoff Ginter, Mike Hall and Steve Larchuk.

(Here's a link to the second MMT panel.)

This audio is edited. For full context, see the original video from which it comes.

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Welcome to the premiere episode of Modern Money Doughnuts (MMD), hosted by Steven Hail and Gabrielle Bond. MMD is an international show about modern monetary theory and ecological economics.

(All episodes of Modern Money Donuts are listed on this page by Modern Money Labs.)

What have doughnuts to do with modern money? Quite a lot, as it turns out. Gabie and Steven explore the relationship between The Deficit Myth and Doughnut Economics, and explain why their show is named Modern Money Doughnuts.

Here's the video from which this audio comes from. The audio is unedited.

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Link to tweet

Welcome to episode 105 of Activist #MMT. Today is my first written interview, which is with Nathan Becker. Nathan is the pseudonym for… well, I've no clue 🙂… but he's a regular presence on Twitter (@netbacker) and secondarily on Reddit (u/ConnedEconomist). Nathan is a computer engineer whose job is to help businesses reduce and outsource their workforce. Like so many of us, we are needlessly forced to hurt others in order to do what's genuinely best for ourselves and our families. We start by discussing this dilemma.

With a couple important exceptions, Nathan is almost fully on board with Modern Money Theory (MMT). The first relates to the job guarantee, and the other, interest rates and their effect on inflation. Regarding interest rates, Nathan argues that Warren Mosler's assertion that "they have the interest thing backwards", is itself backwards. I had the opportunity to pose Nathan's assertions directly to Warren. His response, in both written and audio form, can be found at the bottom of this post.

Jeff:

Thanks so much for talking with me, Nathan. I've come across your name consistently since discovering MMT back in February of 2018, although we've admittedly not had much occasion to speak directly. Your pinned tweet is especially insightful.

Can you please introduce yourself? Then, can you please describe your life and thinking before discovering MMT (and potentially economics)?

Nathan:

Hi Jeff,

I am a computer engineering professional with over 30 years experience in this field. Over the last 20 years I specialized into being a systems engineering consultant who helps large and medium enterprises to optimize their IT infrastructure. These organizations bring me in to help them reduce their cost of IT. Typically each of these engagements lasts about 6 months, at the end of which I would have helped them significantly reduce their cost of IT operations.

In the initial years (2000 to 2010) these engagements were mostly about outsourcing. In the recent years, there's been a big shift in how these cost reductions and optimizations have evolved. Now it is mostly about automation. So now, I am brought in to automate people's jobs away. In all these engagements in the last 20 years, there is this common theme. The C-Level executives all have the same goal, to reduce the cost of labor. Have you watched the movie, Up In The Air? It sort of summarizes what I do for a living, my contracts are in corporate downsizing. In other words, I am brought in to fire people. Thankfully I don't have to do the firing people part, that's where their HR [Human Resources] comes in, but I help set the stage for this to happen.

Looking back at one of my biggest clients who brought me in the times over the past twenty years, I sadly reflect that I played a significant role in reducing their IT staff from over four hundred people to now about ten engineers, while their IT operations and infrastructure has scaled up like 30 times over. Though I enjoy doing the technical part of this job, I don't relish the human side of it. I believe most of these engineers who got let go, have all re-upped their skills to still be in the industry, but there is a significant group of people who were let go who have dropped out of the job market or taken up much lower paying jobs in other industries. Thinking of the number of people's lives I have directly affected, it does leave a bad taste and that's where my interest in economics, public finance and social good comes into play to help me redeem myself. More of this in a bit.

I mentioned the C-level executives earlier. Their objective in all these engagements was their short term gains. The client I mentioned earlier, each time I was engaged, I dealt with a different set of C-levels. Because the previous ones moved on after cashing their bonuses based on the savings I helped produce. So each time I was brought in, the baseline from where to reduce the cost was lower than before. So all this ends up with significant reduction in the number of people they employ, while their business size grows multifold year after year. We all have seen charts like these:

When the Great Financial Crash hit in 2008, it had a significant emotional impact on me. I had wrapped up multiple projects by then, which meant a significant number of people had just lost their good paying IT [information technology] jobs that I helped move offshore. Some ended up losing their homes as well. The crash didn't impact me professionally or financially, but hearing about all the people who I had worked with, either directly or indirectly, turned me into a mental wreck. Ironically, I was getting more offers from my clients to come in and speed up the downsizing. I couldn't bring myself to go back, so I took a break from the industry at the end of 2008.

Now, with lots of time on my hands, I spent it on reading the financial news about the impending doom and gloom. Sites like ZeroHedge, were predicting the US is going to go bankrupt, hyperinflation was coming, yada yada yada. I had accumulated a good amount of savings by then and had liquidated my stock investments, losing quite a big chunk during the crash. I believed in some of these doom and gloom and speculated in the market and lost even more money! That's when it struck me, that I did not know anything about what money really is. Like most people, I thought of money as something physical, so someone's loss had to be someone else's gain. So when I lost all that money, someone else should have gained that from me. Who was it? I couldn't trace that through the online rabbit-holes I was led into :) But whatever I was reading in the financial news talked about money being lost and everyone being the loser. So how could money just disappear? Then came all the news about bailouts and the big Tea-Party rant on CNBC by Rick Santelliz!

I had to understand money. I signed up for an online degree in economics, hoping that will help me understand what money is. My mentors recommended doing an MBA instead. I said no, I just want to know the basics about money. I did end up getting an economics degree in 2013, it wasn't a smooth journey. Because my online quest to learn about money was in conflict with what I was learning in my economics lessons in class. Hence my other handle, ConnedEconomist. 😃😄

During this time (2009 to 2013) I came across MMT and Monetary Sovereignty. I found Mosler's site, Roger Mitchel's mythfighter.com, New Economic Perspectives blog, and on and on.... During this time while I was getting my online Econ degree, I was seeing a big change in the IT landscape as well. The new mantra, "software will eat the world" started becoming the buzzword in my consulting circles. So I pivoted towards that, self teaching myself the new tools of the trade and got on to the AWS (Amazon Web Services) bandwagon very early. "Move to the Cloud" became the new "Outsourcing" model.

It paid off well for me. Now instead of shipping people's jobs overseas, I just automate their jobs out of existence. What used to take some 200 engineers in India to maintain, is now maintained by less than 10 people, while scaling out 30 or even 100 times bigger and complex infrastructure. It is amazing to see how the industry has changed. But the real problems are still the same. C-level executives looking to earn their big bonuses by downsizing their workforce.

So now I am still a mental wreck, even worse than who I was in 2008 I'd say. I live in two worlds. One in which all this new found knowledge about what money really is, and how the public purse can be put to use to benefit society at large and the other world in which the C-suites are still chasing their bonuses, politicians chasing their campaign contributions from the wealthy while going on television saying, "We are out of money, so can't do much but please continue to vote for us" Hey look! We now have the potential for an actual default by the United States in the coming days, because they cannot come up with the money.......

Which one is the real world? I don't know.

Jeff:

That's a terrible position to be in. The only way to survive is to please those above and crush those below. It's an inherent characteristic of our society. It's impossible to do what's right for you and your family without also hurting those with less, in the process.

It's terrible that for-profit companies let people go, but they genuinely need to reduce costs in order to survive. What's worse is that society allows those let go to splat onto the pavement at zero dollars an hour, in abject poverty – which, as we've learned from Pavlina Tcherneva, spreads like a disease through families and communities. Your company and, secondarily, you, are unfairly put in the position of a God; basically, choosing who lives and who dies. (You said you learned from ZeroHedge that "someone's loss had to be someone else's gain". This is truly the case, but only because government sits there passively, allowing its immense powers to lay follow.)

You might consider taking a listen to the very end of my interview with Neil Wilson (part one of episode 85, after the closing music). I talk about how I recently thought about this concept, when I purchased my first home just about three months ago. I'm doing exactly what's best for my family and I wonder how many with skin darker than my own were hurt in the process; both to obtain the land my home was built on (in 1893!), and the mortgage to purchase it.

Can you talk more about this conflict and how you deal with it? In your response, can you please address these two things:

Each time you return to the same company "the baseline from where to reduce the cost was lower than before." What does that mean?
Of those jobs eliminated, how many are (software-)automated, and how many are offshored? And how has that ratio changed over time?

Nathan:

Thank you for pointing me to the podcast with Neil. Neil is a great guy. Have added it to my bookmark and will listen to it in full sometime later. I listened to the part you pointed out and it resonates. You and I are in similar situations. It is a sort of a terrible position to be in. Here you are in the real world working with people who do not understand the real world, especially pertaining to money, and doing what they think is the best course of action without considering the fallout from their actions. So yeah, my wife and I do a lot of charity work and volunteering work on the weekends to "cleanse" ourselves.

Like you, we consider ourselves to be lucky too and ever grateful for the grace showered on us. That's why my passion towards understanding the concepts of a nation's currency being their public monopoly and making others understand these concepts is very important to me. I am hoping to be able to take more breaks from fulltime work and volunteer at grassroot organizations and help them understand these concepts so that they in turn can fight for these public goods and services from a point of strength. I did some of that during this past Presidential election cycle. I would like to do more of that in some of the Red States!

OK, now to answer your two questions.

Each time you return to the same company "the baseline from where to reduce the cost was lower than before." What does that mean?
Of those jobs eliminated, how many are (software-)automated, and how many are offshore? And how has that ratio changed over time?

Let me see how best to do this without rambling off tangent. Let's say when I was first brought to this client (2005), their IT Operating Budget was $100 million, which in the early 2000s was about 20% of their total Business Operating Budget and they are looking for a 25% reduction. At the end of engagement, I achieve that by basically helping them offshore their IT jobs. Those days it wasn't much about automation, it was just purely replacing bodies. For every US worker they fired, they could get the or even four offshore workers. So they retained 100 and let go of 300 workers in the US and replaced them with 400 workers in India and still ended up reducing their IT operating expense by about 25%.

Six years later (2011) they brought me in again. Their business had grown 2x by then, but their IT operating budget is no longer 20% of their business operating budget, it is about 15% - the new baseline. So even though they have grown in size their IT operating budget is still around the same dollar number, about $112 million which means, they have been operating with not much excess slack that can be easily cut this time around. But my contact was again to reduce their operating expenses by 25%! Fortunately for me the technology has changed for the better in these six years.

Virtualization and Hosted services are the new buzzwords. So this time around, my recommendation is around optimization of the infrastructure. Get rid of their inhouse data centers and server rooms and consolidate them using virtualization and have it hosted by some 3rd party hosting companies, like Rack Space. I did manage to squeeze out the savings they wanted by having them reduce their US staff to about 40 and the offshore staff to around 200 people. Third time around, in 2018, the new buzzword is Cloud.

Amazon Web Services(AWS) has changed the entire IT landscape, It was all about automation and pay-per-use. But the ask from the client is still the same: get them a 25% savings on the operating budget. AWS makes it easy to do this if done right. You basically re-imagine the IT infrastructure as something that can be rebuilt on the fly and then rebuilt often using software automation. At the end of this engagement, the client ended up having like five people in the US and about 10 or so offshore while their business had grown to 15x of what it was in 2011 and 30x of what it was in 2005. Their IT infrastructure is more complex now, but with automation, they don't need that many eyes and hands to keep things running.

Listening to Neil, it looks like he has the opposite problem of mine :) He is brought in to advise how to streamline or optimize government systems, but then they don't take his advice. That's one reason why I stayed away from government contracts.

Jeff:

It's fascinating, one of the sparks of your journey towards understanding the economy, was an interest in tracing with precision where your lost money went. If it's truly zero sum – if money really is a commodity – then to whom did your losses go? They had to go somewhere!

So you tried to do that tracing. Before realizing it was a fools errand, where did that lead you? (It reminds me of misunderstanding a book or piece of code in a dream, not realizing you're asleep, but determined to figure it out. Since it's a dream, at least for me, the text keeps changing and I get frustrated.)

Can you talk about the experience of attempting, or thinking about, that tracing, and how it led you to want to understand money, and ultimately to real world economics and MMT? What other sparks were there on your journey?

Nathan:

OK, trying to recall the sequence of rabbit-holes from 10 years ago is a challenge now. The sequence may be incorrect, but it mostly went like this...

I knew a little bit of what fiat currency meant. I also knew that we were no longer on the gold standard. Did not know the implications of what these two meant. Ok, to back up a little bit, some more background about myself. I used to be a libertarian and being from California and earning a big paycheck, looking at the amount of taxes I paid, like every other Libertaraian, I hated the government for taking my "hard earned money" away. Taxation is theft made sense then. So my journey on what is money led me to the Libertarian writings.

Listening to Goldbugs hyperventilating about the coming hyperinflation etc, I speculated in the Stock Market and lost a lot more money. Also during those days I had a long commute to work and used to carpool with a couple of other guys. They mostly listened to conservative talk radio shows. Everyday was about how Obama and the Fed was going to destroy the US economy and how the imminent collapse was coming. But the stock market was defying their views and I was losing money shorting the market. This again was where the theory did not meet the reality. So onward on my search to find the truth.

I started reading more about the origin of the Federal Reserve and the conspiracy theories about the Banking cabal etc. led me nowhere. So I started looking for articles that were the opposite of what the goldbugs and Libertarians were preaching. That's when I came across sites like Rodger Malcolm Mitchell's and his blog.

That was an eye opener. Initially, I was a sceptic, questioning and ridiculing him to the point of annoying him. The typical "First They Ignore You, Then They Laugh at You" phase of discovery. The light bulb moment wasn't instantaneous. I think it took a couple of years for all this to really sink in. During this time, I found more sites and people on Twitter who were expressing these views about money. So I came across resources like the blogs of Mike Norman and Bill Mitchell, and New Economics Perspectives. I also discovered people like Mosler, Ms. Kelton, Wray and many others.

The Debt Ceiling drama in 2011 helped solidify my understanding of fiat money as being a public monopoly. Another resource I used in the early years was this google group called understanding money. There were some very smart people on that list. In all these years of "research work" I had accumulated quite a few lists of blogs and commentators who knew what they were talking about. These include a few conservative commentators who understand economics but their political views override their views.

One such is this guy - Scott Grannis. He understood Fed QE and all the nonsense about the Fed printing money. This guy is a Supply Sider/Reagan worshipper who hates Liberals and "big government". In the same blog where he correctly explains what US treasuries are (safe assets) he would also say the US debt is a burden and unsustainable, or say things like the public sector is not productive and public workers don't add value to the economy etc. I use his site just for the economic data and insights and ignore his political rant. I tried arguing with him initially, but soon realized why risk getting banned from his site if I can get useful information from him ;) Why kill a golden goose with a foul mouth, all I care about is the egg. Lol

So, at this stage of my journey I had a good understanding about MMT, but like many others who came across MMT, I found it difficult to convince others to see the MMT point of view. This is still a challenge, especially with the trolls on Twitter ;) I got called being in a cult a few times and that hurt. So I began a new journey to find credible critics of MMT. So far, there aren't many on that list. Most just build a straw-man of MMT and then keep attacking that strawman and not address the actual weakness in MMT.

Having said that, I'd say I am not fully on board with MMT (not a MMT cult member!). I still have questions and in this journey, I formulated my own amalgamation of all these theories that made sense to me about what Money is. This is made up by borrowing concepts from MMT, Monetary Sovereignty and Credit Theory of Money. I summarize all this in my Twitter profile simply as "Economic policy encourages credit use and discourages the repayment of debt. That's how we in the private sector got so indebted." To me this is the root cause of our economic ailment.

Jeff:

I got called being in a cult a few times and that hurt.
...not a MMT cult member!

I know you're joking, but this issue is a big one for me. Not just as it relates to MMT, but bullying and exploitation in general:

I reject the idea that agreeing fully with MMT (as I do, as much as one can understand it after 3.5 years) means you have no agency but merely blind unthinking allegiance to certain personalities. Also, the term cult is not truly meaningful, but more a dog whistle to sound legitimate and neutral but indirectly and subtly encourage others to discriminate against a minority that dares to call the majority wrong.

Like "fake news". Sure. Maybe their reporting is inaccurate or misleading. Maybe. But much more than that, the term is implicit permission from the powerful, to the less powerful, to discriminate against those who challenge their power – regardless the accuracy of their reporting.

I also strongly disagree with mocking the insulting (dog whistle) term and who said it. It's just stooping to their level and making it worse, when we should be coming up with something better to replace it - or rejecting the assertion outright.

As a brief aside, the other anonymous interview I did was accompanied by a (non-anonymous) interview with a friend who came to MMT as a former libertarian. (Who is coincidentally joining me for dinner tomorrow night as I wrote this 🙂.)

My cynical interpretation of libertarianism is, "I got mine, screw all y'all." I'm pretty sure that among those truly destitute, there are not many hard-core libertarians. I also suspect the goldbug prediction of imminent collapse is not a prediction but a wish and a goal. Kicking the ladder to prevent government action desperately needed by the poor but they say will cause Armageddon.

I respect conservatives – and even racists – who publicly embrace the descrptive aspects of MMT, but still want to do terrible things. This is in contrast to those who say "we have to" do terrible things "because how're you gonna pay for it???" The former are honest about their hatefulness, the latter pretend they're not and hide behind myths.

You can respond to any of the above as you like, then here's a specific question for you:

"I am not fully on board with a MMT"

I assume you agree with the core of MMT's descriptive elements. What do you disagree with?

Nathan:

Oh, yes! I absolutely agree with the core of MMT's descriptive elements. I sometimes joke about it and say, MMT's basic elements are "good enough for government work." meaning at a high level MMT is a good enough description of our current monetary system. I just looked up that phrase and learnt that ironically this term now has the exact opposite meaning from what it was used for originally. Quoting from one of the web sources:

The phrase "close enough for government work" is generally believed to have originated during World War II. At that time, the phrase meant that a product met the highest standards of quality because the product would not be accepted by the U.S. military unless it met such exacting standards. Over time, popular culture began using the phrase in an ironic sense. Eventually, that ironic and sometimes disparaging usage of the phrase changed the common meaning from something that meets the highest standards to something that is just good enough to "get the job done".

MMT says most national governments are currency issuers, which is true. No one can dispute this MMT claim. MMT then says a currency issuing government cannot run out of their own currency, which is also true. But this is where the naysayers and trolls jump in and set up their straw-mans about Zimbabwe, Weimar Germany etc. Ignoring them for a moment, here again no one can dispute the claim that one cannot run out of one's own IOUs. Finally MMT says, the only way to get hold of a government's currency is for that government to somehow issue them first. I saved a snippet from one of Bill Mitchel's interview from years ago where he says:

You first have to ask yourself the question, "Where do you get the money to pay taxes and buy government bonds?" And the answer is that we can't get our hands on the currency until the national government spend it. Spending is the prior act in a fiat monetary system; taxing and borrowing are following acts. In effect, the government is only taxing what it has already spent, and it is only borrowing back money that it has already spent. Once you start pursuing this logic, you realize that most of the propositions that are occupying the current debate around the world are based upon false premises.

In my view, this snippet solidifies and summarizes MMT's core. For anyone to "break into" MMT with that "light bulb" moment they need to fully assimilate what Prof Mitchel said. If one cannot overcome their mental block over this, then one can never understand MMT.

This is also the core message in Prof Kelton's book, The Deficit Myth, where she introduces - How the Currency Issuer Spends: S(TAB) = Spending before Taxing and Borrowing and credits Mosler for that same insight.

According to Mosler, the government spends first and then taxes or borrows. That sequencing turns Thatcher's dictum completely around, reordering the mnemonic to give us S(TAB): spending before taxing and borrowing. By Mosler's reasoning, the government doesn't go around looking for someone else to pick up the TAB, it just spends its currency into existence. Warren saw things that most economists were missing.

— Excerpt From: Stephanie Kelton. "The Deficit Myth." Apple Books.

The second set of insights that Prof Mitchell brings up is understanding the sovereign currency-issuer and their default-risks. This is also where the non-believers and Trolls setup their straw-mans to attack MMT, and bring up for example, Argentina. Here again, I saved a snippet from Mitchell's blog:

Further, to refresh your understanding - the requirements for a sovereign currency-issuer with no default-risk are: 1. Issues its own currency. 2. Floats it on international markets - no pegs, etc. 3. Doesn't borrow in any other currency. 4. Doesn't off any guarantees of convertibility to another currency.

To me if a sizeable section of our society including most politicians and policymakers would understand, accept and publicly acknowledge these two core concepts, we should get MMT into mainstream conversations. This is my definition of "good enough for government work." or to rephrase it - Good enough to get government to work for all of us.

So, when I said "I am not fully on board with MMT" I meant the other aspects of MMT, especially around the relationship between interest rate and inflation and their nuances on Job Guarantee. These however fall under the "prescriptive" side of MMT.

One other "problem" I have with MMT is how they don't give enough emphasis on credit creation and the banking system. I mean they do explain this, but one has to go look for it to find it. You may have seen my Twitter arguments with Cullen Roche about this. He is another resource from whom I learnt a lot about macroeconomics and MMT. He discovered MMT around the same time I did and was initially fully on board and then split from MMT. To me, he is one of the few fair criticsw of MMT. But then, for his own reasons that I haven't yet understand, he too brings up straw-mans against MMT. But to his credit, I learnt a lot about credit from his writings. (See what I did there?)

Jeff:

Well. Setting aside bank credit, I'm curious to better understand the subtleties you disagree with regarding the job guarantee, interest rates, and inflation. If you're willing to share. I don't think I'm in a position to defend or argue (especially about interest rates), but it'd be nice to get a contrary view to compare MMT to as I learn it more deeply.

Nathan:

Ok, these topics (JG and the relationship between interest rates and inflation) are my favorites but also where I have at least to some degree disagreements with how MMT describes and prescribes solutions for them.

Let's start with the Job Guarantee. As a textbook concept, I am fully onboard with what both Bill Mitchell and Mosler say about Job Guarantee. I mean, as a theoretical concept they have it right: Anyone who wants a job, should find one; and a Job Guarantee can act as a floor for wages while creating a buffer stock of labor. Which is all good. But here's the rub. From what I can tell, JG was the brainchild of Prof Bill Mitchell, who is from Australia. Compared to the US, Australia has much better basic services in place already. The JG proposal has an additional tag line that doesn't get as much attention. Both Bill and Mosler's definition of a JG goes like this:

A government job guarantee is a proposed program where the government would provide a job with a basic wage and benefits package to anyone willing and ready to work. The job guarantee is one component of an overall program to stabilize an economy. The job guarantee is financially feasible when a sovereign government's currency uses a floating exchange rate.

I am highlighting a phrase in their definition, "and benefits package". This term is sort of brushed aside by most proponents of MMT, including Mosler and others who push the Job Guarantee program. When I say, brushed aside, I mean they take it for granted, especially in the context of the United States, as if it is a given that we have robust basic services in place, where the government can offer benefits like free healthcare for anyone anywhere in the United States. We don't have such a social safety net in the US like what's available in Australia. So implementing a JG to be the wage floor or as a stabilizer of the economy is going to be very difficult in the United States. We just don't have such a support system in the US.

So before implementing a Job Guarantee program, my recommendation is to focus on building a better social safety-net, especially related to health care. What we need is at a minimum a fully funded universal primary health care system all across the US that delivers medical care that is free at the point of care for everyone in America. No Red State vs Blue State nonsense. Federally funded primary care facilities based on population density. This by itself would be a massive federal jobs program while we build this all across the nation.

This is also where I am split between MMTers and the Basic Income folks. MMT says a FJG(Federal Job Guarantee) is superior to UBI(Universal Basic Income). Every time I have tried to argue with an UBI proponent about the superiority of FJG, I take a lot of heat, understandably. UBIers say the problem is lack of money, so give everyone some money so that they can use it to pay their bills or whatever. So they label MMTers as "ablists" because according to them, MMTers force everyone to work, even those who are unable to work. Of course, MMT does clearly define "anyone who is willing and ready to work". Willing and ready implies able to work as well and no one is being forced. UBI folks also don't want to fix the basic social safety net like primary healthcare to all in America, but want to directly jump to giving everyone a $1,000 basic income, as if that would solve the lack of access to healthcare in the US.

My proposal to MMT and UBI proponents is to first implement an Universal Basic Services program and then assess the need for either a Job Guarantee or a Basic Income program to stabilize the economy. I have plenty of Twitter threads where I have proposed my vision of Universal Basic Services: Healthcare that's free at the point of care; Public Education that doesn't require taking out loans which invariably can't be repaid; affordable housing and world class mass transportation accessible to all.

So to summarize, I get the concept of a Job Guarantee, while it is well intentioned and meets the overall goal of MMT as a price stabilizer, there are a lot of practical hindrances to get it going by itself, especially in the context of the US economy. That's why I am on the side of the critics of MMT's JG program, even though I don't agree with the critics, hardly any of them have brought this up in their criticism of FJG.

Jeff:

Interesting and reasonable.

I'd prefer to not go much further into this particular topic, but I'll just say that my view is, here in the US, we don't have basic services because we have a terribly unstable economy because we don't have basic services because we have a terribly unstable economy*. So, the answer is not just implement a JG or just implement basic services, but to fight for both. There are plenty who want to fight for a JG (me), plenty who want to fight for basic services (you), and likely plenty who want to fight for both. Let em all loose and whichever route is successful, then all those simultaneous efforts can only be a good thing.

*(My 15-year-old was virtual all school year last year. He frickin' wore pajamas all school year long. So he created a community for himself with tweens through the internet. Now he doesn't go outside because there's nothing there for him because he doesn't go outside because there's nothing there for him. It's quite a challenge. I probably need to think about this similarly as I just suggested to you in the JG/basic services context.)

Nathan:

Moving on to the next disagreement I have with MMT, is their view on the relationship between interest rate and inflation. Again, on paper, I get Mosler's point of view about interest rate and inflation, where he says, "the government is the net payer of interest, which adds to the incomes of people. Thus, higher rates are inflationary because it increases the spending power of people." To me, this may have been true in the 50s, 60s and even early 70s, where average Americans had significantly higher savings, such that a higher interest rates would fetch them higher disposable incomes. From what I can gather, the savings rate of bottom 80% of Americans are significantly lower or even non-existent today. Hence, those with the propensity to spend, have less opportunity to take advantage of higher interest incomes.

[A full response to this concern of Nathan's, by Warren Mosler (in both written and audio form), can be found at the bottom of this post.]

The other point Mosler makes about higher interest rate is the "forward pricing channel" where the cost to business increases with a higher interest rate. Again, I can see this also happening to a certain extent, but my view is that the cost of finance is already very high on businesses and even households or individuals because of our over-reliance on credit. As I say on my Twitter profile, we encourage taking on credit, but discourage paying down debt. The fact that businesses, households and individuals are all overextended on credit, any increase in interest rate has a negative effect on overall spending, thus not as inflationary as MMT proposes it would be.

When it comes to interest rate and inflation, I prefer Rodger Mitchell's view, which is:

The Fed's target rate of inflation is maintained by interest rate control, which controls the demand for, and purchasing power of, U.S. dollars. Increasing the demand for dollars reduces inflation; decreasing the demand for dollars encourages inflation.
When annual inflation drifts above or below the Fed's 2% target, the Fed quickly raises or lowers interest rates, i.e. raises rates to combat inflation; lowers rates to stimulate inflation.

When you look at the last 40+ years of data, this view is more realistic than what MMT proposes about interest rate and inflation.

This brings me to another issue I have with MMT, they do not discuss the significance of credit more often or more widely. They focus too much on government money creation while not giving equal importance to credit expansion in the non-government sector. This is one of the issues Cullen Roche also has with MMT.

Jeff:

I don't have my head fully around the topic of CB interest rates, but it's concerning that someone has it completely backwards!

I find the subject confusing partially because of all the different angles interest can be viewed from. It could be the cost of a loan (a cost for borrowers – negative), or higher income on an account (income for the account holder – positive). Both of these things can also be viewed from both sides of the transaction. the payer of the interest and the receiver (positive for one, negative for the other). I also don't know enough about the specific pathway of the Fed's interest payments, how banks respond to it, and how that flows out to the real economy.

Regarding banks, that seems to be the criticism that 97% of all money creation is bank money, so it's as, or more important than government-created money. Bank-created money always puts someone in debt, and the borrower is not out of debt until all the money's gone (fully paid back). Government-created money is the only kind that can create wealth (net financial assets). So even though it's much less, it's enormously important. The fact that bank-created money is almost all, is also a consequence of not enough government-created money (the lank of fiscal policy). Conversely stated, there is way too much freedom for the banks.

I think you're suggesting some more subtle things than that but that's how I understand the issue. I'm not they familiar but I'm not convinced that the subject is neglected in the MMT scholarship.

You can address some of the above, or perhaps give me a taste of what I'm missing.

After that, I‘d like to discuss your Winnie the Pooh pinned tweet. Can you describe it and discuss its significance? Both financially and than politically.

Nathan:

Yes, interest rates and their impact on inflation is a much debated topic with no agreed upon conclusions. To me, as long as we continue with the "Let Them Eat Credit" policies, wherein policymakers push the working class into taking on more and more consumer debt to maintain their standard of living, we would be stuck in this low interest rate regime to encourage consumption. My preferred solution is to encourage paying down debt while also increasing the disposable incomes of the working class using higher wages combined with single-payer healthcare and debt-free higher education. This would help clear the pent up demand for goods and services in our economy as consumers are unable or unwilling to make purchases to satisfy the demand at the present time. Initially this may be inflationary, but it would come with higher GDP, hence a positive for the economy.

Yes, you are right about bank created money, aka credit, it always puts someone in debt. I would like MMT to focus more on this and explain to people how government-created money, via deficit spending, helps the working class to rely less on bank created money. I frequently tweet a meme that says "They want you to worry about the National Debt (represented by a feather); so you will meekly submit to Private Debt (represented by a ball and chain tied to the US map).

Now about my pinned tweet. It basically asks a simple question: "The Federal government's General Fund supports about 1000 federal agencies. Only Social Security and Medicare benefits are limited by tax collections. No other federal agencies are limited this way. Why?" The thread then explains "The military isn't limited by tax collections. Payments for the Supreme Court aren't limited by tax collections. Nor are payments for Congress, the White House, the FBI, the CIA, the NSA and the rest of the government." And finally I ask again "Give me one good reason why Social Security and Medicare benefits are under constant pressure from those who quack about "sustainability," "balanced approaches," "fixes" and "reforms.""

My hope here is that anyone who visits my profile and clicks through this pinned tweet would also ask themselves these questions and begin their search for the answers which hopefully will lead them to MMT. From a financial and political point of view, this should open up people's minds about government budgets not being like a household budget, which seems to be a very common belief among most Americans, reinforced by people like Obama himself, when he famously said on prime time television "Families across the country are tightening their belts and making tough decisions. The federal government should do the same." This is wrong in so many ways and the damage that has been done is immeasurable.

Unlearning this ingrained message is a tough walkback. But if we have to make MMT mainstream, this is the first step towards redemption. I end that tweet thread with "Social Security and Medicare cannot run short of dollars unless Congress and the President wants them to run out of dollars." The responses to these tweets are an interesting mix. Either it is people calling me a socialist or this special one "Did you think money grows on trees?" Shows we have so much more work to do to spread the basic understanding of MMT.

Jeff:

My preferred solution is to encourage paying down debt...

Curious what that means, "encourage". Actually just a PR campaign, or something policy related? Otherwise agree, of course.

The wrong message has an overwhelming head start and advantage, as any social media post by Ted Cruz will make clear. Jumping into those comments is probably not the way to win people over. They're so conditioned with hatred, paranoia, and scarcity, there's something much deeper that must be dealt with before just telling them the basics of MMT.

(At the same time, if people have the patience to do that, and WANT to do it, then more power to them. I'm not going to join them 🙂)

You mentioned to me elsewhere about wanting to branch out to things that are not so familiar or comfortable, in order to avoid talking in an echo chamber, and spreading the word more effectively.

Nathan:

Yes, encourage paying down debt using policies. Today's tax policies encourage taking on large amounts of debt by allowing you to deduct interest on your mortgages and loans like student loans and even business loans. Even though the interest rates are low, the cost of finance is too high. And that's why it encourages the financial industry to come up with various "innovations" to extract as much dollars as they can while offering solutions to reduce the cost of finance. I'd like to see us move away from "Let Them Eat Credit" and towards, "Let Them Have More Disposable Income" policy. I am encouraged to see Biden's Build Back Better plans has lots of things in there that moves us towards that direction, but unfortunately the negotiations with the "moderates" is resulting in dilutions of these proposals. We may end up where we began, the middle class not getting the help they need from their federal government in the foreseeable future.

Yeah, after almost 10 years on Twitter fighting MMT trolls and MMT fanatics alike, I want to see how I can make my Twitter presence more meaningful. I am glad that Stephanie Kelton now has a newsletter where she writes more nuanced MMT points that have a better reach and acceptance. I want to learn her style of addressing the problem and also responding to MMT critics. Just yesterday, where I tried to bridge the differences on a long thread of back-n-forth with other MMT supporters and him.

I would also like to collaborate with people like you and others who have a platform where we can have more good-faith discussion on critiquing MMT and getting the critics to agree to accept the core principles of MMT.

As I mentioned on Twitter, November is going to be a very busy month for me at work, as we scale up to meet the demands of online shopping - Black Friday, Cyber Monday, Something Tuesday, Anything Wednesday, Need it Thursday, Want it Saturday and on and on.... Let Them Eat Credit Baby!

Jeff:

"…encourage paying down debt using policies."

Which is only possible by giving people money or a way to obtain it. I'm sure we agree on that. The job guarantee is an obvious solution to achieve this, but I'm unclear if you agree strongly with that.

"…you and others who have a platform…"

Nice to know someone thinks I have a platform :)

I'm really glad you took the time to do this very unusual interview with me. Before we stop, is there anything else you think needs to be said?

Nathan:

As I mentioned earlier, November is a busy month for me, so I will conclude our conversation with a list of recommended books along with books from MMT authors. These books helped me solidify my understanding of our monetary system and how the self-imposed constraints prevent us from achieving our fullest potential as a nation.

The Deficit Lie: Exposing the Myth of the National Debt (1997)
Neutering the National Debt: How Reagan Got It Right, and How Today's Left and Right Get It Wrong
Freedom from National Debt
Six Myths that Hold Back America: And What America Can Learn from the Growth of China's Economy
Pragmatic Capitalism: What Every Investor Needs to Know About Money and Finance
Understanding Government Finance
Modern Monetary Theory and the Recovery
1000 Castaways: Fundamentals of Economics
The Financial System And The Econiomy: Principles Of Money And Banking - Eric Tymoigne
Money From Nothing: Or, Why We Should Stop Worrying About Debt and Learn to Love the Federal Reserve
Debt: The First 5,000 Years, Updated and Expanded
The World After Capital

Jeff:

Nathan, thanks so much for doing this with me. I've always wanted to do a written interview and I think this turned out great. (To readers, this was a good 1.5-month-long conversation via email, starting in late September, 2021.)

I'm also glad to hear strong skepticism that's delivered in good faith and with respect, and that also refers to actual MMT, as opposed to something made up, as too many too often do. You clearly accept most of MMT's description.

It's been great talking with you and I'll see you back in Twitter and Reddit! :)

Nathan:

Awesome! I'm looking forward to the finished product :)

Appendix: Warren Mosler's full response Below is Warren Mosler's full written response to Nathan's disagreement regarding Nathan's assertion about the relationship between interest rates and inflation. , which comes from episode 104 of Activist #MMT, where Warren answers several patron questions. But first, here's the full audio of Warren's response. It's the first question posed to him in episode 104 (last week). Below is Warren's written response:

Nathan's question, written specifically for Warren:

While it is true that the federal government is a net interest payer and higher interest rates would lead to the government paying more in interest income; isn't it also true that the majority of Americans do not hold government debt as an asset that would earn them higher income but hold mortgages and other debt instead which have a negative impact with higher interest rates? So wouldn't higher interest rates be less inflationary given these circumstances in the US? What would be your recommendation for controlling inflation while also stimulating economic growth in such a situation?

Warren:

Households are net savers:

Nathan (duplicating from the post proper, above):

Moving on to the next disagreement I have with MMT, is their view on the relationship between interest rate and inflation. Again, on paper, I get Mosler's point of view about interest rate and inflation, where he says, "the government is the net payer of interest, which adds to the incomes of people. Thus, higher rates are inflationary because it increases the spending power of people." To me, this may have been true in the 50s, 60s and even early 70s, where average Americans had significantly higher savings, such that a higher interest rates would fetch them higher disposable incomes.

Warren:

Savings is higher now:

Nathan:

From what I can gather, the savings rate of bottom 80% of Americans are significantly lower or even non-existent today. Hence, those with the propensity to spend, have less opportunity to take advantage of higher interest incomes.

Warren:

That's why rate hikes are regressive.

Nathan:

The other point Mosler makes about higher interest rate is the "forward pricing channel" where the cost to business increases with higher interest rate. Again, I can see this also happening to a certain extent, but my view is that the cost of finance is already very high on businesses and even households or individuals because of our over-reliance on credit.

Warren:

Nathan:

As I say on my Twitter profile, we encourage taking on credit, but discourage paying down debt. The fact that businesses, households and individuals are all overextended on credit, any increase in interest rate has a negative effect on overall spending, thus not as inflationary as MMT proposes it would be.

Warren:

The GDP data doesn't support his statement.

Nathan:

When it comes to interest rate and inflation, I prefer Rodger Mitchell's view, which is:

The Fed's target rate of inflation is maintained by interest rate control, which controls the demand for, and purchasing power of, U.S. dollars. Increasing the demand for dollars reduces inflation; decreasing the demand for dollars encourages inflation.

Warren:

This ignores the state as a net payer of interest which increases the supply of net financial assets etc.

Rodger Mitchell, continued:

When annual inflation drifts above or below the Fed's 2% target, the Fed quickly raises or lowers interest rates, i.e. raises rates to combat inflation; lowers rates to stimulate inflation.

Warren:

Yes, but it doesn't work.

Nathan:

When you look at the last 40+ years of data, this view is more realistic than what MMT proposes about interest rate and inflation.

Warren:

I don't agree. And the Fed says their models are broken. Direct him to Richard Werner's 2017 paper showing interest rates lead inflation.

The Deficit Lie: Exposing the Myth of the National Debt

Pragmatic Capitalism: What Every Investor Needs to Know About Money and Finance

Money From Nothing: Or, Why We Should Stop Worrying About Debt and Learn to Love the Federal Reserve

Six Myths that Hold Back America: And What America Can Learn from the Growth of China's Economy

Neutering the National Debt: How Reagan Got It Right, and How Today’s Left and Right Get It Wrong

View Details

This snippet comes from episode 104 of Activist #MMT with Warren Mosler, where he answers patron questions, at around the 3-minute mark of the interview proper. It will be included into episode 105, which is a WRITTEN interview with Nathan Becker.

View Details

Welcome to Activist #MMT candidate interview number six, hosted by Ramona Massachi (Twitter/@RamonaMassachi) and co-hosted by me. Today, we talk with Ezra Watson, who's running to represent New York's twenty-first Congressional district.

(Here's a list of all MMT candidate interviews.)

Ezra was inspired to run by the January insurrection at the Capital building, and his own precarious job as a contingent worker in the semiconductor industry. Despite requiring highly specialized skills, he describes his job as comparable to, and precarious as, the gig workers employed by companies such as Uber and DoorDash. Ezra says a primary reason for the precariousness of these jobs is the lack of good healthcare options, which is sometimes prohibitively expensive or not option at all.

Ezra's running in New York's 21st Congressional district, which is enormous. It encompasses the Adirondack mountains and takes several hours by car to traverse. The district, which is agriculture-heavy, has for years voted almost exclusively Republican. Even so, the Democratic primary field is crowded, with a front-runner who is, not-so-surprisingly, a former CIA agent. Ezra's the only self-proclaimed Bernie Sanders-style progressive in the race, but the Republican incumbent calls every single Democratic candidate "a far-left socialist". This is leveraging nebulous and meaningless fear to give people a boogeyman to run away from, while marketing themselves as the only one who can ward these zombie-like boogeymen off. It's a lesser-of-two-evils race to the bottom, with no space for positivity or hope.

That's where Ezra comes in. The two pillars of his campaign are the Green New Deal and Medicare for All, the latter in response to his own difficulties in getting healthcare. (He's currently on a payment plan for what should have been a routine visit.) Despite being a long shot, he is fighting for people who have been deceived into believing that getting what they need can only hurt them even more. Modern Money Theory, or MMT, illuminates a large part of that deception. Ezra is enthusiastically learning MMT, and is determined to leverage it to provide some of that hope and positivity, and ultimately, desperately needed policy – whether they realize it or not.

You can support Ezra's candidacy by visiting watsonforcongress.org and @ezrawatsonforcongress on Facebook and @EzraWatsonforNY on Twitter. You'll also find a link to donate to his campaign in the show notes.

(A big thanks to Beyond the Spectrum for the "MMT Candidate" logo.)

There are three goals of this MMT candidate interview series: the first is to support and give a platform to candidates who care about all people, and because of this, are ignored by the so-called news outlets that are, in reality, news of, by, and for the rich. The second goal is to determine what these candidates need to beat corrupt opponents supported by a corrupt party in a corrupt campaign finance system, and especially, once in office, to avoid becoming corrupted themselves. Finally, the third goal is to create a community of like minded, MMT-aware candidates who can support each other through their campaigns, and especially once in office. The latter is in order to remain focused on what really matters, which is all their constituents, in an environment where there is overwhelming pressure to focus only on the needs, favors, promises, and especially money of big donors – both in and out of their district.

And now, onto our conversation with candidate for New York's twenty-first Congressional district, Ezra Watson. Enjoy.

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Welcome to episode 104 of Activist #MMT. Today's part two of my two-part conversation with Warren Mosler, where he answers several patron questions. You'll find all them, with written responses from Warren (including data from FRED) below.

In part one Warren talked about how his ideas for MMT came partially from a love of tinkering and, more broadly, a desire to understand complex systems. Those systems can be physical, such as controlling electricity with wires, batteries, light bulbs, and soup cans as a child, or race cars and large passenger ferry boats as an adult. These systems can also be conceptual, such as by playing chess and bridge as a teenager.

Before we begin part two, a few notes:

First, a country trading raw resources such as coal, for highly processed products such as televisions, is, as Warren says, not inherently a bad thing. What's bad, as illuminated by the work of Fadhel Kaboub and others, is when a country is coerced into making a trade they don't want to make.
Second, Warren gives many examples of how government's interface with its citizens is poor, from anxious cops during routine traffic stops, to regulators making blatant mistakes that can only be undone through inordinate – and very expensive – red tape. I believe strongly, and as best as I understand, that these incidents are symptoms of the larger problem that the rich bribe our so-called elected representatives, and lock the poor out of their government in myriad ways. The poor have no avenues to stand up to these small injustices, so the rich have no incentive to stop this terrible behavior.
And finally, Warren describes one of these incidents, when his company was extorted by the IRS for a million dollars, to resolve a blatant error by the IRS. Like student loans, of which ninety percent are owned by the US Department of Education, this is another example of a currency issuer demanding money that it clearly does not need in any practical sense.

And now, back to my conversation with Warren Mosler. Enjoy.

Patron questions, with written answers by Warren Mosler Nathan Becker

While it is true that the federal government is a net interest payer and higher interest rates would lead to the government paying more in interest income; isn't it also true that the majority of Americans do not hold government debt as an asset that would earn them higher income but hold mortgages and other debt instead which have a negative impact with higher interest rates? So wouldn't higher interest rates be less inflationary given these circumstances in the US? What would be your recommendation for controlling inflation while also stimulating economic growth in such a situation?

Warren's response:

Households are net savers

(For much more on Nathan's question, including more detailed responses by Warren, please see the bottom of next week's interview, episode 105, which is a written interview with Nathan [the link will be made available here on Sunday, January ninth]).

Susan Eldridge, question one of two

If we have to tax to give value to the USD, what is the best way to to ensure everyone shares this tax obligation fairly?

Warren:

Free healthcare, Free education, Job Guarantee, 0 rate policy, property tax, high quality low cost public transportation, etc.

Susan:

What about taxing corporations?

Warren:

Regressive- it's paid by the consumer

Susan:

Can we reduce wealth inequality by a wealth tax?

Warren:

Maybe some, but easier/more effective to eliminate the source as per my proposals

Susan:

Since we already have progressive taxation isn't the problem due to tax loopholes? Would enforcing tax laws already on the books reduce wealth inequality?

Warren:

Probably not. And more important, the real compliance costs are something like 15% of gdp and those real resources could otherwise be for the benefit of all.

Ganesh Balamitran

When the Govt spends (say to create infrastructure), doesn't it create new assets in exchange for the spending?

Warren:

Spending adds $ to bank reserve accounts and those $ are new net financial assets.

Ganesh:

Could we say the budget is balanced with these new assets that are created against the liabilities of the Treasuries issued.

Warren:

You can say the accounts balance but 'the budget' has its own definition.

Ganesh:

Does it need to be balanced with revenues (taxes or pay-fors)?

Warren:

Not per se.

Ganesh:

Where (in its books) does the government value and list all the new assets created? (If we spend billions to educate our youth, those human resources are also new assets worth billions to the economy, if not more).

Warren:

That would be on the balance sheet which it generally doesn't prepare or present.

Ganesh:

Just trying to see if there is another way to work around the 'Balancing the Budget' argument. A friend of mine (who I introduced to MMT) asked me this question, so I thought I would pose it here. He felt like if we could keep some of the sound economics framework by speaking of all the new assets that come from the spending, it would be more palatable to people and politicians.

Warren:

Doesn't work that way, sorry.

Advait

What does Warren think of the idea to eliminate all sub-national taxes? Instead of states, cities, counties, localities, etc collecting local taxes, all of them just submit budgets to the national govt and the govt gives them whatever money they demonstrate that they need.

Warren:

I've proposed those taxes be eliminated and the states get per capita annual grants sufficient to cover desired state and local budgets.

Advait:

Get rid of all the many layers of sub-national tax collecting apparatus and staffing. The national govt would have sufficient budget analysts and auditors to make sure all the budgets are reasonable and sufficient for the well-being of local citizens.

Warren:

The per capita formula simplifies that as well.

Advait:

There could be a national "standards of public service" which dictates and mandates all the public services to be provided to all citizens for their well-being and flourishing. No more instances of localities going bankrupt or defaulting. No more blatantly unfair local tax codes. Eliminate all sales tax except as needed to encourage socially healthy behavior (like taxes on cigarettes, alcohol, yachts, luxury items, unhealthy foods, etc.) Also eliminate all local taxation to fund public schools; all schools get the same money per child from the national govt (perhaps adjusted for local cost-of-living variations). Imagine the elimination of all the time and effort that goes into calculating, paying and processing the myriad of local taxes. Warren; your thoughts?

Warren:

Yes, as above.

Advait:

And many thanks to you, Warren, for your tireless efforts to spread the word on MMT! Great work!

Warren:

Thanks!!!

Greg Olsen

Since the MMT lens reveals that foreign exports are a real cost for the exporting countries, why do sovereign governments place foreign trade so highly?

Warren:

Their exporters are in control of the narrative maybe?

Greg:

In Australia, where I live, the performance of our economy is always predicated on a favourable export market. This is never challenged by politicians nor economics media journalists. Why is this so?

Warren:

How powerful politically are your exporters?

Greg:

I would imagine that exports are OK when a sovereign country's needs have been fully met through their own production of goods and services. Does that align with the MMT view of the value of exports?

Warren:

Yes. Exports are the cost of imports.

Kevin Shea

Ask Warren to comment on the velocity of money vis-a-vis the money supply and inflation, and the effects fiscal spending has on the money supply, the velocity of money and inflation.

Warren:

*No need to do that.

Just count bodies in the JG pool and decide if it's too many or too few, then adjust fiscal accordingly.*

Kevin:

Ask Warren to please provide data on his interpretation of the effects of rate increases through the interest income channel, i.e., specifics on the amounts of interest income pumped into the economy with a rate increase versus the slow down effects of the same rate increase on lending and the economy.

Warren:

Those are the propensity to spend from interest income. My Fed contact said they are pretty close to equal, but that he believed they may be a bit higher for borrowers.

Susan Eldridge, question two of two

A little euro centered but my other question has to do with the oft repeated refrain that other countries pay much more in taxes (eg Denmark, Sweden, Norway) but they get more social services. So we should do the same here. But while they issue their own currencies even though they belong to EU (I think) they are pegged to the euro so is that why they pay much higher taxes?

Warren:

No, it's because of the higher public spending on goods and services, including healthcare. Tax liabilities create sellers so gov can buy. More buying requires more tax liabilities, all else equal.

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Welcome to episode 103 of Activist #MMT. Today I talk with Warren Mosler about how his ideas for MMT partially came from a love of tinkering and, more broadly, a desire to understand complex systems. He starts by talking about how, at the age of eight, he unknowingly built the fundamental elements of modern computers, using nothing more than wires, batteries, lightbulbs, and soup cans. As an adult, he built race cars driven by professional drivers. He also designed and prototyped a 60-passenger ferry that was built and is still in use today, because it's much more durable and efficient than what came before it.

(Here's a link to part two with Warren.)

Links to snippets from this two-part episode with Warren Mosler:

Some people just process faster. (from part one; 7 minutes, 28 seconds)
Warren Mosler on the OPEC oil crisis. (from part one; 14 minutes, 16 seconds)
Responding to Nathan Becker on interest rates and inflation (this can be found at the bottom of episode 105 with Nathan Becker [my first written interview].) (from part two)

(Regarding wires, batteries, and lightbulbs, and how they relate to modem computer systems, I can't recommend the 2000 book CODE: The Hidden Language of Computer Hardware and Software, by Charles Petzold, highly enough.)

We then talk about what came between, when he played chess and bridge during high school. Like economics, these games are purely-man-made systems of rules, which are decided on by a collective. Unlike economics, no game is used as justification to craft, or not craft, policy desperately needed by millions. Warren talks about how he chose to learn the rules of these games thoroughly and to play them very well, but not dedicate the time required to reach the top echelons of professional players.

Towards the end of today's episode, Warren gives his detailed view of the causes of the OPEC oil crisis, which he witnessed first hand while searching for his first job fresh out of college.

Next week in part two, Warren answers several patron questions, and we end with a very interesting discussion about the poor interface between government and its citizens, and the possible causes of it.If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons of Activist #MMT have exclusive access to several full-length episodes (including part two with Warren), right now. A full list is here, each with a brief highlight.

Patrons also get the opportunity to ask my academic guests questions (like next episode with Warren!), and they support the development of my large and growing collection of learn MMT resources – among other MMT things. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, onto my conversation with Warren Mosler. Enjoy.

Resources * 2018 Richard Werner paper that interest rate changes "lead" inflation: Reconsidering Monetary Policy: An Empirical Examination of the Relationship Between Interest Rates and Nominal GDP Growth in the U.S., U.K., Germany and Japan * John Kenneth Galbraith book, The Affluent Society * John Kenneth Galbraith book, The New Industrial State * Michael Caine, Ipcrest File

https://imgur.com/0coSEYV.jpg

Code: The Hidden Language of Computer Hardware and Software

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This snippet comes from episode 103 of Activist #MMT with Warren Mosler, called Chess, Bridge, and MMT (always tinkering), at around the 52-minute, 30-second mark of the interview proper.

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This snippet comes from episode 103 of Activist #MMT with Warren Mosler, called Chess, Bridge, and MMT (always tinkering), at around the 17-minute mark of the interview proper.

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Welcome to Activist #MMT candidate interview number five, hosted by Ramona Massachi (Twitter/@RamonaMassachi) and co-hosted by me. Today, we talk with Muad Hrezi (Twitter/@muadhrezi), who’s running to represent Connecticut’s first Congressional district.

(Here's a list of all MMT candidate interviews.)

Muad graduated UNC Chapel Hill in North Carolina with a bachelor's degree in public health and health policy. He spent three years as a staffer for Senator Chris Murphy, and is now running himself. A major catalyst for his deciding to run was a personal experience of what should have been a minor health problem, turning into a major health crisis. This is because the minor problem was neglected, exclusively for a lack of money. Muad also mentions, while a Senate staffer, when a doctor told him of a tooth infection that was left untreated and spread to the person’s heart, ultimately requiring heroic intervention. This enriched all those who saved this person's life (or at least, the owners of the hospital), at the expense of the suffering and lingering health consequences for that individual – and his family and entire community.

Muad's campaign is off to a roaring start, having raised more than $200,000 with more than eight months to go before his primary in August of next year. You can support Muad's candidacy by visiting hrezi.com and @muadhrezi on Facebook and Twitter. You'll also find a link to donate to his campaign in the show notes.

(A big thanks to Beyond the Spectrum for the "MMT Candidate" logo.)

And now, onto our conversation with candidate for Connecticut's first Congressional district, Muad Hrezi. Enjoy.

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Welcome to episode 102 of Activist #MMT. Today's part two of my two-part conversation with Derek Ross. Derek's a Nova Scotia resident who's been a chorus member in theatrical productions for four decades, in shows such as "The Pirates of Penzance" by Gilbert and Sullivan. He and his wife also run a bed and breakfast.

In part one, we spent the first half talking about the non-economic topics of music and musical theater, and solar panels and electric cars. Today we continue our conversation on the basics of Georgism and its relationship to MMT.

And now, back to my conversation with Derek Ross. Enjoy.

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Welcome to episode 101 of Activist #MMT. Today I talk with Derek Ross on the basics of Georgism and its relationship to MMT. Derek's a Nova Scotia resident who's been a chorus member in theatrical productions for four decades, in shows such as "The Pirates of Penzance" by Gilbert and Sullivan. He and his wife also run a bed and breakfast. He was especially helpful in providing feedback for an introductory presentation I developed early this year. Unfortunately, it never came together, but it has many valuable concepts and analogies I still use today. I met Derek in the Facebook group Intro to MMT, which is very busy and has more than 6,000 people, and for which I am a moderator.

(Here's a link to part two.)

Derek first discovered Georgism and later the work of Steve Keen, which ultimately led him to MMT. A main insight of Georgism is that taxing land is a much more elegant way to make a system that's both fair and more difficult to exploit. Although humans can manipulate and destroy buildings, they can't eliminate the land those buildings are on. As an example, I have a friend who's a general contractor. He tore down an old house and built a new one for his daughter. However, he left one wall in the old building standing, which prevented it from being legally considered as new construction, thereby avoiding extra fees and newer regulations.

Land as defined by Georgism is not just the Earth but conceptual, like internet URLs, and the bandwidth for television, radio, and cell-phones. Taxes, or rents on that land can be paid with money, such as interest for a bank loan and taxes for living in a country. They can also be paid with not money, such as by having to provide a certain amount of labor to the king each year, or a percentage of the harvest.

Going beyond Georgism, Physics makes it clear that the most fundamental resource is energy. Resources – and we – are, essentially, forms of energy. In addition, all energy requires energy to find, gather, and process it. Three examples:

Food must be grown, transported, stored, cooked, served, consumed, and cleaned up from. This requires energy
Gold must be dug up from one hole and then put in another, such as a box or vault, so it can be protected forever. This requires energy
Labor must be fed, sheltered, clothed, educated, protected, paid, entertained, etc. This requires energy

Derek has provided several resources for those interested in learning more. You can find links in the show notes.

Before the heart of our conversation, however, the first half of today's episode, part one, is about the non-economic topics of music and musical theater (I'm a classically trained singer), and then solar panels and electric cars. Part two, next week, is entirely academic.

If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons get super-early access to almost every episode. Patrons also get the opportunity to ask my academic guests questions, and they support the development of my large and growing collection of learn MMT resources. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, onto my conversation with Derek Ross. Enjoy.

Resources * People to read and follow: Tim Garrett (his website on viewing the global economy through an energy lens) and Blair Fix. * Not an entirely MMT-compatible source, but a valuable book: The Economic Growth Engine: How Energy and Work Drive Material Prosperity (consider reading the introduction) * Kate Raworth's book, Doughnut economics: Seven Ways to Think Like a 21st-Century Economist. This discusses how we have to take energy into account when we talk about the future of economics. Here's a presentation on the book by the author. * Weird Al Yankovic songs: Hardware Store and Jerry Springer * From Derek: "Here's a tough patter song from Ruddigore (retrofitted into Pirates), It Really Doesn’t Matter. Bad recording quality but an excellent performance." * Another Gilbert and Sullivan patter song: I Am the Very Model of a Modern Major General from Pirates of Penzance. (Here’s my #MMT parody of this song.)

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Welcome to episode one hundred of Activist #MMT. Phew! Today I talk with standup comedian and progressive video podcaster, Ron Placone. When there's not a global pandemic, Ron and Graham Elwood join together for a comedy tour. They've traveled all over the United States as well as Australia. I had the pleasure of seeing them twice in Philadelphia in 2019. The third time would have been October 9th, 2021, were it not for the Delta variant... and our government not doing anything about... well, anything.

Today, Ron and I talk about how he discovered MMT, especially through David Graeber's 2011 book DEBT. It was recommended to him by Steven Hail, over beers the day after a live show with Graham in Adelaide, Australia, in late 2019. After describing his journey to MMT, Ron then expresses two of his concerns about MMT, regarding how to apply the theory and also with some of the practices of a small amount of its supporters.

Among many other things, Ron and I dig into the major (but cordial!) disagreement we've had ever since meeting in August of 2018. Despite knowing that taxes don't pay for stuff at the national level, Ron believes strongly that leveraging the idea is a valuable political messaging tool. I say it's counterproductive. Really counterproductive. Take a listen and see what you think.

Beyond economics and politics, Ron and I share a love of music. For the past three years, I've been a small part of nearly every Ron Placone video and podcast, providing harmony for his theme song. In fact, the day this episode was recorded was the first that a new, more laid-back version of his theme, with new harmony, was debuted.

Finally, at the very end of today's episode, after the closing theme music, you will hear Ron and my live performances in Philadelphia. We sing (the original version) of Ron's theme song, and then our cover of Tom Petty's Last Dance for Mary Jane. Ron is on the guitar and lead vocals, and I sing harmony, whistle, and play percussion. (With a big thanks to Geoff Ginter, the person who introduced me to MMT, for the guitar.)

You'll find links to several episodes of Ron's show over the past three years, with both me and Steven Hail, in the show notes. A final thing regarding today's episode: a minor kind-of correction: the person with Steven Hail in Australia was Phil Lawn.

I also want to mention that, as always, you will a find a duplicate of today's spoken introduction at the very (very) end of the episode. (It normally comes after the closing theme music.) This is for those who wish to hear it without even quiet music in the background. I started this more than a year ago at listener request.

You can contact me directly on Twitter or at activistmmt@gmail.com. If you like what you hear, please consider becoming a monthly patron of Activist #MMT. For as little as a dollar a month, all patrons get super-early access to nearly every episode. They also get the opportunity to ask my academic guests questions, and they also support the development of my large collection of learn-MMT resources, among several other things. To become a partition, you can start by visiting patreon.com/activistmmt. Thanks.

And now, onto my conversation with Ron Placone. Enjoy.

Resources * The original unedited video where this episode comes from. * Ron interviews Steven Hail in October, 2020: + Full video + Segment: An MMT Q and A + Segment: Do politicians pretend to not understand MMT? + Segment: The importance of MMT for a Green New Deal + Segment: How to push for an MMT future outside of electoral politics * Some of my appearances on Ron's show: + My original appearance: August, 2018 + May 2020 + MMT Monday, July 2021

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Welcome to Activist #MMT candidate interview number four, hosted by Ramona Massachi (Twitter/@RamonaMassachi) and co-hosted by me. Today, we talk with Stephanie Gallardo, who is running to represent Washington state's ninth Congressional district.

(Here's a list of all MMT candidate interviews.)

Stephanie's a former high school history teacher and was in union leadership for more than a decade. Her catalyst for running for Congress was her concern about how her current Congressman treated union members during an in-person meeting.

The ninth Congressional district is the state's only minority-majority district and, no coincidence, the location of the state's only immigrant detainment facility. As the wife of an undocumented immigrant, this is an especially disturbing an ever-present reality.

Like so many of us, Stephanie and her husband are living paycheck-to-paycheck, and in a home they can only afford thanks to the money left from her father's passing. I'm also a new and first-time homeowner, and although the pandemic allowed us to accumulate (and not spend) a good chunk of money, there's no way we would be in the house we're in without the generous help of our families. Pre-COVID, I would'nt have been able to send my young boys to summer camp year after year without my father paying for it. I have another friend in exactly the same position. This is yet another thing about our society that is unsustainable.

On a positive note, Stephanie's campaign is off to a great start, having already raised nearly a quarter of what she needs with more than nine months left to her August 2022 primary. She's also receiving the support and guidance of Sarah Smith, the progressive who ran by far the most successful campaign against Stephanie's opponent in 2018. Stephanie also has a small army of volunteers ready and waiting to be mobilized, which will begin knocking on doors in January.

(A big thanks to Beyond the Spectrum for the "MMT Candidate" logo.)

You can support Stephanie's candidacy by visiting electgallardo.com and ElectGallardo on Facebook and Twitter. You'll also find a link to donate to Stephanie's campaign in the show notes.

And now, onto our conversation with candidate for Washington state's ninth Congressional district, Stephanie Gallardo. Enjoy.

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Welcome to episode 99 of Activist #MMT. Today's part two of my two-part conversation with fourth-year MMT activist Bill Brennan. In 2017, Bill ran for the Democratic nomination for New Jersey governor. In 2016, Bill filed a citizen's complaint against then-Republican governor Chris Christie. We talk about both of those things in part one. Today, Bill and I continue discussing his journey to MMT and his relationship with his many conservative friends and their circular arguments.

But for now, let's get right back to my conversation with Bill Brennan, who you can find on Twitter at @BillBrennanSays. Enjoy.

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Welcome to episode 98 of Activist #MMT. Today I talk with fourth-year MMT activist Bill Brennan (Twitter/@BillBrennansays). In 2017, Bill ran for the Democratic nomination for New Jersey governor. In 2016, he filed a citizen's complaint against then-Republican governor Chris Christie for his role in the the Bridgegate scandal. Bill obtained damning sworn testimony from a Christie staffer, resulting in a finding a probable cause. This meant the accusation was legally acknowledged as being a valid one. The Christie administration objected, but instead of dismissal, it resulted in Bill's finding even more sworn testimony from another staffer, and a second finding a probable cause. The case lingered for several months but Christie was never charged or given a penalty. This is partly because the prosecutor decided not to pursue the case, claiming a lack of evidence. A prosecutor who was personally appointed by Governor Christie, and who could be arbitrarily fired by the governor at any time, for any reason.

(Here's a link to part two.)

I met Bill during his run for governor, as a local independent journalist. My outlet was called Citizens' Media TV, which, without exaggeration, covered the secondary candidates in the Democratic primaries more than any other news outlet in the state. I also had the honor of moderating a debate between Bill and another Democratic candidate, plus two Republican candidates. Our debate took place outside the official debate, where only those with big donations could enter.

Bill discovered MMT at least a year before I did, but remained skeptical until only recently. I'm happy to have played a small role in pushing him over the edge, such as by introducing him to the concept of reserve accounting. Reserve accounting shows how simple it is for money to flow around the economy and, indeed, the world.

Bill's also is in the unique position of being a progressive surrounded by highly conservative friends. As a consequence, he can boil some of their arguments down to their essence. He also has some unique analogies to share, which bring these ideas home. One of his conversations with his friends inspired me to write an MMT resource post: National debt versus personal debt (in reality).

(Before were begin, a minor correction: I work in a school but I'm not a teacher.)

And now, onto my conversation with Bill Brennan, who you can find on Twitter at @BillBrennansays. This is part one of a two-part conversation. Enjoy.

Resources * The audio snippet of Bill at the criminal-justice forum comes from around the 1-hour, 10-minute mark in this video. * 5 things to know about anti-Christie Bridgegate crusader Bill Brennan * Bill files a (non-Bridgegate) complaint with the New Jersey state ethics commission * Resident Sues Township Over Bello Serving on the Environmental Commission * Endorsement of Bill Brennan's candidacy by my copy editor, Ben Szioli. * Interview: Bill Brennan on New Jersey's proposed changes to render citizens complaints ineffective * My exclusive coverage of Bill Brennan's lawsuit of Bridgegate figure David Sampson. * All my coverage of Bill at Citizens' Media TV:

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Welcome to episode 97 of Activist #MMT. Today’s part two of my two-part conversation with Ramona Massachi. Last week in part one, we discussed our new interview series with MMT candidates. As I read these words, we’ve already scheduled seven. Today, in part two, we talk about various concepts we’ve learned in the past year, all centering around the idea of taking care of those at the bottom. This is something that our of-by-and-for-the-rich laws and media make extremely difficult. Taking care of the poor is not just a virtue and the right thing to do, it’s necessary for saving our species. If you think of all humans as a single person, that person has a terribly infected foot. It’s now spread up to his knee, and there’s a dull but obvious red line connecting the two. We pretend that foot’s not part of us. We’re deceived into thinking it’s not part of us or connected to us. Soon enough, however, that red line will work its way to the rest of our body and will become unstoppable.

We are all in this together, whether we like it or not. The longer we keep neglecting those at the bottom, the sooner we – me and everyone listening to the show, with their comfortable homes and cars, and affordable health insurance, will become those at the bottom. We will start dealing with these problems and control our destiny, or we can enjoy our second-class amenities in blissful ignorance until the waterline reaches our staterooms.

And yet, as Mr. Rogers says, in a crisis, look for the helpers. We have no choice but to take a breath and learn the true cause of our problems, and our own role in exacerbating them. Part of that is recognizing our own privilege. There is no other planet for us, there is no other government for us, there is no political savior. We are all we’ve got. As Ramona says, reality is what we think it can be. If something is physically possible, then we can do it. So let’s envision what’s possible and start doing it. Start discussing it. Because what else is there?

And now, back to my conversation with Ramona Massachi. Enjoy.

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The snippet comes from episode 100 of Activist #MMT with Ron Placone, at around the one hour 10 minute mark.

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Welcome to Activist #MMT candidate interview number three, hosted by Ramona Massachi and co-hosted by me. Today, we talk with Neal Walia, who is running to represent Colorado’s first Congressional district. In his very first quarter as a candidate, in his first time running for office, Neal raised $100,000. It’s both extraordinary, and not nearly enough, paling in comparison to the $2 million expected to be raising each quarter by his incumbent opponent who is, no surprise, a powerful corporate Democrat. Neal, however, raises money from only actual human beings, so beating his opponent’s fundraising numbers is only possible by becoming someone he’s not. Neal is a candidate who cares about all people, and is standing toe-to-toe with a candidate who cares about some people more than others. Neal is dedicated to proving that it’s possible to win a campaign without compromising your soul – or your constituents – in order to inflate your fundraising totals.

(Here’s a list of all MMT candidate interviews.)

Although policy is paramount, Neal also discusses some of the secondary goals of his campaign and once in office. This includes supporting other progressive candidates, educating his constituents on policy, how Congress negotiates, and how bills are actually funded. Neal also mentions how sharing part of his personality with voters and constituents provides important context when evaluating him and his policy platform. As the host of a podcast substantially about providing context through personal stories, I obviously agree this is important.

(A big thanks to Beyond the Spectrum for the "MMT Candidate" logo.)

Finally, Neal indirectly inspired this MMT candidate interview series. Fadhel Kaboub, who I recently interviewed in episodes 91 and 92, asked if I would consider interviewing Neal. Having already worked with Ramona to introduce candidates to a MMT in late 2019 and early 2020, I asked if she would consider hosting. She not only said yes, we decided to create an entire series, as we discuss and EPISODE_96. Since Ramona is in contact with well over 100 candidates, finding interview subjects has not been one of our problems.

You can support Neal’s candidacy by visiting nealwaliaforcongress.com and NealforCD1 on Facebook and Twitter. You’ll also find a link to donate to Neal’s campaign in the show notes. Neal’s Instagram is @neal_k_walia and his YouTube channel is Neal Walia for Congress

If you’re a candidate and would like to be interviewed by Ramona, please contact her directly on Twitter at @RamonaMassachi, or me at activistmmt@gmail.com. If there's a candidate you would like to see interviewed by Ramona, please let us know, and please recommend us to them!

If you like what you hear and would like to support this interview series and this podcast, please consider becoming a monthly patron at patreon.com/activistmmt.

And now, onto our conversation with candidate for Colorado’s first congressional district, Neal Walia. Enjoy.

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Welcome to episode 96 of Activist #MMT. Today I talk with Ramona Massachi, a year after our first conversation in episodes 47 and 48. Early last year, we worked together to introduce dozens of federal candidates to MMT, by coordinating and scheduling them with private sessions with PhD economists. Now, for November 2022, we are overwhelmed with candidates who already know MMT. It’s time to take the theory and start applying it to the real world.

(Here’s a link to part two.)

In addition, it’s also time to start preparing for being in office and remaining true to yourself and all your constituents. This is something our electoral and campaign-finance systems try very hard to stop. The system corrupts even the best of us. For these reasons and more, Ramona and I have decided to start a series of interviews with these MMT candidates. Our goals are to better understand how they will get in the office, how they will manage once in, and what specifically do they need from us as supporters, from their fellow MMT candidates, and from MMT academics.

Ramona and I talk about the 2022 campaign and what she hopes to get out of these candidate interviews and what they can contribute: for publicity, for learning, and for creating a community of candidates that can get in, hit the ground running, and prevent being deceived by, among other things, false economics.

The candidate interviews are hosted by Ramona, with me as her co-host. After we’re done recording, I take care of the editing and post production. The current plan is to release these interviews with a higher priority than my normal weekly episodes. However, since candidate interviews are only around an hour, my hope is that the normal episodes won’t be too disrupted.

There will be many primaries in the coming months, with the general election in November 2022. It’s time. As I write these words, we’ve already scheduled seven MMT candidates. If you’re a candidate and would like to be interviewed by Ramona, please contact her directly on Twitter at @RamonaMassachi, or me at activistmmt@gmail.com. If there's a candidate you'd like for us to interview, then please let us, or them, know.

If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons get early access to every episode and super-early access to many. They also get the opportunity to ask my academic guests questions, and support the development of my large and growing collection of learn MMT resources. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks.

And now, onto my conversation with Ramona Massachi. Enjoy.

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This snippet comes from around the eight-minute, forty-second mark in episode 109 of MMT Podcast with Fadhel Kaboub, called Unravelling Financial Media & Strategies For The Global South

This snippet is included in the explanation for a question in the online course called "Historical context for real-world economics", which is based on a series of lectures by economist Asad Zaman and produced by Activist #MMT. When the course is made public, a link will be added here.

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This snippet comes from around the 18 minute mark in episode 110 of MMT Podcast with L. Randall Wray, called Are We Living In An MMT World?

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Today is MMT candidate interview number two, with Imani Oakley in New Jersey’s tenth Congressional district, which is right across from Manhattan. No surprise, she’s running against an incumbent Democratic representative who spends most of his time away from the district, is weak on gay rights, and is lavished with big donations from industries that harm the actual people in the district. But he’s a "good Democrat".

(Here’s a list of all MMT candidate interviews.)

New Jersey’s tenth is a historically majority black district, and a mostly urban and suburban area. It struggles with gentrification and poor air quality, and has some of the highest levels of foreclosures in the nation. Regarding the latter, Imani is a law graduate who served as a constituent advocate in the Senate who supported homeowners with mortgage-related concerns. In this role, she too often witnessed the amount due in monthly payments skyrocket suddenly and randomly. This is due a loophole in US federal law that allows new fees to be arbitrarily applied when the mortgage is transferred from one bank to another. The borrowers are often blamed for their own exploitation as not being "financially savvy". Stopping this practice is one of Imani’s first legislative priorities once in office.

(A big thanks to Beyond the Spectrum for the "MMT Candidate" logo.)

Imani also talks about how New Jersey is unique in the nation with its deceptive and exploitative ballot practice called "the line". In the words of Imani, candidates essentially must "kiss the ring" of those already in power in order to be featured on the ballot. Those who do are placed together as a "team" with the biggest name on the ballot, like Joe Biden or Cory Booker. Those who don’t are banished to "ballot Siberia", disconnected from all other candidates – essentially given the appearance of a footnote or misprint. Thankfully, Imani has decided to not kiss the ring, and to instead expose the practice for all to see, and win in spite of it.

You can support Imani‘s candidacy by visiting oakleyforcongress.com (that’s F-O-R, not the number 4), and by following her on social media at ImaniOakleyNJ10 (Twitter, Facebook). You’ll also find a link to donate to her campaign in the show notes.

If you like what you hear and would like to support this interview series and this podcast, please consider becoming a monthly patron at patreon.com/activistmmt.

Before we get started, a correction: Imani wanted to clarify that her incumbent opponent has one of the lowest attendance rates in the Democratic Party, but not the lowest.

And now, onto our conversation with candidate for New Jersey’s tenth congressional district, Imani Oakley. Enjoy.

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Welcome to episode 95 of Activist #MMT. Today I talk with progressive video journalist and stand-up comedian, Graham Elwood, about the debt ceiling, #MintTheCoin, and the myth that "printing money causes inflation". Graham and I first spoke in June 2018, when I introduced him to MMT [parts one and two], only four months after discovering it myself. Although primitive, our initial talk has been seen by thousands and every now and then, I still receive kind emails from people who happen to catch it. The experience was special especially because viewers can witness Graham’s eyes open up more than once.

(As a brief aside, neither Graham nor I realized that he was actually introduced to MMT eight months earlier than that, when a patron submitted an article written by Stephanie Kelton. Although the term MMT never comes up.)

In the middle of our conversation, we talk about the very common myth of “printing money causes inflation" I still have much to learn, but I think I hit on some important points, and put enough out there to call the myth into question.

The heart of our conversation, however, is on the false debt ceiling crisis and its only immediate solution, which is #MintTheCoin. We start off by discussing the true difference between national debt and personal debt. We then talk about where the debt ceiling came from, and how it’s seen from several different contexts and perspectives. And how, except for those who wish to deceive, it’s multiple layers of nonsense.

We end with #MintTheCoin, which is the only legal solution available right now, which the president can do by merely deciding to do it. It’s a ridiculous solution, but would end the crisis immediately and legally, and would prevent real world suffering from millions of people. The platinum coin, however, has the potential to do much more than end the next debt ceiling crisis. In the words of Joe Firestone, the author of the only full-length book on the subject, a big enough coin would be “a revolution“ that “would change politics for the forseeable future.“

Our conversation is based on two of my MMT resource posts, links to which you can find in the show notes. My posts are based on the works of Joe Firestone, Rohan Grey, and others:

The reality of the debt ceiling (and #MintTheCoin)
National debt versus personal debt (in reality)

And now, onto my conversation with Graham Elwood. Enjoy.

Resources * My video appearances with Graham (where the audio for today’s episode comes from): + How #MintTheCoin Could End Government Austerity + Activist MMT Explains Debt Ceiling Myth + FULL INTERVIEW: Acitvist MMT Explains Debt & Mint The Coin * Graham’s full MMT playlist on YouTube

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Welcome to the first Activist #MMT candidate interview, hosted by Ramona Massachi, and co-hosted by me, Jeff Epstein. Today we talk with candidate Jason Call who is running in Washington state's second congressional district, against a twenty-year incumbent that Jason calls "arguably the most corporate-conservative Democrat in the Washington state delegation." This is someone who benefits from large donations from corporations that pollute and exacerbate the climate crisis, among other things.

Here's a link to all Activist #MMT candidate interviews, each with a brief highlight.

(A big thanks to Beyond the Spectrum for the "MMT Candidate" logo.)

In 2020, Jason came within one percentage point of placing second in a district where the top two candidates, regardless of party, move onto the general election. He earned around 35,000 votes on a shoestring budget of $50,000. For the upcoming primary in August 2022, he's going to need a lot more than that to breach the top two, and have an actual policy debate with a candidate who has little to offer beyond moderately less abuse than the Republican.

You can support Jason‘s candidacy by visiting callforcongress.com (that's F-O-R, not the number 4).

If you're a candidate and would like to be interviewed by Ramona, please contact Ramona directly on Twitter at @RamonaMassachi, or by writing me at activistmmt@gmail.com.

If you like what you hear and would like to support this interview series and this podcast, please consider becoming a monthly patron at patreon.com/activistmmt.

And now, onto our conversation with candidate for Washington state's second congressional district, Jason Call. Enjoy.

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Welcome to episode 94 of Activist #MMT. Today’s part two of my two-part conversation with Esha Krishnaswamy, as a guest on her own show, late night with Lenin. Esha has me cold read two pieces by Lenin, written more than 100 years ago, and she describes why they remain important and relevant.

(Here's a link to part one.)

Esha is the host of the podcast Historic-ly, Which is realistic history, similar to how a MMT is realistic economics. You can follow Historic-ly on Twitter at @historic_ly and historicly.substack.com. I’ve hosted eight episodes for her podcast, links to which you can find in the show notes.

Although I admittedly struggle through the readings, with its unusual names and concepts, and early twentieth century Russian history. Even so, it results in very interesting conversation throughout, all anchored by Modern Money Theory.

And now, let’s get right back to my conversation with Esha Krishnaswamy. Enjoy.

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Welcome to episode 93 of Activist #MMT. Today I talk with Esha Krishnaswamy as a guest on her own show, Late Night with Lenin. Esha has me cold read two pieces written by Lenin more than 100 years ago, and describes why they remain important and relevant.

(Here's a link to part two.)

Esha is the host of the podcast Historic-ly, which is realistic history, similar to how MMT is realistic economics. You can follow Historic-ly on Twitter at @historic_ly and historicly.substack.com. I’ve hosted eight episodes for her podcast, links to which you can find in the show notes.

The Lenin readings don’t start until part two. In part one, we discuss the basics of MMT and how it illuminates the centuries long battle between rich and poor. MMT reveals that when the rich say, "depriving the poor is unfortunate but necessary", what they really mean is "of course we can provide for the poor – we just don’t want to." Importantly, MMT makes this clear to average people, not unlike Martin Luther and his papers nailed to the church door during the reformation. In the same fashion (although with printed paper instead of on social media), Lenin illuminated the same things to average Russian citizens, ultimately leading to a rare successful popular uprising.

I admittedly struggle through the readings, with its unusual names and concepts, and early twentieth century Russian history. Even so, it results in very interesting conversation throughout, all anchored by Modern Money Theory.

Finally, as a brief aside, both of our incredible theme music was created by Wreck Tech. You can find Wreck Tech on SoundCloud and Spotify.

And now, onto my conversation with Esha Krishnaswamy. Enjoy.

Resources * My 2020 interview with Esha on Historic-ly, Anatomy of a Revolution: Parts one and two * Episode 71 of Activist #MMT with graduate student Jane Ball: Government-designed racist zoning to prevent popular uprising, which is part two of a two part episode. This episode was re-published by Historic-ly.

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Welcome to episode 92 of Activist #MMT. Today's part two of my two-part conversation with Fadhel Kaboub about his personal story. Fadhel is an economics professor at Denison University in Granville, Ohio, and the president of the Global Institute for Sustainable Prosperity, an interdisciplinary public policy think tank. The focus of his academic work is how the lens of MMT can inform developing nations. I've written a post filled with links to Fadhel's papers, posts, and appearances, a link to which you can find in the show notes.

In part one, we discussed Fadhel's personal story, from childhood through parenthood. Today in part two, Fadhel finishes his story about being parent of three little boys and how music is part of how he raises them. We then turn to his own eclectic taste in music, ranging from Metallica and Guns N' Roses to Tunisian hip-hop. We especially focus on Bob Marley. In the second half of today's episode, we return to academic topics, primarily discussing how Fadhel's work on developing nations relates to the work of John Harvey on exchange rate determination. We end on the topic of the 2011 Tunisian uprising, as discussed in the recent New York Times article in which Fadhel is extensively quoted.

Now, let's get right back to my conversation with Fadhel Kaboub.

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Welcome to episode 91 of Activist #MMT. Today I talk with Fadhel Kaboub about his personal story: his childhood in Saudi Arabia and Tunisia, being a parent, his love of music, and how music has become part of his parenting. Fadhel is an economics professor at Denison University in Granville, Ohio, and the president of the Global Institute for Sustainable Prosperity, an interdisciplinary public policy think tank. The focus of his academic work is on how the lens of MMT can inform developing nations, which we talk about in the second half of part two. I've written a post filled with links to Fadhel's papers, posts, and appearances, a link to which you can find in the show notes.

(Here's a link to part two with Fadhel.)

Today's story begins with a nine-year-old Fadhel at the center of a political drama between his two home countries of Saudi Arabia and Tunisia. When his grandparents in Tunisia fell ill, his father rushed home from his job in Saudi Arabia to take care of them. Saudi Arabia's immigration laws require foreign workers to give their employers not only their own passport, but also the passports of all their children. Unfortunately, when Fadhel's father left for Tunisia, the employer decided not to release Fadhel's passport, essentially holding the nine-year-old hostage. His family leveraged the media to shame Saudi Arabia into allowing the little boy to be reunited with his family. To this day, Fadhel has never seen his original passport.

We then turn to the story of how Fadhel joined the fifth grade in Tunisia, with children who had a 3.5-year head start in learning French. This is the language spoken during half of the instruction time in the country.

The overriding theme of Fadhel's story, however, is how there is no place on Earth where he is not considered an outsider or immigrant. Babies born in Saudi Arabia are only considered citizens if their father is a Saudi citizen. Fadhel's mother was a citizen but his father was Tunisian. When he moved to Tunisia, he had a Saudi accent and was unable to speak French. And now, even though a US citizen, he remains an immigrant. The experience, plus witnessing the experience of his parents and home countries, has greatly influenced and inspired not only his academic work but also his decisions as the parent of three little boys.

This podcast, Activist #MMT, is dedicated half to academic concepts and half to the personal stories of how people, both laypeople and academics, came to MMT and how it changed them. The reason I believe these personal stories are so important is because it's not possible to separate the academic concepts from those who develop and promote them. This includes their personal stories: what they care about, and how they choose to use the power they have, or don't have. The idea was primarily inspired by Fred Lee in his 2009 book, A History of Heterodox Economics: Challenging the mainstream in the twentieth century, which was recommended to me by Nathan Tankus.

Neoclassical economics would have you focus on only their maths and models, and not the discriminatory behavior of universities and journals, and those that back those universities, journals – and their economists. They would prefer you not look at any other discipline, such as history, culture, sociology, institutions, and especially politics. The entire neoliberal project would have you focus only on the how-are-you-gonna-to-pay-for-it question, and not the minor inconvenience of having to change the very foundation of human society, if we are not to go extinct in the coming decades. I talk much more about this concept of interdisciplinarity, in my introduction to episode 81 with Richard Tye.

But for now, onto my conversation with Fadhel Kaboub. This is part one of a two-part conversation. Enjoy.

(By the way, my 12-year-old keeps asking to hear the story in the above highlight, over and over again. :) )

By the way number two: At the (very) end of every interview, the introduction is repeated in full but without the theme music. I started this long ago on listener request, for those who find the music irritating or distracting from what I'm saying.

Resources * Fadhel's 2018 interview with Money on the Left.

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Welcome to episode 90 of Activist #MMT. Today's part two of my two-part conversation with author, researcher, and entrepreneur, Brian Hanley, about his paper, The False Premises and Promises of Bitcoin. The paper, published in 2013 and last updated in 2018, is essentially a summary of Bitcoin and cryptocurrency through an MMT lens.

(Here's a link to part one.)

Brian and I continue with his list of several important claims made by Bitcoin's creators and advocates, and why they're wrong – and in fact, bitcoin and cryptocurrency are based on a fundamental misunderstanding of how modern economic and banking systems work (coupled with anti-government ideology). We also go in depth into why Bitcoin makes credit impossible, and why that's so critical.

We end today's episode with the decidedly non-MMT topic of nuclear power. Brian has done research on the biological effects of radiation, and is a strong supporter of nuclear power being a primary ingredient in dealing with the climate crisis. He talks about how nuclear power and radiation are badly misunderstood by the public and media.

Now let's get right back to my conversation with Brian Hanley.

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Welcome to episode 89 of Activist #MMT. Today I talk with author, researcher, and entrepreneur, Brian Hanley, about his paper, The False Premises and Promises of Bitcoin. The paper, published in 2013 and last updated in 2018, is essentially a summary of Bitcoin and cryptocurrency through an MMT lens.

(Here’s a link to part two with Brian.)

I’ve always been interested in Bitcoin but never took the time to understand or read about it. I just noticed the strong and even emotional views about it online, both for and against. On May 12, 2021, however, a tweet by Tesla CEO Elon Musk, caused the worldwide price of Bitcoin to decrease by 17% in two hours. This caused the wealth of every single Bitcoin holder to lose a total of $170.6 billion. I suddenly became extremely interested in Bitcoin.

I initially thought – actually, strongly suspected – that Musk’s tweet was part of an effort to deliberately manipulate the price of Bitcoin. My guest disagrees. Regardless, it’s obvious that if such devastation can be caused in only a couple hours, by a single tweet by a single billionaire, then the very foundation on which Bitcoin and cryptocurrency sits must be called into question. My fascination with this incident eventually led me to Brian’s paper, among other MMT-informed sources about Bitcoin, links to which you can find in the show notes.

Setting aside energy usage, there is nothing inherently wrong with Bitcoin or cryptocurrency. It’s something to invest in and if you know what you’re doing and choose to do it, then you can make a bit of money off of it. The problem comes in falsely believing that Bitcoin and its ilk are in any way related to the money issued by national governments, and especially that Bitcoin can somehow replace the money of a government – or even more absurdly, the entire world. It betrays a fundamental misunderstanding of how modern economic systems work. Were a government to adopt Bitcoin as its official currency, as just tragically (kind of) happened in El Salvador, then the government would make the personal wealth of every citizen vulnerable to another potential tweet by another billionaire. Those who choose to invest in Bitcoin choose to take that risk. Those who are unlucky enough to be among the nearly 7,000,000 citizens of El Salvador, that risk and vulnerability was just foisted upon all of them.

Bitcoin is backed not by gold or state power, but entirely by the group psychology of all Bitcoin holders and those that influence them. In other words, Bitcoin only has as much value as its holders believe it has, not unlike any other fad or mania, such tulip bulbs in the 1600s and Beanie Babies in the 1990s. [For more on this concept, see Brian’s June 2021 post, Bitcoin is mania, pure and simple.

]

A topic Brian and I discuss that I don’t think we cover sufficiently is the double-spending problem. When a dollar bill or nickel is spent, it physically changes hands. This is something we can keep track of easily and know for sure that it was only spent once. Digital money – digital anything – can be easily duplicated many times over. So how can it be ensured that a Bitcoin was only spent once? This is where the blockchain comes in. Every transaction ever made, with every Bitcoin, is permanently and publicly logged onto the blockchain. Although it’s impressive that Bitcoin has solved this problem, the solution is also a reason why Bitcoin is so inefficient and energy hungry. Every few seconds, a new transaction is added to the blockchain, a process that must traverse every existing transaction, duplicating the information onto every block in the chain. This algorithm is central to the system and the foundation to eliminating double spending.

The other reason it’s so energy hungry is the manner in which new Bitcoins are generated, with each new coin requiring more computing power than the last. Finally, the process must also gracefully handle multiple simultaneous attempts to update the blockchain, as well as deal with potential failures without corrupting existing items.

Here’s a crucial and related topic you’ll hear Brian and I discuss: Modern society is only possible because of credit. Credit is the ability to obtain goods or services before payment is made. In other words, a loan or an IOU. Your boss obtains your labor before you get your paycheck. You pull out a credit card to buy a candy bar and soda, but you don’t actually pay for it until the bill comes due at the end of the month. I commit to purchasing a house, but don’t actually pay for it until months later when seated at the closing table. And I don’t really pay for it until my final mortgage payment thirty years later.

Were Bitcoin to replace a government or bank’s money, it would only be possible by eliminating the very concept of credit. Were this to happen, it would bring us back to the days when lords had vaults filled with gold and gave their customers certificates to obtain it on demand. As long as these forerunners to banks properly calculated the number of people who actually wanted to redeem their gold, they should be fine. If they estimate incorrectly, then there could be a run, and the lord will have to literally defend their stock of gold, potentially running out if everyone wanted it back. In addition, gold certificates are also desirable because gold is heavy and inconvenient. It’s also easier for regular people to hide and secure a certificate than an actual piece of gold.

Critically, however, banking based on Bitcoin would be just that scenario but without the certificates. Banks would literally only have gold. Customers could only deposit and withdraw and borrow actual gold. So the population and its needs continue to grow, but the amount of gold remains unchanged (see the below graph, with thanks to Brian). It means that society is forced to become a 100 percent pure barter economy. In other words modern banking, and therefore modern society, is made impossible. Finally, note that Bitcoin certificates (or Bitcoin credit, or what Brian calls virtual Bitcoin) are impossible not because it’s technically infeasible, but rather because the concept is simply anathema to the supporters of Bitcoin, resulting from a very libertarian, anti-government point of view.

To close, I’d like to share a quote from Nathan Tankus:

The very fact that Bitcoin’s 'price' gets quoted in fiat shows that crypto-currency is an adjunct to state money. I’ll take the idea that pure cryptocurrencies are a threat to state money not when Bitcoin’s dollar price gets very high, but when its dollar price is irrelevant.

And now, onto my conversation with Brian Hanley.

Resources * The MMT view of Bitcoin: + 2013 post by Eric Tymoigne, The Fair Price of a Bitcoin is Zero (Quote from this post: "By the way, just for full disclosure, those who organized the hunt collected a bunch of eggs before the forest opened to the public.") + L Randall Wray: Bitcoin is not money. From Pocket Change + Warren Mosler about Bitcoin in 2012 * 2015 paper by Brian P Hanley, A zero-sum monetary system, interest rates, and implications. * The definition of "hodler" * Stamp Act * Regarding anonymity: 2016 paper Sarah Meiklejohn, Marjori Pomarole, Grant Jordan, Kirill Levchenko, Damon McCoy, Geoffrey M. Voelker, Stefan Sa, A fistful of Bitcoins: characterizing payments among men with no names * The VC article about Bitcoin that Brian finds crazy * 1852 book (1932 reproduction) by Charles Mackey, Extraordinary Popular Delusions And The Madness Of Crowds * Nassim Nicholas Taleb Shellacks Bitcoin and Cryptocurrencies (his 2021 paper for New York University: Bitcoin, Currencies, and Bubbles) * Brian’s 2013 book, Radiation - Exposure and its treatment A modern handbook * 5he story and capture of Dred Pirate Roberts

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Welcome to episode 88 of Activist #MMT. Today’s part two of my two-part conversation with all three co-authors of the 2020 paper, An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies, or GIMMS. The three authors are Richard Tye, Andy Berkeley, and Neil Wilson.

Today’s episode is part two of a two-part conversation, but it’s also the final part in a larger seven-part series on the paper and its authors. (A link to all seven parts can be found here.) The first five are personal interviews with each individual author. In __PART_SIX__, last week, and seven, today, I talk with all three together about their paper in depth. (It should also be noted that David Merrill played an important role in the paper, and was the primary influence of this seven-part series.)

In order to strengthen my understanding of the paper and the Exchequer, today I ask several very specific questions. Some of the topics we discuss include the so-called independence of the Bank of England, intraday credit versus exchequer credits versus actual money; the sui generis balancing item of the Consolidated Fund and other funds, and the daily sweeping process and how it relates to Play-Doh. Obviously.

But for now, let’s get right back to my conversation with Richard Tye, Andy Berkeley, and Neil Wilson.

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Welcome to episode 87 of Activist #MMT. Today I talk with all three co-authors of the 2020 paper, An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies, or GIMMS. The three authors are Richard Tye, Andy Berkeley, and Neil Wilson.

(Here's a link to part 2. A link to all seven parts can be found here.)

Today's episode is part one of a two-part conversation, but it's also part six of a larger seven-part series on the paper and its authors. (A link to all seven parts can be found here.) The first five are personal interviews with each individual author. In part six, today, and seven, next week, I talk with all three together about their paper in depth. (It should also be noted that David Merrill played an important role in the paper, and was the primary influence of this seven-part series.)

Today in part one, we talk largely about the meta of the experience writing the paper: their workflow, the software tools they used, their unique experiences with public records requests, and how they took the large amount of work and finally put it all together into a coherent whole.

Aside from its length, I found the paper to be quite difficult. Not because of their writing, but simply because what they're writing about is really, really complicated. Before attempting to read the paper, I strongly recommend first listening to their MMT Podcast interview [parts one and two], and also watching co-author Andy Berkeley's forty-minute presentation (as organized by my previous guest, Asker Voldsgaard [parts one and two]).

Speaking of difficulty, the paper was deliberately written to be an unabridged and undistilled reference manual. Someone must understand and document everything, and that's the role this paper serves. Now it's time to start translating and distilling these details for the general public.

Towards the end of today's episode, I start asking specific questions on the paper. One of the first is a question by an Activist #MMT patron named Advait. If you'd like to ask a question of my future academic guests, please consider becoming a monthly patron.

But now, let's get onto my conversation with Richard Tye, Andy Berkeley, and Neil Wilson.

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Welcome to episode 86 of Activist #MMT. Today's part two of my two-part conversation with systems consultant and GIMMS associate, Neil Wilson. Neil is also the co-author of the 2020 paper, An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies (or GIMMS). Today's episode is also part five of a larger seven-part series with all three co-authors; first individually and personally, and ending with a joint interview with all three, where we discuss the paper in depth.

(A link to all seven parts can be found here.)

In part one, Neil and I talked about how he came to MMT, how he led a lawsuit against the U.K. government in the name of 10,000 people, and MMT on the social media platform, Reddit. Today in part two, I learn a whole lot from Neil. I read several of his blog posts and I ask several questions about them. You'll notice me experience more than one lightbulb. (Neil's blog is called the New Wayland blog, and links to each of the posts we discuss can be found in the show notes of part one.

To share one example, I knew that the neoclassical assumption of full employment also requires the assumption of balanced trade. What I learned today is that although I'm correct, it's bigger than that. The assumption of full employment requires no leakages of any kind. In other words, if even one dollar of income is not spent, or it is spent but not in the United States, then demand in the United States will, of course, less-than maximized. This means that firms will respond by lowering production, which puts workers in danger of being let go. This means that full employment is no longer possible. So if a dollar of income is saved or invested, that's a dollar not spent at an American firm – this is called a leakage. If ten dollars is spent to buy something from a company in Italy, but only five dollars are spent at American firms, then that's another five dollar leakage. So, neoclassical economics requires every dollar of income to be spent, and for those dollars to be spent in the United States. There's some more to this, but I'll leave it there. You'll find a link to a post where I discuss this topic (written before talking with Neil) in the show notes: The neoclassical assumption of full employment requires balanced trade.

We end today's episode by discussing Neil‘s role in the U.K. Exchequer paper, including how he discovered it and came on board. He also gives a brief summary of the paper and its concepts, which serves as a nice preview for next week's episode, where I talk with all three co-authors and ask them a bunch of questions on the paper itself.

But for now, let's get right back to my conversation with Neil Wilson.

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Welcome to episode 85 of Activist #MMT. Today I talk with systems consultant and GIMMS associate, Neil Wilson. Neil is also the co-author of the 2020 paper, An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies (or GIMMS). This is part one of a two-part episode, but it's also part four of a larger seven-part series with all three co-authors, first individually and personally, and ending with a joint interview with all three, where we discuss the paper in depth.

(Here’s a link to part two with Neil. A link to all seven parts can be found here.)

Like my previous guests Patricia Pino [parts one and two], Andrew Chirgwin [parts one and two], and others, Neil discovered Modern Money Theory, or MMT, by stumbling onto Bill Mitchell’s blog. A precursor to discovering and understanding MMT was a lawsuit Neil led against the U.K. government in 1999, in the defense of tens of thousands. At the time, U.K. law allowed (and unfortunately still allows) for workers to be treated such that they can be taxed as if they’re an official employee, but treated in other ways as if they’re not. In the era before Brexit, the lawsuit was an attempt to override British law with EU law. Although unsuccessful, it led him to question more deeply the government and how it really works.

Neil also talks about his job as a systems consultant. Companies and the government choose to bring him in, they pay him to come in, to evaluate and improve their computer systems. Only sometimes, however, do they give him the power to actually make his recommended changes. So it seems to me that some of these organizations want the appearance of doing their best, without actually having to do their best. Rather than eliminating what’s bad and replacing it with good, the very idea of eliminating anything at all becomes simply and seemingly an impossibility.

It results in the system becoming overly complex – paint on top of paint on top of paint – and for new pieces to now have to overcompensate for the ones that really shouldn’t be there at all. This is a parallel for the final three episodes in this seven-part series, which is all about the over-complexity of the UK economy, or Exchequer, and its 800 years of redundant paint jobs.

Neil and I end with a conversation of MMT on the only social media platform Neil is active on: Reddit. We also talk about the questionable practices of the decidedly mainstream group, r/AskEconomics. (I am happy to announce that both Neil and I are now moderators of r/mmt_economics/.)

Finally, I have some thoughts about the very first thing Neil and I talk about, which is unrelated to MMT, Neil, and his paper. To avoid distracting from the heart of our conversation, you will find these thoughts after the closing music, at the very end of today’s episode.

(Note Neil is always available for discussion and questions on his Discord server.)

But for now, onto my conversation with Neil Wilson.

At the very beginning of today’s episode, I tell Neil that my wife and I are under contract to purchase our first home. As I write these words, it was inspected two days ago. Yesterday, we submitted our rather modest list of repair requests, and are now waiting for the sellers’ response. This is the final major hurdle before the likeliness of the home becoming our own gets pretty close to 100%.

I tell Neil that the home is enormous. At least, to me it is. The backyard is about the size of half a football field. The house itself is 700 ft.² larger than our current rental – 1900 versus 1200 ft.². There are a whole lot of critical small to moderate things it needs, but structurally, the home and all its major systems are in great shape. So although the first several years will be a very expensive struggle, overall, we now have a mortgage that’s $400 cheaper a month than our current rent, and a really world asset that will become even more valuable after everything’s done.

Especially in this crazy market, we hit the jackpot. It’s basically been a fairytale so far. We are so lucky. We are so privileged. (If you’d like to see it, you can find some pictures in the show notes.)

After part two of my interview with Jane Ball, however (episode 71), I’m feeling very conflicted about the whole thing. There is so much suffering all around us, and it’s soon to increase by orders of magnitude as the climate crisis starts to changes all our lives dramatically, whether we like it or not, whether we do a lot or a little. Something very big is going to be happening in the not-so-distant future. It’s either going to be controlled or it’s not going to be controlled. Given how perfectly and elegantly the grip on every lever of power the elite now have, I am really not seeing how it’s going to be controlled.

And yet here I am, suddenly having achieved the so-called American Dream. I now have a sense of security and, at least for a time, a real-world asset with a worth that’s very likely to get a lot higher. Who am I to have this? The color of my skin is obviously a very big factor. So I continue to care about the powerless (like those with skin color different than my own), but now I get to do it from a perch of privilege. A perch that how many black and brown people have been kept away from and knocked off of?

My accepting this home makes the world a worse place, and yet at the same time, I’m doing exactly what’s best for my family.

Resources * Neil's conversation with Phil Armstrong, as hosted by GIMMS and recorded by MMT Podcast. * "Our intellectual powers are rather geared towards static relations. Our power to visualize processes evolving over time are relatively poorly developed." We struggle with dynamics. We’re very good at static. Because we understand it statically, we understand it dynamically, and it’s not the case. * Activist #MMT interview with Bill Peeples, called Accounting, and the story you want to tell [episodes 76 and 77 * 2020 paper by Edward Lane and L. Randall Wray, Why President Biden Should Eliminate Corporate Taxes to Build Back Better. From the abstract: The authors "explain how federal taxes on corporate profits are not well suited to either containing inflationary pressures or reducing inequality. [They are also] inefficient and ineffective taxes more broadly" * Information on ”The Spine” of the National Health Service’s (NHS) computer network in the U.K.: Overview by the NHS, From the company contracted to manage it * Neil’s blog posts: + May 2021: The 'Too Much Money Chasing Too Few Goods' Myth + 2021: UK Government Spending - The Gory Details + November 2020: IT'S THE EXPORTERS STUPID, quoted by Randall Wray in his book, Modern Money Theory (pp289)

Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems

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Welcome to episode 84 of Activist #MMT. Today’s part two of my two-part conversation with 10th-year MMT activist, Andy Berkeley. Andy has a PhD in marine sedimentology, and is a marine scientist and oceanographer by trade. He's also the co-author of the 2020 paper, An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies (or GIMMS). This episode is also part three of a larger seven-part series on the paper and it's three co-authors. The first five are with each individual author, in the final two with all three, jointly, where we discuss the paper in depth.

(A link to all seven parts can be found here.)

Last week, in part one of my conversation with Andy, we spoke about two very non-economic topics: the first half dedicated to the fifty-year-long Israeli-Palestinian conflict, and the second half, to the drastically different and lighter subject of music.

Today in part two, Andy describes his life and thinking before knowing about MMT. He tells the story about how he discovered it from an actual stranger on a train, who he now knows as Chris Cook. While talking with a friend, the person sitting across from him, Chris, interrupted and interjected the fateful words: "Banks don't lend deposits, and governments don't spend taxes." Confirming the former came rather quickly for Andy. The latter, however, that governments don't spend taxes, took years to fully grasp. After learning more about the concept, it made the entire puzzle appear to make sense. However, only after completing his 2020 paper many years later, did he finally confirm that what was mere economic theory – to him, toning more than a thought experiment – actually applies to the world in which we live.

Two important events that Andy believes prepared him to accept MMT years later, were, first, the 2003 invasion of Kuwait by Iraq, and the subsequent invasion of Iraq by the US and its allies. The second was a brief and largely out-of-place montage in the Michael Moore documentary, Bowling for Columbine. The montage shows how the United States’s invasion of Iraq was merely the tip of an iceberg demonstrating its decades-long imperialism, and the U.K.’s support of it. These two things called into question the idea of the US and UK as being 100% forces for good and made him realize that what we are told may in fact be contrary with reality, with the goal of keeping the powerful powerful and everyone else in the dark.

(As an aside, It’s both shocking and not shocking that YouTube will not allow you to share that montage at all. It won’t even allow you to copy the link.)

Finally, a minor correction: the UK is 800 years old.

And now, let's get right back to my conversation with Andy Berkeley.

Resources * Books by John Kenneth Galbraith * 2007 book by Eric D. Beinhocker, The Origin of Wealth: The Radical Remaking of Economics and What it Means for Business and Society

The Origin of Wealth: The Radical Remaking of Economics and What it Means for Business and Society

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Welcome to episode 83 of Activist #MMT. Today I talk with 10th-year MMT activist, Andy Berkeley. Andy has a PhD in marine sedimentology, and is a marine scientist and oceanographer by trade. He's also the co-author of the 2020 paper, An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies (or GIMMS). This is part one of a two-part episode, but it's also part two of a larger seven-part series with all three co-authors, first individually and on a personal level, and then ending with a joint interview with all three, where we discuss the paper in depth. In today's episode, Andy and I discuss some decidedly non-economic topics. For the first half of part one, we talk about the now half-century long Israeli-Palestinian conflict.

(Here’s a link to part two with Andy. A link to all seven parts can be found here.)

Since the 1970s, the UN General Assembly has regularly and overwhelmingly voted to affirm the fact that Israel is illegally occupying Palestine. This, in addition to the fact that Israel is clearly the stronger party by orders of magnitude, calls into question the popular notion and official narrative, that Israel is nothing more than a passive and long-suffering, dainty-little-flower of a victim. On the other side of this narrative is Palestine, serving the role of the melodramatic supervillain, seemingly doing nothing but perpetually alternating between launching missiles at Israel and twirling their overly-long mustache.

I’m a Jew but not religious. I grew up in a family, however, that subscribed strongly to exactly these ideas – that Israel is 100% the victim and Palestine 100% the bad guy. Questioning Israel and its leaders in any way is essentially treated by some as an act of betrayal. My speculation is that Israel is seen by many Jews as the only home on earth for the Jewish people. This is such a powerful thing that it justifies excusing the behavior of the Israeli leadership and ignoring the suffering caused in service of preserving that home. In any relationship, the idea that that one party is 100% in the right, and the other 100% in the wrong, is the stuff of cartoons, not reality. Further, the assertion that the by-far stronger party is the victim, when that so-called victim has been occupying the territory of its so-called aggressor for 50 years, is a highly suspect one in my view.

In the second half of part one, Andy and I greatly lighten the mood with another non-economic topic, this time, music. I'm a classically trained singer, and for the past six months, I've been learning guitar. Andy has played piano and bass guitar for most of his life, and we have a fun and kind-of-exciting conversation about lots of varied topics: how to sight read and learning about music theory, how we were trained, the styles in which we were trained versus those we choose to listen to, the many YouTube teachers who have influenced us, and more.

You'll find a few samples of our playing in today's episode, and we both thank you for your forgiving and understanding while listening. At the very beginning of today's episode, you heard a brief sample of Andy's piano and bass playing. You'll find the entire piece, along with another, after today's closing music. You'll also find links to the several musicians and songs we mention, below.

Although this episode has little-to-nothing to do with MMT, it provides important context for learning and better understanding MMT. The academic concepts cannot be separated from those who promote them. Today is about those who promote them, and what interests them.

Next week in part two, Andy describes his life before knowing about MMT and how he discovered it from an actual stranger on a train. Someone he now knows well, Chris Cook, overheard Andy's conversation and interrupted and interjected the fateful words: "Banks don't lend deposits and governments don't spend taxes.”

But that's next week. For now, here's part one of my conversation with Andy Berkeley. Enjoy.

Link to image

Resources * Solsbury Hill by Peter Gabriel, tutorial by YouTube/Shutup and Play * The version of Blackbird that Jeff learned, from Marty Music. The more accurate version of Blackbird, by Shutup and Play, that Jeff has not yet learned. * Classical Gas, guitar lesson by guitarlessons365.com (the name of a YouTube channel), where Jeff learned the piece [parts one and two]. (He didn't learn parts three and four!) * Luther Vandross’ Never Too Much, guitar lesson by YouTube/Eric Blackman music * Jacob Collier adds elaborate harmony to his fans' performances * Rick Beato: top 20 acoustic guitar intros of all time. Where I re-discovered Solesbury Hill. (Here's Jeff playing Solesbury Hill after one month of practice.)

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Welcome to episode 82 of Activist #MMT. Today I talk with 10th-year MMT activist, Richard Tye (Twitter/@widespreadhaze). Richard is the co-author of – and historian for – the 2020 paper called An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies (or GIMMS). This is the first of a seven-part series on the paper and its three authors. It starts with an individual and personal interview with each of the authors and ends with a two-part episode with all three jointly, where we discuss the paper in depth.

Here are links to all other episodes in this larger series, in order:

Part 2: Andy Berkeley, part one: Palestine and piano [NOT MMT]
Part 3: Andy Berkeley, part two: Confirming the theory applies to the real world.
Part 4: How Neil Wilson discovered MMT (and Reddit)
Part five: Neil Wilson: Real-world economics requires understanding dynamics.
Parts six and seven: An Accounting Model of the U.K. Exchequer

For the past 20 years, Richard has flown a helicopter for Search and Rescue, under perilous conditions on both land and sea, serving millions of U.K. citizens. For the U.K. Exchequer paper, he became a historian, placing today's economic and political systems into proper historical context. Using only the internet, he and his co-authors discovered original government documents from all the way back to the 11th century. Because of the COVID health crisis, writing the paper would have been an impossible task without the internet.

Richard describes several historical concepts and events related to the U.K. economy, including the use of wood tally sticks as a primitive form of money, and the so-called "stop of the exchequer". We also discuss how history moves at a pace that's impossible to directly observe in a human lifetime. We consider this final concept especially in the context of the MMT project.

(Before attempting to read the paper, I strongly recommend first listening to their @MMTpodcast interview, and watching co-author Andy Berkeley's forty-minute presentation [as organized by my previous guest, Asker Voldsgaard].)

Before we begin, I have several observations to make about history. First, in part one of my previous episode with Andrew Chirgwin, and as inspired by Steven Hail, we discussed how neoclassical economists don't "stay in their lane". Those in power and the economists who advise them, have declared that "finding the money" (and preventing the boogeyman of inflation) is the primary prerequisite for doing anything and everything. If one can't find the money in a way that satisfies these economists, then they get to veto the entire project – sight unseen, and very likely, without understanding its intricacies or consequences at even a basic level. In other words, those in power and their economists have made themselves gatekeepers over every aspect of our lives, pretending that without money – their money – it's impossible to accomplish anything. (Note that this also implies that everything in life must have a precise financial cost applied to it.)

In reality, the only reason it's impossible to accomplish anything without money is because we choose for it to be impossible. Knowing this, the resistance to the idea of making education and healthcare free at point-of-service (and therefore free of debt!), now becomes clear: without a price tag, it takes away the ability of those in power to gate-keep and veto. (Not to mention the cherry on top, of profit baby!) Providing education and healthcare for all is not just about making people smarter and healthier, it's about power.

(Another related example is the reserve currency or "petrodollar". Nations must transact for oil in the US dollar, simply because the US has muscled its way into the OPEC cartel in order to make that the case. Without the reserve currency, the United States would lose a valuable barometer with which to monitor the behavior of most other nations. It would not change all that much in a financial sense.)

Along with many other fields, such as science, sociology, and politics, history also illuminates connections that would otherwise remain hidden. As Richard says in today's episode, knowing something new and unknown happened to occur at around the era of another important event, provides valuable context and reveals a new avenue to pursue. History also provides a convenient method of organization, allowing one to confidently place a puzzle piece down in the correct spot and orientation, despite not yet knowing the location of any surrounding piece. In other words, it provides an anchor of sorts, making it clear in some contexts if we are being led astray.

The fact that Modern Money Theory or MMT, and Post Keynesianism in general, are explicitly interdisciplinary, is a reflection of their attempts to ensure their theories apply to the real world. By imposing its money onto all other disciplines, neoclassical economics resists the idea of interdisciplinarity, which is yet a reflection of their decision to grasp onto assumptions that benefit an ideology, at the expense of empirical truth and caring for others. It is little more than further entrenching their power at all costs.

Finally, being interdisciplinary is essentially a decision to have balance and to be aware of the world around you. It's not possible to care about the world if you refuse to recognize its existence. What this means to me personally, as out there as it may seem, is how our emotions and thoughts are considered separate from our physical existence. It's not unlike how "the economy" is considered separate from people. We're essentially told we can't help people if the economy is unstable. The news tells us that because the stock market is at an all-time high, "the economy is doing great!" And yet at the same time, millions of actual human beings are suffering in the real world, homeless and hungry, not to mention we're on the brink of global societal collapse. The truth is that the economy is us. It's all of us. We are the economy. So if the economy’s doing well while millions are suffering, it can only be true by taking those who suffer, and defining them out of the economy.

It's just as true that our mental and emotional existence cannot be separated from our physical existence. Our emotions and thoughts are greatly influenced by our physical condition and vice versa. If we are in physical pain, it can be minimized as much as is possible by managing our emotions. If we are an anguish, it can be minimized by taking care of our body, such as through nutrition, activity, and exercise (and by being lucky enough to have a home whose water supply isn't poisoned!).

We're also not alone. We can't separate ourselves from our family, community, and society. By caring for ourselves, we help others. By caring for others, we help ourselves. It's up to us to find the proper balance between all these things, and to resist those who try and stop us. And yet, we as MMTers know more than most, that we exist in a world in which many believe wholeheartedly in these false dichotomies and ideas. We must rage against the system and be kind to individuals.

My next interview is with co-author Andrew Berkeley and then after that, Neil Wilson, and then the joint interview. Now, onto my conversation with Richard Tye.

Resources * Naked Capitalism financial blog. General news through an MMT lens. Twice daily list of links.

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Welcome to episode 81 of Activist #MMT. Today is the end of the world. Wait. Let me try that again. Today is part two of my conversation with sixth-year MMT activist Andrew Chirgwin. It's a dark episode. Just letting you know. Today Andrew and I continue our conversation about how neoclassical economists don't "stay in their lane", and have essentially given themselves, and those who advise them, veto power over every facet of our lives. Most relevant to today's episode is mitigating, or more precisely, not mitigating the climate crisis.

Andrew and I hit the issue head on, and it's not pretty. The depth of what we face as a species is stark, it's coming in the not-so-distant future, and is becoming more likely by the day. Andrew and I come to terms with this reality, and also wrestle what it means to choose to bring up young children in this context. Mine 11- and 14-year-old boys, his 6- and 8-year old little girls.

I want to mention that the first hint of this severity was made aware to me by Australian economics professor Steven Hail, whose 2020 Facebook post was also the inspiration for our conversation in part one. I spoke with Steven at length at the 2018 MMT conference in New York City. Before talking with him, I was certain that climate change was a very serious issue. After speaking with him, I started understanding that it may actually be a climate crisis.

A much fuller introduction can be found before part one, but for now, let's get right back to my conversation with Andrew Chirgwin.

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Welcome to episode 80 of Activist #MMT. Today I talk with sixth-year MMT activist Andrew Chirgwin. Andrew graduated from the University of Sydney with a Bachelors of Science in Chemistry and Pure Mathematics, and a masters in secondary teaching. Andrew's introduction to Modern Money Theory, or MMT, was in 2015 when he stumbled on the blog of University of Newcastle economics professor and original MMT developer, Bill Mitchell. Andrew spent the next nine months reading five years of Bill's blog posts. Those who are familiar with the blog will understand how this is no small feat.

(Here's a link to part 2.)

The heart of our conversation, however, was influenced by a February 2021 Facebook post by Steven Hail (the text of which can be found below). Steven is an economics professor at the University of Adelaide and the author of the 2018 book Economics for Sustainable Prosperity, which is a good introduction to MMT. In the post, Steven discusses how neoclassical economists don't "stay in their lane". What this means is that economists impose themselves onto and dominate conversations about healthcare, when they should be led by healthcare professionals and their patients. They dominate conversations about education that should be led by educators and their students. And to bring it back to today's episode, neoclassical economists dominate conversations about mitigating the climate crisis that should be led by true experts in the field, such as climate scientists, energy specialists, chemists, and so on.

This domination is in the form of forcing all conversation and concepts to be expressed in financial terms, as exemplified by the "how're you gonna pay for it?" question. This essentially gives those in power and their economists veto power over every facet of our lives, subjecting us to their biases, ignorance, and ideology. It prevents the true experts from ever being able to complete their highly-complex and critical conversations, and it also keeps the public unaware of the depths of the problems they face.

Finance is a purely-human-created concept. Therefore, purely-financial crises are also purely-human-created concepts. This means we can prevent and mitigate financial crises merely by choosing to do so. It also implies that the Great Depression and the Great Financial Crisis are largely man-made disasters, caused and exacerbated by the actions and inactions of those in power and their economists. And yet this is who we allow to dominate highly complex conversations on topics that are largely outside of human control, such as mitigating the climate crisis. In other words, if neoclassical economists can't get their own house in order, then why do we allow them to be in charge of every house?! And of course, when problems are framed in financial terms, then problems that face the rich are always more profitable to solve than those that face the poor.

An analogy I keep coming back to is viewing a child only through their report card. Doing this will do nothing to help the student if she is hungry and homeless, and suffering from abuse. It is very unlikely the problems will even be seen. In the same way, forcing the climate crisis and other real-world problems to be seen through a financial lens basically guarantees that these problems will never be acknowledged, let alone properly and fully dealt with.

Part two of our conversation turns decidedly dark, as we consider our fate as a species and our choices as parents of young children, if we continue to leave the climate crisis in the hands of neoclassical economists. There's no solving a problem if you don't understand its depth. So buckle up.

But that's next week. For now, let's start part one of my conversation with Andrew Chirgwin.

Resources Steven Hail's Facebook post (that inspired much of our conversation) and Andrew's Twitter debate with John Hearn can be found below.

The 2006 paper by S. Abu Turab Rizvi, The Sonnenschein-Mantel-Debreu: Results after Thirty Years

Steven Hail, February 2nd, 2021, Facebook post:

*Some people I respect think you should value our ecosystem in financial terms and then manage a portfolio of natural assets the way a fund manager might use portfolio theory to manage a diversified portfolio of financial assets. I could not disagree with them more profoundly.

Never mind the fact that this buys into the notion of a simple link between GDP per capita and well-being, which should have been dismissed by now in all high income countries, where there is demonstrably no such link.

Never mind that they habitually use a measure of ecological footprint which allows rich countries to 'export' their pollution to poor countries, allowing them to claim that ecological impact does not rise as GDP rises beyond a certain point.

My biggest problem with this approach is the idea that the financial economics of portfolio management implies the safe management of anything - let alone the natural environment.

Portfolio theory requires measurable risks and known probability distributions, or in other words the absence of complexity, non-linearities, feedbacks and fundamental uncertainties.

The complexity and feedbacks and resulting uncertainties of financial systems is the reason we have so many endogenously driven financial crises in our history.

The thing about financial crises is you can recover from them.

Our natural environment is far more complex, has far more feedbacks and non-linearities and connections, and is as a result far more uncertain than our financial system.

So if you can't trust economists to manage the financial system so that it remains healthy and robust, why would you imagine that by financialising ecosystem services, you will be able to trust them to manage that far more complex 'portfolio'?

It is a profound mistake to financialise the natural world, in my opinion. Instead, we should identify where it is safe to be, add a big margin to allow for unavoidable uncertainty (if we can), and then set limits on what we can tolerate. Dollars shouldn't come into the limits.

Then we should take a step back and identify what we need to allow people to have the best possible chance of a good, secure, just, engaged life.

To an extent, this has been done in the UN Sustainable Development goals, but it is done better in Kate Raworth's doughnut, which can be and is being applied at national, regional and local levels.

What is someone who has spent a career training finance professionals doing saying we ought not to be applying the tools of financial management to our natural environment?

I am saying it is entirely inappropriate, misleading and liable to bias the narrative, policies and outcomes in potentially dangerous ways.*

Andrew's conversation with economist John Hearn

Many line breaks have been removed.

Andrew: What is a stock of income?
Hearn: There is no stock of income only a stock of money.
Andrew: Flow of incomes become stocks of money. Accounting 101
Hearn: Accounting 101 is wrong. A stock of money is used to measure a flow of income. Economics always teaches accountants not the other way round.
Andrew: Accounting is incorrect? So your conjecture here can't even stand up to basic bookkeeping? The net sum of flows is a stock. Hence the net sum of incomes is a stock of incomes, and the stock of incomes is savings or money.
Hearn: Accounting is bean counting it does not require any understanding of what it is counting. Flows are not stocks so there is no hence.
Andrew: If accounting is just beam counting, how do you measure any of your work? Economic activity is measured using accounting... that's how Taxes are determined, savings calculated, policy assessed into potential outcomes. Your statement here is like saying "physics ignores distance"
Hearn: Economists understand simple accounting, accountants rarely understand economics.
Andrew: That's a nice hasty generalisation there. You seem to be shaky on elementary accounting Professor, especially about credit creation by balance sheet expansion.
Hearn: Test me.
Andrew: Credits are created with a matching debts. Currency is is therefore both a credit and a debt. Money, as a credit issued by other entities, are both a credit and debt. Hence currency, and all other money, are debts created by balance sheet expansions.
Hearn: Yes it is double entry bookkeeping. A deposit at a bank is double entered as an asset and liability. It is not the currency. Money can be created by a net increase in newly created loans. Fiat money is not a debt, commodity backed currency is.
Andrew: Fiat money is a debt, because it is also a credit. It is a balance sheet expansion of a different balance sheet. I thought you said you were good at accounting...
1. 1. Hearn: Think assets and liabilities as these appear on a balance sheet not credit and debit.
  2. Andrew: That's another red herring professor. You should be running a cafe at this rate. Red herring for everyone. Currency and other money are accounted for on balance sheets along with other credits as assets of the balance ledger. Stop trying to play coy.
2. 1. Hearn: Explain how the Aussie dollars in your wallet are a debt
  2. Andrew: Because the federal government created a credit by balance sheet expansion, hence making them also a debt.
    1. Hearn: Think liability not debt, asset not credit.
    2. Andrew: See my other response. This is a red herring and we both know it professor. Liabilities, and debts, are accounted for on the balance sheet as much as assets and credits. Your accumulated credits appear as assets. But again, a red herring to avoid the actual topic.
  3. Andrew: It's also their liability to me. The Treasurer signed it.
  4. Hearn: How will the Treasury fulfil its liability to you?
  5. Andrew: When they contract their balance sheet. Until they are willing to do so, they recognise the liability exists because they recognise the asset existing.
  6. Hearn: You are wasting your time and your intellect trying to play word games rather than understanding what you are talking about. Spend the rest of the day trying to understand that fiat money is not debt and commodity backed currency is. Come back tomorrow when it is solved.
  7. Andrew: Apparently, Professor, balance sheet contractions and expansions bother you. The collection of an national import duty is a balance sheet contraction of the Issuer of Currency. The collection of a fee for operating a company by the national government as above. The issuing of a, now very limited, UK Passport comes with a contraction of the balance sheet of the UK Government.
  The settling of a debt incurred from a court case at the National Law level comes with a contraction of the balance sheet of the national government. Four concrete examples all generalised as: "The liability to me will be expunged when I do something that the Currency Issuer will contract its balance sheet in response."

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Welcome to episode 79 of Activist #MMT. Today is part two of my two-part conversation with first-year MMT activist Katrina Pilver. It's about how she discovered the importance of economics and then MMT, and her unusually-intensive and -ambitious journey to learn MMT more deeply. After the end of our interview you will hear a brief follow up where, given that she’s only been at this for around five months, a pretty sophisticated summary of the MMT-designed job guarantee and why she believes it’s important for newbies to understand.

A full introduction, including links to lots of resources, can be found before part one, but for now, let’s get right back to our conversation.

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An extended snippet from part one of my interview with first-year MMT activist Katrina Pilver, where we gush about rapper Killer Mike. (It starts somewhere at around the 53 minute mark.) It includes the full audio of a speech inspired by James Baldwin, which used by the 2020 Bernie Sanders campaign in a powerful commercial.

I had the privilege of briefly interviewing Killer Mike at the 2016 Democratic National Convention, when I was a state delegate for Bernie Sanders, and he was a campaign surrogate. (I documented many hours of my experience as a 2016 Bernie Sanders delegate, which you can find here.)

Killer Mike resources * Bernie Sanders' 2016 hour-long interview with Killer Mike in his Atlanta barbershop, in 2016. * Debate with T.I., Killer Mike, and Candace Owens (see Twitter screenshot below) * Killer Mike's song, Reagan.

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Welcome to episode 78 of Activist #MMT. Today I talk with first-year MMT activist Katrina Pilver, about how she discovered the importance of economics and then MMT, and her unusually-intensive and -ambitious journey to learn MMT more deeply. Katrina and her partner own a soul food restaurant and ice cream truck in Connecticut, the former which they opened with her father-in-law in 2014.

(Here's a link to part two, and to an extended snippet where we talk about Killer Mike.)

After the Supreme Court made George Bush junior president in 2000, Katrina became disillusioned by politics. That changed upon the shock of witnessing Donald Trump become elected president in 2016. In June 2020, she watched a debate and discussion including T.I., Killer Mike, and Candace Owens (see screenshot at the bottom). it was there she got her first exposure to economics as a tool of politics – in other words, a tool to manipulate others out of power, in order to increase your own.

At the suggestion of Killer Mike, the first economist she looked into was Thomas Sowell. Sowell is an alumnus of the Chicago School of Economics and two of his primary influences are Milton Friedman and Friedrich Hayek. (Katrina and I spend several minutes gushing about Killer Mike, who I had the privilege to briefly interview at the 2016 Democratic National Convention. I was a state delegate for the Bernie Sanders campaign and he was a surrogate.)

Katrina eventually entered the term "economics" into a search engine for Podcasts. The first result that struck her was Pitchfork Economics with Nick Hanauer. While working long shifts at her restaurant (and no customers to disturb thanks to the health crisis), she binged on the podcast with a speaker in her apron pocket.

The first economist that appealed to Katrina was Paul Krugman. She felt he was different because he offered hope that nice things are indeed possible. (Nice things like healthcare, education, clean water, and a livable planet.) What she didn’t understand, however, was how these things were possible, and so she purchased Krugman's book Arguing with Zombies in order to figure it out. She was unsuccessful.

A later episode of Pitchfork Economics featured economist Stephanie Kelton. For the first time, Katrina felt not only hope, but actually understood herself exactly how it was possible to have nice things. She immediately of ordered Kelton's book, The Deficit Math, and while waiting for it to arrive, listened to every Kelton lecture she could find, all from her apron pocket. Stephanie Kelton's lectures and books served as the major turning point in Katrina's understanding. She has since consumed an extraordinary amount of content in the past several months, which is the major topic of today’s episode. You’ll find links to several of the sources from Katrina’s journey in the show notes.

Finally, Katrina and I met in a Facebook group called MMT for Newbies. It was created in early 2021, in response to its sister group, Intro to MMT, becoming extremely active (now with more than 6000 members) and perhaps less of an introductory group than it once was. (I’ve been a moderator of the Intro group since September 2020.) Both groups are excellent and if you’re on Facebook, I highly recommend you join both. MMT for Newbies is specifically for questions, and only approved, experienced, and patient MMTers are assigned to answer those questions. Links to both groups can be found in the show notes.

And now, onto my conversation with Katrina Pilver. This is part one of a two-part episode.

Resources Killer Mike

Bernie Sanders' 2016 hour-long interview with Killer Mike in his Atlanta barbershop, in 2016.
Debate with T.I., Killer Mike, and Candace Owens (see Twitter screenshot below)
Killer Mike's song, Reagan.

Podcasts

Pitchfork Economics episode with Stephanie Kelton
MMT podcast with Patricia Pino and Christian Reilly

Videos

Your Taxes Pay for Nothing by PEGS Institute
https://youtu.be/RpyuqKLh6QU (YouTube channel: Stonybrook University)
Warren Mosler - An Introduction to Modern Monetary Theory (YouTube channel: OXI - Wirtschaft anders denken)
MMT: Sovereign Currency Governments Should Stop Selling Bonds (YouTube channel: Deficit Owls)
Presidential Lecture Series: Stephanie Kelton (YouTube channel: Stonybrook University)
L. Randall Wray - Modern Money Theory for Beginners (YouTube channel: St. Francis College)
Milton Friedman’s Free to Choose (part 1 of 10).

Books

Deficit Myth, by Stephanie Kelton (2020)
The case for a Job Guarantee, by Pavlina Tcherneva (2020)
Democracy in Chains, by Nancy MacLean (2017)
Kochland: The Secret History of Koch Industries and Corporate Power in America, by Christopher Leonard (2019)
Currencies, Capital Flows, and Crises, by John Harvey (2009)
Contending Perspectives in Economics, by John Harvey (2020)

Contending Perspectives in Economics: A Guide to Contemporary Schools of Thought

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Welcome to episode 77 of Activist #MMT. Today is part two of my two-part conversation with seventh-year MMT activist Bill Peeples. Bill and I continue talking about various subjects such as accounting, China, The lifecycle of a government’s money, and how human decisions are never natural or scientific. A full introduction – and lots of resources – can be found in the show notes for part one, but for now, let’s get right back to our conversation.

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Welcome to episode 76 of Activist #MMT. Today I talk with seventh-year MMT activist Bill Peeples. Bill earned a bachelors degree in mechanical engineering from the University of Texas at Austin. He then opened a retail computer store and managed his business with accounting software. This served as his introduction to double-entry accounting, for which he received some extra support from his father who is a Certified Public Accountant. Bill later worked for a major computer manufacturer, using computer programming and data analytics to determine why certain systems fail. All of this is to say, logic comes easily to Bill, and this helped him to very quickly pick up some important concepts underlying Modern Money Theory, or MMT.

(Here is a link to part 2.)

Bill wants to understand accounting all the way down to the individual transaction. In the context of economics, this is essentially the atomic level. Understanding this level of detail, Bill says, makes the aggregate become more clear. It also turns some of what is commonly portrayed as scary and complicated, into something decidedly mundane. An example is how the public is often told that China may "dump its debt“ and that this is somehow a threat or even potential act of war against the United States. A related insight I recently learned from Bill is the very concise and simple idea that only the issuer can create and delete its own money (this includes bonds, treasuries, and securities). After being created and before being deleted, the money and bonds can do nothing but change ownership. “Dumping its debt” is a hyperbolic term meaning to sell off its entire holdings of US bonds.

First of all, given the nature of the Chinese economy, it’s extremely unlikely that they would ever choose to do this. But even if they did, what Bill’s insight reveals is that China would do nothing more than exchange their bonds for cash. China would be giving up money that earns regular interest income (bonds) for money that earns no interest. In addition, because of the quantity of bonds involved, China would be very likely lose a lot of money in the process. In other words, the total amount of bonds and money in the world would remain unchanged and China would almost certainly harm itself – and not harm the United States.

You will find several sources recommended by Bill below, along with some example balance sheets he’s created during his experience of responding to common questions.

And now onto my conversation with Bill Peeples.

Resources * Books: + Wynne Godley and Marc Lavoie’s textbook, Monetary economics, an integrated approach to credit, money, income, production, and wealth + James Galbraith’s 2008 book The Predator State: how conservatives abandoned the free market and why liberals should too + 2020 book by Stephanie Kelton, The Deficit Myth + 2010 book by Warren Mosler, The Seven Deadly Innocent Frauds of Economic Policy + Steven Hail’s 2018 book, Economics for Sustainable Prosperity * Interviews: + Mark Cuban and Pavlina Tcherneva, hosted by Charles Hayden on Real Progressives + Superstructure podcast episode The virus is the virus + MMT Podcast interview with John Harvey on his book Contending Perspectives: Parts one and two. * Other: + People and organizations mentioned: Sam Levey and Deficit Owls, Nathan Becker, Charles Hayden + New Economics Perspectives + Bill Mitchell’s blog + Eric Tymoigne’s Money and Banking series on New Economics Perspectives + Steve Keen’s Minsky model

Examples of Bill’s work https://i.imgur.com/IlRyEnq.jpg https://i.imgur.com/Bid9vkW.jpg https://i.imgur.com/SLAYS0x.jpg https://i.imgur.com/hNKMq31.jpg https://i.imgur.com/fjinGcY.jpg And finally, the mind-twisting optical illusion (that reminds Bill "of the illusion of government ‘borrowing’ ".) https://i.imgur.com/VGayolB.jpg

Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth

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Welcome to episode 75 of Activist #MMT. Today is part two of my two-part conversation with Chris McArdle. Today we discuss online activism, and also the concept of truth versus an academic theory. MMT is not "the truth about economics" as I have, admittedly, often said, it is simply the most convincing economic theory to me (and Chris). Truth is an inherently-subjective term and is therefore not conducive to encouraging others to look into MMT, let alone be convinced by it.

We end today’s episode by giving a rundown of our lists of important sources that we find valuable to pass on to others interested in learning more about MMT, both from an introductory point of view, and for those wanting more detail. Many links to these sources and more can be found in the show notes for part one.

But for now, let’s get right back to my conversation with Chris McArdle.

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Welcome to episode 74 of Activist #MMT. Today I talk with Chris McArdle (Twitter/@ChrisMctwtr) on the politics and pitfalls of implementing the MMT-designed job guarantee. Chris was politically active in the 2000s, and an early and strong supporter of then-Democratic gubernatorial candidate Dannel P. Malloy. Chris later joined the Malloy administration during its two terms, conducting policy research and providing public and governmental relations around economic development, housing, and workforce.

[Here’s a link to part two of this episode.]

While traveling around Connecticut in 2010 with candidate Malloy, Chris encountered other candidates at all levels of government. One of them was running for the then-open seat for US Senate, first attempting to earn the Democratic nomination, and ultimately running as a third-party candidate in the general election. What set this candidate apart was his unique policy proposals, highlighted by the promise of a job for anyone who wanted one. That candidate was Warren Mosler.

After the campaign ended, Chris joined Warren and his son for lunch, noting the fancy car out front that Warren himself had built. Warren bought lunch and Chris bought two of Warren’s books (Seven Deadly Innocent Frauds Of Economic Policy and Soft Currency Economics). The two stayed in touch, and Chris was introduced to the then still-small community of economists and students of MMT. He soon spent many hours reading MMT papers and posts, and learning key concepts like Wynne Godley’s sectoral balance identity, Abba Lerner’s functional finance, and Georg Fredric Knapp’s state theory of money.

In 2018, MMT economists released their paper Public Service Employment: A Path to Full Employment. Chris used the paper as an opportunity to introduce the possibility of a job guarantee to the Commissioner and staff of the Connecticut Department of Labor.

Chris praises the authors of the paper for its acknowledgment of political realities. An example is how it considers existing Prevailing Rate structures in a number of states, including Connecticut. This is important because it avoids unnecessarily alienating the building trades unions, therefore increasing the chances that they will support the proposal. He’s also proud to have made a small contribution to this particular aspect of the proposal.

The other concept Chris and I discuss regarding the job guarantee is one I struggle to grasp during this episode, but became more clear of in follow-up conversations. The job guarantee as designed by MMT economists would be a federal law that is federally funded and locally designed and administered. This means that state, county, and municipal governments would design the implementation they deem appropriate for their communities. Chris remembers well the pitfalls and potential abuse of a government-run jobs program such as those endured by the Comprehensive Employment and Training Act (CETA) of 1973. One of those pitfalls is the stigma associated to having a "government job."

What Chris recommends is that the actual hiring and management of those jobs be placed into the hands of, for example, non-profits and public-private partnerships. As is already the case in areas such as for the provisioning of social services and construction of housing, governmental and quasi-governmental entities would provide professional selection and oversight, while avoiding creation of a large new government workforce and bureaucracy. Finally, it should also be noted that in Chris’ state (Connecticut), there is no county government – implying that the job guarantee would most likely be delivered at the state level. Where I live in New Jersey, county governments are more prominent.

This episode is part one of a two-part conversation. In part two, Chris and I discuss online activism, and also the concept of "Truth" versus theory. MMT is not "the truth about economics" as I have, admittedly, often said, it is simply the most convincing economic theory (to both me and Chris). Truth is an inherently-subjective term and using it is therefore not conducive to encouraging others to look into MMT, let alone be convinced by it.

We end by giving a rundown of our lists of important sources that we find valuable to pass on to others interested in learning more about MMT, both from an introductory point of view, and for those wanting more detail. Many links to these sources and more can be found in the show notes.

Now onto my conversation with Chris McArdle.

Resources * Regarding the political issues surrounding the implementation of a job guarantee: A 2018 paper by L. Randall Wray, Policy Note: A Consensus Strategy For A Universal Job Guarantee Program * MMT resources recommended by Chris: + The podcast interview where Warren Mosler is interviewed by Alan Kohler (as highly praised by Chris in this episode) + Video: Alan Greenspan speaks with Paul Ryan + Warren Mosler’s MMT White Paper + Stephanie’s 1998 paper, Can taxes and bond sales finance government spending? + L. Randall Wray’s paper, The state theory of money to Modern Money Theory * Introductory MMT resources recommended by me: Good first academic papers to learn MMT (for the layperson) * What is an academic theory? And how does the term relate to Modern Money Theory?: + Understanding what the T in MMT involves, Bill Mitchell, 2018: post, interview + Read the first chapter of the 2020 book by John Harvey, Contending Perspectives in Economics * Mentioned by Chris: + The concept of degrees of separation + BJ Fogg, founder, Stanford’s Behavior Technology Labs + Nicholas Christakis' book Blueprint + 2019 Johann Hari book about the failed War on Drugs, Chasing the Scream * Mentioned by me: + Bill Cimbrelo, MMT federal candidate from Massachusetts + Confirmation that MMT and its job guarantee are inseparable. * Two additional in recent sources related to the CETA program: + April 2021 article: Artists say a forgotten Nixon-era jobs program could radically alter federal arts funding + 2018 it’s out of the podcast Money On the Left: Ballerinas On the Dole with Colleen Hooper

Blueprint: The Evolutionary Origins of a Good Society

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Welcome to episode 73 of Activist #MMT. Today is part two of my two-part conversation with Texas Christian University PhD. economics professor and Cowboy Economist, John Harvey. The topic of our conversation is exchange rate determination, and we continue to work through my question list, which can be found in the show notes for part one. Much more information and resources can also be found in the show notes for part one, but for now, let’s get right back to my conversation with John Harvey.

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Welcome to episode 72 of Activist #MMT. Today I talk with Texas Christian University PhD. economics professor and Cowboy Economist, John Harvey. The topic of our conversation is exchange rate determination. However, be forewarned that this episode is not an introduction but a deep dive into the weeds of John's 2009 textbook, Currencies, Capital Flows, and Crises. For a proper introduction, you'll find links in the show notes to several good recommendations, including two MMT Podcast episodes (December 2020 with John, and October with Steven Hail), John's August 2020 lecture with Modern Money Australia, a 2012 interview on the economics blog Naked Capitalism, and a layperson-friendly 2004 book by psychologist Thomas Oberlechner.

(Here is a link to part two with John.)

This interview took three months of preparation. When I first read John‘s book, I only made it halfway through and, in all honesty, aside from the introduction, I got very little out of it. John's writing has nothing to do with it, it's simply an intense and completely (if you'll forgive the pun) foreign topic. Chapter two, especially, was impenetrable. It's a summary of the major exchange rate models in neoclassical economics and frankly made zero sense. I took a nap after every few paragraphs and watched videos on each type of model, but none of it felt relevant. (John briefly goes over this chapter in his August 2020 lecture.)

I started the book over again and grew fascinated by a five page section in chapter one called Post Keynesian Economics. You'll find it on pages five to nine. The section is an introduction to post Keynesianism and specifically how it contrasts with neoclassicism (the latter of which is currently mainstream economics). Without exaggeration, I read the section around twenty times and wrote pages of notes and questions, several of which I posted on the Facebook group, Intro to MMT (which, I wasn't then, but am now, a moderator of… and I recommend you join it).

I spent the next two months diving into the basics of mainstream economics, starting with a 2019 paper expressing the common concern for the long-term fiscal sustainability of government spending, and its corresponding debt and interest. I then read and interviewed the authors of the 2020 paper responding to it, by German MMT economist Dirk Ehnts and Danish PhD. candidate Asker Voldsgaard. I also read a paper on historical time as recommended by Asker, and a 2006 paper by Scott Fullwiler. The interview inspired a post where I break down the topic in detail: The long-term fiscal sustainability of government spending (is a non-issue)

I then read Steve Keen's 2011 book, Debunking Economics, second edition. I didn't understand much more than I did understand, but it was fascinating and enlightening nonetheless. It also provided excellent background for my next interview with UMKC PhD economics candidate Sam Levey, with whom I discussed the core assumptions of mainstream economics [parts one and two]. Links to all of these papers, posts, and interviews can be found in the show notes.

Before returning to John's book, I read several papers by John and Ilene Grabel, plus the 2004 book by Oberlechner, called The Psychology of the Foreign Exchange Market. I especially recommend Oberlechner's book as a layperson introduction to exchange rate determination. It's particularly easy-to-read and also comes highly recommended by John. As is made clear in Oberlechner's book, one of, if not the, most important determinant in the reality of exchange rates is group psychology.

Finally, I read John‘s book straight through, beginning to end. This time, I was better prepared to distinguish between what to discard and what to focus on. Re-reading chapter two, I now realize that it's less that I didn't understand it and more that it's just not understandable. You would not lose much from skipping the chapter entirely. Its primary benefit is not to learn about foreign exchange but to provide a benchmark for just how far off mainstream is from reality.

The other major lesson I take from John‘s book is that people do not want only to trade – meaning purchase physical goods and services from a company in another country – actual human beings want to accumulate financial assets, and especially, to profit in the short term. Neoclassical economics assumes people only want to purchase stuff (meaning trade), and the only reason they need and want to use money is in order to purchase that stuff. But in the world in which we actually live, only between 1.5 to 8% of all international transactions are for trade. The rest, well over 90%, is for purely-financial assets.

Despite this obvious contradiction by the facts, minstream economics assumes barter for every person, in every country, at all times. In fact, the assumption of barter is required in order for their assumption of balanced trade (either right now or soon to be) to also be true. And that assumption, of balanced trade, is required in order for the assumption of full employment in a single country (any country!) to also be true. In other words, if the myth of barter is indeed a myth (and it is indeed a myth), then mainstream economics falls apart. John and I discuss this in part one, and it inspired me to write a post where I elaborate on the concept, a link to which can be found in the show notes: The neoclassical assumption of full employment requires balanced trade.

If we are to be a civilized society, then we must do what it takes to achieve full employment. Mainstream economics falsely assumes that doing nothing is the only possible avenue to achieving it. MMT demonstrates that full employment can only be attained and maintained, in both good times and bad, by a federally-funded jobs guarantee; one paid for by a currency issuer with a freely-floating currency and little to no debt and other currencies. Despite mainstream's protestations, full employment doesn't and can't happen "naturally." It can only happen with the deliberate and ongoing intervention by the central government – and this will only happen when we stand up and make them do it.

Two notes before we get started: first, a minor correction: I say that "today's" exchange rates are determined by the forecast for next week's exchange rates. I should have said tomorrow. Second, my full question list can be found in the show notes.

And now, onto my conversation with John Harvey.

More resources * By John: + Lecture notes: Exchange Rates and Trade Flows:A Post Keynesian Analysis + 1996 paper, Orthodox Approaches to Exchange Rate Determination: A Survey + 2001 paper, Exchange Rate Theory and "the Fundamentals" * By Ilene Grabel (her website): + 2016 paper, CAPITAL CONTROLS IN A TIME OF CRISIS + 2011 paper, Not your grandfather's IMF: global crisis, ‘productive incoherence' and developmental policy space + 2003 paper by Grabel, Gerald Epstein, and Jomo Kwame Sundaram, Capital management techniques in developing countries: An assessment of experiences from the 1990's and lessons for the future * Other academics recommended by John to learn more about exchange rate determination: Anina Kaltenbrunner, Rogerio Andrade, and Daniela Prates

Full question list 1. First things first! Today is a red letter day in the history of exchange rate determination. (brief Battle of the Bulge summary) 2. Before discovering MMT, I never followed or read about economics. Before discovering your work, I never followed or read about foreign exchange. In my ignorance, coupled with how simplistically it seems to be portrayed in the media (such as "China and the United States trade lots of stuff"), I thought that foreign exchange was only trade (which is the exchange of physical goods and services). I also thought that this trade was mostly done directly between two central governments. But the very existence of exchange rates and currency exchange at all, suggests that exchange actually happens, at least substantially, between companies within two different countries. Governments don't need their own currency! Companies do. So a company in country M (M for import) wants to purchase something from a company in country X (X for export). So company M needs currency from country X, before it can do business with company X. This is not really a question, but I found the opening pages of your book to be pretty eye-opening, and I suspect my ignorance is not unique among the general public. 3. The trading of goods and services is only about 1.5 to 8% of all International transactions. The rest is the trade of financial assets. On page 2 in your book you quote a 2005 BIS survey that says the average daily currency transactions worldwide was about $1.5 trillion. This is around 40 times the value of daily trade. In the show notes, I put a link to a 2019 tweet from Scott Fullwiler that refers to an interview, where it's stated that $5 trillion of settlements are made each day in the Federal Reserve system in the United States. I don't remember which one, unfortunately, but Scott also states in a paper that it may be actually between five and $20 trillion per day. Obviously the data quoted in your book is from 15 years earlier, but I'm shocked that the whole planet is only $1.5 trillion when the US alone is $5 trillion. Are these numbers comparable? 4. Regarding a single nation: A major assumption of mainstream economics is that full employment is here now or soon will be. A critical assumption underlying that is that people (households) are insatiable and will spend every dollar of their income on consumer goods and services. This maximizes aggregate demand, which means companies always need to hire more, hence full employment. A critical assumption underlying this is that all of the spending stays within that country. If even one dollar more leaves the country than comes back in, then total demand is lowered and full employment is put in jeopardy. This is why the assumption of balanced trade, either right now or soon will be, is what you call "one of the legs by which the full employment assumption is maintained." Each country must be a perfectly self-contained, hermetically-sealed bubble, or mainstream theory falls apart. Can you elaborate on this connection, and also briefly describe the other legs that undergirds mainstream's assumption of full employment? 5. One of the most important determinants of exchange rates is group psychology. There's a great moment in your book discussing how the most important determinant of today's exchange rate is today's forecast for next week's rate (or however far into the future). So the idea that your forecast of next week affects next week's actual rate is mostly an illusion. And by the time next week rolls around, you don't care about those actual results anymore! In other words, the expectations are self-fulfilling prophecies. Expectations create the future. Mainstream or neoclassical economics primarily evaluates this situation by comparing those expectations about future values to the actual future values. This is not useful because (A) it pretends the result is unaffected by the expectations (which is called logical time where PK has historical time) (B) Conversely, it suggests that next time maybe we could predict the future. (C) It pretends (I'm not sure how to elegantly say this) that, as if flipping heads five times in a row then makes flipping tails five times in a row more likely and (D) it distracts you from trading and forming expectations in the now! Post Keynesian focuses exclusively on the process of forming those expectations. Can you elaborate on this difference? (I read Oberlechner‘s book. It was very good and in my opinion very layperson friendly. I don't know why it only addressed foreign exchange since it seems to me that almost all its findings apply just as much to traders at any geographic level.) 6. Mainstream acknowledges that it has nothing to say about exchange rate determination in the short run, and only models for the long run. All of those models are wrong, but let's pretend that they're right. So mainstream can predict what will happen, say, 10 years from now, but nothing sooner. So what at all is useful about mainstream economics? 10 years off is always 10 years off. 10 years from now, 10 years from a year from now, 10 years from six years from now. So how is it not just an every-man-for-himself rat race at all times? If I'm correct, then how is mainstream anything more than propaganda for the status quo, which by definition only benefits those already in power. Does that make sense? 7. So much time and energy in foreign exchange is spent on nonsense. Analyzing meaningless charts (chartism) or random economic rules (the fundamentals), pretending that we can somehow predict the future, that we don't affect the future, that we aren't affected by others or the past. So on one hand, because we can't predict the future, what alternative is there? How can it be anything but a big gigantic game? On the other hand, it seems that the vast majority of traders think that neoclassical fantasy world is indeed real. Perhaps a select few that know the reality, deliberately use that knowledge to manipulate and dominate the masses. That seems like a reasonable speculation. Aside from the elite being less elite and neoclassical economists being thrown to the street, what if every trader read your and Oberlechner's books, and Ilene Grabel‘s work, and really got it? What would this alternate foreign exchange universe be like? Trading wouldn't stop! How would it be different? 8. Two meta questions: I'm pretty sure these things are not related, but I'm going to ask them together: (one) I've heard you say that you disagreed with some aspect of MMT but that it's something in the weeds, nothing major. What is your disagreement? 9. (Two) knowing that the book was written well over a decade ago, on page 72 you state, "we [the US] have a fractional reserve banking system…." I can only guess that you would agree that that's no longer the case. So to ask this more broadly: if you were to rewrite the book again today, or update it for a second edition, what would change? How much would each of those changes impact your conclusions, diagrams, and mental models? 10. My ultimate goal, which is clearly impossible to achieve today, is to make a clear connection between your work and that of Fadhel Kaboub. My instinct is that there's something important there. In your late-Mexican-delivery, margarita-fueled, yet very entertaining "horrifically boring" lecture (which was organized by the fine folks at Modern Money Australia and a MMT Podcast), you said the following: "What if I'm a small African nation. Can I follow MMT policies? I don't know. I have always wondered about that." You then clarified that your area of expertise is not developing nations. I believe I understand your specific concern and I'd like to clarify your thinking. First, speaking of MMT in general. We as MMTers know, with total certainty, that the central government's of at least the US, UK, Canada, Australia, and so on, have the capacity to provide dramatically more for public purpose. The challenge is to inform the people and take back control of our government and our money. This may turn out to be unlikely or even impossible, but that's a purely political and social obstacle, not financial. This is analogous to developing nations: although clearly with less bells and whistles than in developed countries, all nations, no matter how developing they are, have the financial capacity to float their currencies and, given enough time, to provide full employment. At that point, they can indeed provide much more for public purpose. The challenge is therefore not financial, but rather to escape out from under the thumb of their colonizing overlords. This may prove unlikely or even impossible, but that's mostly a political and social problem. So when you say "I wonder" and "I don't know," I can only guess (and honestly, hope) that you're referring to those political obstacles, not the financial ones. Is that a fair characterization? 11. A major cause of currency crises is the discrepancy or tension between groupthink (bandwagons and herd behavior) and the underlying conditions in the real world. As the difference grows larger, the tension is more susceptible to smaller and smaller final straws. But often it seems that the final straw is blamed for the years, and sometimes decades, of problems that the final straw merely exposed. An example is the December Surprise which is blamed for the Mexican Currency crisis in 1994, even though it had been building for at least a decade. This is quite analogous it seems, to the false idea that "creating too much money was the cause" of famous historical hyperinflations. As if the war never happened in Weimar, or the decades of terrible circumstances and decisions never happened in Zimbabwe. It even seems appropriate on a personal level, of people spending years in denial, sometimes unknowingly, and then some point years later, the consequences come out all at once – or at least it feels that way. Can you elaborate on this and bring it back to these exchange rate crises? 12. How much does a country need to be concerned about (groups of) individual traders sitting at computer screens on the other side of the planet? Or are problems generally centered around large actors? How did the internet and computer-based trading change things? Were these problems dramatically different before internet/computer based trading? 13. As I understand your book and Ilene Grabel's work, the primary problem regarding exchange rate is, essentially, we've let the mob take over, and their loan sharks have been put in charge of our economies and finances. The mob definitely does not care about public purpose, they care about nothing more than in-and-out, short-term profit. They also push all financial and real costs on to everybody else, who happens to be more vulnerable and farther from the levers of power. And it's all done with little to no consequences. So a country or a company makes a deal with the mob devil (neoliberal devil), and eventually takes out a predatory loan: a cash injection in exchange for control. The country is put into an impossible position and eventually fails to meet that impossible condition. In order to bail themselves out, they must often do something that contradicts with their long-term survival, and give up even more control in the process. It inevitably leads to financial ruin. I believe this analogy is in the ballpark, but you'll correct it as necessary. The major solution according to you and Grabel is to disincentivize short-term profit in order to protect vulnerable countries and companies from predatory loans. But since the mob is in charge of the planet, this is no small task. Can you elaborate on this? 14. Is there anything else you think should be said? Can you recommend related work listeners can look into for more on these topics?

The Psychology of the Foreign Exchange Market

Debunking Economics - Revised and Expanded Edition: The Naked Emperor Dethroned?

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Welcome to episode 71 of Activist #MMT. Today is part two of my two-part conversation with second-year MMT activist and graduate student Jane Ball. In part one, Jane described their journey to MMT and the flaws of mainstream Marxism.

Today, Jane and I discuss two of their academic style posts. The first documents studies that demonstrate the benefits of existing UBI-like programs, including the $5000 a year paid every Alaskan citizen by a fossil fuel company. The regular payment is clearly beneficial to its recipients, with the cruel irony being that the payments are being made by companies which are viciously predatory to those very same recipients in the long run.

The second is a fascinating post documenting how racist zoning has been official United States government policy, starting soon after the Russian revolution. The policies were a deliberate effort by the government to prevent a similar kind of popular uprising. This was done primarily and essentially by dangling a nice home in the faces of white people, and by keeping black and brown people out via redlining and discriminatory ordinances. So not only was this country built long ago on the backs and with the blood of black and brown people, that virulent racism continues today in active policy, all around the country.

And now back to my conversation with Jane Ball. This is part two of a two-part conversation. Enjoy.

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Welcome to episode 70 of Activist #MMT. Today I talk with second-year MMT activist and graduate student Jane Ball. Jane earned an undergraduate minor in international economics at a conservative business school during the heart of the Iraq war and the first George W. Bush administration. Jane enjoyed the philosophy, theory, and history of economics, but strongly disliked the math and calculus. Because of the latter, they decided against pursuing an economics PhD. In early 2019, Jane discovered MMT in an episode of a podcast called Season of the Bitch. Jane then branched out to MMT Podcast and Money on the Left, and into academic papers by Randy Wray and Stephanie Kelton. Only then did Jane realize that it was not their understanding of mainstream economics and its math that was faulty or lacking, but the economics itself that made no sense.

After describing their journey to MMT, Jane then talks about the flaws of Marxism. Not as it actually is, but as it is popularly understood. Jane says this is primarily due to supporters inappropriately accepting and attempting to work around mainstream assumptions instead of rejecting them outright.

An example is the flawed belief that at its heart, money is a scarce commodity. This is despite Marx’s own monetary theory of production, or M-C-M’, which, as I understand it, in turn implies chartalism and the state theory of money. The monetary theory of production and chartalism, which is supported by the overwhelming body of historical and anthropological evidence, is in direct contradiction to the a-historical idea of barter, in which money is a commodity, or a tangible and scarce thing. If money were indeed a commodity, then as Jane describes, it means that money is a purely economic phenomenon and is inherently separate from the political world, and therefore outside of direct human control. All that said, I have studied little to no Marxism, so take this with as big a grain of salt as you see fit. We are all learning together.

In part two, Jane and I discuss two of their academic style posts. The first documents studies that demonstrate the benefits of existing UBI-like programs, including the $5000 a year paid to every Alaskan citizen by a fossil fuel company. The regular payment is clearly beneficial to its recipients, with the cruel irony being that the payments are made by companies which are viciously predatory to those very same recipients in the long run.

The second is a fascinating post documenting how racist zoning has been official United States government policy, starting soon after the Russian revolution. These policies were a deliberate effort by the government to prevent a similar kind of popular uprising. This was done primarily and essentially by dangling a nice home in the faces of white people, and by keeping black and brown people out via redlining and discriminatory ordinances. So not only was this country built long ago on the backs and with the blood of black and brown people, that virulent racism continues today in active policy, all around the country.

A couple notes before we get started: First, Jane is a voracious reader. Many of the books and authors they mentioned are listed in the show notes. Second, I mention how even the poorest countries can distribute their resources equally. I have since learned that there are many complications related to this, centering around the sovereignty of developing nations and how they are deliberately sabotaged and coerced by more powerful nations. I am still learning.

Now onto my conversation with Jane Ball. This is part one of a two-part conversation. Enjoy.

Resources * My interview with Marxist academic Jim Kavanagh (recorded after this episode Jane): Episodes 58 and 59: Jim Kavanagh: A Marxist academic and MMTer. * My recorded Apple ID scam phone call * Stephanie Kelton’s August 2020 appearance on Mark Blyth’s podcast. * My interview with Ryan Mathis: + Part one: Episode 21a: Millennial, first-year law student, and 5th year MMTer: The left-wing project to recreate our corrupt political, media, and educational institutions. + Part two: Ep 21 [2/2]: Ryan Mathis: There is nothing “natural” about society’s laws * Doug Henwood’s 2019 criticism of MMT: Modern Monetary Theory Isn’t Helping. Three responses by MMTers can be found in this post: * My chartalism post * Roosevelt Institute UBI study * Warren Mosler’s state theory of money story: There’s a guy at the door with a gun. * John Harvey’s August 2020 lecture with Modern Money Australia, summarizing his book: Exchange Rate Theory: Is it as Horrifically Boring as it sounds? * Pocket homes by Ross Chapin * Books: + Empire of Cotton, Sven Beckart + Books by Sylvia Federici + Henry George’s Progress of Poverty + David Harvey: A Companion to Marx’s Capital + Richard Rothstein’s Color of Law by + David Freund’s Color of Property + Racial Taxation, book and my interview with the author, Camille Walsh [parts one and two]. My related post: The many reasons why the idea that “taxes pay for stuff” is deeply sinister. + Christian Parenti’s Radical Hamilton: Economic Lessons from a Misunderstood Founder * American-Canadian Marxist political theorist and historian Ellen Meiskins Wood

The Color of Law: A Forgotten History of How Our Government Segregated America

Radical Hamilton: Economic Lessons from a Misunderstood Founder

A Companion To Marx's Capital: The Complete Edition

Colored Property: State Policy and White Racial Politics in Suburban America (Historical Studies of Urban America)

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Welcome to episode 69 of Activist #MMT. Today is part two of my two-part conversation with Dirk Ehnts and Asker Voldsgaard. It’s also part four of a larger four-part series on the relationship between neoclassical or mainstream economics and MMT. Parts two and three were with Sam Levey on the core assumptions of mainstream economics. Part one with Dirk and Asker was on the 2020 paper they wrote responding to a 2019 paper by a mainstream economist, expressing the common concern for the long-term fiscal sustainability of government spending and its corresponding debt and interest. Here is the post this conversation with Dirk and Asker inspired me to write: The long-term fiscal sustainability of government spending (is a non-issue)

In today’s episode, we take a step back to discuss the larger context in which all these topics exist. For the first half-hour we discuss the monster we truly face, both as MMTers and human beings, as painstakingly and powerfully detailed in the 2017 book Democracy in Chains by Nancy MacLean.

For the rest of the show, we talk about what must be done to change our economics and economics education, the latter of which is largely based on the 2014 book, Econocracy. Econocracy was written by three members of Rethinking Economics, which is an international organization of economics students promoting pluralism in the classroom. Asker serves as the vice chair of Rethinking Economics, Denmark.

We face multiple catastrophic problems, which Asker summarizes as a financial crisis, inequality, and a climate crisis. These are the big problems that must be addressed with bold solutions. But solutions are not possible until the problem is fully understood – which is not possible until those problems are acknowledged to exist in the first place. Most unfortunately, the powerful have little incentive to stop these crises at all, since they are likely to be the last and least harmed, and in important ways, may even benefit from their happening. As Dirk says, quoting Keynes, “in the long run, it is the ideas that matter.“ The only question is how many of us suffer between now and then.

All we can do is take a breath and continue to show people how the economy actually works, to realize that we can decide to use it differently, and that it is time to either make our leaders into better decision makers, or for us to replace those leaders – or become those leaders. There are simply no other options.

You will find links to several important figures, books, and sources mentioned by Dirk and Asker, below. But for now, onto my conversation with Dirk Ehnts and Asker Voldsgaard.

Resources * Goldman Sachs CEO Lloyd Blankfein: Our Employees Are Among The Most Productive In The World, 03/18/2010 * HOW WELL GDP MEASURES THE WELL-BEING OF SOCIETY. Chapter 19.5 of the Open Economics Textbook. * Georg Friedrich Knapp's The State Theory of Money (this book is also recommended by my future guest, Panayotis Giannokorus): + Full book on Google Books + PDF, from here + Dirk’s 2020 paper: Knapp's The State Theory of Money and its reception in German academic discourse (PDF) * Mariana Mazzucato’s 2018 book, The Value of Everything: Making and Taking in the Global Economy * The work of Michael Hudson * Samuel von Pufendorf, 1600s German jurist, political philosopher, economist and historian. * Mark Carney's lecture on value, validating Mariana Mazzucato's assertions in her book The Value of Everything * Symptomatic Redness - Philip Mirowski On neoliberalism and economics education. * Nancy MacLean - 4 April 2018 Lecture - OSU MediaSpace

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Bonus: 11-year-old Squeaky explains chartalism (the state theory of money)

This is a picture from around 2018. (I'm only his father! How would I know these things?!)

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Welcome to episode 68 of Activist #MMT. Today is part two of my conversation with Sam Levey, on the core assumptions of mainstream economics. Sam is a research scholar with the Global Institute for Sustainable Prosperity, a PhD candidate in economics at the University of Missouri Kansas City, or UMKC, and a co-founder of the online advocacy group, Deficit Owls. Sam starts by giving an update on his progress towards his PhD. After that, our conversation is all about the core assumptions of mainstream economics, which is currently neoclassical.

Much more can be found in the show notes for part one. But for now, let's get right back to our conversation.

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Welcome to episode 67 of Activist #MMT. Today I talk Sam Levey on the core assumptions of mainstream economics. Sam is a research scholar with the Global Institute for Sustainable Prosperity, a PhD candidate in economics at the University of Missouri Kansas City, or UMKC, and a co-founder of the online advocacy group, Deficit Owls. Sam starts by giving an update on his progress towards his PhD. After that, our conversation is all about the core assumptions of mainstream economics, which is currently neoclassical.

(Here's a link to part two.)

This is part one of the new two-part conversation, but it's also part of two of a larger four-part series about the relationship between mainstream economics and MMT. Parts one and four are with Dirk Ehnts and Asker Voldsgaard (here's part one, which contains a link to all four parts). Last week, I spoke with Dirk and Asker about their 2020 paper which is a response to a 2019 paper by Jeppe Druedahl. Jeppe's paper is a summary of the mainstream concern for the long-term fiscal sustainability of government spending, and its corresponding debt and interest on the debt. For more on the details of this particular argument, consider taking a listen to last week's episode.

Today, Sam and I use Jeppe's paper as a bouncing off point for discussing the core assumptions on which the above argument, and mainstream economics in general, is built. To very briefly summarize Jeppe's argument:

This conversation with Sam is focused on mainstream (which is currently neoclassical) economics, and more specifically, the fundamental assumptions that underlie it. As a jumping off point, I'm going to briefly review the paper I discussed last week with Asker Voldsgaard and Dirk Ehnts. They wrote a response to a 2019 paper by Danish economist Jeppe Druedahl. Jeppe's paper is called "A kinder egg on MMT" and is basically the mainstream argument against MMT regarding the long-term fiscal sustainability of government spending, and its consequential debt and interest on the debt.

In brief, under mainstream assumptions, if you model out government spending to infinity, which means at a minimum, 75 to 100 years, there are serious concerns. To such an extent, that there may be only two choices, both of which are genuine Economic Armageddon: hyperinflation or – despite the ability to issue its own currency – voluntarily default in order to avoid hyperinflation.

You should consider reading Jeppe's paper, as well as Asker and Dirk's response. You should also listen to the previous episode where we discuss both. In addition, this argument has been thoroughly addressed in several papers by Scott Fullwiler, the latest being the 2020 paper called "When the interest rate on the national debt is a policy choice (and "printing money" does not apply)." Links to three of these papers by Scott, from 2006, 2016, and 2020, plus those by Asker and Dirk, and Jeppe, can be found in the show notes.

As I understand it, when it comes to the particular concern of long-term fiscal sustainability, the core assumptions are:

First and foremost, loanable funds: The idea that banks cannot issue loans by creating new money, but rather loan out other peoples money. In addition, the central government can borrow that money as if the government is just another private citizen or company.
Loanable funds implies that financial crowding out is possible, which means that the non-government sector must compete for those loanable funds with the government.
This further implies that, although the central bank can set the short-term interest rate that they wish to target (called the nominal rate), they have little to no control over long-term interest rates. These longer-term rates are called "real" interest rates, because they are set by so-called "real" forces in the market. Note the inherent ideology lurking behind that word "real."
MMT says that there is only one way to spend which is by issuing currency. Taxation and bond sales may be necessary for other purposes, but when and for what is never directly related to the currency that is issued – and rarely-if-ever a one-to-one relationship. Mainstream calls issuing currency without selling bonds "printing money." It asserts that printing money is (A) not possible without also paying for it with the revenue from taxation or bond sales, either now or in the future. and (B) conversely, that it is indeed possible for the issuer to collect that revenue and then re-spend it at a later date. Again, MMT says this is not possible, as the only way for the issuer to spend is by... issuing. More specifically, this is done by expanding balance sheets at the central bank and Treasury, by making numbers bigger and smaller on accounting t-charts.
Finally, mainstream also assumes perpetual or inevitable full employment, in addition to the god-like foresight to know what federal spending will be, not just next year, but 100 years into the future.

In addition to the mainstream argument regarding fiscal sustainability, Sam and I talk about many other different topics, including deductive versus inductive reasoning, quantitative versus qualitative research methods, the Great Depression versus the Great Vacation, and statistical over-fitting, We also discuss the contradictory view of how the central government is seen by mainstream as both a helpless dainty flower and, simultaneously, a potentially-catastrophically destructive force. We also answer a question by a patron of Activist #MMT, Alexander, regarding the mainstream response to sectoral balances in the context of loanable funds.

Finally, we talk about how and why mainstream economics considers money to be "special." Basically, in the mainstream view, money is a scarce, physical thing – in other words, no different than any other commodity. This means that the only way for someone in the non-government sector (citizens and businesses) to get new money, is for it to be wrested from the hands of another citizen or business. Under the theory of loanable funds, even government spending comes from the non-government sector, and so must also be ripped from the hands of someone in the economy. Hence, a zero sum game and crowding out.

scarce! But even if not scarce, the assumption of full employment SIMULATES scarcity!

MMT recognizes that all kinds of money, including reserves, cash, bonds, and other treasuries, is not scarce but another type of IOU. As Sam told me, "finance itself is not scarce, It's a coordination mechanism." This insight and reality changes the battle from, "from whose hands will we take the money?" To "Who will we put in charge of this coordination?" As MMT recognizes, the latter has always been the case. The former is predicated on the assumption that our money can and will never be coordinated by the government. As Neil Wilson said to Phil Armstrong on their recent Gower Initiative interview (to paraphrase): "the plane works just fine, we just seriously need a new crew." Sam takes this further by saying that we need a new process with which to choose that crew. However, even if we do get a new process, even if we do get money out of our politics, and even if we do get a new and good crew, none of it matters if money is truly scarce and special, such as under loanable funds. If money is scarce, then we as a society and citizens, and the government that is supposed to represent us, will never be in charge of coordinating our money.

As a final note, I also talk about the mainstream assumptions of the neutrality of money in episode 57, which is part two with Asad Zaman, and historical time in last week's episode with Dirk and Asker.

And now onto my conversation with Sam Levey.

Resources * My primary source for preparing for this interview was Steve Keen's 2011 book, Debunking Ecoonmics, second edition. * Every episode and snippet on Activist #MMT with Sam. * I discuss the neutrality of money in part two with Asad Zaman, on episode 57. * Michael Kalecki's 1943 paper, Political Aspects of Full Employment (Sam considers this papers one of his favorites) * Yale economics professor, Truman F Bewley * 1998 book by Alan Blinder, Elie R.D. Canetti, David E. Lebow, and Jeremy B. Rudd, Asking About Prices: A New Approach to Understanding Price Stickiness * Sherlock Holmes is the master of deduction (the difference between deductive and inductive reasoning) * Eric Grauchwe's 2018 book, Winter War: Hoover, Roosevelt, and the First Clash Over the New Deal * Here's Sam's response to my statements regarding S=I: "So, they way Keynes defines actual S and I, they are always equal at all times no matter what. Usually if you’re talking about the possibility that they might not be equal at some time, then you’re talking about desired or planned S and I. Keynes has a 1937 paper that goes into this issue, which is still important for PKE I think. "The Ex Ante Theory of the Rate of Interest."

Full context of question by Activist #MMT patron, Alexander

Dear Sam, I wonder if you could explain what is the neoclassical equivalent of the sectoral balance view in national accounting. And how it is different from the heterodox perspective. Today I've shared a post about EU interest Payments in % of GDP "Public-debt-to GDP can be a misleading metric in assessing debt sustainability; it does not account for interest payments!" (https://twitter.com/heimbergecon/status/1330806100992651264) I got this reply from a banking consultant: "This is a terrible argument because it ignores both the impact on investment appetite of the destruction of the time value of money, and the misallocating to the public sector of a disproportionate share of available funds, starving the private sector and disrupting the yield/safety/liquidity equation." … My answer: Dear Bob Lyddon, there is no tradeoff between funds spent into the public or into the private sector. This is because the public sector, the government creates those funds as it spends. This at least is true if the government has a sovereign currency, a central bank and a treasury. As shown in the Sectoral Balance View of National Accounts: (S – I) + (T – G) + (-CAB) = 0 Meaning: The private domestic financial balance (household savings minus private investment, S - I) plus the government financial balance (gov. tax revenue minus gov. spending, T - G) plus the current account balance (- net exports + net external income flows, CAB) equals zero Meaning: The public sector deficit must be the income of the other two sectors. This is an accounting identity. It is true by definition! With external trade in balance, the government deficit must be the private sector income! Asking the government to reduce its deficit equals asking the private sector to reduce its total income!

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Welcome to episode 66 of Activist #MMT. Today I talk with Asker Voldsgaard and Dirk Ehnts on their 2020 response to a paper criticizing Modern Money Theory, or MMT. Dirk is a PhD economist based in Berlin and Asker is a Danish PhD student in innovation and public policy, with a Master’s in international political economy and economics.

[Links to all other parts in this series: Part two and three with Sam Levey. Part four again with Dirk and Asker.]

Their paper is in response to a 2019 paper by Danish PhD mainstream economist Jeppe Druedahl, called “A Kinder Egg On MMT." It expresses primarily the mainstream concern for the long-term fiscal sustainability of government spending, and its corresponding debt and interest. Since MMT demonstrates that large amounts of new spending on public purpose is perfectly safe (not to mention desperately needed by millions) the criticism is essentially aimed at the MMT project itself. This interview and the mainstream argument inspired a lengthy post addressing the several assumptions on which the argument is based and why each of them are incorrect. A link to the post can be found in the show notes: The long-term fiscal sustainability of government spending (is a non-issue).

A major reason that Asker and Dirk decided to write their response was because Druedahl’s paper was written in what we consider to be good faith. By that, we mean that it cites MMT academic literature and treats its authors with respect. Too many so-called critiques do neither, pretending that MMT says something it doesn’t and then vehemently criticizing that made-up argument. They are also often snide and personally insulting to the MMT project and its developers and supporters, both as individuals and as a whole. I’ve collected several examples of good-faith arguments against MMT in a post, along with responses by MMTers, in this post: What are some good-faith criticisms of Modern Money Theory (MMT)?

Regardless of faith, the argument between mainstream and MMT is not occurring in the academic papers themselves but in the assumptions on which those papers are based. In other words, the argument is not taking place in the papers but in the world around them. Asker and Dirk’s response does not directly address Druedahl’s arguments but rather rejects its assumptions and replaces them with ones that reflect the world in which we actually live. After seeing Dirk and Asker’s response, Druedahl stated on Twitter, “this is a non-reply."

Especially with those critiques that are of less-than-good faith, they are not written in the spirit of learning or improving MMT, or the economics discipline as a whole. Rather, they are to convince the general public to dismiss MMT and its developers and supporters out of hand. MMT clearly has the more convincing argument and is also understandable by the general public. (It is convincing substantially because it is understandable by the general public.) The only hope mainstream has is to prevent the public from looking at those arguments or to its authors to begin with, and to convince them that if they do, they shouldn’t believe they’re lying eyes.

This episode is part one of a two-part conversation, and it’s also part one of a larger four-part series on the relationship between mainstream or neoclassical economics and MMT. Parts two and three are with Sam Levey on the core assumptions of mainstream economics, and part four is again with Dirk and Asker on the larger political context in which these issues exist.

And now, onto our conversation.

Resources * Master's Thesis: Money and the Fiscal Space of Monetarily Sovereign Governments: The Case of Denmark, Asker Voldsgaard Ruge, Rethinking Economics, 2018 * Historical time and economic theory, Mark Setterfield, 2006

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Welcome to episode 65 of Activist #MMT. Today is part two of my two-part conversation with third-year MMT activist Hannah Judson. In part one, Hannah described her journey to MMT and her just-begun MMT-informed sociology PhD program at Stonybrook University in Long Island, New York.

Today we talk about a very different topic, which is mental illness and anxiety, and how these things are seen through and informed by MMT. Hannah and I both experienced a traumatic event in our childhood which will remain with us for the rest of our lives. She describes how she came to terms with this, how she manages it today, and how her Christianity influences her anxieties as well as her politics. We share MMT as a lens through which to see the world, our situations, and ourselves.

I end by telling my own story. Regular listeners will not be surprised to hear that I have been strongly influenced by Fred Lee’s 2006 book, A History of Heterodox Economics – which coincidentally was recommended to me by Hannah’s now-housemate and MMTer, Nathan Tankus. The intellectual and academic concepts of economics are only half the picture. The other half is what Lee calls community history: the personal history and behaviors of those who develop, support, and benefit from those academic concepts. The assumptions, maths, and models of neoclassical economics cannot be separated from the century of discrimination endured by those who dare to call it wrong.

In the same vein, the decades of genius comedy by Bill Cosby cannot be separated from the terrible crimes we now know that he has committed. It is not possible to draw a conclusion until one looks at the entire picture. Despite growing up with his comedy, I have decided to not listen to him again.

The clearly-good work that I have done, including this podcast, my large set of MMT resources, and many other things, cannot be separated from my own behavior and the consequences that it has caused. I have certainly committed no crimes and have always done the best that I could. I am also deeply ashamed of how some of my behavior has affected others, and especially how it has pushed away exactly those who I wish to work with and become closer to. I would also be lying if I said that I was not profoundly sad for the many opportunities lost and for how long it will take to even reach the starting line once again.

This conversation with Hannah was one of the more important personal milestones I’ve experienced. I thank her for the space and support that I needed in order for it to happen.

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Welcome to episode 64 of Activist #MMT. Today I talk with third-year MMT activist Hannah Judson. Hannah was introduced to MMT at a local community college in 2017. Her professor was BJ Unti who introduced both mainstream and MMT concepts and let the class decide for themselves which theory was more convincing. She later discovered that Unti was a student of Stephanie Kelton. Hannah received a decidedly non-MMT undergraduate degree in business from DuPaul University in Chicago.

In September 2019, she impulsively flew out to Long Island, New York in order to attend the MMT conference at Stonybrook University. Despite knowing no one, she ended up being selected as a last-minute replacement to moderate a conference panel. She and her husband now share an apartment with MMTer Nathan Tankus in Queens, New York, and she has just begun an MMT-informed sociology PhD program at Stonybrook. Her hope is to further expand the interdisciplinary reach of the MMT project, which currently centers around law. Her primary interest, however, is the racial-wealth divide in the United States, and more broadly, stratification and inequality. (Stratification being the decisions and actions that cause and result in inequality.)

Hannah describes how she got here from there, through a Zoom wedding in her home state of Washington, Zoom church in Chicago, and 11,000 miles of driving from Washington to New York to Washington to New York… in order to attend a Zoom PhD.

In part two we drastically switch subjects to mental illness and anxiety, and how they are seen through and informed by MMT. Hannah and I both endured traumatic experiences in our childhoods which will remain with us for the rest of our lives. She discusses how she came to terms with this, how she manages it today, and how her Christianity influences her anxieties as well as her politics. I end by sharing my own story, which I will say more about in the introduction to part two.

Now, onto my conversation with Hannah Judson.

Postscript: TikTok During this conversation, Hannah told me "I'm too young to be a millennial and too old to download TikTok." Then only a few weeks later, she started an (excellent) TikTok channel for The Modern Money Network. I, um, "researched" it and subsequently became addicted to TikTok for music and singing. I now have my own channel dedicated to singing (and a little guitar). (The songs are also shared on Facebook and Twitter.) I'm a classically trained singer. The last music I did was to be in an a cappella group for five years, up until I discovered Bernie Sanders in August of 2015.

Resources * Website: Why Blue Lives Matter * Episode 21 of Activist #MMT with Ryan Mathis: There is nothing "natural" about society’s laws * Gilda's Club Chicago (Zoom church)

#LearnMMT For an overview of Modern Monetary Theory (MMT) with many reliable sources to learn more, here is a good place to start:

My large set of resources is a gateway to every known academic paper written by those who have developed MMT over the past quarter century, and is framed around my layperson takes. It is essentially a long-form FAQ, addressing many basic concepts and criticisms, and more.
On Facebook, the pinned post on Modern Monetary for Real Progressives contains a wealth of information.

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Welcome to episode 63 of Activist #MMT. Today is part six of what was originally supposed to be a five-part conversation with one of MMT's original developers, Mat Forstater. Mat first resolves the unexpected cliffhanger from the end of episode five, regarding the purpose of MMT and how it is sometimes misunderstood.

(Here are links to parts one, two, three, four, and five.)

As Mat told me at the start of today's episode, "The purpose of MMT is not to be a complete theory of capitalism, but rather to correct some crucially-important mistakes that have very important and practical policy implications." Specifically, MMT is an accurate description of the financial system at the heart of modern capitalist economies. It has three (and only three) policy prescriptions as implied by that description: a floating exchange rate, a federal jobs guarantee, and a permanently, near-zero central bank target rate. In other words, MMT is deliberately limited in its scope which is sometimes twisted to portray MMT as not enough.

What MMT actually says is that many things desperately needed by millions can be safely provided right now and, in fact, can always have been provided. There is no need for the issuer to "obtain the money" from anyone or anything in advance in order to do so. This is because the issuer has no choice but to spend by issuing new money.

This reality is misinterpreted, for example, in some popular Marxist critiques, as if MMT enables or even promotes terrible things like imperialism and inequality. MMT shows that we don't need to reduce the belligerent military or reduce inequality in advance of doing these things. What these critics miss is that reducing the military and inequality is a good thing to do for its own sake – not because we need their money in order to pay for those things. The military must be made less belligerent because we reject belligerence as a moral stance. We must reduce inequality (partially by taxing the rich), because we reject inequality as a moral stance and also because that money is being used to kill our society and the long-term existence of our species – at least as far as most of us here in the 99% are concerned.

Conversely, the limited scope of MMT is positive in the sense that it allows those things it leaves unaddressed up to interpretation – without compromising its core findings. For example, MMT allows for Islamic economics (as discussed in episodes 56 and 57 with Asad Zaman). It allows for the Marxist worker revolution (as discussed an episode 58 and 59 with Jim Kavanagh). As Mat and I discuss in today's episode, MMT allows, encourages, and even requires personal feelings, instinct, intuition, and even imagination and dreams. To quote Mat, "MMT builds bridges between economics and other interdisciplinary fields." Mainstream allows for none of these things, and in fact, discriminates viciously against anyone who dares even consider them. This is the only way it can preserve its dominance since clearly it can't win on the arguments.

In the second half of today's episode, Mat and I discuss the connection between economics and the second law of thermodynamics. The first law of thermodynamics states that the total energy in an isolated, or closed system, such as the universe, is constant or fixed. Energy can transition from one form to another, but it can't be created or destroyed.

The second law states that any utilization of matter and energy permanently decreases the amount available and accessible to that same system. This is called, or leads towards, entropy. To bring this back to economics, the idea that the so-called "free market," which is another example of a closed system, can survive without injections of new money from the currency issuer, is just as nonsensical (if perhaps in different time scales) as the idea that a television can continue to function when its no longer plugged in. It might last for a few seconds, but soon enough, it no longer functions.

Major corporations needing federal ballots bailouts every decade or so is all the evidence needed to prove this. They don't just require periodic bailouts, they require outsized influence over our media and educational institutions, and all three branches of our government. Without the ability to push all real and financial costs onto their workers and society in general, they would need much more than a massive bailout every decade or so, in order to survive.

Most importantly, regarding the economy (and as I understand it), the second law of thermodynamics seems to fully hold from the point of view of the non-government sector. However, from the point of view of the currency issuer, it does not hold. The first law states that the amount of energy is fixed. But energy and matter are physical things and therefore subject to the laws of... physics. From the issuer's point of view, money is not physical; it's merely numbers in accounting ledgers. In other words, they're essentially tally marks. Tally marks are a concept, not a physical thing. As long as humans exist, their capacity to create (and destroy!) their own money is limited not by physics but their imaginations. Therefore, to not provide the money desperately needed by millions, and to provide it to those who need it the least (or use it to hurt others), is not for a lack of finance but imagination and morals.

Resources, from Mat:

The first law of thermodynamics is better put: "matter/energy can neither be created nor destroyed, but can only change in form." And the second law, aka entropy law: "any utilization of matter/energy decreases the total available matter/energy." What’s with the "matter/energy"? Matter is energy ( E=mc2 ). * Nicholas Georgescu-Roegen, The Entropy Law and the Economic Process (book) * Herman Daly, Beyond Growth (book) * Herman Daly and John Cobb, For the Common Good (book) * Herman Daly, The economic thought of Frederick Soddy in the Winter 1980 edition of the journal History of Political Economy

You can see how degrowth could follow from the entropy law, or zero growth. On creative discovery, see * George Polya, How to Solve It? (book). * My 1997 paper: Policy Innovation as a Discovery Procedure: Exploring the Tacit Fringes of the Policy Formulation Process * Working Backwards: Instrumental analysis as a policy discovery procedure

See my Levy working paper, Policy Formulation as an Innovation Process, 1999, or article Working Backwards from 1999, Review of Political Economy. It might be called Policy Innovation as a Discovery Procedure, the 1999 Levy Working paper

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Welcome to episode 62 of Activist #MMT. Today is the final part of my five-part conversation with one of MMT’s original developers, Mathew Forstater. Mat concludes his many varied stories from the history of MMT, heterodox economics, and his long career. He starts by talking about how truly full employment can only be attained and maintained, both in good times and bad, by a federally-funded job guarantee. In the same vein, only a federally-funded job guarantee can be flexible enough to respond effectively to both structural and technological changes – again, in both good times and bad.

(Here are links to parts one, two, three, and four.)

Mat also describes how the term "flexibility" has been distorted to give the appearance of an increase in options, when in reality it is a ratcheting down of worker rights. It also relates to how mainstream economics assumes for-profit businesses to be perfectly flexible and always trending towards full employment. In my interpretation, this is the excuse used to assert that any government intervention is not just pointless and redundant, but decidedly detrimental. It also hides the fact that what gives private industry this flexibility is their ability to push all real and financial costs onto workers and, secondarily, onto customers and society in general. This is as evidenced by the very existence of involuntary unemployment and underemployment.

Mat ends by describing an experience of how an unsubstantiated criticism he saw in the comment section of a New Economics Perspectives blog-post worked its way into a journal article. Instead of the journal editors addressing the error directly, they offered Mat an opportunity to publish a response. Although he wrote it, he never sent it, feeling that it would be embarrassing to the original author, despite their bringing it on themselves. He says the experience is representative of how the academic community selectively applies its standards, depending on who in the moment it happens to benefit.

Finally, a programming note. Due to an unfortunate technical glitch, today’s episode ends very abruptly.

And now, back my conversation with Mat Forstater.

Resources Parts one and two of my Historic-ly interview with a #BlackLivesMatter organizer on #GeorgeFloyd, the systemic racism that led up to it, and the performative changes in its wake.

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Welcome to episode 61 of Activist #MMT. Today is part four of my five-part conversation with one of MMT’s original developers, Mathew Forstater. Mat continues telling his many varied stories from the history of MMT, heterodox economics, and his long career.

Today’s conversation is highlighted by a detailed story of how his then-student, Pavlina Tcherneva, became part of the MMT project. Pavlina was an undergraduate at Gettysburg College in Pennsylvania, a straight-A student, and a triple-major in economics, mathematics, and Japanese. After her summer plans to return to her home country of Bulgaria fell through, she requested a paid summer internship. Despite being long after internships were decided, Mat wrote a brief letter on her behalf and sent it out to three prominent economic email listserves. He got three responses.

(Here are links to parts one, two, and three.)

Around the same time, Warren Mosler was sharing his new ideas in a draft of a short book called Soft Currency Economics. At the suggestion of Art Laffer (the same Art Laffer whose curve serves as the foundation of trickle-down economics) Warren found his way to the Post-Keynesian Talk (or Thought), PKT email forum. It was there he saw Mat’s letter, and offered Pavlina a paid internship at his home in West Palm Beach, Florida. After Mat confirmed it was safe, Pavlina spent the summer writing a critical review of Warren’s book and ideas, comparing it to the ideas in the history of economics. She also helped organize a 50th-anniversary meeting of the Brettonwood’s conference.

Since then, what MMTers such as Mat, Pavlina, and Randall Wray added to the MMT project, was confirmation and validation of Warren’s ideas by the historical record, both in and out of economics. The most prominent example Mat gives is how tax-driven money was confirmed by, among other sources, many of the various books from Mat’s undergraduate degree of African American Studies.

Mat also talks about the opportunities, tensions, and discrimination, resulting from the new source of research funding that Warren provided. The tension was exacerbated by an environment of artificial scarcity, as imposed by a society and government that frowns upon having its ideas being challenged.

And now back my conversation with Mat Forstater.

Soft Currency Economics II: The Origin of Modern Monetary Theory (MMT - Modern Monetary Theory)

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Welcome to episode 60 of Activist #MMT. Today is part three of my five-part conversation with one of MMT’s original developers, Mathew Forstater. Today, Mat and I start with a light-hearted conversation about music, parenting, Twitter, and the book club his two sons gave him for his birthday this year. He then proceeds to tell many stories from the history of heterodox economics, his own career, and his role in the early history of MMT. Along with several other UMKCers and MMTers, Mat was recognized by a 2015 Bloomberg article (original, archive) for properly predicting the Euro currency would be a disaster. The other MMTers are Wynne Godley, Warren Mosler, L. Randall Wray, Warren Mosler, and Stephanie Kelton (along with the seriously-not-MMTers, Milton Friedman and Margaret Thatcher!).

(Here are links to parts one and two.)

UMKC is one of the few universities in the world with a PhD program in economics through an MMT lens. With the assistance of Warren Mosler, the program was begun by Mat, Stephanie Kelton, Randall Wray, and others. Over the years, the program has resulted in hundreds of MMT-educated professors now teaching around the country.

Mat also discusses the economist who is the subject of his own dissertation, Adolph Lowe. Lowe was a professor at The New School, and one of Lowe’s students, Robert Heilbronner, later became Mat’s own professor at The New School. Mat describes the early history of The New School, originally called "The University In Exile,” which was created by a group of disaffected professors from Columbia University.

In part four, Mat tells the full story of how his then-undergraduate student Pavlina Tcherneva became involved in the MMT project.

But for now, let’s get right back to my conversation with Mat Forstater.

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Welcome to episode 59 of Activist #MMT. Today is part two of my conversation with Marxist academic and blogger, Jim Kavanagh. Jim has taught at Princeton, Carnegie Mellon, and Wesleyan universities. He was also a regular guest on the internet radio show Loud and Clear with Brian Becker and John Kiriakou. He is currently an author at Counterpunch and editor at The Polemicist.

Jim and I continue our conversation about the relationship between Marxism and MMT, and also take a brief diversion to talk about our prognosis for the coronavirus health crisis.

A full introduction can be found before part one, but for now, let's get right back to our conversation.

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Welcome to episode 58 of Activist #MMT. Today I talk with Marxist academic and blogger, Jim Kavanagh (Twitter/@thepolemicist_). Jim has taught at Princeton, Carnegie Mellon, and Wesleyan Universities. He was also a regular guest on the internet radio show Loud and Clear with Brian Becker and John Kiriakou. He is currently an author at Counterpunch and editor at The Polemicist.

Jim wrote his first post on Modern Money Theory, or MMT, in January 2018, only one month before I discovered MMT. Here's a choice quote from the article:

In saying that taxation is not a funding source for government spending, this analysis puts the focus on taxation as a matter of political and social decision – a decision made from a position of power, not dependence. It allows us to make spending decisions without asking the rich for a damn thing. Imagine we’re in a meeting to decide on a new social program (‘cause we are), and there are two possible ways to set the agenda: 1) Let’s figure out how much tax we’ll have to collect from the rich. Or, 2) Let’s ignore those fuckers and do what we want. Which is more radical? To answer that question, you have to understand that the second agenda is possible. The radical possibility of budgetary decision-making independent of the rich is contained in the fact that money is created by a public authority—a fact that fundamentally undermines any “taxation is theft” or “government spending is parasitic” argument. This package holds powerful potential for leftists, if they’ll open it. Right off the bat, for example, it allows you to say: “Abolish payroll taxes!” Not a bad place for progressive class politics to start.

His second MMT post was written in September that year, which is how I discovered his work. The post, called "Taxpayer Money" Threatens Medicare-for-All (And Every Other Social Program), had a great influence on me in my early learning. It is now the final item in my recommended list of non-academic works to read for those interested in a brief introduction to MMT. Jim’s post lays out why the MMT lens is so powerful, by describing in great detail how detrimental the myth of taxpayer money really is.

Jim’s latest post, which serves as the bouncing off point for our conversation, is on the century long myth that Social Security can only be viable if its trust funds have sufficiently large numbers associated to them. In reality, the trust funds are useless, non-functioning, appendages

This means that eliminating the payroll taxes that feed the trust funds, can only cause problems for Social Security recipients, only as much as our federal representatives want it to be a problem. There is no inherent connection between the size of the trust funds and the viability of the Social Security program. As University of Texas at Austin economics professor, James Galbraith, says, "The exercise of linking future benefits and projected payroll tax revenues is an accounting farce, done for political reasons."

In other words, the Social Security trust funds (in addition to those attached to Medicare and even Bernie Sanders’ proposed Medicare for All) are an entirely-artificial constraint that serves to choke off benefits that could indeed be fully paid, with little to no financial or inflationary concerns. The trust funds also promote the insidious notion the basic human needs can only be met by paying for them. This implies that anyone who can’t pay due to centuries of systemic discrimination, is incorrectly characterized as somehow less deserving of basic human rights.

Jim and I also talk about his view as a Marxist academic, of Modern Money Theory. From his Marxist perspective, he believes MMT to be an accurate description of how the fiat money system works that provides a necessary but incomplete basis for a critique of modern capitalism. Unlike mainstream economics, however, MMT does not preclude those more extreme things from happening. As many Marxists believe, Jim wants to take the means of production away from capitalists and place it into the hands of workers. Although MMT’s job guarantee is, in a sense, a patch on our flawed system of capitalism, it is also a huge step towards empowering workers, who can then start considering different and more ambitious ways of utilizing that power.

Speaking of which, money is no less than a manifestation of power. As Jim says, we don’t need to take money from the super-rich because we need to use it to pay for stuff for the poor. We must take it because having that much money is not so different than having an atomic bomb. No one should have an atomic bomb.

The idea that the government can only waste money and do things inefficiently, is ideology, not reason. If we think of money as power, then we can more easily see this. If you yourself had the ability to create money in your basement, would that be a good thing or a bad thing? I know that I would use the money for good. Why then, is it guaranteed that "the government" would use that same capability, that same power, for bad, or incompetently? Perhaps the very power itself that has the potential to corrupt. Whatever the case, the reality is that this power is now and has always been in the hands of our government, not in our basement. It also must be said that having this power is indeed a burden, at least in the sense that you alone hold the key to preventing suffering and death for millions.

We as individuals want the ability to create money in our basement because we want more power. We instinctually believe this power to be a good thing, because we believe ourselves as individuals to be good. We believe in our own abilities to make good decisions. We have lost faith, however, in ourselves as a society and as a result, we have decided to neglect it – especially the very institution that exists to create some semblance of order in it. And yet, now we complain that "the government" has been taken over by the corrupt, and we use it as an excuse to neglect it further. As Jim told me, "Could it be used badly in another way? Yes it could. But it also could be used better."

There is only one option, and that is to take control back. The only way we have a chance of doing that is to understand the true nature of how it works. MMT is a large part of that reality.

A brief note before we start. You'll her Jim praise Marxist economist Michael Roberts. I have no comment on Roberts in general, and certainly none related to Marxism. In my strong opinion, however, Roberts' grasp of MMT is not great. You'll find a link to a paper written by Roberts, criticizing MMT in the show notes, along with some of my own comments regarding it.

Resources * Robert Bostik blog * Rodger Malcom Mitchell in this 2013 post: The Gap, the whole Gap and nothing but the Gap... so help me.... * Poor Marxist critiques of MMT: + By Doug Henwood (plus three responses by MMTers) can be found in this post. + By Michael Roberts. Jim praises Roberts as a Marxist, but this particular criticism of MMT is outright lazy. * A 2014 Princeton study concludes that the United States is an oligarchy: summary article and video * "There’s a price for that?" * Jim's 2012 post on Social Security, written before he knew of MMT: Social Security in the Great Jambalaya

#LearnMMT For an overview of Modern Monetary Theory (MMT) with many reliable sources to learn more, here is a good place to start:

My large set of resources is a gateway to every known academic paper written by those who have developed MMT over the past quarter century, and is framed around my layperson takes. It is essentially a long-form FAQ, addressing many basic concepts and criticisms, and more.
On Facebook, the pinned post on Modern Monetary for Real Progressives contains a wealth of information.

Please become a monthly patron of Activist #MMT We shouldn't have to beg,
but we do have to beg.
So it's not that we beg,
but who we beg.

I am choosing to beg you, my listeners, to financially support this show.

To be clear, however, all episodes of Activist #MMT are free, for all, forever. Patrons only get the opportunity to hear them before the public.

Take a listen. If you like what you hear, please consider becoming a monthly patron of Activist #MMT. You can start here: https://www.patreon.com/activistmmt.

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Welcome to episode 57 of Activist #MMT. Today is the second part of my two-part conversation with Pakistani PhD economist, Asad Zaman (wiki, personal website). Today, Professor Zaman first talks about what Islamic Economics is, how it compares to MMT, and how mainstream economics makes Islamic Economics impossible. He then describes why money is not neutral – and what the concept of neutrality means. We end by discussing the nature of the necessary revolution in economics, as difficult as it: will be especially in the United States. We fight not because we will win but because, if we are to have a chance at remaining an organized species and society, then there is no other choice.

You will find much more in the description of part one, but for now, let’s get right back to our conversation.

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Welcome to episode 56 of Activist #MMT. Today I talk with Pakistani PhD economist, Asad Zaman (wiki, personal website). Professor Zaman arrived in the United States in 1971 at the age of sixteen to pursue a masters and then doctorate in economics and econometrics, starting at MIT in Boston. Five years later, in addition to earning his doctorate, he realized his personal life was a mess, poisoned by the individualism promoted by the West that says a primary goal in life is nothing more than to maximize one’s own pleasure. He worked through this crisis, but it would take him another twenty-five years to realize, have, and finally resolve another major crisis in economics.

(This is part one of a two-part episode. Here is a link to part two.)

In 1996, Professor Zaman published a highly-advanced textbook on econometrics, after working on it for ten years. The book received accolades and is still used as a reference in university classrooms around the world.

One of the important things he realized while writing his textbook, however, was the vast gulf between those who get their hands dirty with real-world data, and those who earn prestige and status by developing theory. Because the two sides never communicate, the theory becomes progressively more unrealistic. This is called the theory-practice divide.

In fact, only a few years after being published, he realized that it, and indeed everything his entire academic career was based upon, was fatally flawed. Professor Zaman talks about the many incorrect and insidious concepts underlying mainstream economics, first and foremost being the idea of logical positivism, which he calls one of the most poisonous philosophies ever developed by human beings. Logical positivism says that if something cannot be externally observed and measured, it must be discarded – not just from economics but one’s life in general. It means that our internal realities of thoughts, emotions, and spirituality are not important because they cannot obviously witnessed or measured by others or with instruments.

Here is a haunting quote from Professor Zaman’s autobiography, which comes from the book Modernity and the Holocaust by Zygmunt Bauman:

It was not illiterate savages, but graduates of the finest educational systems of the West who designed the gas chambers used to burn millions of innocent men, women and children in Germany. The philosophies of logical positivism (combined with the those of individualism and binary logic, the teachings of Kant and Hume, and others), is substantially why man can do the evil that he does: we are taught that we must do what’s best for us alone, we can only trust what can be reduced to maths and models, and we must also ignore our own inner emotions and spirituality. How could this lead to anything but disaster? We have cut ourselves off from the only signals that can truly guide us and know nothing about those we harm, or that they exist at all.

Most unfortunately, the deep flaws of mainstream economics are not accidental, they’re in service of keeping the rich rich and the poor poor. Especially in the US, daring to challenge or question these things results in brutal suppression.

Professor Zaman says he may never have realized these things had he not taken his family to Turkey for six years. Being out of the United States, especially in a less-advanced and -wealthy country, allowed him to study other subjects and schools of thought, and also to take a look at the mainstream economics of the West from the outside. His life is now dedicated to educating others on real world economics, which includes Islamic Economics and MMT.

Finally, in the show notes, you will find links to some of Professor Zaman’s prolific body of work. This includes his 2020 paper on models as we discuss, his full video-course on Modern Money Theory, and his six part series describing the economics of his home country and how MMT can apply to it. The MMT course has an hour-long segment on most of the chapters in the MMT textbook.

This is part one of a two part episode. Enjoy.

Resources * Professor Zaman’s work: + 2020 paper: Models and reality: How did models divorced from reality become epistemologically acceptable? + Interview form the top of Professor Zaman’s "about me" page, as I mention at the beginning of our discussion. + A six-part series of how MMT applies to Pakistan (also see my own post called The MMT view of developing nations and financial sovereignty.). + MMT textbook video chapters + Macroeconomics videos, including several on MMT + Another MMT video playlist, hosted by Surya Darma + 2019 talk on MMT at the Pakistani State Bank, including skeptics questions afterwards. + Many blog posts on WEA Pedagogy * Related podcast episodes: + My 2020 interview with Esha Krishnaswamy on Historic-ly: "The first act of revolution is love" [part one and two] + My 2020 interview with 1st-year law student Ryan Mathis on Activist #MMT: "There is nothing natural about society’s laws." * 13th, the 2016 documentary * Karl Polanyi’s book, The Great Transformation: political and economic origins of our times * Juliet Rubin’s book, The Making of the Modern University: Intellectual Transformation and the Marginalization of Morality * Michelle Foucault’s book Archeology of Knowledge * Article documenting why the economics Nobel is not a Nobel prize at all. * Atif Mian and Amir Sufi’s book, House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again * Paul Bairoch, Economics and World History: Myths and Paradoxes * Geoffrey M Hodgson’s book, How Economics Forgot History: The Problem of Historical Specificity in Social Science

#LearnMMT For an overview of Modern Monetary Theory (MMT) with many reliable sources to learn more, here is a good place to start:

My large set of resources containing many expert sources, layperson tutorials, and people and places to follow.
On Facebook, the pinned post on Modern Monetary for Real Progressives contains a wealth of information.

Please become a monthly patron of Activist #MMT We shouldn't have to beg, but we do have to beg. So it's not that we beg, but who we beg.

I am choosing to beg you, my listeners, to financially support this show.

To be clear, however, all episodes of Activist #MMT are free, for all, forever. Patrons only get the opportunity to hear them before the public.

Take a listen. If you like what you hear, please consider becoming a monthly patron of Activist #MMT. You can start here: https://www.patreon.com/activistmmt.

✌️, ❤️, and #MMT 🦉

The Making of the Modern University: Intellectual Transformation and the Marginalization of Morality

The Great Transformation: The Political and Economic Origins of Our Time

House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again

Economics and World History: Myths and Paradoxes

How Economics Forgot History: The Problem of Historical Specificity in Social Science (Economics as Social Theory)

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Welcome to episode 55 of Activist #MMT. Today is part two of my conversation with third-year MMT activist, Sam Hollenbeck. Along with my recent guest, Amber Griego, Sam is a co-founder of the organization Beyond the Spectrum. Sam talks more about his volunteering experience and his thoughts on the federal job guarantee, and the struggles introducing MMT to those who are deliberately made to struggle just to get through the day.

A full introduction can be found before part one, but for now, let’s get right back to our conversation.

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Welcome to episode 54 of Activist #MMT. Today I talk with third-year MMT activist, Sam Hollenbeck. Along with my recent guest, Amber Griego, Sam is a co-founder of the organization Beyond the Spectrum. Sam and I start by talking about parenting young children in the face of increasingly-likely global societal collapse.

He then describes his journey through mainstream politics to MMT. This was highlighted by his excitement followed by letdown of both Barack Obama and Bernie Sanders, although for very different reasons. Sam was introduced to MMT by my previous guest Lana Dell (who spoke with me in episode 15). Lana referred Sam to the online activism group Real Progressives, where he had his lightbulb moment in videos with Steve Grumbine and Ellis Winningham.

For years before, however, Sam knew something was wrong with his understanding of economics. This is exemplified by his realization that it is simply not possible for the same money to circulate around and around through a community. Although he couldn’t put words to it at the time, he knew there must be an external source of new money in order to keep the economy going – not unlike the Go-spot on a Monopoly board. The second law of thermodynamics states that the entropy of a closed system can only increase. another way of saying this is, a reaction always contains less energy than what caused it. This implies that no system can function in the long term unless it is powered by some external energy, which obviously must come from some external system. Perpetual motion machines do not exist.

Sam lives in a New York town bordering Pennsylvania, which he calls “a rusted out post-industrial wasteland." Sam volunteers with his ten-year-old daughter at a resource center for families struggling with substance abuse. It's called Truth Pharm (which you can find at https://truthpharm.org/ and TruthPharm on Twitter). Here's Sam's description of the organization:

Truth Pharm is a resource center for individuals and families struggling with substance use disorders. They providing Harm Reduction education, resources, services and support and assist people who are transitioning in or out of treatment or incarceration. They also advocate and activate for policy changes to fight against the failed War on Drugs. The lack of jobs and more specifically, a job guarantee (in addition to a lack of healthcare and education, and the terrible burden of private debt), is a major reason that people are driven to drugs (and guns) in the first place, why his town is a rusted out wasteland, and why Truth Pharm is needed at all.

Like so many charitable organizations, Truth Pharm doesn’t have the staff or funding necessary to properly serve those who are desperate for its services. A job guarantee would provide that staffing and funding. At the same time, it would make Truth Pharm much less necessary, because it would have less clients, and would therefore need less staff and funding. In addition to receiving a socially-inclusive wage, those who might have been clients would simply have more positive things to focus on.

What I take most from my conversation with Sam, however, is the idea of balance, and I mean that in the broadest sense. First, balance between academic study and theory, versus practical experience. Sam felt he was missing what was happening in his own community, so he chose to spend much of his time volunteering locally. Although this meant less time for academic study, it allowed him to see the mass suffering caused by a half-century of neoliberal-era policies, up close and personal. This experience provides critical context for those academic concepts, and transforms those numbers and statistics into actual human beings.

Balance is also doing what it takes to survive now. To pay this month’s rent – to cancel this month’s rent. Sharing the knowledge that the issuer could pay all rent, if only they wanted, is not helpful to someone facing potential eviction. Even if our federal representatives did choose to pay all rent, it would take a substantial amount of time before it affected the lives of those who are desperate today.

Two balance-related decisions I’ve made for my podcast is, first, to interview both academics and laypeople. It’s important to know how laypeople perceive and are affected by the academic concepts. This is especially true given how MMT academics have (necessarily) chosen to spread the knowledge among the general public primarily via blogs and social media. I’ve also decided to not just discuss academic concepts, but also how their personal lives led them to and are affected by MMT. This final element was inspired by late UMKC professor Fred Lee’s book, A History of Heterodox Economics.

My recent interview with Pakistani PhD economist Asad Zaman taught me that western education strongly discourages balance. It pushes students to diving headlong into a single subject, resulting in the exclusion of all others. This is a negative and even devastating philosophy, in the sense that without confirming that a particular theory applies to the real world, that theory becomes progressively more detached from reality. What’s devastating is when those in power use those theories to implement policy that affects millions. Not so coincidentally, the MMT project is deliberately and decidedly interdisciplinary.

Finally, balance can not only be achieved as an individual, but also as a collective. The universe of podcasts entirely or largely dedicated to MMT is very diverse: MMT Podcast focuses on academic concepts. Money on the Left discusses MMT through an interdisciplinary lens. Macro N’ Cheese balances between MMT and progressive politics. A new podcast called Superstructure discusses politics and other topics through an MMT lens. My own podcast balances between academic concepts and personal stories.

We all choose our different ways to balance, both what we do, and how we do it. All are important in their own ways. No individual can do it all. No individual is responsible for preventing climate and societal collapse. As a team, however, we can refer and defer to each other as and when necessary. We can realize our own limitations and ask for help and rely on others when we need it. When we happen to have more energy and time, we can assist those who need help, even if they don’t ask for it. And of course, we could choose to join together, stand up, and demand better, in order to give our children even a small shot at living out a full life with even a modicum of the privilege that we enjoy today.

And now onto my conversation with Sam Hollenbeck. This is part one of a two-part conversation.

Resources * Stephanie Kelton's' 2019 tweet: When the #MMT coin drops and you realize the suffering is gratuitous. * Captain Planet and the Planeteers. More images from the show. * Esha Krishnaswamy's 400-tweet "Obama years" thread. * Sam Levey's 2020 article regarding "real" versus "paper" problems, Where does the (economic) buck stop? * Warren Mosler and Mat Forstater’s 2005 paper, The Natural Rate of Interest Is Zero * Bernie Sanders' How Does Bernie Pay for His Major Plans? page from the top of his issues page. * 2017 video: Professor Fadhel Kaboub on Job Guarantee in the US

#LearnMMT For an overview of Modern Monetary Theory (MMT) with many reliable sources to learn more, here is a good place to start:

My large set of resources containing many expert sources, layperson tutorials, and people and places to follow.
On Facebook, the pinned post on Modern Monetary for Real Progressives contains a wealth of information.

Please become a monthly patron of Activist #MMT We shouldn't have to beg, but we do have to beg. So it's not that we beg, but who we beg.

I am choosing to beg you, my listeners, to financially support this show.

To be clear, however, all episodes of Activist #MMT are free, for all, forever. Patrons only get the opportunity to hear them before the public.

Take a listen. If you like what you hear, please consider becoming a monthly patron of Activist #MMT. You can start here: https://www.patreon.com/activistmmt.

✌️, ❤️, and #MMT 🦉

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The full audio from the Cowboy Economist video #11: Printing money does not cause inflation!

Here is the link to the full vidoe

For links to the full audio of all other parts, go to part one.

With thanks to John Harvey.

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Welcome to episode 53 of Activist #MMT. Today is part two of my two-part conversation with one of the original developers of Modern Money Theory, L. Randall Wray. Today we talk briefly about the differences between the words sufficient and necessary, and the concept of desired net savings.

(In part one, Dr. Wray spoke about his personal history before meeting Warren Mosler and Bill Mitchell in the PKT email forums, and then we discussed his November, 2019 Congressional testimony, partially in response to the February, 2019 Republican resolution to denounce MMT.

The heart of our conversation today, however, is in two parts. The second half is an overview of MMT from the Kansas City point of view, as documented Dr. Wray's new paper, The ‘Kansas City' Approach to Modern Money Theory. [A link to which, along with many other resources, can be found in the show notes for both parts one and two]. The Kansas City version of MMT differs in one important way from the broader version as agreed upon by all its original developers: and that is, the influence and inspiration of Hyman Minsky, and the importance of his concept of financial fragility. His paper and our discussion on it inspired this MMT-reference post: What specific components make up MMT?

The first part of our conversation, though, focuses on the true meaning of the word productivity. This was in response to strong criticism I received regarding the job guarantee, and more specifically, to the April 2018 Levy paper called "Public Service Employment: A Path to Full Employment, of which Dr. Wray is a co-author.

Before I go on, I want to be clear, these are my own words, not Dr. Wray's or MMT's. It's my best interpretation of what I learned in my preparation for and conversation with Dr. Wray. Although I'm confident I'm much closer than I was before talking with Dr. Wray, I'm not pretending to be an expert or that what I'm about to say is perfect MMT. Just like you, I have more to learn. I'm also obviously taking the knowledge of MMT and applying my own progressive values to it.

That said, I'd like to take a step back and start with an analogy:

Something cannot be removed from a container until something is first put into that container. A leakage from the economy cannot happen until something is first injected into the economy. The only institutions that can make injections are commercial banks and the central government. Savings therefore cannot cause bank lending, and taxes cannot finance (federal) government spending.

Regarding productivity and the job guarantee, in a similar way, jobs can create skills but skills cannot create jobs. As Dr. Wray explains, washing my own dishes is not considered to be officially productive, but paying someone else to do it is. Why? Because they were paid, I wasn't. In other words, productivity as officially measured is substantially a reflection of, not the production itself, but how much workers were paid in exchange for it. Despite consistently increasing output, wages have remained stagnant since around 1970 – nearly half a century. Have workers really been less and less productive? Or have they been more and more screwed?

Currently, the only thing that's considered officially productive is what makes somebody else richer – who, by the way, is someone that seems to never be me. Productivity is essentially equated to profit because business owners are essentially the only ones who get to decide who is to be paid, what they will be paid for, and how much to pay them.

Instead of only paying people for making some business owners profit, perhaps we can also start paying people for making our world a better place. For helping other people. For cleaning our environment, for holding the hand of the dying, for recording the history of the old, for helping a child with homework, or a teacher in the classroom, or a youth soccer coach on the field.

Wages are not created by productivity, productivity is created by wages. How do you increase productivity? By paying workers more. By paying them at all. We don't have to measure productivity with maths and models, we don't have to equate productivity with only profit, and we definitely don't have to leave these decisions and definitions to only business owners. We can redefine productivity to whatever we want it to be – and then we can start paying people to do it.

#LearnMMT For an overview of Modern Monetary Theory (MMT) with many reliable sources to learn more, here is a good place to start:

My large set of resources is a gateway to every known academic paper written by those who have developed MMT over the past quarter century, and is framed around my layperson takes. It is essentially a long-form FAQ, addressing many basic concepts and criticisms, and more.
On Facebook, the pinned post on Modern Monetary for Real Progressives contains a wealth of information.

Please become a monthly patron of Activist #MMT We shouldn't have to beg, but we do have to beg. So it's not that we beg, but who we beg.

I am choosing to beg you, my listeners, to financially support this show.

To be clear, however, all episodes of Activist #MMT are free, for all, forever. Patrons only get the opportunity to hear them before the public.

Take a listen. If you like what you hear, please consider becoming a monthly patron of Activist #MMT. You can start here: https://www.patreon.com/activistmmt.

✌️, ❤️, and #MMT 🦉

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The full audio from the Cowboy Economist video #08: Why we need a Federal Job Guarantee.

Here is the link to the full vidoe

For links to the full audio of all other parts, go to part one.

With thanks to John Harvey.

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The full audio from the Cowboy Economist video #07: Why Social Security can't go bankrupt!

Here is the link to the full vidoe

For links to the full audio of all other parts, go to part one.

With thanks to John Harvey.

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Welcome to episode 52 of Activist #MMT. Today I talk with one of the original developers of Modern Money Theory, L. Randall Wray. Dr. Wray tells the story before the story: his life before meeting Warren Mosler and Bill Mitchell in the Post-Keynesian Talk or PKT email forums in 1996, where MMT came to be.

Dr. Wray originally set out to be a fourth grade elementary school teacher and did his student teaching in Mexico City. Since the OPEC oil crises made it difficult to start a teaching career, he instead got a job in solid waste management in Sacramento County, California. He got the job thanks to the Jimmy Carter administration's Comprehensive Employment and Training Act, or CETA, which was a New-Deal style public-sector job creation program. It was here where he had the opportunity to take free college courses, but only if they somehow applied to his job. His boss suggested he take some courses in economics, which he did at Sacramento State College. Dr. Wray said that he really liked the mainstream courses he took... because they took so little thinking, as long as you could do a bit of mathematics. He says he immediately knew how unrealistic it was, and to such an extent that he felt it wasn't even worthy of choosing a garbage truck, which happened to be part of his subsequent job at the Sacramento County Solid Waste Facility under the Governor Brown administration. He took every course he could, in both mainstream and heterodox, and despite still wanting to be an elementary school teacher, he decided to try a PhD. in economics. He ended up studying under Hyman Minsky, who he was told was "the best Keynesian there is," at Washington University in St. Louis, Missouri.

We end today's episode by discussing Dr. Wray's November 2019 Congressional testimony, which was partially in response to the March 2019 Republican resolution to denounce MMT. We look back at a particularly unfriendly set of questions he had to endure, and how the hearing that was supposed to contain many friendly faces, due to a last-minute vote, unfortunately had fewer than expected.

Here's the full audio of the 2.5 hour hearing (and the video where it comes from), and a fifty-minute edited version that I believe will be of interest to MMTers (and the video where it comes from). The latter contains all of Dr. Wray's testimony, plus interesting (and painful) statements by Congress members on both sides of the aisle.

Finally, we discuss his written testimony, as submitted in advance. This is a unique document written exclusively to a mainstream audience, identifying and validating their fears of deficit and debt and then slowly walking them, step-by-step, to exactly why deficits are not fearful in the way they think, and that they are largely not even under their direct control as members of Congress. Dr. Wray calls it the best, strongest case he's ever made using data.

In part two, we move on to some general MMT questions, and especially focus on two subjects: the real meaning of the word productivity, and an overview of the entirety of MMT specifically from the Kansas City point of view. A full introduction will also be included before part two.

Many resources, both related to part one and two of this interview, can be found in the show notes of part one. This includes the full audio to the hearing in which Dr. Wray participated, and another, both in audio and video formats, that contains only highlights I believe will be interesting to MMTers.

Note: Before we get started, two small corrections: Dr. Wray wanted me to mention that he believes Warren Mosler's initial undergraduate degree was in fact, engineering. In addition, from Dr. Wray: "The garbage trucks were for Sacramento County solid waste, not the California energy commission--where i projected energy use in the Ca agriculture sector."

Resources * MMT: REPORT FROM THE FRONT, parts one, two, and three. * A direct link to the full video of the congressional hearing, and Dr. Wray's written testimony, which includes a question by Minnesota representative Ilhan Omar, and a detailed response * Dr. Wray's July 2020 paper, The "Kansas City" Approach to Modern Money Theory and a a 2018 post that is a kind of precursor to the KC paper. * "It is irrational to fear deficits more than we fear the annihilation of human civilization." * His 1997 paper, which serves an excellent introduction to the MMT-JG guarantee, "Government As Employer of Last Resort: Full Employment without Inflation" * The two MMT-resource-posts inspired by my conversation with Dr. Wray: + What specific components make up MMT? + The real meaning of the word "productivity."

#LearnMMT For an overview of Modern Monetary Theory (MMT) with many reliable sources to learn more, here is a good place to start:

On the web: My large set of resources with many expert sources and layperson tutorials.
On Facebook: Follow this podcast :) The pinned post contains the above web-article. Also, the pinned post on Modern Monetary for Real Progressives contains a wealth of information.

Please become a monthly patron of Activist #MMT We shouldn't have to beg, but we do have to beg. So it's not that we beg, but who we beg.

I am choosing to beg you, my listeners, to financially support this show.

To be clear, however, all episodes of Activist #MMT are free, for all, forever. Patrons only get the opportunity to hear them before the public.

Take a listen. If you like what you hear, please consider becoming a monthly patron of Activist #MMT. You can start here: https://www.patreon.com/activistmmt.

✌️, ❤️, and #MMT 🦉

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This contains highlights (from the point of view of an MMTer!) Congressional testimony of Professor of Economics, Bard College; and Senior Scholar, Levy Economics Institute, L. Randall Wray, at the November 20th, 2019 hearing called "Reexamining the Economic Costs of Debt." The hearing is partially in response to the March, 2019, Republican-led Senate Resolution 182: "A resolution recognizing the duty of the Senate to condemn Modern Monetary Theory and recognizing Modern Monetary Theory would lead to higher deficits and higher inflation."

Here is Professor Wray's written testimony (which includes a question from MN Representative Ilhan Omar, and a detailed answer) and related blog post.

Here is the video that this audio comes from. Here is the full audio of the hearing.

Specific highlights * 32:30 (37 minutes, 30 seconds) to 37:20: Opening statements * 52:30 to 55:10: Representative Smith. "taxpayer debt, not government debt" * 1:00:30 to 1:01:00: Representative Horsford: "Do you think the long term economic and fiscal consequences of neglect could be more damaging than 'debt'?" * 1:03:30 to 1:09:30: SC Representative Norman: "Taxpayer debt, government term misused by the left." "Dr. Wray, have you ever run a private business?", "GND is top of the list, above national defense?" Forcing all to put a pricetag on the GND * 1:15:30 to 1:19:10: China * 1:27:20 to 1:31:20: Representative Woodal: debt ratio, Representative Scott: Economist Jared Bernstein: "Government is like a household is very misleading because they can borrow at low rates." * 1:34:40 to 1:41:00: Representative Hern. MMT says we don't have a responsibility, MMT is a left Trojan horse for big spending and our kids and grandkids will have to pay for it. * 1:59:50 to 2:05:50: Entitlement reform and "crowding out." * 2:07:40 to 2:10:40: Representative Johnson. Green New Deal and Representative Schakowsky * 2:21:40 to 2:35:00: Arkansas Representative Steve Womack. (This segment is featured in episode 34 of Activist #MMT with Mark Collins. Here is the specific snippet.) * 2:45:50 to end: Kind of closing statements. Automation. Sectoral balances.

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The full audio from the Cowboy Economist video #06: How the American People (could not possibly have) Financed World War Two!

Here is the link to the full vidoe

For links to the full audio of all other parts, go to part one.

With thanks to John Harvey.

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Welcome to episode 51 of Activist #MMT. Today I talk with fourth-year MMT activist and nursing assistant, Amber Griego (Twitter/@realityisralph). Amber is a co-founder of an organization called Beyond the Spectrum (@BT_Spectrum), or BTS. BTS produces a short weekly video, highlighting important and influential tweets regarding Modern Money Theory, written by academics and laypeople alike. I‘m happy to have been included in several of their videos since they began in January 2020.

Amber grew up (and still lives) in a highly conservative part of Washington state, despite personally having strong progressive views. She was home-schooled and even though she says there are large swaths missing from her education, she still graduated with honors after taking the Washington state exams. Just as I was, Amber was politically woken up by Bernie Sanders in 2015. In addition, because one of those missing swaths happened to be economics, discovering modern money in 2017 was a relatively quick and painless transition. Her breakthrough came from Rocco Million (Twitter/@RoccomillionMMT), who at the time did regular livestreams for the online activism group, Real Progressives.

Amber considers kindness to be of paramount importance, which is partially influenced by her experience as a nurse, sitting at the deathbeds of hundreds of elderly patients and witnessing the last breath of many. Just as different styles of patients prefer different styles of nurses, different styles of listeners and learners prefer different styles of speakers and teachers. Despite being told by some so-called allies that "kindness won't get you far," the truth is that all styles are needed. When you are presented with someone you can't reach, your job is to pass them off to someone else with a more appropriate style for that person.

Finally, Amber's geographical region was particularly affected by the job guarantee, or more specifically, the New Deal. Her area was originally a desert but in the 1930s and 40s, was permanently transformed into what is now called the Land of a Thousand Wineries. It is currently under the management of the Army Corps of Engineers.

Although she doesn't consider herself an artist, Amber expresses her learning through memes, videos, and other graphical forms. Some examples of her work can be found in the show notes.

Amber's work: videos https://imgur.com/Wv8nk3D.jpg inspired by Stephanie Kelton, artwork by Amber. https://imgur.com/FOgOycj.jpg https://imgur.com/d6HS9fA.jpg https://imgur.com/EJC25KO.jpg https://imgur.com/7H2KYFK.jpg https://imgur.com/aDzxCyT.jpg https://imgur.com/lNShx6O.jpg https://imgur.com/dGjwKJY.jpg https://imgur.com/eJ1i1Rk.jpg

Amber's work: videos https://youtu.be/gOQuJ8c0tyc Link to video https://youtu.be/M-t0EAjzbzY Link to video https://youtu.be/LyIwZjahXMo Link to video https://youtu.be/S2tN5w4F_nU Link to video https://youtu.be/BvuooV4lMgg Link to video https://youtu.be/kcjbQl4B8cM Link to video

#LearnMMT For an overview of Modern Monetary Theory (MMT) with many reliable sources to learn more, here is a good place to start:

My large set of resources containing many expert sources, layperson tutorials, and people and places to follow.
On Facebook, the pinned post on Modern Monetary for Real Progressives contains a wealth of information.

Please become a monthly patron of Activist #MMT We shouldn't have to beg, but we do have to beg. So it's not that we beg, but who we beg.

I am choosing to beg you, my listeners, to financially support this show.

To be clear, however, all episodes of Activist #MMT are free, for all, forever. Patrons only get the opportunity to hear them before the public.

Take a listen. If you like what you hear, please consider becoming a monthly patron of Activist #MMT. You can start here: https://www.patreon.com/activistmmt.

✌️, ❤️, and #MMT 🦉

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The full audio from the Cowboy Economist video: Look out, Communism!!!

Here is the link to the full vidoe

For links to the full audio of all other parts, go to part one.

With thanks to John Harvey.

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This is the full audio of the November 20th, 2019, called "Reexamining the Economic Costs of Debt," featuring Professor of Economics, Bard College; and Senior Scholar, Levy Economics Institute, L. Randall Wray.

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The full audio from the Cowboy Economist video: The Green New Deal: what is it and do we actually need it?

Here is the link to the full vidoe

For links to the full audio of all other parts, go to part one.

With thanks to John Harvey.

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The full audio from the Cowboy Economist video: How the government finances its deficits.

Here is the link to the full vidoe

With thanks to John Harvey.

For links to the full audio of all other parts, go to part one.

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Welcome to episode 50 of Activist #MMT. Today is part two of my five-part conversation with one of the original developers of MMT, Mathew Forstater. Mat is a professor of economics at the University of Missouri Kansas City, or UMKC which, according to Sam Levey, who was my first-ever guest and is also UMKC economics PhD. student, is where MMT was born. Mat is also research director for the Global Institute for Sustainable Prosperity and research associate for the Levy Economics Institute at Bard College.

(Here is a link to part one.)

Today Mat starts by describing the difficulties endured by women and people of color throughout the economics discipline, whether heterodox or mainstream.

We spend the bulk of our time, however, discussing the sad reality of unemployment statistics in the United States. This begins with the overly rosy and highly unrealistic U-3 measurement by the Bureau of Labor Statistics, or BLS. The less unrealistic measurement by the BLS is called U-6. I wouldn’t go as far as calling it "better," but it is less bad. What both leave out is the millions upon millions of Americans who simply do not exist as far as those statistics are concerned. Not only are they not counted in the report, this flaw is not even recognized or acknowledged as a flaw. The non-acknowledgment is perpetuated by media, the general public, and finally, lawmakers.

As Mat describes in his chapter in the 2013 Encyclopedia of Race and Racism, called "Unemployment and Underemployment," those who are disappeared from the employment statistics include, among others, the homeless and phone-less, simply because the survey is conducted by phone. Further, because of the realities of our society, including de facto racism and slavery, such as the war on drugs and the 13th Amendment, black Americans are much more likely to end up in prison. This is because, since our federal representatives do not prevent mass suffering when they clearly could, many citizens choose to enter the military because it provides good pay and benefits, in exchange for the risk of being blown up.

Of course, those who enter the military or are put in jail are usually among the most disadvantaged in society. In other words, these millions don’t just magically disappear from the labor pool, they are actively pushed out.

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The full audio from the Cowboy Economist video: How the private sector finances its deficits.

Here is the link to the full vidoe

With thanks to John Harvey.

For links to the full audio of all other parts, go to part one.

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The full audio from the Cowboy Economist video #01: : How to tell if someone is a socialist!

Here is the link to the full video

Links to the full audio of all other parts (released so far) (Note that videos only applicable to the time they were recorded (such as for the 2020 Democratic primaries) are not included.)

Full audio: Cowboy Economist #02: How the private sector finances its deficits.
Full audio: Cowboy Economist #03: How the government finances its deficits.
Full audio: Cowboy Economist #04. The Green New Deal: what is it and do we actually need it?
Full audio: Cowboy Economist #05: Look out, Communism!!!
Full audio: Cowboy Economist #06: How the American People (could not possibly have) Financed World War Two!
Full audio: Cowboy Economist #07: Why Social Security can't go bankrupt!
Full audio: Cowboy Economist #08: Why we need a Federal Job Guarantee.
Full audio: Cowboy Economist #11: Printing money does not cause inflation!

With thanks to John Harvey.

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Welcome to episode 49 of Activist #MMT. Today I talk with one of the original developers of MMT, Mathew Forstater (Twitter/@mattybram). Mat is a professor of economics at the University of Missouri Kansas City, or UMKC which, according to Sam Levey, who was my first-ever guest and is also a UMKC economics PhD. student, is where MMT was born. Mat is also research director for the Global Institute for Sustainable Prosperity and research associate for the Levy Economics Institute at Bard College.

In this first of a five-part episode, Mat and I first talk about how he grew up in Philadelphia, where I also grew up and still live near. He attended Temple University in North Philly and earned a bachelor’s degree in what was originally called Pan African Studies but came to be known as African-American studies. According to Mat, quote, "everything seemed to keep coming back to economics." He says he also decided on economics because economists and their theories "affects peoples lives” in a more immediate sense than other subjects. Although all subjects are important in their own way, there is a reason, he says, that every countries’ leaders have economic advisers.

Mat then talks about his long career as a heterodox economist and professor, and the difficulties he experienced and witnessed among the heterodox community, substantially due to the lack of support from (and benefit to) those in power. The infighting and factionalism he describes is similar to the concepts in his 1999 paper regarding Abba Lerner, called "Functional Finance and Full Employment." In it, he talks about how the artificial scarcity of jobs and funding imposed by the central government and currency issuer, causes bad behavior and decisions by workers and unions, in an effort to protect their artificially limited jobs at all costs. This understandably results in discrimination against the most disadvantaged. As Stephanie Kelton describes it, it is a cruel game of musical chairs. Mat calls Fred Lee an important figure in promoting and supporting a "big tent" for Post-Keynesians, in order to address some of these concerns. (This interview was partially inspired by Fred Lee's book, A History of Heterodox Economics.)

One of the primary examples Mat gives of discrimination by neoclassicals is how heterodox economists were told that if a concept could not be modeled or expressed in math, then it wasn’t really economics. I see this as a tool to make economics inaccessible to the general public, and also as a way to take the real world, which is complicated, difficult, and beautiful, and reduce it to meaningless numbers and formulas. This is not unlike focusing on a child’s report card or standardized testing grades and ignoring the child himself. This intentionally myopic view of the world obviously ignores real world suffering and also makes it very easy to justify not alleviating it.

Resources * Cambridge debates (Paul Davidson) * 2004 book by Virgil Henry Storr, Enterprising Slaves & Master Pirates: Understanding Economic Life in the Bahamas * 2015 by New School's Mike Isaacson, "Braaaaaaaains! The Undead Humbug Production Function: Now With Human Capital" * 2011 paper by Mat Forstater, regarding Byard Rustin, called "The Freedom Budget at 45: Functional Finance and Full Employment" (The latter half of the title is indeed the same as the below Lerner paper.) * Papers written by Mat (unless otherwise stated) that I read in preparation for this interview: + 1999: Functional Finance and Full Employment Lessons from Lerner for Today?: Some excellent insights from Abba Lerner, as it relates to the MMT-designed job guarantee (which is MMT proposed solution to Lerner's goal of always balancing full employment while avoiding inflation). + 1999: Public Employment and Economic Flexibility: The Job Opportunity Approach to Full Employment (highlights): The many reasons why the private sector cannot achieve (or maintain) full employment, and why only the public sector can (and must). + 1999: Savings-Recycling Public Employment: An Assets-based Approach to Full Employment and Price Stability (here is the same paper, but with ERRATA from the author): The only thing that can cause people to spend more (recycle their savings) is an injection of new money by the federal government – that is, deficit spending. + 1999, with Warren Mosler: A General Framework for the Analysis of Currency and Commodities + 2002: Full employment policies must consider effective demand and structural and technological change: a prime point of Pasinetti's political economy: A more technical look at the unique advantages the federal government has over the private sector, regarding achieving and maintaining full employment. + 2005: TAXATION AND PRIMITIVE ACCUMULATION: THE CASE OF COLONIAL AFRICA + 2005 with Warren Mosler: The Natural Rate of Interest Is Zero (One of the first papers I recommend to those interested in learning more about MMT.) + 2012: Unemployment and Underemployment, a chapter from the Encyclopedia of race and racism: The depth of how many, and especially disadvantaged populations, are disappeared from unemployment statistics. + 2017 by Flavia DantasL. Randall Wray: Full Employment: Are We There Yet?: A look at the state of current unemployment statistics, and the differences between the official, "top line" U-3, U-6, and Augmented Unemployment (and those not captured by even the latter).

#LearnMMT For an overview of Modern Monetary Theory (MMT) with many reliable sources to learn more, here is a good place to start:

My large set of resources containing many expert sources, layperson tutorials, and people and places to follow.
On Facebook, the pinned post on Modern Monetary for Real Progressives contains a wealth of information.

Please become a monthly patron of Activist #MMT We shouldn't have to beg, but we do have to beg. So it's not that we beg, but who we beg.

I am choosing to beg you, my listeners, to financially support this show.

To be clear, however, all episodes of Activist #MMT are free, for all, forever. Patrons only get the opportunity to hear them before the public.

Take a listen. If you like what you hear, please consider becoming a monthly patron of Activist #MMT. You can start here: https://www.patreon.com/activistmmt.

✌️, ❤️, and #MMT 🦉

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Welcome to episode 48 of Activist #MMT. Today is part two of my two-part conversation with second year MMT-activist Ramona Massachi. Ramona is a New Jersey resident, mother of two, and an artist who creates handmade jewelry, chandeliers, and metal sculptures that light up. In this second part, Ramona and I talk about how we worked together for several months to coordinate and schedule dozens of federal candidates for private introductions to MMT with PhD economists. Before we met, Ramona helped create a community of hundreds of progressive candidates, which became a network to promote their campaigns. She discovered MMT in early 2019, and vetted these candidates for an openness to learning it, and a platform that reflects its knowledge.

(Here's part one.)

Between October 2019 and March 2020, several dozens of federal candidates joined our introduction sessions. This includes Cori Bush of MO-01, who just had a stunning upset victory against a twenty-year incumbent – an incumbent whose father was in that same position since 1969. Some others were Lauren Ashcraft of NY-12, Xavier Carrigan of OH-05, and Amanda Siebe of OR-01.

Ramona ends with a story of how she owned a jewelry store at the age of 23 and how she felt pressured to selling online, on the then-fledgling internet. She knew instinctually that doing this would have instantly made her store into an international company, and made it more difficult to focus on her local customers and treat her workers well. It's also a statement on our so-called free market and the devastating effects of getting products and services needed for daily survival, from very far away.

Note that this two-part conversation is not a discussion of MMT concepts but rather how MMT has affected our lives and political views.

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Welcome to episode 47 of Activist #MMT. Today I talk with second-year MMT activist Ramona Massachi. Ramona is a New Jersey resident, mother of two, and an artist who creates handmade jewelry, chandeliers, and metal sculptures that light up. She designs the latter by programming it into a 3-D CAD program. She is also a modern orthodox Jew and talks about the struggles of personally having strong progressive values but being part of a community that is highly conservative. In addition to her Judaism, Ramona has practiced meditation since the age of sixteen. When she discovered MMT in early 2019, she describes it as academic justification for what she had always known to be true: that there is abundance in the world and it has always been possible to provide all with what is needed to prevent suffering.

We end with a good faith debate about the current state of our society, electoral process, and the elite behind at all. I play the role of the dark cynic, and she, a self-described extreme optimist. This is part one of a two-part conversation. In part two, Ramona and I talk about how we worked together for several months to coordinate and schedule private introductions to MMT for dozens of federal candidates, with PhD economists. Note that this two-part conversation is not a discussion of MMT concepts but rather how MMT has affected our lives and political views.

Resources * Bernie Sanders Middle East policy speech, March 22, 2016 * Nathan Tankus’ blog Notes on the Crises

#LearnMMT For an overview of Modern Monetary Theory (MMT) with many reliable sources to learn more, here is a good place to start:

On the web: My large set of resources containing many expert sources and layperson tutorials.
On Twitter: My massive pinned tweet with expert sources and layperson tutorials.
On Facebook: Follow this podcast :) The pinned post contains the above web-article. Also, the pinned post on Modern Monetary for Real Progressives contains a wealth of information.

Please become a monthly patron of Activist #MMT We shouldn't have to beg, but we do have to beg. So it's not that we beg, but who we beg.

I am choosing to beg you, my listeners, to financially support this show.

To be clear, however, all episodes of Activist #MMT are free, for all, forever. Patrons only get the opportunity to hear them before the public.

Take a listen. If you like what you hear, please consider becoming a monthly patron of Activist #MMT. You can start here: https://www.patreon.com/activistmmt.

✌️, ❤️, and #MMT 🦉

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Welcome to episode 46 of Activist #MMT. Today is the final part of my three part conversation with Texas Christian University economics professor, author, and Cowboy Economist, John Harvey. We continue our conversation about inflation from both the mainstream and Post-Keynesian points of view, and also discuss the MMT-designed job guarantee. A full introduction can be found before part two, but for now, let’s get right back to our conversation.

(Here's a link to part 1.)

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The full (and significantly-improved) audio from a panel called "8. Money, Imperialism, and Development" with Ndongo Samba Sylla and faclitated by Fadhel Kaboub. This is from the 2019 International MMT Conference in Long Island New York. It ends with a question-and-answer session.

Original MMT developer Randy Wray says the following about this panel: "This one-two punch is the best panel on MMT I have ever seen."

Here is a link to the full video (with the improved audio), which is featured in this MMT resource post: The MMT view of developing nations and financial sovereignty.

(And, I have to say: the orange-black charger Fadhel is holding at the beginning, plus the blue-green “CM” logo on the top-right of the screen as the slides are being loaded, are both mine. So I’m forever part of the best panel on MMT Randy Wray has ever seen 😁.)

Original video, with not-the-greatest audio Here is the original video which has audio that is servicable enouguh (with headphones and the volume turned up), but is a bit difficult to hear.

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Welcome to episode 45 of Activist #MMT. Today is part two of my three-part conversation with Texas Christian University economics professor, author, and Cowboy Economist, John Harvey. In part one, John talked about John himself, institutionalism, and discrimination. In the final two parts, John and I talk about inflation as seen through the lenses of both mainstream and Post-Keynesian economics. As people who challenge the overwhelmingly dominant school of economic thought, we must learn both schools. Another reason is because we want to efficiently communicate with and convince the masses who have been influenced by the dominant school – and the nearly infinite power that backs it.

I was inspired to talk with John after having an unpleasant debate with a local lawyer and history-buff. He was perfectly pleasant and respectful, but his views I found to be highly cynical and disappointing. (With his permission, the entire dialogue can be found in the show notes.)

As I understand it, his view is that it is essentially impossible for the central government, the one and only issuer of the currency, to safely do anything bold, without offsetting that spending one-to-one with taxation or bond sales, in advance. In his own words:

I simply believe the government has to pay for those programs through taxes or serious consequences will result. Often, the tradeoff is worth it - I'd gladly pay more taxes for universal healthcare for example. This is because, regardless how desperate the program may be needed, creating the money to do it would increase the money supply, which would cause inflation, which would cause the people to rise up and literally bring down the entire government. In other words, the quantity theory of money is so volatile that even the state’s monopoly on violence is no match for the unbridled rage that would result from the inflation caused by the new money necessary to implement that bold policy.

So, for example, take the Green New Deal, which is required to prevent organized human civilization from devolving into literal worldwide chaos. Daring to create the money necessary to implement this program would cause revolution and bring down the government anyway. As Randy Wray and Yeva Nersisian say in a recent article, "it is irrational to fear deficits more than we fear the annihilation of human civilization."

The objection reminds me of the resistance I have received regarding the job guarantee: for example, if the job guarantee jobs are not "valuable," it would potentially demoralize workers, lead to corruption, and undermine the entire program. Another is that corruption in general would make it essentially impossible for the job guarantee to be properly managed.

[I’ve included some screenshots of this criticism in the show notes]

(See screenshots at the bottom for examples from a recent conversation.)

The idea that these micro concerns would somehow so-dramatically undermine the entire macro purpose of these programs is, of course, absurd. For example: how valuable are the jobs we have today? Right now? Even if a job guarantee job weren’t as valuable as the jobs we currently have, would they be so bad that it would completely outweigh the horrors of involuntary unemployment?

What kind of corruption do we have right now in the for-profit private sector? Even if there was some corruption in the administration of the job guarantee, again, would it be so detrimental that it would outweigh the horrors of involuntary unemployment? How much has corruption undermined other federal program such as the police, libraries, and public schools? (And of course, those who vehemently express these concerns are almost always not desperate for a job, or a better job.)

As John says, the job guarantee is "elegant in its simplicity" and "just so obviously simple and straightforward." The job guarantee is as beneficial to society as seatbelts are in cars. While padded dashboards and more flexible and stronger windshields may be a good idea, it is no replacement for the most important safety feature of all, which is seatbelts.

In these final two parts, John and I talk about the reality of inflation, and describe and refute several mainstream concepts related to it. The concepts include the quantity theory of money, the money illusion, rational expectations, and the never before seen NAIRU boogeyman of runaway inflation – the latter of which, in reality, is hyperinflation.

A couple of notes before we get started:

First: John talks about an interesting and revealing debate he had in the comment section of one of his Forbes articles. That full dialogue can be found in the show notes.

Second, you’ll hear me say that "runaway inflation is not possible unless government is complicit." What I mean to express is the following sentence from page 257 in chapter 17 (Unemployment and Inflation) from the MMT textbook, which applies less to a genuinely-hyperinflationary episode:

The role of government is also implicated. While it is the distributional conflict which initiates the inflationary spiral, government policy has to be compliant for the nascent inflation to persist. Tweets critical of the MMT-designed job guarantee Link to tweet

Link to tweet

Dialogue with Monetarist in response to John’s Forbes article, Money growth does not cause inflation!: JTH: The problem is that none of that addresses the fundamental fact that one cannot increase the money supply above money demand (Friedman’s key causal factor). Monetary policy can accommodate inflation, but it cannot cause it. In a modern, capitalist economy, inflation is never a monetary phenomenon. MARCUS THE MONETARIST: If you cannot increase the money supply above money demand, you would never have inflation! Check the first 2 graphs on this post: http://thefaintofheart.wordpress.com/2011/04/04/delong%c2%b4s-%e2%80%9canatomy-of-a-slo w-recovery%e2%80%9d/ Why did you have the “great inflation” in the seventies? Why did inflation “dissapear” after the early 80 ́s? Who, if not the Central Bank, controls nominal quantities – like NGDP? The analogy I make of the monetary nature of inflation to freshman students is: Can you keep the fire in the fireplace burning without adding wood? No, if you stop “stocking”, the fire will peter out. The same with inflation (defined as a sustained rise in the “overall price level”. JTH: Explain how this happens in the real world–how does the Fed increase the supply of money in the absence of demand? Specifically. MARCUS THE MONETARIST: So why during inflation money becomes a “hot patato” and during hiperinflations a “boiling patato”, something no one is eager to hold? JTH: You see, Marcus, you cannot answer the question without invoking a fireplace or helicopter. If it is true that the Fed can raise the money supply in the absence of demand, then this should be a very simple, even fundamental, question to answer. How does it do it? What is the mechanism? Where is the line of causation? MARCUS THE MONETARIST: Our postions are so diametrically opposed that I don ́t think this conversation will lead “somewhre”. In any case, for what it ́s worth below my answer: By your reasoning “apple growth” would not cause “apple inflation” unless the apples were dropped out of a helicopter. Think about a big harvest of apples. The apples are sold for other assets, and the value of apples drops in the marketplace. Now think about a big harvest of money. The Fed sells the money in the marketplace for other assets, and the value of money falls. When the value of apples falls, the nominal price of apples falls. When the value of money falls, the nominal price remains unchanged. Instead, a falling value of money can only occur via inflation. Nick Rowe has some great posts on this topic. JTH: Thank you for posting a reply, Marcus. Again, however, I’m afraid I don’t see a direct answer to my question. I asked what mechanism in the real world the Fed has available to raise money supply above money demand (something that you said above is necessary if inflation is to occur). Money supply can rise if the Fed buys assets or if loans are made from available reserves. To my way of thinking, neither of these can occur without the full and conscious participation of the other side of the transaction. Hence, the supply of money cannot be increased in the absence of demand. Yet you say (above) that inflation only occurs when money supply is in excess of money demand. You have defended this with analogies, but not with real-world examples of the underlying process. I am a huge fan of using analogies to get the essential idea across; however, unless these mirror something that is going on in the real world (and in a very real and tangible sense), then recommending policies based on such stories is dangerous to say the least. I hope you don’t think I’m being rude, but I think this is a key question and one that I have never found a monetarist able to answer: how is it in the real world that the central bank raises money supply above money demand? Can you please tell me this and in the context of actual Federal reserve policy tools? This is not a trivial question. The entire monetarist superstructure rests on it. If the answer is that in reality this cannot happen, then I’m not sure how the rest of the monetarist analysis survives. MARCUS THE MONETARIST: crickets Debate with history-lawyer: full dialogue [NOTE: My hypothetical Pony For All Act example would literally give everyone a pony who wanted one. It is admittedly a highly resource intensive [and possibly impossible?] project, only meant to make it clear that resources, not money, is important regarding the implementation of a federal program. It’s a chapter in my old MMT-101 presentation. See here: https://youtu.be/mTvgG1Y9GKQ. It was inspired by this 2017 article by Stephanie Kelton.] Below is the text of a Facebook post, containing the full text of my debate, shared with his blessing, and a bit of background. I had a pretty upsetting conversation with a lawyer and history-buff. Not because he was disrespectful or anything, but rather how darkly cynical and suffocating (and confident) the point of view is. He, in so many words (roughly) said that "printing money causes inflation/devaluation" is such a sure and harmful thing (specifically, the issuance of currency increases the money supply which devalues the dollar) that it renders chartalism, the state theory of money, pointless. In other words, if the government dared to use it’s power of money creation for an ambitious project, it would cause severe inflation, which would cause people to no longer accept the dollar (despite taxation!), which would cause revolution, which would end the state. I got his permission to share the conversation. I did my best but I’m clearly not educated enough to compete against such confidence that MMT and the foundations it’s built upon, are wrong. I’m not interested in bashing him (he’s a nice guy I know personally), but rather to get a few steps closer to being able to handle this kind of deep skepticism properly. Perhaps a small set of academic papers or lectures that best address these concerns. 🙏 [DIALOGUE STARTS HERE] [He saw one of my old presentations and I started by defining and distinguishing between currency creation and bank credit creation.] HIM: Question to challenge your view of money. Regarding a bank loan at the beginning of the nation: Obviously the new American bank in 1789 would love to charge Citizen Farmer as much as possible and Citizen Farmer would like the loan to essentially be free. So yes, they negotiate and the answer is somewhere in the middle. But this still begs the question. In this new country with the new money system, what determines how many of the new dollars the farmer will be willing to accept for his farm? I'll direct you even further: people in this new America know that a farm is worth more than a single chicken and less than 10 farms. But what is everything worth in terms of these new dollars if nothing has ever been priced before? What is the formula to determine how many dollars the marketplace will on average pay for and accept for a farm if everyone is negotiating out of self interest and is rational? You don't need a degree in microeconomics to answer the question; you just have to think about it. The government in my story isn't hiring anyone or setting the price of anything. The bank is holding the dollars and can loan them as it sees fit. So what determines the price of the farm in our new country with these new dollar bills? Hint: A pizza in bitcoin might cost. .0000001, 20,000 yen, or $20. ME: There is a tax obligation. People must accumulate enough tax credits in order to extinguish their taxes when they come due. That’s part of the equation. But I’m not sure what you’re getting at. Another hint? HIM: Another hint: you're on an island. There is only one good on the entire island that you don't ever want and you have. The only other person on the entire island has $5. What is the cost of the item? Answer: $5. Now the same problem but the other person has $10. What is the cost of the item? The answer to the above is the same formula as what determines the price of the farm the farmer will be willing to accept in this new currency we've created. ME: You say the central government isn’t in your story. Since that’s the case, then there is no such thing as the government’s money. So the money being held by the banks in your story has nothing to do with “society’s money.“ (There’s no evidence that any major society in the past 5,000 years ran on barter [which was then “taken over” by a government and its money to make the barter more efficient]. There is plenty of evidence to suggest that the major money of all major economies was state based money: The government imposed a tax obligation and then spent its money – the only thing that could extinguish that tax – into existence. This is called chartalism or the state theory of money.) So, as best as I’m understanding you, the money in each bank in your story is that bank’s money and no more. Each bank is essentially its own little government. This is like wildcat banking before the Federal Reserve existed. No one could be sure that their dollar would be accepted in any other state or bank (at a 100% exchange rate), because there was no centralized entity to ensure it. I don’t know where you’re going with this. I’m obviously missing something. You’re welcome to keep going if you like, but I have a strange feeling that our foundations of reality are not compatible. Whatever the answer is, it’s only applicable to that bank’s dollar. There’s no way to tell what that value will be compared to any other bank’s. HIM: The central government exists in my story - it was just created and we are a new country. A private bank is holding some of the money. It's not a wildcat bank and it deals in dollars. The bank, not the government, wants to loan money to a private farmer. The farmer will put the deed to his farm up for collateral. What determines the result of the negotiation between the bank and the farmer to determine the size of the loan? The answer is the amount of money in circulation. If there is only 1 dollar infinitely divisible into fractions, the farmer might take $.0000001. If there is $10 million in circulation, the farmer of going to require much more money to risk his farm. If there is $1 quintillion in circulation, the farmer would be reasonable to ask for $10 million. This is why for example things cost so much more yen in Japan than dollars in America - there is more yen in circulation. The formula for the price of goods is the amount of dollars chasing the amount of goods. Thus, for example, if you have a lot of high value earners in an area with a limited number of houses, home prices will be high and vice versa. So, yes, the government can print let's say $2 trillion to finance your Pony For All Act out of thin air. But what government cannot do is control the resulting price increases that those additional dollars will command for the same limited number of goods elsewhere in the economy. Government also cannot mandate that the original horse owners will sell their horses or labor to the government for the listed price in the first place or continue to do later on. Why would I sell my limited number of horses, for example, to the government for $X dollars if the government is going to print more money and reduce its value relative to the number of other goods in society? More dollars chasing the same number of goods means higher prices. If government keeps printing money, yes, it can pay for its own obligations indefinitely. But what it can not do is force its citizens to keep accepting the money, even if it has a law and the force behind it as a mandate. This is what happened in America during the Articles of Confederation - America simply refused to accept these dollars in exchange for their goods or labor. I'm not putting my farm up for collateral in exchange for $X if the amount of dollars in existence will double tomorrow - other people will have double the money for their goods and my money will only be worth half. Yes, government printing money can have a stimulative effect of creating more resources, but many goods are quite limited. For example, there is a completely limited amount of land. When government doubles the money supply, the price I will be willing to sell my land for doubles. Do this enough and no one will accept the money at all. ME: Okay. You said “The government in my story isn't hiring anyone or setting the price of anything..” Not “The government doesn’t exist.” But it’s not that much of a difference given your scenario of the country just beginning. You say, in so many words, that “printing money causes inflation” or devalues the dollar. This is incorrect. Unfortunately, I am not educated enough to speak deeply on it. Especially given your apparent confidence, not to mention being a lawyer. You also seem to be suggesting that once issuer-created money enters the economy that the issuer loses control of the situation. That is incorrect. Money is a human created concept. Humans have literally infinite control over human created concepts. Issuing currency causes inflation only if we let it. The issuer has literally infinite power over its own money. They can redefine prices, tax any amount, implement better laws and regulations, enforce existing laws and regulations, eliminate bad laws and regulations. Put CEOs in jail, provide better for the people to prevent major problems, empower workers and disempower capital, etc. Our corrupt government CHOOSES to do little, but that’s an arbitrary human choice. That political reality does not change the inherent legal reality. Sure, things happen in the real world that we can’t control and that could cause inflationary pressures, but money and economic policy (both fiscal and monetary) can always be managed in order to minimize them. Not just reactively but preventatively, such as through automatic stabilizers like a federal job guarantee. There will always be real world problems that cause financial problems but we can always manage and minimize the financial problems. Real problems being created by financial problems however, is always due to ignorance, incompetence, or corruption. Here’s a good article elaborating on this concept: https://medium.com/@slevey087/where-does-the-economic-buck-stop-cc2c1ad66652 Two more points: Printing money barely even exists as a concept since physical money creation is not involved in the issuance of currency at any point. Physical money creation does not occur until bank customers explicitly request it from a teller or ATM machine, at which point the same amount of reserves is removed. “But what it can not do is force its citizens to keep accepting the money, even if it has a law and the force behind it as a mandate.” This is plainly incorrect. Federal taxation drives demand for the dollar. They will accept the dollar or they will go to jail (when they don’t have enough to pay taxes). There’s no law, per se, that requires usage of the dollar beyond taxation. Like I said, our assumptions of reality are simply incompatible. HIM: How does the American government have the power to set price controls? If Congress and Donald Trump sign a law that requires you to work for less money per hour to fight inflation, do you have to listen to them? If Congress and Donald Trump say you cannot sell your home for more than X to fight inflation, do you have to listen to them? Is that constitutional, and even if it is, is the US government revolution proof if the people choose not to listen? [My emphasis:] The only way the federal government currently has the power to set prices is the very thing you don't want it to do - by destroying the money supply or by spending less. Otherwise, the pony owners who just got a $2 trillion dollar raise in their salary to sell horses to the government are free to spend that income in the economy. That $2 trillion chasing the same number of homes will result in increased home prices. ME: One of the foundations of MMT is chartalism (the state theory of money). It requires a sovereign that has a monopoly on projecting violence within its borders. If it wants to retain that monopoly then it’s going to treat its people well ENOUGH in order to prevent revolution (or it will successfully prevent or crush that revolution). Chartalism requires a sovereign. If it treats them so badly that a revolution is caused, such that the sovereign itself is eliminated or its constitution fundamentally rewritten, then all bets are off. HIM: Right, and one of the conditions of, "treating the citizens fairly" is not inflating the money supply. If I worked my whole life and saved up $X and then overnight the government puts $2 trillion into the hands of pony owners, my savings is worth much less as those pony owners are free to drive up prices of consumer goods and I am not. I have the same number of dollars as before and the pony workers have much more; they can buy much more than me. This government control isn't a matter of will, it's physics. Raise the money supply in real or electronic form and prices go up. [[[[[[[At the suggestion of a commenter on Facebook, I passed him John Harvey’s Money growth does not cause inflation article, at the suggestion of Facebook commenters.]]]]]]] HIM: Harvey's article doesn't address what is happening in your pony law [from my MMT-101 video lesson, which is admittedly a highly resource-intensive example]. Harvey says that supplying money is like supplying haircuts - someone has to be willing to accept one in order for more haircuts to happen. Right, but in your pony law the people who sell their ponies to the government in exchange for the higher amount of money the government has borrowed and given them very much accept those dollars. And they very much have the freedom to spend those dollars in other places in the economy. So say I'm selling my home. On one hand is a retiree who wants to buy it. He has $200k, which I thought was a fair price. Now the pony sellers have far more money because of the new government program and also want my house. They can and do offer me more. What happens to the value of my home? It goes up. What happens to the relative purchasing power of the retiree's savings? It goes down. ME [integrating the feedback in this post]: (This is mostly not responding to your thoughts on the Harvey article. My hypothetical Pony Act example, which would literally give everyone a pony who wanted one, is admittedly a highly resource intensive project, affecting much of the economy.) Most of the dollars in the economy are hoarded by the super-wealthy in investments (interest bearing US treasuries). They’re not being spent on, or chasing, anything. Only the dollars people are currently attempting to spend can contribute to inflation. If you believe that spending new dollars devalues the dollars already in the economy, then the dollars already in the economy must be redistributed. This means they must be ripped from the hands of the super-wealthy and given to the poor like Robin Hood. This is a pointless battle when the issuer has the power to create more. The super-wealthy may want more yachts and homes, but they certainly are not purchasing massive amounts of food, clothing, or healthcare – not to such an extent that it makes food, clothing, or healthcare inflationary for the entire economy. So the issuer spending new money to provide more food or healthcare for those desperate for it, for example, would clearly not be inflationary. Also, paying off debts is also not inflationary since debt is essentially negative money – a vacuum. People are forced to not earn income during this quarantine but still have to pay rent and bills. Landlords depend on rent to pay their own vendors. The vendors depend on that income to pay their own* vendors. And so on. Filling this vacuum would not cause (unmanageable) inflation. NOT filling this vacuum definitely will cause lots of real world suffering. Only the issuer has the power to fill this vacuum in such a way that all parties are made whole. A final example: Spending new money to prevent, stop, and rectify horrible things (such as cleaning up from and reversing pollution) is also clearly not inflationary because no dollars are currently attempting to purchase that negative externality. New spending to help the desperate and suffering, from whom wealth is being sucked away from* (or never given to in the first place), does not cause (unmanageable) inflationary pressures. The idea that the super-wealthy, because they happen to hoard well over 90% of the nation’s wealth in investments, just sitting there, holds the vast majority of us hostage like this, is a pretty terrible one. Finally, around six trillion dollars was keystroked into existence in the past month or two in response to coronavirus. At the same time, inflation has plummeted. That pretty clearly contradicts you. Sure there may be some examples that demonstrate the idea, such as the hypothetical, simplistic, and highly resource intensive Pony Act, but to say it’s a steadfast rule that “increasing the money supply devalues the dollar”, for the entire economy, every time, is incorrect. The concept serves to withhold even more from the millions upon millions who are desperate. You can have the last word if you like, but I think I’m going to stop. I’m not going to pretend this wasn’t very disappointing in a way but it was also quite interesting. So thanks. HIM: It was a pleasure debating with you.

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Welcome to episode 44 of Activist #MMT. Today I talk with Texas Christian University economics professor, author, and Cowboy Economist, John Harvey. In this first of a three-part episode, John talks about how he decided on economics as a profession, despite mainstream thought doing its best to discourage him. He then elaborates on the concept of institutionalism, which he recently discussed on MMT Podcast [parts one and two], and specifically how MMT integrates its ideas.

Here's a link to parts two and three.

This part one with John is the first inspired by Fred Lee’s book, The History Of Heterodox Economics. As the book makes clear, heterodox economics, which includes MMTers, Institutionalist, Marxists, and all Post-Keynesians; is resisted by mainstream economists with every fiber of their being – and the nearly infinite power that backs them. John talks about how John Galbraith told him – importantly over drinks – that mainstream economics is "dead" and "hopeless." So instead of changing the minds of people whose paychecks depend on their minds not changing, the decision was made to communicate directly with candidates, policymakers, and importantly, laypeople via interviews, blogs, and social media.

In parts two and three, John and I discuss inflation as seen through the lenses of both mainstream and Post-Keynesian economics, and of course we touch on the MMT-designed job guarantee which directly addresses much of it.

Resources

John’s book Contending Perspectives in Economics: A Guide to Contemporary Schools of Thought, original edition. New version coming out August 2020.
A Guide to Post-Keynesian Economics, by Alfred Eichner.
My Naked Capitalism article on the sham that is the Paycheck Protection Program.

#LearnMMT For an overview of Modern Monetary Theory (MMT) with many reliable sources to learn more, here is a good place to start:

My large set of resources containing many expert sources, layperson tutorials, and people and places to follow.
On Facebook, the pinned post on Modern Monetary for Real Progressives contains a wealth of information.

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