Episode 78 – Paying Ourselves to Save the Planet: An MMT Story with J.D. Alt

Macro N Cheese Episode 78
Paying Ourselves to Save the Planet: An MMT Story with J.D. Alt

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J.D. Alt [music/intro] (00:02):

The world tends to think that mitigating climate change is going to cost a whole lot of money. But what this new perspective with the perspective of Modern Money Theory says is that it’s not going to cost a lot of money. A lot of people are going to get paid. A lot of money.

Private enterprise says, no, no, no, we’re going to do it. You have to let us do it. If you take it over and start doing it. And that’s, un-American, you’re sending us down the road towards socialism and communism. And those are just bogeyman.

Geoff Ginter [music/intro] (01:23):

Now let’s see if we can avoid the apocalypse altogether. Here’s another episode of Macro N Cheese with your host, Steve Grumbine.

Steve Grumbine (01:34):

All right. And this is Steve with Macro N Cheese. I have guest, J.D. Alt, joining me this week. And J.D. Alt is a guy who you’ve got to get to know. He’s written some great books out there. Some of the ones that I think are absolutely must have in your library from Diagrams and Dollars, The Millennials’ Money, and he’s got a new book out here. And the new book is called Paying Ourselves to Save the Planet.

I’m very, very excited about this book. I haven’t read it yet, but I did pick it up. And so I had reached out to JD who has had a relationship with myself and RP, has written several articles for us in the past. And I met him actually at the first Modern Monetary Theory conference in Kansas City. Back in 2017, I was moderating his panel and just a really nice guy, really neat guy.

And so I figured, you know what I’d like to hear what JD has to say. So given the fact that we’re in the midst of a pandemic, given the fact that we are in the midst of a climate crisis his book Paying Ourselves to Save the Planet, seemed like the perfect thing to talk about. So with that, let me welcome my guest, JD. Welcome to the show, sir.

J.D. Alt (02:47):

Thanks for having me on, Steve. I appreciate it.

Grumbine (02:50):

Absolutely. So, you know, last time I was talking to you, you were in Annapolis and just a hop, skip, and a jump. It seems like you’ve made a geographical move out there. What? To New Mexico?

Alt (03:02):

That’s right. We’re just south of Santa Fe now. So, where are we are, it’s very hot [mixed laughter].

Grumbine (03:10):

To say the least. What is it, around 100, 102?

Alt (03:13):

It’s about 102 right now. Yeah. Wow. Wow. It’s very dry. So it’s actually quite comfortable.

Grumbine (03:22):

Okay. Alright. So tell me a little bit about what this new book Paying Ourselves to Save the Planet is all about.

Alt (03:32):

Well, it’s really all about what the title says it is all about. The book really started with my finally coming to understand how the reserve banking system works. And this was a real revelation for me, and it took me a long time to actually figure it out and understand it. But when I did, it was like all these ideas and things that I’d been writing about for so long and really began to click into place in a completely new way.

And the original insight was basically how the reserve banking system works. And the fact that what we call fiat money ,US fiat money, is actually reserves. What the banking system calls reserves and all the other money that we use, which is bank money, money created by banks, and cash money. All of that money are claims on the reserves and the reserves are held in the reserve banking system and they never leave.

They’re in fact just digital entries on a score sheet, so to speak. And the insight that this created was versus there were two distinct methods for creating reserves. And the first method is the one that’s commonly understood, which is that banks make loans. And when a bank makes a loan, it creates bank money. And the bank money that it creates when it makes that loan is a claim on the reserves that that bank has at the Federal Reserve, at the central bank.

And this process requires a profit to be made. So the bank can’t create bank money unless it’s going to make a profit, which is the interest that is going to be paid. And the central bank then creates the reserves that back up the claims that the bank money creates. So this is how all the money for private enterprise for private commerce is created. And it’s why private commerce requires that everything it does make a profit.

So private commerce will only undertake projects and provide goods and services that it can make a profit on. And if it cannot make a profit, it will not provide those services. And the banks will not create money for those services to be created. So that all works fine and well, it produces what we need, except for the things that don’t make a profit. So all of the things that we need as a society that are not profit-making that nobody can make a profit producing.

Those things have to be created by what I call public enterprise. And the question is, where does the money for public enterprise come from? And this really kind of goes to the heart of what MMT is concerned about and what I call the Standard Money Theory. We have Modern Money Theory. Then we have that’s opposed to what the Standard Money Theory isn’t.

The Standard Money Theory says that the only way that money can be created is by the banking process, the process of making loans and charging interest and making profits, and that the not profit making things that have to be provided by public commerce, the only way that the money for those things can be obtained by the government, which has to pay for them is either by claiming some share of the private enterprises profits, i.e. collecting taxes, or by borrowing from private enterprises after tax profits, i.e. issuing Treasury bonds and the debt of the Treasury bonds has to be paid for by collecting future taxes.

So this is the Standard Money Theory. This is the only way it believes it’s the legitimate way for the government to get its hands on the money that it has to spend to provide for the public enterprise. In other words, the goods and services that society needs, but that private enterprise either can’t produce or will not produce because it can’t do it profitably.

So this leads, the other insight I had in thinking about what the book was going to be about is the fact that the modern society that we live in today requires an enormous amount of public services that just two generations ago, nobody even thought about. And this goes to, you know, health care and education and housing and daycare, all of these services that modern society desperately needs to have that are not profit making have to be paid for it by public commerce, by public enterprise.

And the struggle is that the Standard Money Theory, the way it says that the government has to get its money, it can’t obtain enough money through that Standard Money Theory through that process to pay for all the things that have to be paid for. So one of the main sections of the book is all through, and I do it tallying up of all of the public enterprise goods and services that we need to have and how much they’re projected to cost.

And then I compare that to how much the Standard Money Theory says, the government can either collect in taxes or borrow, and there’s a huge disconnect. And the disconnect becomes really big when you add in the cost of climate change and how much it’s going to cost, how much the government is going to have to pay people to mitigate and adapt to climate change. And a huge percentage of all of those things that people are going to have to do are going to be things that do not generate a profit.

So the banking industry cannot create the money to pay people to confront climate change. And I try to simplify this analysis by simply looking at one thing, and that’s paying people to sequester carbon, either in the soil or to scrub it out of the atmosphere and the number of dollars that’s required to pay people to do that is something like $60 trillion.

Grumbine (10:15):

Wow.

Alt (10:17):

It’s way beyond what the Standard Money Theory says. The government can either tax or borrow from the profits of private enterprise. So.

Grumbine (10:31):

It’s amazing. This is really an amazing enlightening moment.

Alt (10:36):

Well, the thing is, what it makes you realize is that this is really the main reason why there’s been no realistic effort or even really plan for how to confront climate change around the world. Because when you calculate the costs of it, nobody can even wrap their minds around how governments are going to get enough money to pay people, to do all these things that are going to be necessary to do.

And again, what’s important to realize is that a lot of these things are not going to generate profits. So, therefore, the banking industry cannot create the money. So the money has to be created in some other way. And this leads to the second major insight that the book is based on.

And that is that understanding how the reserve banking system really operates, creates a kind of new perspective on what Treasury bonds are because Treasury bonds, according to the Standard Money Theory, Treasury bonds are a form of debt. The government is borrowing dollars from private enterprise, from the profits of private enterprise, actually from the after tax profits, the private enterprise. And from that perspective, that’s money that has to someday be repaid to somebody.

Grumbine (11:56):

You know, it’s interesting, real quick, because in speaking with Mark Blythe, he made this exact point. He was on that Standard Money Theory. And this is a guy who I really care about nice guy, but nonetheless, he is the lead economic voice at Brown university. And he is literally saying that these things are future debts to future payments for our children, et cetera. We’re banking on that. It’s just amazing how deeply embedded this thinking is. Anyway, keep going, JD. I just wanted to drop that in there.

Alt (12:28):

That’s right. So that’s the standard perception and it’s very easy to understand why that perception exists, but when you understand how the reserve banking system works and what reserves are and what fiat money actually is, you realize that a Treasury bond is really not a debt instrument. What it actually is, is an issuing of future reserves.

So when the Treasury bond matures, the Treasury does not pay anything to anybody because it has already given them what they need, which is the future reserves. And when the bond matures, the central bank, the Federal Reserve simply creates the new reserves that are promised in the Treasury bond.

 And if the Fed happens to have on its balance sheet, if it happens to be holding the Treasury bond, when it matures, then it’s simply cancels the Treasury bond because it has no need to pay itself reserves because it can create reserves any time it needs to. And that’s exactly what it does all the time, every day. So Treasury bonds are not a form of debt. They are in fact, a form of fiat money, but it’s a future fiat money. And the reason that’s true is because there is absolutely no doubt that the Treasury bond that the future reserves promised by the Treasury bond will in fact be made real.

Grumbine (14:01):

They are keystrokes, right?

Alt (14:03):

They are keystrokes. But if for some reason there’s a decision not to make that keystroke. Well, then that means that the whole financial system is essentially collapsed. So when you understand that Treasury bonds, then to go back to Treasury, bonds are in fact, future reserves. You then can construct how the government is able to create the money that it is going to need to pay for this new level of public enterprise. That modern society is going to need to undertake specifically, well, you can apply this to healthcare.

You can apply it to education. You can apply it to daycare. You can apply it to affordable housing. You can apply it to all kinds of things. And I think it will be. But the main thing that you can apply it to is mitigating the climate crisis and to begin to actually plan for the kinds of things that are going to need to be done and to actually start paying people to do them.

So that’s basically what the book is about. And the essential point of it is that the world tends to think that mitigating climate change is going to cost a whole lot of money. But what this new perspective with the perspective of Modern Money Theory says is that it’s not going to cost a lot of money.

A lot of people are going to get paid a lot of money to do what needs to be done, to save the planet, essentially. And when you look at it from that perspective, it’s like a no brainer because there are so many people right now, it’s becoming a crisis. There are so many people who can’t get paid to do anything who need to get paid to do things and who want to get paid to do things and who want to do things that are meaningful and useful and not just to themselves, but to their communities and to the world.

And so, when you realize how simple it is to actually do that, if you can get organized to plan for what needs to be done, that you can actually do it well, then that’s pretty radical perspective to have, and it’s one that’s desperately needed to be implemented. I think

Grumbine (16:22):

Warren Mosler says, and I think this is a key MMT insight. That one person’s spending is another person’s income. And if you look at the sectoral balances images, you can always see that spending mirrors income. There’s always the two sides of that graph, if you will.

And I think we oftentimes think of the government’s debt as debt that we carry, as opposed to the quote, unquote “ledger entry” of debt for the government. That’s actually the other side’s income and that’s our income. And so it speaks immediately to your great analogy. This is amazing. So let me ask you, in the grand scheme of things, how did you work through the numbers that it would take to mitigate climate change? What was your process?

Alt (17:07):

Well, that’s an interesting question. It was not anything scientific or mathematically rigorous. I simply in my reading, I found a few basic benchmarks in, you know, just the literature that’s available. Like for example, how much it’s projected to cost to pay a farmer, to sequester a ton of carbon in their soil, by changing their farming techniques.

And I think it was like $15 a ton or something like that, that you would have to pay a farmer to do that in order to make it worth his while to adopt new farming techniques and new crop rotation techniques. And then there’s been cost estimates made on building machines that scrub carbon out of the atmosphere and sequester it in the ground or repurpose it in various ways.

And right off the top of my head, I can’t remember what those numbers are, but I just took these numbers and applied them to the number of tons of carbon that needed to be sequestered. And, you know, just worked out this very simple math that way. And I’m just looking through the book here right now. It’s been a while since I read it,

Grumbine (18:28):

Come on, JD, why don’t you have it on total recall, man?

Alt (18:31):

Yeah. Well, I don’t know any, right. I think it was a million tons of carbon that needed to be sequestered in the next decade in order to mitigate the carbon buildup in the atmosphere. So the point is that, it’s my understanding. It’s not just enough now to start reducing our carbon emissions. We literally have to take carbon out of the atmosphere and sequester it. And if that doesn’t happen, then we’re not going to meet the targets.

Grumbine (19:04):

Can I ask you a question. Did you take into consideration any of the different technologies and what might be used to do exactly what you’re saying? Because when speaking with Steve Keen, he was very grim on this prospect. He shared a lot of the same ideas you were sharing, but he went a step further on one side because he was digging into the energy component of what it would take to mitigate this. And so his focus was largely on the energy process that would be required.

And he kept saying, I don’t believe that renewables are strong enough to do this. I believe that it will require some form of nuclear energy. And he pointed to thorium and he said, but the problem is there’s no thorium reactor. At this point, though thorium is probably the safest solution of all the potential nuclear options, but there is no renewable version of this.

He didn’t feel that was capable of delivering on this without severe investments into ramping up production of thorium reactors. I don’t know if this is in your book or not, but I was interested in your take on that.

Alt (20:08):

Well, my take on that is the way this is going to unfold is going to be an all hands on deck kind of process where we’re going to have to be doing everything we can and using every kind of strategy that’s available. And certainly nuclear power is probably going to have to be part of the mix in some way or another. But the other thing to consider is that, and this is not my expertise by any means at all.

Grumbine (20:36):

Sure. Yeah. It was an unfair question, but I was just curious.

Alt (20:40):

But I certainly think that a lot of the people who say it can’t be done, they’re assuming what we’re going to do is we’re going to maintain the status quo in terms of how we use energy and what our lifestyles are, how much energy our lifestyles require, you know, and so a major part of what I think is going to have to happen and that it will just kind of evolve is that we will be forced to change our lifestyles so that we use less and less and less and less carbon-based energy.

And we’ll just have to change the kinds of things we eat. For example, that’s a huge one right there. The meat industry is a huge producer of greenhouse gases and the whole agricultural industry, how it produces food and what kind of food it produces and how it packages the food and how it delivers it. All of these things are changeable. You know, they can all be modified. And right now we just happen to be living a lifestyle on almost every level that is very, very carbon intensive.

So I think that it’s going to be a combination of pulling on the string at both ends to get there. And I don’t know whether we will get there. And so where we end up, we may not have the wonderful outcome that we hope or that we expect or that we can’t imagine the alternative, but it’ll end up being something. And I think the point is that the point of the book that I wrote is that, well, we have to start doing something. And right now we’re literally not doing anything at all.

Grumbine (22:24):

Exactly. I want to bring up something here real quick. That really sticks out in the very beginning of our conversation here, you talked about how banks give loans for things they can make profit on that businesses do these things based on a need for profit. And so the things you’re talking about when you’re talking about consuming less and changing stuff like that, a lot of the things that are being produced right now are junk, just junk within an expected planned obsolescence.

There’s an intention to just literally keep making you buy the next thing every 18 months, because they’ve figured out some calculation how to keep their points going up on wall street. I believe this is a fundamentally flawed way of doing things that would literally kill us. It’s not just a matter of, Hey, you know, you’re hating on capitalism kind of thing. This is a structural thing that is literally creating the very grounds by which we’re killing ourselves.

I’m just curious, given your take on the way the loans come in and the concept of reserves and how this all plays out. If there’s a tie in there, there’s a one for one almost in terms of curbing our lifestyles. So to speak with this junk and all this built in obsolescence, where they are not planning, how do we do a responsible upgrade?

Why are we not building chassis on systems so that they last for 20 years versus building them so that they die every 18 months, there’s gotta be some form of state-based control to force that kind of thing. Otherwise it won’t matter. It will require some level of discipline for regular people. And I don’t know that we have the, wherewithall to make that kind of bold change at our own level. I think that there’s too much variable there with millions upon millions, if not billions of people to be able to do such a thing. What are your thoughts on that?

Alt (24:14):

Well, everything you say is true, but the economy that we’ve created is sort of, as you imply, is based on that whole dynamic. So I’m not sure how you change that in a regulatory fashion. And actually, I don’t want to avoid what you just asked me, but it connected to another set of ideas that related ideas in my thinking and in my recent reading.

And that is that one of the reasons that there is such a pushback against MMT is there’s a history behind this that I was not totally aware of, but I’ve become aware of recently. And it has to do with the pushback against MMT is not necessarily that people don’t understand how money is created and all the issues that MMT is trying to put out there.

It’s that MMT implies that as we just been speaking that the federal government is going to have to be very proactive and is able to create the money that allows it to be very proactive. Well, there’s a very large and powerful group of people in special interests that do not want that to happen. They do not want the federal government to be proactive. They want everything to be undertaken by private enterprise. They want private enterprise to be running the show.

And the history of this goes back to the end of the New Deal. And after World War II and the Keynesian economic model, which MMT really evolved from, and after a World War II, the American economy was basically a Keynesian model economy. And what happened was this faction of special interests, which is basically the large corporations and the financial industry began a concerted effort to dismantle that Keynesian model that existed. And it really began with Joseph McCarthy and McCarthyism and the argument behind it was.

And I think this is the same fear that people have now about MMT is that when you give the government that much spending power and that power to decide what things money should be spent on, and you take those decisions away from private enterprise, then you are on the road to socialism and communism. And our country has had this fear of socialism and communism. That’s been driven into our psyche by these special interest groups.

And they’re motivated by not wanting the government to have this power because they want to have the power for themselves. And they’re afraid of the government takes it over, that they will lose the power that they have.

Grumbine (27:23):

That right there is neoliberalism. Is it not? I mean, that is the essence of neoliberalism.

Alt (27:28):

Well, it is, it is. But neoliberalism went even further than that. It created the globalization of the world economy, which was basically the transformation of the labor markets, where things are built by the lowest price labor that’s available. And the neoliberal perspective was that the markets have to be free to choose, to make those decisions, to choose where the money’s going to go to pay people, to build things.

So that goes even further than national governments, creating money to pay their own citizens, to build things. There are two points of view that are just totally in conflict. And so I guess what I’m trying to say, and I’m stumbling around with it because I’m thinking it through, as I’m talking to you about it here. But I think the thing I’m coming to realize is that the challenge that MMT has right now is not so much a challenge of making people understand how fiat money works and making people understand that the debt and the deficit are as myths.

Stephanie Kelton has informed us now making people comfortable with the idea of the federal government, doing things and building things and making decisions about what is going to be built and what is going to be done and what goods and services are going to be provided to address these needs that we have now. And, you know, the private enterprise says, no, no, no, we’re going to do it.

We have to; let us do it. If you take it over and start doing it, then that’s, un-American, you’re sending us down the road towards socialism and communism. And those are just bogeymen that are used to scare people so that they go along with this idea that you can’t let the government do these things.

Intermission [music] (29:35):

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Grumbine (30:24):

I just want to ask this question because it’s sticking out in my side here. Big time. The idea of the means of production key thing here was socialism is the ownership of the means of production. It’s not necessarily where the money is spent. It’s really a matter of means of production. That’s socialism.

Now this idea though, that anything the government does is somehow or another socialism, it is preposterous, but they’ve bastardized this in such a way that there’s a false equivalence there. I guess my question to you is this really all the government would be doing is quote, unquote, eliminating the FIRE sector (fire, insurance, and real estate) or not even eliminating the FIRE sector, but eating into the FIRE sector as opposed to eating into production.

I mean, we’re not really talking about the government suddenly being in the business of building homes, they might be in the business of funding, the building of homes, but they’re not necessarily in the business of building homes, the question of whether or not they would be in the business of building hospitals or creating healthcare systems. The idea of the government funding, those sorts of things is not quite the same thing as the government, literally being the means of production.

I’m just curious as to how we would ever overcome this framing dichotomy here, given the fact that we can clearly do anything we want. It’s not a fiscal constraint, it’s a real resource constraint, and time is ticking. So how would you recommend framing this? I’m sure your book has something to say about this, but I’m curious, how would you frame this?

Alt (31:55):

Well, yeah, and I don’t know, that’s what I’m starting to really think about because the last few years, what I’ve been focused on is this other aspect, which is how can I frame the idea of money in a way that the average person can see it, see how it works to do that in a way that’s can be, you know, quickly grasp. And now I realize that while that’s important, that’s not the real stumbling block that we have.

What we have is what you were just talking about and what I was talking about before and the way you just said it is true. And that’s, from my perspective, I don’t see this conflict. I do not see the fact that the government pays people to provide daycare. Those people can be private businesses. They can be private daycare businesses, and there’s all kinds of ways to set that up. And all the governments are doing is providing the funding for it.

It’s not like daycare workers are suddenly becoming public workers or public officials. So this idea that the government’s spending a lot of money to produce goods and services that private enterprise either can’t produce at a profit, or it can produce a profit, but the market does not have enough money to pay the price that makes it profitable. So all of those things are not going to be produced by private enterprise. You either are not going to have them, or they’re going to have to be produced by public enterprise.

Grumbine (33:31):

Where does a federal job guarantee fit in here. If you were putting the Pavlina hat on or the Green New Deal-style hat, given the framing you’re going with, how might a federal job guarantee work in this space? Do you see that being part of the solution?

Alt (33:48):

Well, it certainly could be. I mean, it certainly fits in. I think the idea of the federal job guarantee is this is what it says, that you provide a job for everyone who needs a job and who wants a job, then you provide them a job. And then the question is, and Pavlina has done a lot of research and generated a lot of creative ideas about how you actually create jobs, how you create things for people to do.

And then there’s a long list of things that in fact they can do, but is it just make-work or is that directed towards actually doing things that need to be done? And this goes back to paying ourselves, to save the planet. Well, let’s make a list of all the things that need to be done to save the planet, to try to save the planet. Let’s start with that list right there.

Grumbine (34:38):

It’s interesting because Warren Mosler when I talked at length about this and I want to interrupt because I think this is a really key point. I’m going to bridge the divide here. The job guarantee is the employer of last resort. ELR model really it’s about ensuring that we don’t have unemployment, that isn’t wanted the people that want employment, half employment and so forth. So it’s not intended to supplement the skilled jobs that the government could easily fund without any issue whatsoever.

And so the conflation there between the job guarantee, although I see a value in having it as part of this, if nothing more than political framing, but Warren’s point was, Hey, why in the world would you try and shove an engineer into the job guarantee program? If you need engineers fund the damn engineers, if he need hospitals, build hospitals, whatever it is, don’t try and shoehorn it with a job guarantee.

The job guarantee has a very specific purpose. But when you think about in a COVID-19 environment or environmental crisis, we’re facing, the object of people that are going and pushing paper from one side of their desk to the other could be severely mitigated in terms of carbon alone, by working in your local community, as opposed to having to commute an hour and a half for no purpose whatsoever, other than just appeasing, somebody need to see a butt in the seat.

So I’m just curious in terms of actually mitigating this crisis and being able to pay ourselves, which I love that framing. What kinds of jobs do you think the federal government might be able to fund in perpetuity to meet this demand? I know that it’s wide ranging, but I’m just curious. What kinds of things are you thinking there?

Alt (36:18):

Well, a couple of the examples I gave in the book and they are very simple is that the government could begin paying farmers to sequester carbon, specifically to change their farming techniques, to sequester carbon in the soil of their farms. And that’s one thing that they could begin to do. They could also begin to pay people to develop new plant varieties that kind of supercharged the process of sequestering carbon in the soil.

Another example I gave him the book is that they could right now in the Amazon, right? The developers quote, unquote in the Amazon are burning the jungle down to create agricultural land that they’re going to either grow cattle on or grow crops on. And so you get this kind of double whammy carbon problem from that process. Not only do you cut the rainforest down, that’s sequestering carbon, but you’re releasing the carbon that’s in the rainforest when you burn it down.

And then you’re replacing the rainforest with cattle, which produce greenhouse gases. So it’s this disaster and why are they doing it? They’re doing that because they think they’re going to make a profit. Well, what you have to do is you have to pay them more money to preserve the rainforest and to actually try to expand the rainforest and to repair it, you have to pay them more money to do that than they would make by burning it down and raising cattle.

Now the differences, and this goes to the heart of the argument in the book. And the difference is obviously that raising cattle makes a profit, but saving a hundred acres of rainforest and trying to repair it and reserve it that does not generate a profit. So the banking industry is able to create the money to burn the forest down and to replace it with a cattle ranch, a developer can borrow money to do that because he can demonstrate to the bank that he will make a profit and be able to pay the bank back.

It’s money with interest, but he can’t go to the bank and borrow money to save the rainforest, to leave it alone or to repair it. You can’t borrow the money. So that money has to be created by this other process. And that’s the process of creating future reserves. And the government also can’t borrow that money from profits because it’s such a huge amount of money that we’re talking about.

It’s such a huge percentage of all the money that exists right now in the world. And so it has to be created completely new in order to meet the scale of what’s going to be required. But I guess I kinda got off the subject there a little bit, because what we were talking about was what kind of things can you actually do? But sequestering carbon is one of them.

The other thing that you could pay people to do in my opinion is, and I come at this as an architect is the reason affordable housing is a problem. It’s not a problem for the private enterprise to build housing. The problem is that the average income that people make that’s generated by private enterprise is not enough to buy the housing. And so there’s a disconnect there.

So an idea that I’ve been pursuing or thinking about for a long time is a national housing co-op that would pay people to build houses, to pay developers, to build houses and houses would be owned by the American people. And they would be owned as a national co-op. And if you’re a member of the co-op and you would be a member of the co-op, if you were a citizen of the United States and you needed a place to live, you could live in one of the co op houses and here the government would be, as you alluded to earlier, it would be paying private builders to create these houses or this housing.

Then it would be owned by the national co-op, but now would generate a whole lot of employment for the construction industry. And the construction industry is an important industry because it doesn’t require high skills to participate in. It. There’s a whole lot of ways that people could participate in that kind of a program.

Grumbine (41:00):

Interesting, because the fear of socialism, you nailed it. I did a show not too long ago, describing modern McCarthyism. As they tried to smear Bernie Sanders as a dirty socialist Red Scare, you name it, all these things that they use, very dirty politics and it’s highly effective, unfortunately. And you saw it happen to Jeremy Corbyn.

Now, my question to you is if we were to take tranches, that’s probably not the right term here, but if we were to take these pillars, if you will, these lanes of thought, you’ve got the Trump people now that are rebelling because they’re just angry and they’ve got a million good reasons. There’s a lot of reasons why people fell for Trump because the Democrats have failed so miserably in representing labor and representing so many important 99%-type things. And the flip side of that is that you’ve got this existential crisis going on with the climate change.

So it’s almost like perception is, Hey guys, we’ve got to get past this partisan nonsense and take action. And then the flip side is you’ve got the Republicans who are like, Hey, we’re going to extract every bit of wealth we can until the last spaceship leaves this earth and the combination of these two mindless things. And then you’ve got, of course the vote blue, no matter who, folks that are not really fighting on the issues, they find it safe and secure and saying vote blue.

And so there’s no meaningful push amongst the electorate, if you will, for a Green New Deal. In fact, the Biden commission, this unity commission where Stephanie Kelton and Derek Hamilton were on with Sarah Nelson and I think AOC, they went in there with all Bernie’s proposals, trying to negotiate stuff. They came out literally with nothing. They rejected the Green New Deal, they rejected Medicare for all. They rejected the federal job guarantee. They rejected just about everything, full-scale, and then the student debt elimination, which really doesn’t play into this environmental stuff so much.

But the student debt, even that was watered down to the point of, okay, okay, whatever, more in dinking around the edges. So here we are trying to eliminate Trump on one level. And on the other level, we’re trying to install a guy who’s a fiscal conservative and somebody who has got a very limited, if any mind for environmental justice, how do we ever come that, I mean, I’m doing the best I can with this podcast.

God knows it doesn’t have nearly the reach it needs, and others are trying to do it too. But really this is a communications issue, correct? People don’t understand it. They don’t really understand these concepts and us MMT activists and writers and scholars and academics and politicians that are MMT literate. We are by far and away the 1% of that world, we, we might even be the 0.05%, if that. How do we get this out to the mainstream? Stephanie’s book definitely helped us get some notoriety, but in fairness, it seems like there’s no appetite for saving society.

Alt (44:06):

Well, I wish I had a good answer to your question. I think it’s a puzzle to me. Why the progressive arm of the political structure? Well, I’m not sure exactly what they’re thinking about. I don’t know how to answer your question.

Grumbine (44:26):

It’s almost like a Gordian knot. There is no answer. It seems like, you know, the concept of there is no alternative within the financial space within the fiscal space. It also appears like within the political space, because of the first pass the post mindset that we stopped fighting for issues. And we just fall into this duopoly, partisanship that like a bad volleyball game that happens every four years or two years or however often the election cycles go, but it steals the narrative away.

It steals the narrative away from talking about these very important issues. Like I don’t know, survival and puts it into. do you like devil A better than devil B. And we don’t seem to ever be able to break from that. And the news apparatus that we’re fighting against the propaganda wing of these two parties is strong they’re ninja-level strong they’re out there crushing us.

Every time we make an inch of gains, they’ve got propaganda to come through and literally eliminate it from the public conscience. And you said it excellently earlier, these things can’t be long and drawn out. They’ve gotta be quick. And to the point that people don’t have the attention span anymore, it’s not there to indulge a deep discussion in reserve accounting.

They’ve got to understand how this pertains to them in quick, easy to understand language or it’s lost. As soon as it’s uttered, it’s vapor, it’s gone into the ether. I’m very interested in the framing and the messaging of this, because your idea, I love this as an MMT informed individual, your entire concept has got my juices flowing. So this has got me really thinking, how do we take this message and now frame it so we can get this massively distributed. I think it’s really important. Well, I couldn’t agree with you more. And you know,

Alt (46:20):

The last few things that you’ve said to me have gotten me started thinking again, well, maybe the big problem is in fact, making people understand that you can do these things without bankrupting your grandchildren. The conversation sort of got me back to square one.

Grumbine (46:40):

It’s tough, man. I’m with you. I’m right there in the thick of this maze with you, man. And how do we get the cheese?

Alt (46:47):

Yeah, exactly. So I appreciate that. I really do, becauseI thought I was making progress there. And now I’m wondering whether I have to go back and rethink some things.

Grumbine (46:57):

We know you did make progress. This is all iterative. You realize, I know as a professional architect that you do things iteratively, I’m a project manager. I do things iteratively. You build a website, you build it, iteratively, everything you do is an iterative thing, and you’re constantly improving on it, constantly searching for that perfect balance and what you did with this book.

And I haven’t even read it, but I’ll tell you what I’m going to be reading it now, because now I’m really stoked about the framing. This is the kind of framing that I need in my world. And so I think that part of what our job is, is to take this great insight you did, and find ways to turn it into memes and quick videos and quick little messages, quick little adverts that grab people’s attention and make them think, oh yeah, that’s interesting.

Find out more click here. And then for those people that are willing to do the dive, give them that, and we do have a website getting ready to launch it. This is even making me think even more about this. This is really fantastic, J.D. Actually, it’s a great conundrum to be in if you’re seeking answers because you got us closer to the finish line. I think I really do

Alt (48:12):

Well. I appreciate that. The other thought I had based on what you just said is that this is a short book. It’s very easy to read. And I’m also in the process right now of turning it into an audio book and I’m not doing the reading, right. I have a professional reader, who’s doing a great job with it. And the reason I did that was because the target audience here really is the millennial generation.

And it may be that this is a generational thing. I think they are the ones who need to get this message because they are the ones who in fact are going to be in a position to actually implement this and to make it happen and to take the reins of political power and just do it. And I think they’re capable of doing that. And the challenge with them is that they’re not big readers, their listeners.

So I thought it was real important that this book be turned into an audio book. The whole audio is just about an hour long. And so it’s just like listening to a podcast. But I think packaging it that way for the millennial generation is really important because they’re the ones who are ultimately going to have to take the reins and solve these problems.

Grumbine (49:30):

I agree a hundred percent. So folks, just so you all know, you can get this book. I see it on Amazon right now, “Paying Ourselves to Save the Planet: A Layman’s Explanation of Modern Monetary Theory. And I strongly suggest picking it up on your Kindle. I can’t wait for the audio. We will definitely feature that on our website. And I look forward to digging into it. J.D., so why don’t you let folks know a little bit about how they can find you and other works that you’ve done, that maybe they might be interested in, then we’ll go ahead and take it out.

Alt (50:03):

Okay, well, I’ve written a lot of essays and they’re all on New Economic Perspectives.org, but unfortunately that website is no longer active. I think you can still access it, but it’s no longer an active website, which is sad. Well has a long history to it, but at any rate. But I also have a website, jdalt.com and it has some architectural ideas and it has all the essays on there. And all the books I’ve written are on there as well.

And there’s diagrams that you can download and use to make your own slide shows. And I’m working with a lot of people, not a lot of people, but several people now who are using the diagrams to create classes, MMT classes at community colleges. And so there’s things on the website that might be useful to people who want to go further with this, but also who want to have some tools to convince other people as well.

Grumbine (51:10):

That’s fantastic. And you’ve written some of the best articles on New Economic Perspectives. And I’m really sad to see that go dormant. Like I said, we gladly will be publishing anything you put out, man. And I look forward to leveraging some of those downloads because we want to try to be able to create that space for people to be able to see the tie-ins to the real world that we’re living in and the MMT world that we’re trying to produce a lens for people to evaluate their own lives through. So with that JT, thank you so much for taking the time with me today. I look forward to talking to you again in the future and thank you so much for the time break. Great talk.

Alt (51:50):

All right. Thank you, Steve. I enjoyed it.

Grumbine (51:52):

You got it. All right. This is Steve Grumbine with Macro and Cheese and J.D. Alt and we are out of here!

Announcer (51:56):

Macro N Cheese is produced by Andy Kennedy. Descriptive writing by Virginia Cotts and promotional artwork by Mindy Donham. Macro N Cheese is publicly funded by our Real Progressive Patreon account. If you would like to donate to Macro N Cheese, please visit patreon.com/realprogressives. [music]