Episode 102 – The Global Scourge of Neoliberalism with Patricia Pino

Macro N Cheese – Episode 102
The Global Scourge of Neoliberalism with Patricia Pino
January 9, 2021

 

[00:00:03.150] – Patricia Pino [intro/music]

Injustice is something that I have very little tolerance for. I’ve always been like that, and worst of all,  seeing this Tory government lying about poverty, homelessness, everything that they’re doing to people. It’s a slap in the face and an insult on top of injury. It’s just completely horrific.

[00:00:23.250] – Patricia Pino [intro/music]

Brexit was a symptom, not the cause, much like Trump was a symptom.  And it’s wrong to say that if we go back, we’ll be just fine. And it’s wrong to say that the EU had nothing to do with it.

[00:01:07.140] – Geoff Ginter [intro/music]

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

[00:01:34.560] – Andy Kennedy

Hello. This is Andy Kennedy, the producer of Macro & Cheese. Steve and his family have been struck with Covid-19. We have every reason to believe they’re all on the mend, but Steve hasn’t been able to record a new interview for this week.

Instead, we are releasing a live interview from December of 2017. His guest was Patricia Pino, who is well known to our listeners. Patricia is co-host of the MMT Podcast in the UK and is a close friend of our Macro N Cheese family.

We think you’ll enjoy episode 102 The Global Scourge of Neoliberalism. Enjoy.

********************* 

[00:01:34.560] – Steve Grumbine

It is Steve with Real Progressives. For those of you who see me, mostly you see me on Facebook. I have another life. I have an alternative reality over on Twitter, too. And over on Twitter there’s a lot of good hardcore economic battles going on as well. The world is full of misinformed people, and when I say the world, I do mean the world. We’re talking about all over the world.

We have people that are literally ignorant and have been lied to about how the economic system works and oftentimes hear me talk about monetary sovereignty and you’ll hear me talk about how different nations are monetarily sovereign, such as China, Japan, Australia, Canada, Russia, the UK and, of course, America. Well, I have a friend, Patricia Pino.

She is an author, writes for the Pileus, which is a really cool blog that I oftentimes will post from the UK. And she’s just a really powerful warrior, really awesome feeling. I oftentimes feel like I’m surrounded by dudes fighting economics. But when there are women that are stepping into the fold ready to do serious battle, I just get enthused. So, I was grateful when she joined up with us here. So without further ado, let me go ahead and bring her on. Welcome to the show. How are you tonight?

[00:03:05.240] – Patricia Pino

Hi, Steven. Thank you for having me. I’m good. Not too bad.

[00:03:10.010] – Grumbine

It is super, super, super exciting for me to have you on here. I am such an admirer. You’ve written some really great pieces. In particular, you wrote one recently that I have included in our write-up for this interview about neoliberalism and Labour. And let’s be fair, you and I are fighting the same enemy: ignorance and neoliberalism – ignorance for the people that would be our allies and neoliberalism for the people that are not ignorant.

They just know what they’re doing, and they don’t care whether they hurt us or not. Tell us about neoliberalism in the UK. Well, before we go there, why don’t you tell everybody a little bit about who you are?

[00:03:59.070] – Pino

Well, I’m an activist like yourself. I got involved in the Labour Party because in 2015, we had this general election that we lost horrifically and I thought I either have to join Labour and help or I scream at the TV for the next five years and I decided to join. And after that, the whole Jeremy Corbyn thing happened. And to me at the time – I was starting to get familiar with MMT from Bill Mitchell writings, etc. – and to me, it was obvious that austerity had to go.

Back then I hadn’t even kind of identified neoliberalism as the culprit. I just thought this isn’t about austerity. But after backing Jeremy Corbyn it came natural because he was the only anti-austerity voice in there. And it was then that kind of I didn’t realise that all hell would break loose from making that decision. And it was very educational, it was an awakening, a rude awakening, I think, because until then, I had so much faith in our establishment, had so much faith in all our systems of government, and it just broke everything completely.

It was so traumatic that it kind of drove everybody to understand where the problem was and what had happened. And that’s when I started learning more about the history of the Labour Party and neoliberalism and all these things. And it kind of started making sense when I threw the pieces together. So in the process of that, I’ve met a lot of friends and the Pileus people came to me and I think they saw my Facebook posts. And I think, you know, they liked the passion, I guess. And they asked me to write a couple of articles for them and well, they seem to have enjoyed them because I’m still there.

[00:05:50.510] – Grumbine

I was going to say  – I enjoyed them – and I was so thrilled to have you join us. So let me ask you a question. Jeremy Corbyn, he seems like an angel compared to Miss May, and yet at the same time Jeremy’s economics aren’t quite there either, are they?

[00:06:09.950] – Pino

I don’t know that. You know what? There are rumors and I’m trying to piece the things together. I don’t know who told me that he had spoken to Stephanie Kelton. I know that he knows Richard Murphy. I know for a fact that John McDonnell knows MMT and that his closest advisers know MMT. But there is a reluctance at the top to adopt it. I believe it’s partly political, but I think that not everybody in the kind of John McDonnell circle is keen on it just yet. So we have a lot of work to do.

[00:06:47.730] – Grumbine

Indeed. It’s interesting because we had our own version of Jeremy Corbyn here in the United States in Bernie Sanders, and Bernie had the luxury of having Stephanie Kelton at his side.

[00:07:03.630] – Pino

Yeah! What happened?

[00:07:05.100] – Grumbine

It just goes to show. I’ll tell you what I believe. Now I’ve heard different stories and obviously people have a need to be right. Bernie Sanders has had the same message for 40 plus years and trying to get him to suddenly admit that we don’t need rich people tax dollars to pay for a robust progressive agenda, probably was a bridge too far for him to overcome. But I believe that he understood that the underlying mechanics of it all favored what Dr. Kelton was pushing forward.

[00:07:41.760] – Pino

Yeah.

[00:07:41.760] – Grumbine

But you also look… You and I have done many Twitter battles out there and you’ve watched people. And by this time, it’s almost like you really think people have an excuse for not getting this. And it’s like, yes, of course, they’ve been lied to forever. But the flip side is you’re like, my goodness, I presented case after case after case after case.

At what point in time do the sparks fire, does the light bulb go on? And so you realize that Jeremy Corbyn and Bernie Sanders and others are going up against a public that is infatuated with talking about the Rothschilds. It is infatuated with talking about the Illuminati. It’s infatuated with talking about any conspiracy they can possibly come up with. And so naturally, when you just give them a simple answer like “guys, keystrokes.”

[00:08:31.590] – Pino

That’s not as bad here. By the way.

[00:08:33.180] – Grumbine

Oh, really?

[00:08:33.180] – Pino

I know . . . You see a lot of conspiracy theories. I’ve seen you. And yes, there is some, but I get the feeling is not as widespread as it is in the US. I don’t know.

[00:08:42.990] – Grumbine

Oh, it’s an awful abomination. And I think the hardest part for me to deal with is, is that they act like they’ve stumbled onto this nugget of gold that nobody else knows about. And they’re like the cool kids on the block telling you how it is. And I’m like, guys, if you’re really going to attack the Rothschilds, are you going to go to the butler? Are you going to put a bar of soap in his tub and make him slip?

Are you going to poison his Earl Grey? What exactly is it you’re going to do to the Rothschilds? And they never really have an answer. They just want to be angry. They want to march around with fists in the air and get nothing done. And to me, that’s unacceptable. I’m too old anymore. I’ve got too many children. I’m looking at and praying to God they have a better future than we do.

And I look at this and I say, my goodness, this is our army? This is what we’ve got to rely on. My God, can we please do away with the Rothschilds? I’ll help you put a bar of soap in the tub if it’ll get you to focus on spending on the people.

[00:09:40.140] – Pino

Yeah, but, you know, it’s easy to get confrontational. And I get so angry at people all the time, but I think I try to speak to people in a language that resonates with them in particular. And it’s really hard because everybody has different values. In listening to them kind of understand what those values are and then kind of use them almost against them. Does that make any sense?

[00:10:07.350] – Grumbine

It does. But I want you to tell us more about it, because we all have a different style. I mean, these are individuals who are very gifted in their own style. Tell us about your style. Talk to us. Take us through an engagement here with somebody you know – eye level.

[00:10:25.950] – Pino

I think what you have to understand is that I’m an engineer in my day job. That’s what I do. So I often speak about very complex physics stuff to people who are not necessarily, you know, keen on math or physics. So architects and other creatives. So as part of my job, I have to bring language from very academic to the very plain so that the average person can understand it.

So when I try to write about MMT, you know, there are so many talented writers out there, so many people who are much more knowledgeable than I am in it. But what I wanted to do was make a bridge between them and the average Labour supporter who is not necessarily academic. They tend to be creative, actually, and generally, you know, average people.

They don’t need to understand math. They don’t need to understand physics to understand the basics of how an economy works. So that was kind of my aim about it. And then what I said about trying to find the key kind of values that people have and try to frame an argument within those sets of values. So when he talks about UBI, for example, trying to put the case against UBI, I understand what the motivations for UBI are.

I understand where this kind of backlash against work comes in after you’ve been exploited for so many years. Who wouldn’t? So I try to put it to them. But there’s a very kind of long standing working class tradition here, and they understand what it means to own the means of production and have power over the means of those prices and frame the whole argument within that and say, look, UBI effectively means that you relinquish that power and it doesn’t enable you to gain any power from the capitalists and those are way in which it resonates more with them. Just think of this.

[00:12:26.160] – Grumbine

I love that. I need to put that into my bag of tricks. There’s a lot of things. I come at this, obviously, from . . . I’m a heavy metal guy. I listen to hardcore music. I come from a recovery mind. So that means it’s all tough love. There is no coddling. It’s all like, come on, man, do the right thing. And so from my vantage point, I reach those people that can hear that message, but I also deter a lot of people who need to be kissed on the cheek and stroked gently. And it’s just not in my makeup to do that.

And I try sometimes to pull it off. It’s just not who I am. Because you know how you talked about finding out what their motivations are, what their thoughts are. Let me tell you what my motivations are. When I think of neoliberalism, I don’t think about MMT. I don’t think about all these academic exercises. I remember sitting there in a shitty hotel room with a bed sunken in and a guy laying there with a needle in his arm, gray from being dead, from overdosing, and us not having the resources to be able to save his life.

I think of the people that are in the streets huddled on heat grates, trying to stay warm on a subzero day, unable to eat, unable to find shelter, unable to find clothing. And I think this is all completely preventable. I don’t think about the person out there that’s needing to hear an economic message said gently. I’m over here thinking about the dying. And I mean this literally. I cry at night.

There’s many nights I literally cry myself to sleep thinking, am I ever going to be successful in getting this message out to the masses? And the economic message is kind of like the follow-up. It’s not the primary focus, even though that seems to be what it is. It’s just watching so much pain and suffering for the average human being and people not understanding why it’s happening.

And to put an exclamation point on that, I’m an educated man and I had a lot of opportunities and I lost those opportunities with the global financial crisis. When that struck, I lost almost everything. And so I felt this pain in real-time. It was a real thing. I lived it. So for me, this whole knowledge of MMT shows that that pain I went through, not only was it completely unnecessary, but it was also preventable. And so that’s what pushes me to the finish line, so to speak.

So I guess in a way it’s a selfish motivation because here I am.  I’m a white man, educated, and I suffered. Imagine the people that are in vulnerable communities that don’t have any of that, how much worse it is for them anyway. That’s kind of my worldview and where my outreach comes from. You guys have it a little bit different over there. You guys have a national health service. You all have a lot of nice citizens benefits, if you will, built into society. It seems like American exceptionalism and neoliberalism is trying to attack that foundation. Can you talk a little bit about what the UK is like and how neoliberalism eroding those values?

[00:15:47.580] – Pino

Well, when I arrived in this country, it was 14 years ago and I remember being completely blown away by the NHS [National Health Service], which we don’t have in Peru, at least not widespread as it is here. And at the time, we had free education, university, very cheap education. And all these things seem amazing. For the last 14 years, I’ve seen nothing but continuous deterioration of that to the point where now what’s happening to the NHS is absolutely obvious.

It really depends on where you live because there’s huge inequalities between regions in the UK. So more affluent regions will still have decent NHS services while regions might not. But what we do see, I live in London, and I see homeless people in the street, a growing number of homeless people in the street and it’s present, and it’s there and, you know, when you walk by a homeless person and part of your brain kicks in where you try to justify why that person is actually OK.

You know, you try to make a little story in your head and convince yourself that actually it’s not that bad or you force yourself to look away, because if you didn’t, you wouldn’t be able to cope with seeing these people there. And neoliberalism has kind of encouraged all of this. But it becomes so . . .  It’s growing so fast. I used to see one homeless person on my way to work. Now it’s three, four, five, and it just becomes emotionally unbearable.

And I know it sounds. Perhaps it’s selfish, I don’t know. Perhaps it is. I can’t say that I had the experiences that you’ve had, but injustice is something I have very little tolerance for. I’ve always been like that. But right now and worst of all, seeing this Tory government lying about poverty, lying about homelessness, lying about everything that they’re doing to people is a slap in the face and an insult on top of injury. You know, it just completely horrific.

[00:17:54.390] – Grumbine

Can you tell us a little bit about the party system in the UK? You have your Tories, you have Labour. Can you explain to us a little bit about the dynamics of these parties and for those people who are not familiar with UK politics?

[00:18:09.530] – Pino

OK, so we used to have a two-party system, which was mostly Tory and Labour. Then a slice of Labour broke away, and they became the Lib Dems [Liberal Democrats], and then we had all the smaller parties coming up, but the two dominant parties were still always Labour and Tory. And the way it works is that here we don’t vote for the leader, so we don’t vote for the prime minister.

We vote for a party at local level. So there are about 640-odd constituencies in the UK. The UK split up in 640-odd parts and each of those parts will vote for a candidate, a local candidate, which will become their member of parliament. And then it’s first past the post system. So whoever gets the most votes, they don’t need to reach 50 percent. If there are 10 candidates and somebody gets 11 percent, they become a member of parliament for that area.

And then once you have all those 640-odd members of parliament, you form your parliament and whoever has the majority gets to form a government and the leader of that party becomes automatically prime minister. If no party has a majority, then you have what is called a hung parliament, and the largest party gets to negotiate with the other parties to try and form a coalition and form a government. That’s basically it.

[00:19:41.680] – Grumbine

That’s very interesting, so Jeremy Corbyn being, quote-unquote, “the leader,” if you will, is really just the leader of Labour, and so you’re voting for Labour. And so if Labour were to take over, then Jeremy Corbyn by default would end up being prime minister and they might have a fight internally with Labour, but Jeremy right now would be that guy. Is that the way?

[00:20:05.500] – Pino

I mean, Jeremy’s also an MP, he’s from the Islington constituency, so he also is running for election, but on a local level.

[00:20:16.090] – Grumbine

OK, what does that mean? What does an MP mean for the audience?

[00:20:19.210] – Pino

Member of Parliament. It just means a member of parliament for a particular area. A bit like a senator, I guess.

[00:20:25.360] – Grumbine

OK, OK, that makes sense. So this question . . . austerity.  People don’t really understand what the word austerity even means. It really is quite a simple word, you could Google it quickly, but this is a word that I think people’s eyes glaze over and it really is probably more lethal than the wars we’re in. It’s probably more lethal than just about anything. I mean, it’s more lethal than shark attacks, more lethal than cholera.

Honestly, austerity kills more people around the world through suicides and unneeded deaths from lack of health care, you name it, than anything else on the planet. This is a word that is very familiar. Everything I see in European language in general, not just the UK, but all throughout Europe and even some of the Balkan states. And I guess you could even say like Czech Republic and Poland and so forth, you see these sorts of things. Is this prevalent in the UK right now, talking about the very word austerity?

[00:21:36.370] – Pino

Yeah, it’s a war that the Tory party has been waging on the working class since 2010. And at the beginning, it was sold as a great idea because we just came out of the financial crisis and of course the banks were bailed out and that pushed government debt quite high. Well, I don’t want to say high, because what is high when you talk of debt?

Higher and the Tory party started selling the idea that the government needed to save and that therefore we needed to, like a household, cut our budget, save here and there. And then in a few years, we’ll all be good because we’ve suffered for the good of the economy.

[00:22:31.940] – Intermission

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[00:23:20.930] – Grumbine

It’s interesting you say that because Dr. Steven Hail, Bill Mitchell and many of the individuals really, quite frankly, from around the world, Fadhel Kaboub, who is, you know, in the States, obviously, but has an eye for third world countries in developing a job guarantee in those areas. These individuals have been in my ear like crazy saying, Steve, it is important that you not be so Americanized in your approach because quite frankly, the war that we’re fighting is not just within the little boundaries of the United States.

I mean, it may feel like, you know, it is, but the reality is it’s all over. And they’ve got us convinced that they outnumber us. They’ve got us convinced that they’re the majority. They’ve got us convinced that we’re hopeless and powerless. The reality is, is that it’s only a matter of time, if we ever were to band together, lift the veil from the truth that we need our men and women to embrace and our fellow global travelers, if we can spread this word throughout, there’s nowhere that neoliberalism can hide without having a ready set of combatants to take them down. Talk to me a little bit about what the awareness is of sovereign economics in the UK.

[00:24:46.030] – Pino

I try to encourage them to look outwards as well, and I think it’s getting there. I’ve seen interest in MMT grow exponentially within Labour within the last three years, two years, six months, two months, it just seems to accelerate all the time. And I think that there are progressive economic superstars within Labour that everybody knows and everybody recommends.

And some of them, like Richard Murphy and Steve Keen, coming through to MMT, endorsing it, so to speak, it validates it and it helps to spread the word. But there is a reluctance sometimes, but I found is not so much about the US because they understand, you know, with Trump, what Trump is trying to do with taxes, et cetera. But the problem here is try and make them recognize that the EU is also got its feet . . . well dunk into the neoliberal mud, you know.

And because of Brexit and because there’s a rejection of all things Brexit within progressives, because they associate Brexit with, you know, bigotry and racism, etcetera, they automatically run completely in the opposite direction. And they say, “Oh, everything about the EU must be good. To say anything bad about the EU is to be like the Brexit is, to be racist and to be horrible.

Therefore, I must not criticise the EU.” And oh my God, you tried going on to one of the main Jeremy Corbyn supporting websites which have like quite a few hundred thousand followers and just say anything in there against the EU. You need to be pretty strong to come out of there.

[00:26:27.180] – Grumbine

So obviously, people that are really struggling with understanding basic economics, at least macroeconomics, because they may have great investments and they may be very well to do and not understand macroeconomics. And you look at somewhere like Greece and people don’t understand that sectoral balances come into play, whether it’s the United States or whether it’s the EU or whether it’s the UK or Australia.

You know, when you look Greece is a net importer. They have no ability to really produce any kind of export activity, not at least at the level required to sustain their existence. And when they gave up their monetary sovereignty by joining the EU, they, in essence, gave up the ability to offset the fact that they’re a net importer. And so now they’re basically a debtor nation enslaved to the troika [popular term for group made up of the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF)].

This is similar to the states and our own government. You look at Puerto Rico, for example, and they’ve got debt and they’re not monetarily sovereign. They’re kind of in a situation as well – like Greece. But then you look at the U.K. who had a bit of a presence of mind there and said, I think we’re going to go ahead and keep the pound and I think we’re going to probably leave this neo… you know, I don’t know whether they thought neoliberalism.

It wasn’t working out for them, this whole global trade thing wasn’t working out for them. So they left that arrangement. When you understand MMT, it’s not that crazy that they did it. When you don’t understand MMT, to your point, you start getting into the “feels” and you start talking about identity politics. And that’s how suddenly a macroeconomic issue becomes a racial identity equation. Talk about what Brexit is, is not, and your understanding of the relationship of the UK and the European Union.  I know that was a mouth full. [laughter]

[00:28:25.630] – Pino

The whole European Union thing was a project that started as a means to keep European countries together after the Second World War. At least that’s what people are told that that’s where it started. A few decades later arrives neoliberalism, and they start making all these treaties around government spending and the single market agreements. And the problem with that was that that’s where neoliberalism slipped into the EU structure.

So to a lot of people here, they still associate the EU to that kind of ideal of a united Europe, so they associate it strongly with international cooperation, but they do not recognize, or they see the whole neoliberal episode as a glitch in the European history. On the worst end of the scale, they will blame Greece for its problems. They will say things like, oh, well, you know, Greece wasn’t taxing properly, therefore they were asking for it.

And that’s how, in a way, the EU has endeavoured to present the problem with Greece. That’s what the EU wanted people to think, that Greece deserved what it got. And a lot of people have fallen for that or have accepted that. I see the EU at the moment and yes, whatever it was built to do, maybe it was built to unite Europe. But right now, as it is, is not uniting Europe. A lot of Greek people hate Germany. There are far-right parties rising all over Europe.

That’s not uniting Europe. And worse of all, the EU doesn’t want to accept responsibility –  things like these, kind of, are external factors to it. A glitch, you know, we’ll get through this. We’ll be fine, you know, we just need to keep the right wings at bay, keep voting for the Macron’s and we’ll be fine. And it’s delusional. It’s a big, big problem, and the issue is that also this whole free trade thing which, you know…

You can teach people about MMT but it’s very hard to persuade them that we do not need free trade in order to be prosperous. You know, they said, well, it’s free trade, therefore, it must be better, right, because it’s free. It’s yeah, it’s a very simplistic way of seeing it, but also that there is a fear of change. And I understand that. If we leave a free trade agreement, there is going to be changes in our trade patterns.

There’s going to be an adjustment period and some people just simply don’t want to go through that. Understandably, they don’t trust the Tory government to take them through that, which is a much better, I think, sort of reasoning about it. But at the same time, you can’t simply say, oh, well, if you cancel Brexit, you’ll be fine. We’ll just go back to how it was like nothing happened. You can’t do that. Brexit was a symptom, not the cause – much like Trump was a symptom, not the cause.

And it’s wrong to say that if we go back, we’ll be just fine. And it’s wrong to say that the EU had nothing to do with it. I think the EU has a lot to do with its own demise, has a lot to do with Brexit, and we should look at the problem as a whole. Like you say, you know, neoliberalism is a global problem.

[00:31:41.930] – Grumbine

I love this Einstein quote. It really is going to lead me to the next part of what we’re talking about. “We can’t solve problems using the same kind of thinking we used when we created them.” And that right there, if you think about it, we get this over and over again, don’t we? You look at a very simple model, the countries in the European Union that are using the euro as their currency now that are net exporters are doing fine.

The countries in the EU that are net importers are struggling. Any time you’re a net importer, it doesn’t matter where you are, if you’re a net importer and you don’t have a sovereign currency, you’re going to be in a debt problem because there is flows and those flows have a balance sheet associated with it. And when you look across the balance sheet, when you have money leaving the country, but no output from your own country to offset that via spending on public purpose or whatever, no means of subsidising the output, the leakage, the demand leakage, you’re going to have problems.

And that shows its face in Greece for sure. But it also shows itself in the United States. And I don’t want to be too US centric. But if you look at the United States and you look at the way the states are set up, some of them have really invested in bonds and stuff like that to help offset tax shortfalls that offset the economy in the ebbs and flows and the tax receipts, because states do require tax receipts, bonds and other funding to be able to sustain themselves, but the federal government does not.

But in the European Union, that’s not the case. European Union has a non-state driven central bank and Germany is king because Germany is the ultimate net exporter. And so Germany naturally pulls the strings – they’re by default, the king of the EU – and there is no way that these other nations will ever be able to prosper in that arrangement, in my opinion, no matter what.

There is no basic income or job guarantee unless they get back to their own sovereign currency, or they come up with a different form of funding models that the central bank does to those nations instead of allowing them to become basically serfdoms. What is your take on the sovereignty issue out there in the EU?

[00:34:21.990] – Pino

Well, I think that was the whole point of the euro, to be honest, to take sovereignty away. Of course, that wasn’t the way it was presented, but we saw a quote from one of the guys that was presented as a creator of the euro. I can’t remember his name,[Robert] Mundell?

But he said that he was hoping to create a system where if you take away the fiscal powers of the government to do exactly what you’ve just described, then to reinvigorate an economy that is in need of stimulus, then what they would have to do is lower wages and become more competitive in other ways.

[00:35:01.530] – Grumbine

The race to the bottom. Exactly.

[00:35:04.230] – Pino

Exactly. So he saw that as a means of not letting democracy get in the way of the market. Robert Mundell, that’s it. Yes. So that was the whole point, I think. And of course, you know, that’s not how it was presented. It was presented as international cooperation and therefore is an aberration to criticize anything of this system, because, you know, I must be like the Brexiters and, therefore, I must be racist. I think that’s our own version of, you know, when you talk about conspiracy theories? To us it’s the Brexiters, that’s the stigma.

[00:35:43.020] – Grumbine

OK, so let me ask you, obviously, we have in America groups like the Pete Peterson Foundation and the “Fix the Debt”-ers that run around screaming about sovereign debt. And quite frankly, you have everyone from Barack Obama to Bill Clinton to Ronald Reagan and everybody else throughout history, Cenk Uygur of the Young Turks and even Bernie Sanders, all of them saying the same gibberish about this long term debt problem, this long term deficit problem.

Oh, my God, we have to get our arms wrapped around it. You know, in the US, we sell Treasury bonds and the like as we deficit spend. There’s rules in play to sell these bonds. They don’t fund anything. We could effectively go to a zero interest rate policy at the Fed and not sell bonds anymore at all. And you’d have no more debt. I mean, there’s other little tricks of the trade you can do. But the bottom line is, is that you can’t buy U.S. Treasuries with Chinese yuan, and you can’t buy it with Japanese yen and you can’t buy it with Russian rubles. You can’t buy it with euros.

You can only buy it with U.S. dollars because what they’re trying to do is take the unproductive money out of the economy to put new money into the economy. This is like this thing and it’s also a basic income for these wealthy groups that they park their money at the Fed when they’re doing international trade. What are they going to do with that money?

Why not buy some treasuries to earn a little interest? So the fear of our net asset is unfathomable to me. Most people are petrified of this national debt. And so in the United States right now, we’ve got the debt ceiling issue, this garbage construct that no other country really has to deal with.

[00:37:34.600] – Pino

Why?

[00:37:36.250] – Grumbine

It’s a political game. Back in the day, I imagine this is a gold standard relic like, oh my God, we don’t have enough gold reserves. What are we going to do?

[00:37:46.210] – Pino

The American people realize nobody else has this, right?

[00:37:50.890] – Grumbine

They don’t realize it. And it’s actually kind of funny because as we go through this process, we’re trying to tell folks, guys, listen. What happens if China dumps the dollar? Well, there’s going to be an awful lot of bucks in circulation, which they could keystroke out of existence. I mean, they could sell new debt instruments, pull that money out of the economy. They could do all kinds of stuff.

And if folks don’t want to buy that debt, they just get rid of it. At the end of the day, there’s a million ways to write down the debt. You know, we could get rid of it without any problem whatsoever. And unfortunately, folks think that it’s Chinese that are holding our dollars. And my God, what if the Chinese or what about Saudi Arabia, the petrodollar? And it’s like, look, guys, there is no petro pound, there is no petro yen, there is no petro ruble or anything else.

I mean, it’s like it’s just a means of exchange, guys. But you cannot get past this because we’ve got this guy, Alex Jones of the US, that these people literally are infatuated with being depressed over by watching this guy. They love the idea. They sit there at three o’clock in the morning fantasizing about the collapse of the dollar. And they fantasize about this, and they dream about it, and they talk about it, and they write about it.

And this is what we deal with in this country day in and day out. It makes no sense. But in the UK, you guys sell debt instruments as well. You guys do different things very similarly. Can you talk about how British debt, or UK debt works?

 

[00:39:29.110] – Pino

Much the same way, I’d imagine. There was a really interesting paper.  Richard Murphy very wisely sent an inquiry to the Bank of England, which is our central bank, so the equivalent of the Fed. And he asked about whether taxes were necessary for spending and the Bank of England gave a detailed answer, bearing in mind that those who run the Bank of England are largely of neoliberal ideology.

In not so many words explained to them that taxes were not the only way to do it, that they had all the options available. They could just create money outright. They could just get into debt. But once you also look at the operations closely and realise that first comes the spending and then the Bank of England decides whether to issue bonds or not, then you realise actually, you know, the spending has already happened when the Bank of England issues the bonds.

So it’s a decision they make afterwards. It’s not stopping the spending which has already happened. How can you say you’re borrowing if you know the issuance of the bonds comes afterwards, literally afterwards, and they just assume that somebody is going to buy them, which they always do. And apart from that, what I’m not sure about is whether there are any EU restrictions about, say, the central bank here not issuing debt, whether they are obliged by EU law to issue debt in response to government spending.

[00:40:51.590] – Grumbine

I think about this frequently, obviously. If we could somehow or another, amass… You nailed it earlier: people don’t need to be economists to get enough of this to be angry. Once the light bulb goes on that this is not real debt, it’s not real debt at all, and it will not be passed on to your kids. It’s not like that. Once that little bit of a light bulb goes on, you would think we could have millions and millions and millions and millions of people uniting against austerity.

You would think that their desire to live a life more vibrant would overtake their desire to lead a life of misery. And I’m wondering, what will it take? What will it take for us to really pull the veil back and let them see the Wizard of Oz is just a little man behind a curtain? It’s not that big a deal. There are no big deals. The only big deal is the lie, the big lie, the great big lie that we’ve all been fed around the world and have bought and have allowed them to literally put our friends, relatives and children to death, quite frankly. What do you think it will take for a mass awakening?

[00:42:09.860] – Pino

I think we’re getting there, but I think what is going to take is somebody very brave just kind of blurting it out and then just creating a media storm and then everybody saying, actually, yeah, that’s kind of how it works. Like when Trump said that the country couldn’t go broke and then there was a mini outrage and then the economies were like, “actually he’s right.” It was quite funny.

But I think that’s what needs to happen. If just one politician becomes brave enough to just say it, the people who know it to be true, will be forced to come out and speak out and say, yes, this is true in the midst of a huge media storm. And yes, there would be outrage, but I think we would win and I would encourage those in the U.S. to familiarize themselves with the kind of UK system.

To try and play the social media game with the UK people and frame the MMT argument on a UK system, which is, to be fair, much simpler than the kind of federal office and state systems that you have, because we need a big push here. I mean, of course, in America you also need a big push. But the Democrats are not there at the moment. They’re kind of not that organized or they’re not doing anything really, are they?

[00:43:26.720] – Grumbine

No, they’re not. It’s frustrating because you want to push for a third party because the neoliberals in the Democratic Party . . . But the reality is that when you look at the third parties, this is so bad. Our third parties are running around talking about the Rothschilds. I’m not even joking, like at the top they’re talking about it. At the top they’re talking about, “oh, my God, the debt!” This is no . . .

[00:43:52.280] – Pino

You know, they’re really not that smart. I believe them to be evil, but they’re really not that smart to pull off something like the Rothschilds or, you know, all this stuff that they talk about.

[00:44:02.780] – Grumbine

It’s unfair to the people because while they want to get away from the Democratic Party, the third parties out there are busy waxing poetic about the collapse of the dollar. This is what we go through. And so if I go third party, I’m stuck talking about Wi-Fi signals giving me cancer and the collapse of the dollar. If I go Democratic Party, I’m stuck with them giving me the rope-a-dope, but taking me deep back into neoliberalism.

How do I get out of this? How do we win? And I’m telling you, the only way I know to win is the way of hope and the way of MMT, and the way of understanding how to put neoliberalism down. And I got to tell you, I’m so impressed with you. I really hope that you’ll come back and do this again. I hope you realize this is so much fun for me. You’re amazing.

[00:44:56.090] – Pino

Thank you. I love everything you do, Steve. Huge admiration.

[00:45:00.620] – Grumbine

Well, I tell you what, I want to give you a chance to close out real quick. So if you have any parting words for people to keep them in the game, the floor is yours.

[00:45:09.880] – Pino

We haven’t much longer to go. I think we’re almost there. Just one final push. I think that would be my parting words.

[00:45:19.250] – Grumbine

Well, very good. I appreciate it. I need encouragement, too, because you’ve probably suffered the bruises of having people just reject these words outright. We all need encouragement. And I think that the encouragement has to be that we know the truth and that prosperity for all… And when I say prosperity, I’m not talking about necessarily a capitalistic version of prosperity.

I’m talking about a shared prosperity where we all can create a new future right there for our taking and it can happen around the world. So with that, thank you so much for joining me tonight. This was an incredible pleasure for me. And I really do mean it. I really do hope you’ll come back again soon.

[00:46:02.570] – Pino

Thanks, Steve.

[00:46:03.560] – Grumbine

All right. With that, I’m Steve Grumbine with Real Progressives. Have a good one.

[00:46:14.870] – Ending credits

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