Episode 403 – Are You in the Loop? with Tyler Suksawat & Scott Ferguson

[00:00:42] Steve Grumbine: All right, folks, this is Steve with Macro N Cheese. You’ve heard from him before. You’ll hear from him again today. My friend Scott Ferguson, who is just a brilliant, brilliant mind, who’s somebody I’ve known for the better part of almost 20 years now. It’s kind of scary to think it’s been that long. And also Tyler Suksawat, who is…

Both of them collectively are part of the Money on the Left collective. We have covered numerous things that Money on the Left has done over the years, and I’m really happy to have them come back on today. You know, we’ve talked about public banking and other things of that nature many, many times. The concern from this program’s perspective has always been electorally, how do you make that sort of thing happen, right?

I’m not a big believer in that, but I also don’t want to shut the door on people that are trying to make change, even if it’s in a way that’s different from how I envision it happening, because if my way was right, it’d already be done, right? Right? You know, so we’re going to look into some really, really fascinating things.

You know, I was brought in to kind of review some papers after the fact, mind you, of kind of like the Seattle Loop. I was like, the Loop? What the heck is the Loop? And, you know, rather than me butcher it. What I’m going to do is I’m going to allow my guests, Tyler and Scott, to break it down for us because right now, let’s be fair, we’re trying anything, man.

The world is changing faster than we can shift with it. And we need to be able to reclaim some power, find some strength. And, you know, this might be one way of doing that. So without further ado, my guests, Tyler and Scott, welcome to the show.

[00:02:25] Scott Ferguson: Thanks for having us.

[00:02:27] Tyler Suksawat: Yeah, thank you for having us.

[00:02:29] Steve Grumbine: Absolutely. Man, you guys, you know, I don’t want to paint myself…

I don’t like the term because I don’t agree with the term because I see myself in a positive sense. It’s just not through the electoral system. But, you know, you could say I’m more of a nihilist in the sense that I don’t see it happening. But my interest was extremely piqued when Tyler came to me and said, “Hey, man, you won’t believe this.

We’ve got some forward trajectory, forward movement.” And I was like, “What? What? Tell me more.” And so we spent, you guys and I spent like two hours on the phone together talking about this because, lo and behold, technology failed us. And so we couldn’t do the interview then. And the opportunity to do it again today, a couple weeks later, mind you, gave me some time to really think about this at a different level.

And I’m pretty excited about it. Even if I think the framing is challenging with the electoral part of this. I’m very interested in the technical aspects of it and what the possibilities are. Let’s say, hypothetically, you are able to pull this off. You are able to, you know, win this kind of thing. So I think that’s where my interest lies is let’s look at this through a positive lens as to what could happen.

So with that, I don’t know which one of you want to start with this, but. Who wants to bring up and explain what the Loop even is?

[00:03:52] Scott Ferguson: Well, Tyler is the one who came up with the Loop. So I want to eventually pass it to Tyler to explain it. But maybe I could start us off by just kind of setting the stage of where all this came from. You know, Money on the Left, I think like Real Progressives, is an MMT-oriented organization. We’re trying to think with…

in complementary ways and sometimes beyond the lessons of MMT. And as I think I’ve mentioned on several occasions on this very show, what Money on the Left has really been keen on doing is taking MMT’s basic argument that money is essentially public. and essentially endogenous which is to say it is created out of thin air all the time as a function of political and legal institutions to take those truths and maximize them and so that has pushed us to trouble some of some of MMT 101’s basic arguments about where monetary power lies and what’s truly possible with it.

So I think another thing to say is that historically, we, again, I think, like you all, have been more interested in the fiscal side of all this. We’re interested in government finances because we want to expand and make robust the public sector. And I don’t know. I think it’s not that we haven’t supported public banking. as a part of this process.

But I guess we’ve thought to ourselves that, you know, public banking is nice, but what we really want is robust fiscal policy. And public banking, for the most part, gets pitched as, you know, lending at interest, but maybe lower interest and for socially and ecologically beneficial projects rather than, you know, rapacious capitalist extraction. So we were all for it, but we weren’t doing deep dives into public banking.

That wasn’t our area until… until Tyler shows up and he asks me, have you ever considered doing something like this with public banking? And now I’m going to pass it off to Tyler and he can tell you about what we would eventually come to call the Loop.

[00:06:34] Tyler Suksawat: Yeah, and this idea came as a response to federal funding cuts. And I’ve had a lot of these ideas since the pandemic of, you know, what can sub-federal entities do when we can’t rely on the federal government, you know, if it’s becoming, you know, more and more feckless in nature. And then… all of a sudden it just decides that it wants to start pinching pennies and not spend anything into the economy at all, you know, because it can just decide to do that.

You know, what kind of power do we have in that instance and what kind of powers can we kind of create and leverage against things like that that might insulate us from the shocks that follow? So I basically…

Thought back to the municipal liquidity facility and some talks with Robert Hockett about that program that came along during the pandemic. For municipalities, basically, to be able to sell their bonds directly to the Federal Reserve. And I found that interesting and fascinating, much in the same way Scott and the Money on the Left crew saw it as a huge opportunity for

new design possibilities. And then looking deeper into that, I just had this idea of, well, since that program doesn’t exist anymore, what if we just had a public bank that was able to purchase municipal bonds? And what would that look like? How would that design function?

I actually contacted a well-respected member of the MMT community and kind of just asked, what do you think about this? If we sell a municipal bond to our own public bank, would the bank basically be able to take the profits from that and deposit it back into the general fund for the state or the city that controls that bank?

And he just simply said, “Yes, let’s just net the cost of funds.” Very, very simple, straightforward answer. And that got me to dive in deeper into this. And the more that I did, I went to Scott and I said, “Hey, I think you’re going to be one of the only people that actually understands what I’m trying to cook up here.”

And that just kind of brought us in this moment of shock. And then over the next few weeks, we rushed to kind of publish some material and then dive kind of deeper into what this actually does and what it not only does in the nature of spending and into the economy, but what it does to the public bank itself, which is the really interesting part of all this.

So basically, the Loop, it starts off as your municipality or your state creates a public bank. That’s the first step. Second step. [Easy peasy.] Yeah. Not a hard ship to turn around at all.

The second step is to designate that bank as the single buyer, as the sole purchaser of municipal bonds for that municipality or the state. And then what that allows the bank to do is start issuing credit to purchase those bonds. The municipality gets the liquidity that it needs in the immediate. And because of the nature of municipal bonds, they have to pretty much start paying interest on those bonds immediately.

So the interest payments go back to the bank, and then the bank nets the profits back into the general fund. So it’s kind of a way of the municipality to kind of grow its tax base locally. And then as it re-engages that circuit, it’s reclaiming the interest that it would normally pay to private equity or Wall Street banks bring that back into its own pockets and creating this closed Loop.

Hence the Loop. Yeah. And what’s cool about this is the way that balance sheets and assets and things like that, collateral is all tracked through conventional banking models, just in the way that all private banks account. We’re not asking for any exceptions or different rules when it comes to creating a public bank.

We’re just acknowledging the powers that exist of what banks do and how they operate. And then we’re saying, hey, the things that we invest in with this bank also allow this bank to leverage more public credit, which is amazing. It makes it a stronger financial institution. And it’s less risk averse because of the depository function. So we’re pulling all public deposits out of private banks, putting it into the public banks, which gives us a really strong deposit base from taxes, fines, and fees constantly flowing in.

And the reserves that follow also come with those funds being deposited. But it makes these… what would otherwise be a tiny institution much more stronger and much more capacious and then we can do things locally that we never thought possible before without having to beg federal government for more money and getting lost in the minutia of [Washington] DC politics and then you know even if your your state government is kind of in a horrible place right now where they’re offering cuts-only budgets or wage freezes for public workers or whatever, at least locally, you might have some power to create some financial stability for your community.

[00:13:21] Steve Grumbine: This is really powerful. I want to go back to something you said and add a name to it. Warren Mosler, who has said repeatedly, and I’m going back 15 years, maybe longer, has said, “We already have public banks. What’s the problem? We already have public banks.” And he’s correct in the sense that we have allowed those banks to behave in the way that they do.

And I say we, I reject the “we” by the way, just so you and I aren’t talking past each other. When I think of government, I no longer think of it as “we the people,” okay? So I don’t think of “we,” doing those things as “we” doing those things. The powers that be, the ownership class, the ruling class, the oligarchy, the capital order, whoever you want to call it, the people in the rotating, you know, revolving door of government and private industry that make the rules and stuff, they have allowed banks to be what they’ve become, which is predatory agents of the ruling order to continue

capital accumulation, and a number of other things. So, you know, I always wonder, because, you know, I was a rook, a big rook. And, you know, when Warren would say, “We already have public banks” you know, my instinct, because it was bad, was to say, “Yo, Warren’s correct, right? Warren’s right on the money.” I mean, Warren is unassailable when it comes to his understanding of MMT, given the fact that he is largely credited as “the father of MMT”.

But when it comes to public banking, the framing of it was very Warren-unique in the way that he saw that. And the challenge becomes, can we win a legal or a legislative battle that would suddenly turn the regular banks that he calls public into actually behaving as public banks? Or should we just create, you know, stand up a whole nother system or a whole nother set of institutions that are truly serving one purpose or the purpose of public banking?

And so as I grew up and began to realize power relationships and started developing an understanding of capital, which has diverged significantly from a lot of the other MMTers, it became obvious that you’re not going to reform the banks. That’s not happening. And so that made me open to the concept of public banking. Where it went awry was folks like Ellen Brown, who…

really, really don’t understand debt, or at least the way they put it out there, don’t understand national debt and such. And so it really soured my interest in public banking, as it were, as a movement, because it just felt like she bastardized the entire concept of public debt. And she mismatched public debt with private debt. And there was no understanding of that delineation.

But when Tyler came to me with this idea. I realized that he had kind of circumvented some of the nonsense that caused me to dislike, not dislike the concept of public banking, but dislike the way that the public banking body of people out there, the body politic of public banking presented things because they were not MMT informed.

And you could clearly tell they were not MMT informed. And by not being MMT informed, they got a lot of things wrong. So help me understand what makes, not just me, but the listeners understand what differentiates the Loop and the kind of concept of public banking you have today and that of the Ellen Brown camp and the others that have traditionally been credited in this space.

[00:17:08] Tyler Suksawat: So definitely up until this point, since we’ve kind of been invited in to the movement officially.

[00:17:25] Scott Ferguson: Yeah, they’re excited about us. Yeah. [That’s great!] In partnership in various capacities now. Can I quickly plug? The Public Banking Institute is putting on a conference in Philadelphia next week. I don’t know when this is going to be released. It’s October 22nd to the 24th at the Friends’ Center in Philadelphia. And it’s going to be titled Public Banking for Public Prosperity, a Declaration of Financial Independence. And I’ll be speaking there and Tyler will be speaking there and many, many others as well.

But back to you, Tyler.

[00:17:53] Tyler Suksawat: Yeah. So up to this point, public banking has kind of been pitched as like this friendlier option to private banks and that the public bank should function like a private bank. So it should be profitable. It should still engage in kind of the same things. [speculative lending] yeah that private banks are basically forced you know that the way in which they operate, um, which kind of you know continues to muck up a lot of things but we’ve come along and basically say, “No they they don’t have to be that” right, so we don’t have to do this through revolving loan funds and we don’t have to you know kind of um you know, also create this kind of proving ground.

And this is the other part of the public banking equation that kind of takes all the sexiness out of it, which is to say, “Hey, we have to create this tiny institution that then has to prove itself through stages of feasibility.” Where we’re coming out and saying, “No, like you’ve got the depository function.

You can, if you move all the public deposits, you have this institution that’s entirely risk averse, you know, because what is the risk of a bank run if the city or the state isn’t going to pull all of its funds out of its own bank” right? So there’s not going to be this kind of run on deposits, you know, that other banks could experience that form of liability.

The really interesting thing here too is there’s been, you know, a lot of talk, talks that we’ve been a part of where they say, “Oh well you know you’ll have to create this institution and it’ll have to act as like a revolving loan fund and it it’s not going to be really feasible to be a strong financial institution or prove itself to to kind of get, become a depository or or get chartered unless it goes kind of goes through these, these stages of showing itself as a profitable entity.”

But we’re trying to kind of flip the script and say, it’s not so much about the profits. It’s just about the strength of the balance sheets in general. So it just, it’s in terms of how we account for what is an asset, you know, and what’s a liability and how do we, you know, change these, these accounting relationships change the ontology of banking overall and challenge that.

Because there’s a lot of conventional people in banking, the conventional approach, that don’t actually understand how these operations would function in terms of a true public bank. So they’ll continue to use the same logic for private banking not understanding the public-to-public relationships.

[00:21:06] Scott Ferguson: And we’re trying to really bring an MMT-informed fiscal framework to public banking in ways that I think is pretty fresh in terms of the public banking movement. Thinking about public banking as a design framework for supplementing, expanding the public fisc. So that’s an entirely different strategy.

[00:21:35] Steve Grumbine: Very good. Obviously, one of the things that Tyler brought up to me when we first talked about this, which really is probably the hardest horse pill for me to swallow, is the, hey, we hear you. We hear what you’re saying, but we’re not really going to say anything until you have a movement to bring to the table.

We’re, you know, we’re not really going to raise this up unless, you know, unless you guys have a million people running behind you and you’ve already seen, we’ve been at this for a hot minute. You know how hard it is to get a hundred people running, much less a million people or however many you need. What is the understanding of these electeds and stuff in, in, in Washington particularly?

What is the response? Why do you think that they’re kind of saying, well, you know, give us a full fledged movement and then we’ll back it?

[00:22:33] Scott Ferguson: Well, can I let me start with some preliminary remarks and then maybe I’ll pass it on to Tyler to talk about where he lives, which is in Seattle. I think first and foremost, while the materialists claim that, you know, mere ideas are going to get you nowhere without, you know bodies that are engaged in a mass movement is well taken.

And we don’t pretend to have, we’re not ready for the million person march.

But I think we would also assert that, to use our colleague Jakob Feinig’s term, we remain in a world defined by monetary silencing. We remain in a world where we, we collectively tend to think that money behaves in a particular way it can only do certain kinds of things, right, it only, it’s essentially a private exchange instrument, government can you know tax or borrow it on the back end. Future spending comes from past revenues. We have all of these myths, right, that I think a lot of us have been trying to puncture for a really long time and the Loop is itself an act of raising consciousness.

It is itself an act of trying to, at the level of political education, just puncture this tight ideological chokehold that the dominant ideology has on us, right? So I would say that it’s valuable just for that alone already before we even start getting into, well, come on, guys, how are you actually going to make this happen in a society controlled by class?

Because I think that is part of the struggle for hegemony, right? It’s what is legitimate knowledge? What can we be debating about and what shouldn’t we be debating about? What is unthinkable versus what is thinkable? What is on the horizon of possibility? What is locked away? What I’ll say about the Loop is it hits this sweet spot.

You don’t have to fully understand that money is public and endogenous and deeply designable and contestable to understand and get excited about the prospect of having a public bank that’s going to buy public bonds and move the interest right back into the general fund. And I think unlike other some other projects that we’ve had, like university currencies or, you know, the last time I was on the show, we were talking about [blue bonds], blue bonds, right?

States, blue states and municipalities and their sympathizers, you know, issuing bonds just in the immediate aftermath of, you know, the ascendance of the fascist Trump 2.0 machine and DOGE [Department of Government Efficiency] and all of that kind of fiscal sabotage, embargoes and impoundments and all of that, right? So those projects we stand behind them I think that they they are and remain important, um, but they’re well blue bonds I think are actually pretty easy to grasp, but the the university currency uh project, I think it’s hard for people that it’s just like but the money doesn’t work that way you know or you know what are you talking about company scrip you know and that That’s bad.

Without thinking about the fact that company scrip like airline miles and gaming company gift cards, those are all company scrip. But okay, we can’t have that for the public sector. There’s something about the Loop because electeds and politicians and organizers and activists have some sense of what a public bank is, even if it’s a kind of minimal reductive sense that we would want to challenge.

They know what bond… what bond sales are. They know that their cities, counties, and states are hemorrhaging hundreds of millions, if not billions of payments per year in interest alone. And when we say, “Hey, look, you know, this whole public banking thing, you can actually use it to just taper down and eradicate your interest payments.” Suddenly eyes just light up and it makes all kinds of sense to them because you can just say, oh yeah, a bank can purchase it.

That’s fine. That’s what banks do all the time. But instead of the private banks doing it, we’ll have a public bank doing it. But then what’s to me, frankly, magical about all this is that what the Loop also does at the same time is it’s this highly intelligible, at least for certain kinds of people, this highly intelligible, just seemingly straightforward proposal, project, program, that at the very same time, peels the mask off of privacy and scarcity and reveals the kind of inexhaustible font of public money that we all know in the MMT community has been hiding and been repressed for years and years and decades and decades and centuries and centuries.

So to me, it’s an explosive meeting of intelligibility with deep, deep revelation that, again, at a kind of level of political education and the battle for hegemony really matters. But, but, but, but, we have nevertheless been sharing our ideas in different formats and different ways. And one of the places where we’ve really seen a lot of excitement and ongoing interest is in the state of Washington and in Seattle in particular.

So with that, I’m going to pass it on to Tyler.

[00:28:16] Tyler Suksawat: Yeah. So, I mean, Kind of the doors that this has been able to kick open has just been incredible in itself. And when I first started this, I wasn’t officially working with or partnered with this public banking group that already exists in Washington State. There is Washingtonians for Public banking. But I’d get asked kind of repeatedly, “didn’t we hear you present this already?”

And I’d be like, no, this is an entirely new thing. And so it piqued a lot of interest. And then as soon as I mentioned, you know, the bonding loop, that’s when I’ve got them. That’s the hook, line and sinker of the thing. I mean, I’ve talked with the Office of the Mayor. We’ve got central staff at city council, some city council members.

We’ve got, you know, state reps. You know, State Senator Bob Hasegawa, we’ve talked to a number of people across the state in a number of organizations from unions to various other community orgs, even one for a state-based universal health care that we found interesting and in the ways that it could also help strengthen the capacity of the Loop, and just kind of finding how these groups fit in.

How do you fit into the Loop? And it’s kind of been incredible just the amount of interest that we have reclaimed. We have kind of captured the interest of all these organizations. The hard part of it is to actually get the committal to be like, yeah, I’m going to come out guns blazing for this, right? And there’s a lot of reluctance.

And I think it’s the uncomfortability with making claims about money, especially when it’s not the dominant ideology, to come out, be a politician who’s just an activist, an organizer, not an economist or a banker or a financier or anything like that, to come out and make these claims about what a public bank can do and instantly have that challenged, public facing.

But what has given us a lot of opportunity is kind of the public banking movement’s failures of the past. So looking into the legal arguments against, like, why has it taken so long for this movement to gain ground? Kind of looking at where they are, what laws have been created, where the successes are, and what has intentionally made this weak.

So when we look at things like… There’s a lot of misunderstanding about what FDIC insurance actually is and how that works. And, you know, we’ve kind of touched on this before. You know, the FDIC insurance, it’s looked at like this stamp of approval that a financial institution just has to have. You know, much like if your chicken doesn’t have the USDA organic [label], is it actually healthy for you?

But you know, the truth is that, you know, that organic label, you can still get salmonella from that chicken, right?

So, so it really doesn’t, doesn’t save you much there, but there’s a lot of these misunderstandings. And I think that’s, that’s the hardest part about it for some of these public officials is coming out. This is a new revolutionary thing and it’s not, it’s not a technology of sorts. I’m not out here trying to say, oh, we need AI-powered crypto.

[We hacked public banking.] Yeah. So we’re coming in and saying, no, this is just how these institutions on the private side just exist. You’re just changing the relationship. And all of the would-be profits are just going back into the public accounts to be reinvested back into the public, right? And the bank only needs to keep a small percentage to, you know, to continue to capitalize itself so that it becomes more financially strengthened.

In talking with them about, you know, they want to see that there’s this movement behind it, things like that, but on the other side of it from like unions and stuff. They want to see that the legislators are behind it or the city council members are behind it. So then it gets you into this weird situation, this paradoxical situation where nobody wants to be the first domino.

[00:33:39] Steve Grumbine: It’s like the Spider-Man meme. [Yes, yes.]

[00:33:43] Tyler Suksawat: And I think part of it too for the activist organizations is they don’t want to be seen as some fringe movement that then is severely underprepared for everything that’s going to get thrown at them.

[00:33:58] Intermission: You are listening to Macro N Cheese, a podcast by Real Progressives. We are a 501c3 nonprofit organization. All donations are tax deductible. Please consider becoming a monthly donor on Patreon, Substack, or our website, realprogressives.org. Now back to the podcast.

[00:34:20] Scott Ferguson: And just to say, you know, doing a power analysis of the situation in Seattle, I mean, there’s just incredible stuff going on there. I mean, it’s arguably the most progressive left-wing city in the country right now, or if it’s not the most, it’s among the most. And I mean, I visited this summer and attended a few events that were just shockingly beautiful.

But, to be honest I actually think one of the choke points when it comes to this struggle is something that we’ve dealt with at Money On the Left for years now which is that the left media and the left press and the progressive media and the progressive press are terrified of us. So we’ve tried you know what what do you do when everyone’s standing around like you know like Spider-Man’s pointing at each other like, you go, no, you go, no, you go, I’ll follow, no, you go, no, I’ll follow.

What do you do? Well, you get the ideas circulating in the public through the press, right? And then suddenly people are contemplating it, debating about it, yelling at each other about it online. And then suddenly it becomes like a legitimate thing to argue over. And, you know, we do what we can through our own platforms. But…

[00:35:37] Tyler Suksawat: Our punk rock approach to Seattle. What I was doing for a long time, Steve, was just walking into community events and handing out our essays as if they were punk rock flyers.

[00:35:54] Steve Grumbine: I know a lot of good guys that did that back in the day pre-revolution, man. That’s how it gets going. Pamphlet, pamphlet, pamphlet. [People love it.]

[00:36:04] Scott Ferguson: People love touching. Touching things. [They do like touching.]

Yeah, but anyway, if we could break through and get the local leftist media system at least just scratching their head in public over this, I think that would go a long way.

[00:36:23] Steve Grumbine: I want to just jump in momentarily. I had the opportunity, and some would say, what? But I got a random invite onto the Jimmy Dore Show after a six-year break from being on there. And I got to just simply talk about the national debt amongst a number of other things. And, you know, it only happened because people were saying, you got to have Grumbine on.

He tried to get Kelton on, but Kelton gave him the Heisman. And, you know, and so he went, he slummed it and got Grumbine on there. And, but the thing is, yeah, the organic Grumbine, the organic intellectual doing his thing. I want to bring up something that I think I want to get your take on it, because I think that we’re all rational beings in this call here.

And I think that we’ve all kind of experienced both the pitfalls of the overly cautious academics who tiptoe around messiness and and also on the other side, the folks that just say things and lose credibility. You know, I went to an Economists for Peace event. I went to a bunch of them back in the day before the pandemic.

I used to go to any one that I could get to. And there was one in particular, went to one with Jamie Galbraith. And then I went to one where Stephanie was at both of them. But in particular, there was this congressman, former congressman from North Carolina named Brad Miller. And, you know, I was like, who is this guy?

I’d never heard of him, but he really had a great presentation. One of the things that he said. And this is right at the height of AOC coming in, you know, and there was a lot of optimism for folks, you know, hey, wow, there’s this lefty. Not so much, but there’s this lefty and so forth. But he said some things in that meeting that, I mean, it’s a long time ago.

And this is a random dude for me to remember his name. You need to know what an impact it made on me. And he said, listen, because you guys think these folks are like ideological and so forth. He said these people are bumping into each other in the hallway, walking to the next meeting. They have a handler slipping them a piece of paper to tell them what to say.

[Yeah, the staffers run it all] Yes. And they have no idea what’s going on. They’re signing bills they have no clue about. They are literally just following somebody else’s orders, right? And that really struck me. I was not where I am today. At that point, I was still, but God, we can change their minds. Honestly, we can.

[00:38:55] Scott Ferguson: You had a really high-pitched voice back then.

[00:38:57] Steve Grumbine: Amen.

I was soprano, Grumbine, you know, contralto. I don’t know. Anyway, the idea, though really hit me hard because there was a big push. I think Fadhel [Kaboub] and Andres [Bernal] and others were trying to educate through the brand new Congress movement that was going on at the time. And there was a lot of energy to try and win electoral…

I think a lot of that has gone away, but there was, there was a tremendous amount of desire and effort trying to bring that forward. And what Brad Miller said that day really, really struck me because. These guys don’t write the legislation. They don’t understand the legislation. They’re told what to do. They sign off and that’s it.

And within that space, I don’t know what it looks like at the municipal-well at the municipal level, I kind of do because friends are on the board and stuff like that. You know, I mean, I know people, right, which is not saying much. But when you get to that next level, you know, city and state government, I mean, are we dealing with a more informed level of politician that’s more willing to be more hands-on? Or do they have a, you know, are they still being run by lobbyists and so forth? I mean, how does the game get played at the local and state level?

[00:40:12] Scott Ferguson: In my sense, there’s a lot more interesting wiggle room and there’s a wider spectrum of modes of governance. And, you know, I mean, very often the local legislators, they can’t afford an office full of staffers to tell them what to do. So I think, but that’s of course not to say that they’re not run by lobbyists. I mean, you know, that, that happens as well.

I don’t, Tyler, what would you say?

[00:40:37] Tyler Suksawat: Yeah. Well, and there’s challenges too. I mean, Washington state, it’s only a part-time legislature. And so we’ve, we’ve also gotten that too, where, you know, they only work for like half the year. And so that makes it really challenging where, you know, we’ve talked with a representative and she’s like, you know, is there a bill for this already?

And we’re like, no. And she’s like, oh, she’s like, I would, she’s like, I would take this on, but I already have way too many bills on my plate. And so…

[00:41:12] Scott Ferguson: And if somebody introduces it, I’ll sign off on it, basically. I’ll sponsor it. Yeah.

[00:41:17] Tyler Suksawat: And so, there’s challenges in that. And also, yeah, I do know lobbying takes place because our unions actually lobby the government all the time. And it’s something they’ve done recently for AI price regulation to stop AI price gouging. That is something they’ve lobbied for, like public worker unions. They actually actively have to lobby the government to get raises.

So there is a lot of that activity that does influence. And I know a candidate we’ve been working with that I’m really excited about, Hannah Sabio Howell in the 43rd. She is up against the incumbent, Jamie Peterson, who is the Senate majority leader.

He’s also viewed as one of the most progressive in state Democratic leadership. But what was really interesting that happened this year is seeing the youth, the diversity that’s behind Hannah, and also her openness to new ideas, to challenging the status quo and not just accepting a millionaire’s tax as the best case scenario.

And what’s interesting about that is her district, the Democratic Party actually endorsed her over the incumbent. And that’s a really interesting story to happen, considering he played a huge role in winning the millionaire’s tax here in Washington. Now, we all sitting here doing this podcast, we know what that means, too, is if you pass a millionaire’s tax, you have to cozy up and create an environment that’s nurturing to millionaires, right?

Because you need that tax revenue now. Now that’s an important part of your schools getting funding, of kids having meals to eat, of all these programs are now dependent on the fact that we actually have millionaires to be able to tax them for this. So kind of the dark side of Peterson is being cozied up with the insurance lobbies, being cozied up with landlords.

So those are some of the big challenges that do still exist and are still present, as progressive as things may appear on the surface. But to know that there is hope and there is… there are people still looking for opportunities and alternatives to do more than just call a millionaire’s tax or a billionaire’s tax a win. And I think that creates a wonderful opportunity to kind of create a new system and kind of what we’re advocating for in this public banking system in the public banking world, it’s something new.

I mean, there’s only one state in the US that has its own public bank. And I think that that creates incredible opportunities for states and municipalities to explore new ways of generating revenue, of investing in the causes that their localities believe in and having, you know, having their public funds being insulated from, you know, activities in the finance world that they don’t agree with.

And it also helps. And I know we know that federal taxes, you know, don’t fund anything, but it is nice to be able to say that the profits that your public bank makes can’t be taxed by the federal government to do nefarious things with, right? Where the profits our public bank make aren’t going to be helping drop bombs on kids in Gaza, right?

I guess the other thing that’s been kind of beautiful about this, and as I’ve been organizing from this angle and kind of kicking doors open where I can, what I’ve found is t’s the same people. I run into a lot of the same people that I’ve already talked to. They’re all thinking in these terms of something new, of something much needed.

And here’s the really cool part, is they’re all supporting each other. And I wouldn’t even say it’s necessarily behind the scenes because you see the support. You see a sitting city council member that you’ve talked to about this public bank showing up for a candidate that you support, who is one of the first people to sit down and listen to you talk about this public banking idea.

You see them endorsing each other, supporting each other on certain things. And that, to me, is kind of like, okay. All of the puzzle pieces are here. They just have to be put in the right spots to complete the puzzle. So that’s kind of where we’re at in Seattle.

[00:47:02] Scott Ferguson: There’s also…

[00:47:03] Steve Grumbine: If you don’t mind, just real quickly, obviously Seattle, and I would imagine you could go not too far off into Oregon, Portland and other areas where there is a significant… you know, left, at least left of center, you know, idealism and populism and so forth. I would hesitate to call it a leftist movement, but I would say that they have far more left wing, more working class, hopes and dreams, public kind of approach to the world.

But they are truly unique, right? I mean, like, you know, your opening statements there, Scott, about like you were shocked when you went there. It was like, it’s truly beautiful and so forth. I would imagine most people are not living in communities like that, right? I would imagine. So I don’t want to, I guess you have to start somewhere and let it be the place that is already kind of got that ideal mindset, if you will.

You’re going to still have challenges, but I guess on a broader scale, you know, what do you think the rest of the country could take from this? I mean, should people be getting excited about it, like beyond Seattle? You know, it obviously is something that anyone could do if they have the access to the halls of power.

What are your thoughts on its universality, I guess, is the universal approach? It’s a fork liftable. Is this?

[00:48:46] Scott Ferguson: Oh, absolutely. Absolutely. And this is actually where I was going to go next. So we were kind of meandering in lockstep. So thinking again, in terms of power analysis, I actually don’t think you just need, you know, the beautiful communities in, you know, San Francisco Bay area, Portland, Seattle to accomplish this. Look, one of the most powerful villains in the world is the final boss at the end of this game, right?

And that’s the American financial sector, right? And so they will, as soon as they sniff this out, they’re going to come swinging, they’re going to come attacking in every which way that they can, and they have oodles and oodles of financial resources to do so. On the other hand, there is broad, broad appeal in telling the public that we can drastically, severely reduce our public interest payments per year.

And so you could see people who think of themselves as fiscal conservatives or fiscal responsibility people, you could see them getting behind this. I think something else, too, is that there’s also a growing public banking movement. And there is even a right wing or conservative / libertarian version. They tend to call it sovereign banking. There was a, you know, people in some kind of state legislator.

I can’t remember. He might have been like working in the Florida state government and some financial capacity who was advocating a few years ago precisely for a sovereign public bank of Florida. And hilariously, he said, we’ve got to get our public funds out of the woke Wall Street, which is ridiculous. But I think, so a), you’ve got a heterogeneous growing public banking movement going on all over the place.

And I just think that there’s such great appeal in all communities to say, “Hey, why are we sending hundreds of millions of dollars per year in interest payments to Wall Street? Why are we doing that? You’re telling me if we had a public bank, we could stop doing that?” Oh, look, look at all the extra financing that this opens up for us to do things with.

And now we can argue about whether it should go to charter school vouchers or taking care of trans kids. Opening up that fight is itself, I think, a real possibility and a real important step forward.

[00:51:31] Tyler Suksawat: Yeah, there’s definitely a strength in being able to say, “Oh, this is going to save the government a lot of money” right? Now, our take is that we want to just continually reinvest those funds back into the public. We’re not creating gigantic…

Surplus. Yeah, surpluses and rainy day funds for no apparent reason while we have potholes in the roads, right? So that would be one fundamental difference. But there’s a cool thing in the way in which you can build a movement and the way that it attracts people you wouldn’t necessarily find yourself allied with. So we’ve got this public bank, right?

Well, one thing that the Bank of North Dakota does is it services the liquidity needs of small community banks and credit unions in North Dakota. And so that relationship that they have with small capital helps them fight against the larger capital interests that are more extractive and keep things a little more in balance. They have a really healthy ecosystem there, financial ecosystem for community banks and credit unions.

I think they have over 90 different banners. But that’s a really cool thing that you can do is get people who are small business owners who are on the boards of community banks and small credit unions coming together and supporting this thing.

[00:53:15] Scott Ferguson: And this is what this kind of expanded MMT approach allows for this, what we typically call democratic public finance, which is refusing zero sum logics all the way up and down the hierarchy of money, not just at the sovereign federal level. It allows you to mess with these conventional divisions. We know from history, we know from Karl Marx’s analyses of history that the petty bourgeoisie, right, the small business owners, they tend to be reactionary, right?

And I think that that’s often the case, right? But if when you’re talking about, you know, tax redistribution and you just kind of stick to that same script, it all just fuels this zero-sum antagonistic machine. Whereas if you can say, no, no, no, this is, you know, this is good. This is going to be great for our small business owners.

Look at, look at, you know, the Bank of North Dakota. Look, look how they thrive. Look how they thrive with counter cyclical lending during, you know, national or international market downturns. We’re really, we’re not alone, you know, Bob Hockett too, and many others. We’re very excited about, you know, like digital public payment systems that are you know no cost or very low cost, um you know a public Venmo as Bob Hockett likes to say and you know what would that do to small business owners right, retail owners, uh owners of retail shops, you know all across a community suddenly you’re saving lots and lots of

money and not sending it off to credit card companies and whatnot. So to me there’s also the just a real, a real possibility for creating new unlikely coalitions by breaking down that that dogma of zero sum, rob Peter to pay Paul, uh, rhetoric that we’ve you know we’ve been fighting against in the MMT community for years and years and years but we’ve typically done it just at the federal level.

[00:55:17] Tyler Suksawat: And who doesn’t like the idea of, you know, funding uh really cool programs that we all either want or need, and also simultaneously not having to raise the tax rate all the time.

[00:55:34] Steve Grumbine: I could see a lot of bennies here if you’re able to pull it off. And really, my lone critique would be that we’re rarely hurting for good ideas. We’re always hurting for how to get there. This is clearly something that has the ability to reach popular interests. So I’m pretty excited about it. I mean, you know my hesitations in dealing with the state and as it pertains to the institutions of said state, given who controls those interests.

And I think you appropriately nailed out that the financial industry and all of its power will be brought to bear when it sees this. So I think that there’s some real challenges, but I think the idea is really sound. And I can see how this could easily create a pathway to escape some of the punitive nature of the federal side of things.

We are at time. I just want to give you guys a chance to give us a close out before we close out.

[00:56:43] Tyler Suksawat: Yeah, I just kind of want to end on something that I know appealed to you a lot, Steve, is looking at this public banking infrastructure as something that is kind of pluggable and amenable to the times that we’re in. So let’s say we build this thing, we use it to create all these cool institutions within our state.

And let’s say in a hope-filled sense that eventually maybe we do change the federal government and we do get all this positive outcomes, well, then we already have the institutions that we’ve built in place that we can just plug funds appropriately where they need to go. The reverse side of it, the doom-pilled version of this, is at least you have institutions set up with their own financial infrastructure that can help give people stability.

We can open up the gates for a soft secession, if you will. But no matter what, the people in our communities, we need stability under all conditions. And if we want to improve those conditions and infrastructure, then hey, we already have this system there. If everything goes nuclear option, then hey, at least we have this system already in place.

[00:58:15] Scott Ferguson: All right. Well, okay, so I’m going to respectfully push back a little bit to what you closed out with, Steve, which is that I’m not actually sure we have a lot of great ideas. I think we’re wanting for great ideas. [Okay] I think we have a lot of zero-sum. Someone’s going to have to lose. Someone’s going to have to pay ideas. That plays a huge role…

[00:58:43] Steve Grumbine: Let me interrupt momentarily.

[00:58:45] Scott Ferguson: Yeah, go ahead.

[00:58:47] Steve Grumbine: I would clarify this only, only. From our podcast. We have a lot of people that come to our podcast with great ideas. They just, they’re like, well. It’s beyond my pay grade how we get there. [Fair enough.] So that’s all I’m saying for context. Go ahead. [Fair enough.]

[00:59:10] Scott Ferguson: So yeah, I think we need more good ideas. I think we need more good ideas that are not zero-sum and are not pitting communities against one another, that are not suggesting that the only way to take care of everyone is by robbing someone and paying somebody else. So those are some of my closing thoughts. And then I guess my very last thought is to say to all of your listeners, if you are curious, if you’re a Loop curious, if you’re a Loop excited, if you want to know more, if you want to pitch this to a local city council person, somebody running for office, whatever, get in touch with us.

You can reach us in a number of ways.

And you know what? Get the word out. See if you can place an op-ed in your local newspaper. Just get people angry about it. Get people excited about it. Get people going nuts over this idea because we’re here. We’re ready for the fight.

[01:00:13] Steve Grumbine: Love it. Great. I love the optimism, and I am happy to provide a platform, however small, to get that word out. And folks, where can we find more of your work just as a way of getting everybody closer to you?

[01:00:28] Scott Ferguson: Moneyontheleft.org is the best place to go. We are in your podcast feeds, wherever you get your podcasts. We have multiple podcasts. We have the Money on the Left podcast. We have the now only occasional production of what’s called the Superstructure podcast. And then we have a fairly new podcast, which is dedicated to democratic public finance. And we’re calling that In the Loop.

[01:00:55] Steve Grumbine: Ah, very, very good. All right. Well, gentlemen, it was an absolute pleasure. I’m sorry it took this long to get us together, but maybe it was perfect to have it take this long because it allowed me to get some of my thoughts together. And I really appreciate the time you guys took with that. I’m going to take us out.

Folks, my name is Steve Grumbine. I am the host of this podcast, Macro N Cheese, and the founder of the nonprofit Real Progressives, which funds this podcast. If you like what we do and consider the work that we do worthwhile, you can become a monthly donor at patreon.com/realprogressives. You can go to Substack and become a monthly donor there as well.

Or you can go to our website, realprogressives.org and become a monthly or a one-time donor. This podcast comes out every Saturday morning at 8 AM. We release it to the world. And every Tuesday night, we have a thing called Macro N Chill, which we will cover this very episode when it comes out on the Tuesday night at 8 PM ET, 5 PM PT.

And you Aussies out there that listen to this podcast, folks, that’s the morning time for you. You can join our webinar. Come on, join us, man. No more excuses, Aussies and New Zealanders and on and on and on. So with that, on behalf of my guests, Tyler Suksawat, Scott Ferguson, myself, Steve Grumbine, and the podcast Macro N Cheese, we are outta here.

[01:02:27] End Credits: Production, transcripts, graphics, sound engineering, extras, and show notes for Macro N Cheese are done by our volunteer team at Real Progressives, serving in solidarity with the working class since 2015. To become a donor please go to patreon.com/realprogressives, realprogressives.substack.com, or realprogressives.org