Episode 56 – A Road Less Travelled and the Media with Alexandra Scaggs

Macro N Cheese – Episode 56
Episode 56 – A Road Less Travelled and the Media with Alexandra Scaggs

February 22, 2020

Alexandra Scaggs [intro/music] (00:00:03):

I was really surprised, I guess, that the further down I got into the Treasury market covering it, the more that the MMT sort of worldview started to make sense to me. I have been lucky enough to be at some places that have been very reporter driven, but there are newsrooms that are very editor driven and it’s a very top-down kind of thing. And you’ll write something, but know that the thing that you write and file is not going to be what gets published.

Geoff Ginter [intro/music] (00:01:27):

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

Steve Grumbine  (00:01:34):

And this is Steve with Macro N Cheese. I have got a different show for you today. I have been trying to get my mind wrapped around the bias that I see in the media and trying to understand why all the business sections and the political speak always tend to be written through the lens of neoliberalism. I mean, everything from sitcoms to your kids’ coloring books, you name it.

And you know, I ran into an individual at the third Modern Monetary Theory conference, and recently got to hear a phenomenal interview with her on the Money On The Left podcast. And so I figured I’ve got to talk to her.

Her name is Alexandra Scaggs, and she’s a financial journalist based in New York City. She covers markets and investing at Barron’s and previously covered markets for the Financial Times, Bloomberg News and the Wall Street Journal. So with that, let me say hello to my guest. Welcome.

Scaggs (00:02:40):

Hi, thanks for having me.

Grumbine  (00:02:41):

You better believe it. I love that interview. I really, really do. It peaked my interest. I hate that sometimes I have to follow behind those guys cause they’re just so sharp and they have so many great contacts, but when I heard you, I was like, I’ve got to have her on my show. I’ve got to have her here to talk about this. So I really appreciate you taking the time to do that.

Scaggs (00:03:03):

Of course, thanks so much for having me on. I mean, it’s always fun to talk about the media stuff because I feel like I have kind of worked everywhere. It’s like, people make fun of me now. “Where haven’t you worked?” And I’m like, “Don’t worry about it.”

Grumbine  (00:03:20):

The list is becoming smaller. Huh?

Scaggs (00:03:24):

Oh God. Yeah. So I feel like I’ve like seen, I guess the different ways that different newsrooms operate and sort of seeing the ways that they’re similar and the ways that they’re different almost helps me think more about the way that the views are built and sort of where they come from, from like the ground up or like the top down.

Grumbine  (00:03:47):

You know, it’s interesting because one of the things that I really value about you is that the writing that you do is written with a MMT undertone. Like you understand Modern Monetary Theory, and.

Scaggs (00:04:01):

I hope so.

Grumbine (00:04:01):

It comes out in your writing and, you know, obviously for the Modern Money Network to bring you in to have you at the conference, it tells me that they have some faith and confidence that you know what you’re saying. And you add that together and you are a rare gem in the journalism world. It’s just, you’re like, you’re like hen’s tooth, a four-leaf clover.

Scaggs (00:04:26):

Sadly though. Right? Like I feel like, so it’s a little weird because I feel like sometimes it can be difficult to cut through all of that even with my writing. Like, you know, I work at different places and different places do edits differently. But it’s funny cause when I was at the FT, I had a lot more room to sort of write what I thought, to explore things.

And that’s sort of where the full conversion, I guess, to MMT took place and where I was able to really write, you know, actually this makes sense actually, you know, this sort of austerity view that we’ve been Fed since we were, God knows how old, isn’t true.

And I figure now, at least now that I’ve written that and that’s like out there, if people are hiring me, they’re sort of knowing, okay, this person has this view, but we think that she can do her job regardless, which is good because a lot of editors are very skeptical about the whole thing, which is not ideal.

But, it’s still, you know, I’m hoping that the fact that I really am behind the sort of the expansionary all-inclusive vision that MMT has, and I can hopefully understand credit markets kind of gives people a little bit more, or makes people who are in credit markets think twice.

Grumbine  (00:05:47):

Yeah. You’ve got a dual purpose there. A dual mandate, so to speak, writing to the professionals and writing to the lay people. I think that’s phenomenal.

Scaggs (00:05:55):

Yeah. It’s one of the more challenging things to do, I guess, is getting it to be smart enough for the professionals, but also in English. So like real people can read it. Because half the time, like I’ll read research or try to learn about some corner of some market and I don’t like feeling like my brain has been put through the fire, you know. So I know how it feels.

Okay. Well, if I can sort of make these guys explain themselves and then hopefully explain some of this to people who like shouldn’t have to feel like their brain has been put through a wash cycle, you know, hopefully that can be helpful.

Grumbine  (00:06:37):

One of the things that I felt like I needed to ask you, I have a Master of Business Administration and a Master of Science, and both of them took me down economic trails where I had to learn the classics so to speak. And I had been in the Ron Paul camp years ago, many, many moons ago.

And you know, the gold standard thinking and then the neoclassical, you know, crushing blows that you get from grad school and having to unplug all that stuff. I know what I had to go through to decouple that from my mind, to be able to, now I can talk fluently both directions.

But my question to you is how did you get into this? This is a pretty nichey thing. You know what I mean? Hopefully it becomes bigger and more, less nichey, but it is pretty nichey. How did you get here?

Scaggs (00:07:26):

So I got here actually by covering markets, believe it or not. I was covering the Treasury market for Bloomberg and Bloomberg started off as a Treasury pricing service. And they’re big on transparency, there’s something to be said for the news agency and the way that they sort of operate. And so I was learning about the Treasury market and like there were a few things I just did not understand. Okay.

We’ve had how much QE, and Treasury yields are where, you know. Having the 30-year yield not be high when interest rates have been zero for a decade at this point, or at least when I joined Bloomberg. None of that made any sense to me. And then I actually met Rohan Grey and I talked to him about his understanding of economics.

And he’s a very effective advocate because he sat me down and shouted at me until I understood it. I always tell people I’m so glad he did because you know, then I actually understood the market and then I could talk to people in the market who’ve been in the market forever a lot more easily.

And then you sort of realize, Oh, all of the guys who actually know what’s what in this market, they all kind of know this. And that was a little weird, you know, people who work at the Treasury. I mean, I don’t to talk to them a ton, and I didn’t talk to them a ton, but you get the impression that they understand it too.

And that the Treasury desks understand this, anyone who’s traded repo understands this, but they aren’t telling people. And then like that sort of leaves a lot of space for the Paul groupies of the world. And all of these people who are saying, “Why don’t we have a balanced budget?”

It’s sort of, I dunno. I was really surprised, I guess, that further down I got into the Treasury market covering it, the more that the MMT sort of worldview started to make sense to me.

Grumbine  (00:09:34):

That’s amazing. I think to myself, the trouble that we have in society is less about what is said than with gaps, the lacunas, if you will, that are not said these deltas, these gaping holes in the story that people then in turn, go into the caves and find hieroglyphics to transcode, whatever they don’t understand in that gap. And that’s how we end up with these wild fairy tales.

I mean, the story of the Federal reserve is pretty, you know, boring in some ways and exciting in others. And yet I’ve never seen people be able to turn such a nothing burger into something of a something burger and make it really almost James Bond-dish. It almost requires its own theme song when they talk about it. But…

Scaggs (00:10:23):

Oh my God, yeah. That’s kinda, sort of nuts.

Grumbine  (00:10:25):

Tell me honestly, what has been your take as you walk through these things, you clearly, you could see the huge gaps at the regular person level, voter level, the, you know, even the academic level, to some extent through your work.

How does that upside pyramid of knowledge, you know, you could see how so broad and vast when people don’t know what’s going on, they’re talking tales from the firepit and the barstool. And as you get deeper into the rabbit hole, how does that firm up? I mean, what are some of the things that make it so challenging to understand?

Scaggs (00:10:57):

So I think that one of the challenges actually is before I started covering treasuries, I knew just enough about markets and finance to be a problem. You know, like you get like real people and you’ll sit them down and you talk about concepts of money and concepts of the government’s involvement in markets and the Federal Reserve.

And there’s some really, I might’ve talked about this on Money On the Left a little bit, but there’s some really crazy conspiracy theories about the Fed, but I heard this great lecture from a Fed historian named Peter Conti-Brown. He sat us all down, took us through these hilarious, really weird conspiracy theories and was like, okay, so all of these are funny, but they all have a seed of truth in them. What?

And this guy was not like an amateur. He had the backing of Arthur Burns to write this book. And he’s sitting there saying, actually, this is a pretty undemocratic institution, the way that it’s structured now, which really took me aback, you know?

And I feel like, you know, after I had gone through, you know, my liberal arts education and I had talked to a bunch of people in the market and it’s just like, sort of learning about finance and stuff and econ, you know, I sorta just accepted what people were telling me. Oh, I must’ve been wrong because all these people are experts and they’re saying this, so that must be the way it is.

And then it’s funny because then I learned even more and I was like, Oh, actually I was kind of more right beforehand. Actually, the guys that are sort of mad at the Fed are more correct than I was when I was like, the Fed is a purely technocratic institution. It’s not political at all, but that’s what I was taught, you know.

Grumbine (00:12:58):

The idea I joked with people before and they were like, well, the Fed, the Fed, the Fed, I said, have you ever seen a progressive president before — a real progressive president, not a neoliberal with progressive next to their name kind president, but a real legitimate progressive president? No. She had no idea what a real progressive would appoint to the Federal reserve board, correct? Yeah.

And so you have no idea what it would look like when they start cleaning out offices of the neolibs and the other hard finance people, the sound finance people that are all about markets, et cetera. You don’t know what that would look like either. Right?

So let’s find out, let’s get ourselves a Bernie Sanders presidency right now. For me, one of the light bulb moments was that the board of governors is appointed and they seem to always find, you know, these Wall Street natives to travel in there. And you never understand why it always looks exactly the same as the day before.

Scaggs (00:13:57):

Yeah. People are like, why is our economy always the same? Well, you got the same people. They all studied with the same people. That’s pretty wild.

Grumbine  (00:14:11):

What has been your biggest “aha” moment through this process here, obviously coming into this profession, you have a pretty bright light on you in terms of, you know, if you’re saying crazy stuff, people are not going to read your work. And you’ve got editors that are staring over your shoulder, et cetera. Through this process, what would you say has been your biggest aha moment?

Scaggs (00:14:32):

So that’s a really good question. Learning about MMT, like that process, was what helped me understand economics. Right? And I’m trying to think of one aspect of it that would be specifically, that’s the specific incident was when all of a sudden I saw everything. You know, maybe there is one. So this was actually after I was at Bloomberg.

This was when I was at the FT, and I started seeing after the election in 2016, I started seeing all of these Democrats come out and start writing these op-eds about how, you know, “oh, the Trump administration is going to run our fiscal health into the ground. He’s going to bankrupt America. He’s going to do this or that.”

And I started looking at…well, I don’t understand. There was no real issues with like fiscal expansionary policies for different reasons, right. And you can also definitely take issue with the way that the current administration has been pursuing their fiscal policies.

I think that there’s a way to tell that story and to say that story, but just being categorically opposed to fiscal expansionary policies but like only when your opponent is in office just strikes me as so disingenuous. And I was like, well, these guys were saying something kind of different a little while ago, but actually they’ve been pretty consistently in favor of austerity for a while.

And then I sort of realized like, oh, well, what they get from austerity is they sort of keep their position as like the wise man who like gets to write in the New York Times. I just remember like kind of figuring out what the game of that actually was. And I was writing, I think they had a series that was called someone’s wrong on the internet. There were a lot of people. Yeah.
It’s never me. Of course. No, just kidding. But I remember seeing some op-ed where I was like, you know, this is really disingenuous and this is kind of the stuff that they’ve been saying this whole time. And you know, interest rates are zero or close to zero.

You know, the deficit is coming up on 1 trillion, whatever. But like none of that really matters because the actual mechanics of the Treasury market, once you know about it, they’re not really being affected and they haven’t been, and no one at the Treasury actually thinks they’re going to be affected.

Grumbine (00:17:07):

That’s amazing.

Scaggs (00:17:08):

Right? And it was that moment where I was like, Oh my God, they’ve been lying to me like this my entire life. And I got like kinda mad, you know. I feel like because I had not necessarily consciously bought into it, but because again, you’ve mentioned this, like this sort of, you know, neoliberalism, it’s the perspective that all mass media takes.

It’s the perspective that traditionally all of our politicians have taken. That’s just what I thought the world was. And as it turns out, that’s not actually the way that things work, you know, Treasury yields at whatever 2% is what did it, strangely enough.

Grumbine  (00:17:53):

You know, it’s funny you say that. And believe me, when I say this, I interviewed Mark Blyth a while back and it’s one of our most listened to podcast of them all. This guy is a whizzbang from Brown University. He’s a rockstar economist out there in the world. And he talked nonstop about financing deficits and things like that.

And I just listened and this guy is a genius. He really is brilliant man; but there’s a blind spot there with this. And I’m sitting here as a lay person and I’m thinking to myself for 10 years now, I have known this stuff. And for 10 years now, that anger moment that you had has not left me. It’s just been a perpetual, slow burn.

And I’ve been seething because every day, a new piece of what does this lie mean comes to me. Every day this lie brings on a new bit of reason to burn a little brighter. And especially wintertime as you go through cities and you see people park benches,and you see people living in cardboard boxes, and people at the missions.

And you hear all these people doing all this great volunteer work, and donating to the cause. They want to donate money to find a way to cure cancer. And you’re thinking to yourself, “Why in the world are we draining poor people’s money to fund cancer research when our government could do it with a click of a mouse?” It makes no sense to me.

And those are the burning moments that make this lie so bad. It gets, let me bring this back full circle to the original point of this conversation. That’s the media. The media makes everyone dream a little less, have a little lower expectations. They make the ACA seem like it’s far reaching Socialism and the bastardization of words and definitions.

And every one of these has a dead body at the end of the rope, unfortunately. There’s people that are literally dying from this lie on the daily and the media has a huge part to play in that. And I guess the question to you is, is that having been in a few of these places, how does the enforcement of this neoliberal narrative take place in the newsroom? How does it warp the writing or how does it impact a writer?

Scaggs (00:20:12):

Yeah, so it’s really interesting because I feel like a lot of the ways, on an economics desk for example, a lot of the ways that’s continued as almost like the ways that more conservative educational institutions will perpetuate this myth. You choose the people who are really into credentials and are very credentialed themselves.

And there’s nothing wrong with credentials, but I feel like there’s this sort of neoliberal focus on that kind of thing. And you put them in rooms with people who are very important and you say, okay, we’ll just say what the important person said, cause that person’s rich and important. So that’s the news.

You know, there’s no sort of, okay, why don’t you think about this for yourself and, you know, on the economics desk, that’s sort of what it seems like. I usually was covering markets and the way that stuff I always found was enforced, was it just deadlines.

If you have 20 minutes to write something and you’re spending your entire day turning out 20 minutes stories, you don’t actually have the time to stop and think and be like, what is it that I’m really writing? You know, I don’t think a lot of the time that these sorts of churney type stories are even necessary.

And so the way, I guess that it sort of turns people into automatons who are just repeating what they’ve heard can be pretty dangerous. And I do think also that’s one of the situations where austerity begets austerity, right? Because you don’t hire enough journalists. And so the journalists that you do have don’t have any time.

And it’s strange also because I do think that — I’m talking about this now from the reporter’s perspective — and I’ve been lucky enough to be at some places that have been very reporter driven, but there are newsrooms that are very editor driven and it’s a very top down kind of thing and you’ll write something, but you’ll notice the thing that you write and file is not going to be what gets published.

And that turns into almost like a learned helplessness kind of thing, where you’re, well, I just have to get the things. I have to get the quotes. I have to throw them all into a story. And the editors who, by the way, are not the people actually reporting things. They’re going to write what they want with it, more or less. Yeah. And I’ll say I’ve worked with great editors.

I don’t want to throw an entire class of people under the bus, but I think that it’s at least within the business journalism world, it’s this sort of scary mix of insecurity, lack of time and deference to authority that I think it just perpetuates, I guess the trend. I myself, you know, when I was young and when I was green, uh, editors would sort of lean on me to write stories certain ways.

When you’re 24, you’re not going to push back against the head of your section. They have a lot of power. And I think that it’s interesting because you’ll notice a lot of the larger, more like institutionally robust or not robust, but the places that are more invested in institutions rather than like people, or the institution of, you know, whatever publication it is, that they end up hiring people pretty young.

And then you end up thinking, okay, so you’ve hired a 24-year- old reporter. Like I was a 24-year-old reporter. I’m glad that I did it, but I didn’t have any time then to think about what I was actually saying and to worry as much as I worry now about the potential consequences, you know. But the funny thing is that the more this continues, the more that people end up becoming alienated for mass media. I think you’re seeing a lot now.

Grumbine  (00:24:23):

You know, there’s a seminar, I guess, a panelist discussion in Washington D.C. a couple years back, actually I think it may have been last year. Anyway, Bob Hockett and Stephanie Kelton were there and what’s his name? Um, the gentlemen from 350.org, Bill McKibben, there were several others.

And there was a gentleman from North Carolina who was a former Congressman, and he was talking about how the average politician goes from room to room, meeting to meeting without time to even breathe or go to the bathroom. And they’re given like a little teeny piece of paper to say the things they need to know before they go into their next meeting.

And they don’t have very deep convictions. They don’t really know what’s going on, they just say something, he said. So in other words, don’t lose hope you can change their minds because they’re just wafer deep on these things. Most of them, most of them haven’t invested incredible amounts of time and understanding these policy space issues and these economic understandings.

And they’re just regurgitating kind of what an aid gave them the say going into the next meeting. And I found that rather interesting because I think we’re all in kind of a bit of a fast food culture. We’re trying to get things done, got deadlines, hurry, rush, rush, rush. And so people flip on the TV, they read an article that comes across a alert that comes on their phone, whatever.

And that’s probably the beginning and the ending, or maybe just a quick Twitter, one little tweet. And they got enough to fill their knowledge base. That’s more than enough information right there – one tweet. It’s a soundbite culture and you’re writing articles for people and you’re explaining very important, very deep, detailed things.

And the average person by design, I believe, doesn’t have enough mental capacity, mental space, mental time to be able to ingest that and process it and make decisions on that. So they go to the easiest understanding they can.

And I imagine that’s gotta be a challenge, too, when writing to people, knowing that you’ve got this tiny window of time to capture what they’re thinking and what they’re saying and so forth and boil that down really, really quickly and still at the same time, have an impact. I mean, that’s gotta be a challenge.

Scaggs (00:26:40):

Yeah. That’s a great way of capturing it – a really good way of describing it. Yeah. I still struggle with that. I feel like, especially in markets, like you have to learn a lot to say anything confident. And like, I don’t know, maybe it’s like that with everything and markets just seem complicated. So you actually know that you don’t know that much.

But I feel like, you know, before I could write about the mortgage market, I had to talk to seven fund managers and a few analysts and do a lot of reading and Oh, this CFPB put this regulation into place in 2010 because this and that — most of that doesn’t get into a story, right? But I feel like I have to know all of that before I can say, okay, this is the story.

For example, with the mortgage thing, I don’t think mortgages, mortgage finance, is that scary right now. I think that they’re pretty much okay, but to come to that conclusion, I had to learn a lot of different things because mortgage markets were what blew up in 2009, right? First thing you think about is, uh oh, that’s like risky and scary.

Grumbine  (00:27:45):

Let me ask you a question. Having been around this for a while, what would you say is the biggest challenge you have in terms of getting Modern Monetary Theory lens baked into your stories and getting them past the editor’s task.

Scaggs (00:28:03):

That’s a really good question because I’ve been covering markets, I think that writing about the Treasury market is actually a good way to sort of embrace the concepts. Because again, you’ve got a scoreboard for that, which is a kind of a cool thing, right?

All of the crazy people who are like, oh, it’s going to be hyperinflation because you know, the Fed is doing all of this stuff. They’ve been so wrong, you know.

I actually heard secondhand that one of these gold standard guys was saying, okay, actually I think that in a world with quantitative easing and MMT kind of makes sense, at least as opposed to negative interest rates or like some of the other policy tools people have been trying to use. And I thought that was amazing.

I do think that because markets have been, so what people thought was going to happen in markets over the past decade just didn’t happen, that’s really made it easier from like the Treasury market perspective. However, as soon as I try to extend that to anything else, I think the bar goes up a lot.

Intermission (00:29:31):

You are listening to Macro N Cheese, a podcast brought to you by Real Progressives, a nonprofit organization dedicated to teaching the masses about MMT or Modern Monetary Theory. Please help our efforts and become a monthly donor at PayPal or Patreon, like and follow our pages on Facebook and YouTube and follow us on Periscope, Twitter, and Instagram.

Grumbine  (00:30:20):

I’m interested in knowing something. Maybe this isn’t something you can answer right here, but I just want to spit this out into existence, right? What if we didn’t have a finance market? What if finance didn’t exist? And we were just dealing with economics? We’re just dealing with efficient movement of real resources.

I wonder how different things would be in terms of, obviously everybody puts so much stock in Wall Street, so much stock and percent of interest rates and Treasury bonds and this and that. And in reality, they’re just financial debt instruments, they’re not really anything productive in society at all. They do nothing but earn interest.

They literally do nothing. So I’m curious when you think about that division line, and I know it’s very hard to really draw a straight, clear, solid line for this, but the difference between monetary policy and fiscal policy and understanding the role of interest rates and lending and investments and all on one side, while simultaneously on the other side, income bearing, buying bread and, you know, guns and all the other things people buy with money.

It just seems like there’s a real divide there. And people conflate the import, if you will, of the financial markets at the exclusion of the currency issuing Federal government. That one big piece is so missing. I wonder what would happen if we’d stopped and thought about.

Scaggs (00:31:52):

Yeah. Another “aha” moment. You’re reminding me of, I was actually having a conversation with Rohan about this. And we got to the point where I was still feeling a little skeptical because I was like, oh, well, I have been told that decent people believe this one thing for so long that I’m like, oh, well that must be right, because I want to be decent.

You know, I want to be polite, civil and whatever other bullshit liberal people want to be. I don’t, I don’t know. But I got to the point, okay, actually, yeah, you’re right in practice, or if you really get to the bottom of it, like there really isn’t that much of a difference between seigniorages and debt issuance. It’s just not that different.

And then you start thinking about the division between the Treasury and the Fed. Oh, that isn’t really that substantial anyway. And then you keep thinking it through and you’re like, oh wow. And then, you know, the sort of realizations from there I think snowball.

But at least that’s how it worked for me. But then being free of markets, just imagine, right? Without someone being able to hold the bond vigilantes, Ooh, you know, over the head of policy makers that want to do nice things. That seems like a good thing to me.

Grumbine  (00:33:17):

Yeah. I’m kind of dreaming with you here. I’m swimming through the ether and just enjoying the thought.

Scaggs (00:33:24):

That’s one of the things I will say, that’s one of the things that I’m happy I got to do when I was at the FT, because I don’t think there were that many people who had written the story. Where’s the bond vigilantes now?

These are the people who apparently were so scary that Universal Health Care couldn’t be a thing in the nineties when everyone else was adopting it. And now we’ve just gone ahead and done these things and Oh, look, they’re not here because they’re not real.

Grumbine  (00:33:53):

You know, I oftentimes look at people that do bad things. And one of the big things that I judged them on is contrition. Whether they, I don’t want to say repent. But yeah, I guess that’s a term we can all wrap our head around. I think it’s been used enough that we can know what that means. And you look at people and you say, now that they’ve had their “aha” moment, what did they do with it?

And I see folks out there that are trying to pretend like they’ve always known this all along. There is no repentance. You can watch them doing this gradual shift. And for all of our sakes, I’m glad they’re shifting.

Scaggs (00:34:29):

Yes.

Grumbine (00:34:30):

But I’m looking for that mea culpa, that come to Jesus moment, if you will, where they actually say, “you know what, guys, I was wrong. Let me tell you, I feel really bad.” Cause let me tell you the fallout. You go back. There’s this guy named Ignaz Semmelweis, he’s part of history, one of these stories that most people have probably never heard.

And he was the guy that discovered that if you washed your hands with bleach in the hospital, that germs stopped going around. He had no idea. He just couldn’t stand the smell of the cadavers at the school that they were doing, you know, all this stuff in. But all of a sudden, the child death and the crib death and the mother’s dying in the hospital dropped 90% or something, it was done.

And what that meant to the entire medical profession if they came out and said, “Oh my God, we weren’t washing our hands so we killed all these mothers.” They couldn’t allow it. He ended up dying in an asylum crazy because he knew he found this thing out.

They just basically made him out to be a nutter. And the story of Ignaz, that’s gotta weigh on some of you guys’ minds, maybe not in Ignaz world, that’s kind of a weird reference, but in the real world, I mean, now that you know, I look at these guys, I know damn well Krugman knows. I know he knows.

Scaggs (00:35:46):

Yeah, no, exactly. That’s what drives me nuts. But like the thing is that the more that you think about it, the more I bet for them, I’m not sure it matters. I don’t want to generalize or anything. But I feel like at the heart of this sort of neoliberal ideology is just a total disregard for an entire class of people who just aren’t holy people in their views.

People who didn’t go to college, people who struggled to keep together jobs. I just feel like if you think that only a certain class of people say is redeemable, then neoliberalism, and I don’t think that, but I feel like you look at neoliberalism and you realize that’s sort of the underpinning assumption of it. That’s pretty grim, right?

But for them, I think that the reason they’re shifting their position is not because they realize that they’re wrong or whatever. I think it’s because, uh-oh, the barbarians are at the gate, the common folk are gonna revolt if we don’t actually, you know, relax our austerity standards a little bit. And I think that’s why.

Grumbine  (00:36:58):

It’s interesting, cause you know what you brought up and I want to see if I can put this in a different framework because we have some libertarians that listen to this as well.

Ayn Rand had her makers and takers in her “Atlas Shrugged,” and her “The Fountainhead,” and all the other good things, where they celebrated these wonderful people, these good people, the people that were the gooders, you know, the best of the best, that were the makers. And they, if, but if they only had more they can make the world a better place.

Because after all, we need to build monuments and statues to them. And the ne’er-do goods, the takers, you know, those people over there, we’ll give them stuff to keep them alive, maybe, you know. But in reality, we don’t owe them thing because they’re not good. And that’s really the essence of Ayn Rand. And that is the goddess of neoliberalism if you think about it — she is the ultimate in that mindset.

And you’ve got a Maggie Thatcher and Ronnie “Ray Gun” and the rest of the gang and Milton Friedman. And this has been brewin’ for a long, long time. To me, that whole mindset is why we have such hatred in America.

I’ve recently been able to interview Keeanga-Yamahtta Taylor and David Freund, and some others who have really taken the plight, if you will, of the African American and minority homeowners and others in terms of how they are treated in this economy and treated in society, et cetera.

And this whole deserving mindset, this idea of being deserving is so fundamental to the idea of what they consider fairness to the idea of what they consider to be, you know, “if you’d have made better choices,” “if you would have just been a better person” then you, too, could have enjoyed neoliberalism the way we love it, kind of thing. It’s unfathomable to me.

And I think you nailed it right on the head. This mindset is really about you don’t see these people as people. They don’t.

Scaggs (00:38:54):

Yeah. And that’s what gets me now seeing that some of the experts are like, oh, well, we actually knew this thing all along and you know, Oh, well MMT is just pretending to reinvent the wheel. Yeah. You know, we probably could use some fiscal expansion.

But I really do think the only reason that they’re doing that is because of the threat of revolution. I really think that that’s, it. It seems more like self-interest to me than, oh wow, we should care about, you know, everyone, but maybe I’m just really cynical.

Grumbine  (00:39:29):

You know, you just gave me another seed, another piece of kindling for the burning fire, because I agree with you. I think that are were throwing bread and circuses at us to keep us at bay. Maybe they’ll throw us a ACA neoliberal insurance handout instead of single payer.

You know, it’s just amazing to me. With that in mind, you know, obviously you’re coming at this with eyes wide open, what would you say is the single greatest, or maybe it’s not the single greatest, but what are some of the impacts, if you will, that you’ve noticed of neoliberal austerity and why this paradigm is so important to get out there?

Scaggs (00:40:10):

So I think that the biggest effect is putting everyone basically at zero-sum mindset. And I’ve written about it a little bit and I’ve probably tweeted about it a lot because it’s sort of always on my mind, but the way that people behave when they think that, “oh, the pie is only so big, I’ve got to get mine,” versus the way people behave when you start thinking about, “Oh, if we all sort of coordinate, collaborate.”

You know, you can actually create something bigger than even just the group of people. You know. I probably am not describing the populous part very well, but the zero-sum part is definitely the sort of neoliberal mindset.

And if you know, there’s only so much to go around, then there’s all sorts of reasons to pit people against each other and to have everyone competing for scraps. And then of course, once everyone’s competing for scraps, there’s no actual time to think, “Oh, maybe things don’t have to be this way.” You know, I think it’s kind of an insidious cycle in that way.

Grumbine  (00:41:20):

There’s a guy he’s not a Modern Monetary theorist, but he’s adjacent if you will, and Rodger Malcolm Mitchell, and he writes in a publication called Myth Fighter and he’s been blogging forever and he gets a lot of things wrong. But of the things he gets really right is he’s got an article called, “The Gap, The Whole Gap and Nothing But the Gap.”

And it’s about the motivation between the haves and have-nots. And they measure their success by the gap between them and the next person below them. And this mindset is so pervasive when people ask, well, why would they do this then if they know, why would they do this? And it really is a very selfish approach to viewing the world. They really do measure as in, “He who dies with the most toys wins.”

And I think that from my vantage point, I do think about the populous side of this immensely because you know, we’re faced with a lot of good people in the left wing circles, if you will, good people all over the place, but in particular, because I come from a progressive viewpoint.

You know, we have a lot of good, well, meaning people that are trapped deeply in this mindset and the pain and shame that come from not making it in this world, the pain and shame that come from not being able to take care of your family based on the rules of this world, they really do warp how you see yourself.

They warp how you behave in society, they warp everything. And the further down you go, the more desperate you become. And there they are in this self-perpetuating cycle where the haves can say, “see, see why we don’t want those types in our school. See why we don’t want those types of neighborhood. See why we don’t want them around.”

And it’s really deeply painful when you see it happen. And you have eyes to understand why it’s this way. I think from my perspective, you know, you articulate these things so nicely and cleanly in writing, especially, within these financial markets.

But let me ask you as a human being, what are your experiences seeing this stuff? I mean, you obviously run in some pretty elite circles just given the work that you do, but what are your thoughts on the way society is structured today?

Scaggs (00:43:37):

Oh boy, That’s a very good question. And you know, I do think that this sort of false sense of scarcity pervades. I think as you grow up, you know, the fear sort of diminishes bit by bit, right? But I also think that because billionaires and huge corporations are squeezing every drop of profit that they can out of the economy, this sort of real, you know, material fear is starting to make its way further up the class structure.

And I’m really hoping that people all over can understand that. But it is, like you said, it’s really hard to break this sort of zero-sum mentality. For me personally, I mentioned this on Money On The Left, once you see it, you kind of can’t unsee it. A good way, I guess, to talk to people who I know about it because, you know, I always try to think of, okay, how can I sort of get this across, right?

How can I get this across to people who I know who are doing fine? And because of that, can’t really see or perceive the suffering that’s really happening outside of these sorts of circles. It’s funny because I think one good way is just, Hey, guess what? This sort of scarcity mindset is clearly wrong because look at the world right now, financial markets aren’t changing, there isn’t hyperinflation.

You know, there aren’t bread lines in the cities because the Fed did QE. And you know, it’s been hard because at the same time, I think that everyone has like vulnerabilities and weaknesses, right. I personally have run into my own recently, and you know, I’ve seen people I care about and love run into their own.

And I don’t come from like a posh family that like came over on the Mayflower, right? I’m not personally that removed from poverty that I never see it. And I think just even seeing it is really important, you know, paying attention to people outside of your immediate surroundings and thinking about just people you might run into in your workday, I think.

That’s really big. And so I’ve been actually thinking that I should talk about this more, but I am in recovery. I am about a year sober, which is very exciting.

Grumbine  (00:46:05):

[inaudible]

Scaggs (00:46:06):

Thanks. But that was a big, the recovery community is one of my favorite things in the world. For me, I know I was drunk for like a good 10 years, you know. I wasn’t drinking in the morning so I could tell myself, Oh, well I’m fine. But I was still numbing myself out, not seeing anything beyond my own nose.

So that’s really, so that was like ah, getting sober was like just a wildly world reorienting thing for me. And it like, sort of reminds you of what actually matters, and it’s not, okay, who was first with that MNA scoop, you know. Who beat the person on the deal by like 30 seconds so the computers could read his story first. All of that stuff seems so kind of pointless in comparison.

Grumbine  (00:47:02):

Okay. Can I pause you right there? I’m serious. I got goosebumps standing up everywhere. I was sober September 15th, 2006.

Scaggs (00:47:11):

That’s amazing.

Grumbine (00:47:14):

Wait till you hear the story. My father was suffering from what turned out to be progressive supranuclear palsy. And we thought it was Parkinson’s. Well, it’s deadly. Parkinson’s you kinda of go on in perpetuity, but supranuclear palsy you’ve got a born on date, expiration date.

 And I came home drunk one night, really drunk. I was going through a divorce and my dad hunched over, grabbed my keys from me, wouldn’t let me leave. And it was September 15th, 2006.

Scaggs (00:47:47):

Wow.

Grumbine (00:47:47):

And I bulked up, I’m a big man. And I said, “Give me my keys!” He said, “no, I’m not giving you the keys. You can kill me if you want, but I’m not going to let you kill yourself.” And I couldn’t even, I melted, big man melted right there. And that was my last drink. Well, get this September 15th, 2016, my father passed away on the 10 year anniversary of my sobriety. Imagine this, do you think I’ll ever get drunk again?

Scaggs (00:48:22):

By the grace of God…

Grumbine  (00:48:24):

He gave me the greatest gift of all time. So yeah. You just went up 40 notches. I just want you to know that.

Scaggs (00:48:33):

That’s so wonderful to hear. Yeah. Well you sort of see it, right? Like the compassion that sobriety brings. And I think the amount of numbing that’s going on out there, you know, like. I’m not, I don’t want to take the world’s inventory or whatever, but…

Grumbine  (00:48:49):

I’ll tell you, I sat in an AA room and an NA, just a story in and of itself. And you’ve got congressmen in there with you. And you’ve got a homeless Black man with teeth missing over here, and you got a pregnant woman over here.

And then you got these clean people that you can tell are leading the good life over there. It’s all one room full of drunks and addicts and people that are there for the same purpose, and class didn’t change that they are all children of this disease.

And for me, recovery is a very spiritual and bonding experience and reflective, and it really does come out in all the activism I do is, in fact, the way I’ve tried to build this organization is sort of based around the 12 steps, knowing that, you know, we’re all kind of fellow travelers in our own way. And it just really changed my perspective as I married the understanding of economics to that as well. So I think [inaudible].

Scaggs (00:49:54):

Yeah. It’s so great. Oh, that’s so good to hear. So I actually have a little bit of a funny story, I guess. Uh, so one of the times that this, I had already sort of had my world reoriented or whatever, but one of the times that it really hit home for me how arbitrary and stupid our whole economic system is, is I had been traveling or something for work.

And of course that was like a trigger for me, and so I had, you know, drank and then was coming back to a room and, you know, miserable feeling incapable of even being a human, right. So, but of course I’m still have been sober a couple of days and I had a coffee commitment and this coffee commitment, I just couldn’t do it.

 I don’t know where to get the coffee. I don’t know where to get the things. I felt like a complete disaster. And the guy who was living at a shelter down the road was like, really, okay, let me do it. And he totally saved my ass.

This was one of these big meetings where there were like a ton of people and they would have been very angry if they didn’t get their coffee. I was like, this guy is performing under pressure way better than I ever have. And yeah, just completely arbitrary. And it was like, why am I the person who like has the place to live? Right?

Grumbine  (00:51:14):

It’s so funny. When I walked in the very first meeting I ever went to, it was June 13th, 1993, not to put too fine a point on it.

Scaggs (00:51:21):

Right.

Grumbine (00:51:22):

And when I walked through the doors, this guy was a fat slob. He was sweaty and stinky and just biggest smile you ever seen in your life though. And he came up and goes, give me a hug. And now mind you, I had never hugged a person before in my life like this. And he wouldn’t accept no for an answer. And so I hugged him and it was like really powerful, really, really powerful.

And it made me come back, you know? And I remember sitting out there in the parking lot of a meeting and this priest came up to me and he goes, “Steve, you know, I don’t believe I’ve ever seen an angrier young man than you before. So what I’d like to do is I’d like to give you my God to borrow for a little while. You don’t have to keep him, you can give him back if you’d like.”

He says, “But he’s a very understanding God. And he tends to take on stragglers. So if you’re interested, I’d like to give them to you for a little while.” And I said, “sure.” So he holds my hands in the parking lot. He goes, “I’m just going to pray with you a little bit. It’s not a big deal it won’t hurt, I promise.” And he prays this prayer with me. I remember it, but I won’t go into all of it.

And I was six foot tall, 240 pounds. And none of it was fat. I had long hair. I was an angry, fighting metal head. And this guy made me fall to my knees, literally weeping. And it was in that moment that my life changed. And it has been that way consistently now in different ways since then. And to me, this MMT thing is my church of sorts. It’s my gift back to society for allowing me to survive all the mistakes I made.

 And it’s a way of saying, I don’t want anyone else to suffer. I don’t want any more families breaking up over finance. I don’t want any more people dying without the medical care they need. I don’t want any more homeless. I don’t want any of that. And come to find out it’s all a political decision anyway. Huh?

Scaggs (00:53:24):

Yeah. It was the thing that I was, Oh, God, made me so angry. Finding out that it is, you know, is sort of political thing and the way it goes down the line. And to be fair, like, I don’t think that journalists are sitting there at their desks thinking, Oh, I’m going to do this political thing. I think they’ve just been sort of brainwashed, I guess, into thinking like, “Oh, this is just the way that the world is,” you know, Right?

 And they don’t see much outside of their own little world. It’s easy to think that when everyone’s winning,

Grumbine  (00:53:57):

Can I ask you a question real quick? Because this cracks open, the seal of “came to believe,” right? And I’m not going to get into the spiritual side of this so much, but it does talk about awakenings. And I think for me, the biggest awakening, you know, we’re so conditioned to bootstraps. We’re so conditioned to thinking it’s all up to us, everything’s up to us.

And it becomes so overwhelming to carry that weight, that it just impossible to carry that weight, the guilt, the pain that every outcome is on you, that if you just made a better decision, you know, and then when you lose it, you just feel less and less and less. And for those of us that are given to drinking and other things, we find our escape in the bottle.

And then the other things inside once the obsession kicks in. But as far as the awakenings of that whole thing go, I think the biggest thing that changed me from being a right winger aside from understanding money was the fact that I understood that collectivism was not the devil.

And that I could not do it on my own and I was tired of being ashamed of myself. I was tired of fighting so hard and I wanted help. And I think that that is what changed my political perspective as well, is the realization that we’re all in this together.

Scaggs (00:55:19):

Just seeing the amazing things that happen in the rooms when it is just people getting together, just trying to help each other. I am astonished every day by the fact that there is a huge organization, that’s completely self-structured, self-run, people who just want to help each other. And of course help themselves by helping each other. But that is so incredible. And it gives you such faith in people. It’s really amazing. Just an amazing thing.

Grumbine  (00:55:54):

You know, the service work that you were being sucked into as the coffee maker, you realize after a while that it’s really not about the coffee. It’s really about making sure that you have something to bring you back — service.

You know, getting out of yourself and taking the “I” out of everything and starting to put the “we” in it. And this plays right into our political movement. I mean, I can’t tell you all the connecting points that this stuff just, it is so inside me.

Scaggs (00:56:26):

That’s really amazing. Uh, it’s awesome. And it really is, it is, right? Like I said, talking about it for me is still kind of new, but I’m so happy to, and it’s been such a life changing thing. I feel like otherwise I, like, can’t tell this story, right?

And I feel like that’s another thing about how all of us relate to each other is just by telling these kinds of stories and being like, hey, but really I experienced the way that these people just get in a room and help each other.

Grumbine  (00:57:01):

Are you familiar with scrum? Have you ever heard the word scrum before?

Scaggs (00:57:05):

I’ve heard the word, but maybe just in rugby.

Grumbine  (00:57:10):

So scrum is kind of a way of managing projects and it’s a way of getting things done. It’s about solving complex problems with democratized solutions. It’s timeboxing things and so forth. But the idea of it is that everybody’s kind of just on the team.

There isn’t a big boss and there isn’t a little boss. Everybody’s on the same team and they get together and they work through breaking problems down to smaller and smaller things until they’re actionable and things get done and it’s agile. And it creates a way for people to work through very complex ideas. And for me, I’m a project manager by trade.

So, you know, typically we do a lot of top-down stuff. The big guy comes up with an idea and it’s like, it’s gotta be done by this day and you put a plan together and execute it. And that kind of thing, you know, works great when you’re just talking about something real small.

But when you try and project out over two or three years how you’re going to get something done, those timelines stretch; the resources are gone, et cetera. And usually the people that are there end up having to change everything they thought they knew about the first part to meet the end.

Well in our world, the way we look at politics and the way we look at self-organizing, looking at the Federal Job Guarantee, and some of these other things that are part of this Green New Deal approach to society.

You think to yourself, you know, they’re putting a framework out there, we’ve got to work together to kind of find a way to fill that framework out so that it not only meets the needs of the climates that we can have a sustainable society, but also so that we can restructure the way society functions, and all these things in my mind play very tightly into the program.

It’s so integrated. And I look at scrum is a way of executing that in a project programmatic sense at the local level. You could create these scrum teams in your local community where you’re working together collaboratively and you’re learning each other and you’re building relationships and building trust and coming up with the best solution for all, not just the best solution for you or whatever.

And it’s just so empowering, and it’s exciting. And I look at someone like you with the power of the pen and the ability to take these complex issues and put them out to society and all the interconnections that go with that. And it’s just, I don’t know, I’m just, you’ve given me an incredible amount of hope tonight, today.

Scaggs (00:59:41):

That’s really great to hear today. It’s a, you know, gray outside at least where I am.

Grumbine  (00:59:48):

It’s gray, but right now you’ve given me some sunshine on a gray day.

Scaggs (00:59:51):

Oh, that’s nice to hear. Same with you. Oh my God, who would have thought? I mean, I guess, I don’t know, maybe that’s why I feel like it is such a compassionate movement and it’s such a inspiring thing. That’s I guess part of the reason why, you know, it’s good to talk about recovery and all of these things together, right.

Grumbine  (01:00:12):

I don’t see them as separable. For me they’re not.

Scaggs (01:00:17):

Exactly. Well, yeah, this was great. Thank you so much.

Grumbine  (01:00:21):

I guess on that note, why don’t we go ahead and let us know how we can follow you, you know, Twitter, where you write, etcetera.

Scaggs (01:00:30):

Oh, sure. So I am at @AlexandraSkaggs, just one word on Twitter. And I write for Barrons, but I will warn you, a lot of it is sort of like personal finance stuff, which can be helpful but a lot of it’s like stock picks, which you know, is not my favorite thing to do. But you know, it’s got its uses or whatever. So I would say Twitter, and I’m hoping that I’ll have a Substack up and running relatively soon.

Grumbine  (01:00:59):

Okay. Well, I tell you what you have an open invitation if you ever feel like submitting an op-ed to us because I think that your perspective, this personal side of you here needs to have a room to express itself. And I would be grateful to have you do any of that. That would be amazing.

Scaggs (01:01:15):

That would be amazing. Thanks so much again.

Grumbine  (01:01:19):

Absolutely. Look, thank you so, so much for joining me today and I hope you’ll come back.

Scaggs (01:01:25):

I would love to. Thank you for having me.

Grumbine  (01:01:28):

Better believe it. This is Steve Grumbine and Alexandra Scaggs for Macro N Cheese. Thank you all so much. We’ll see you soon.

Ending Credits (01:01:42):

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