In this episode of Macro n Cheese, Professor Robert Hockett of Cornell Law and a Fellow of the Century Foundation, talks about how Pelosi’s PayGo is dangerously misleading. Steve and Hockett discuss the implications of a Green New Deal.  Hockett writes about law, justice, money, finance, and economics for Forbes and many other publications.

Special Thanks to Geoffrey Ginter for the excellent intro song! And of course special thanks to our guest Robert Hockett, the donors of Real Progressives and our excellent staff of volunteers

Macro N Cheese – Episode
Metabolic Optimism with Professor Robert Hockett
February 10, 2019

Bob Hockett [intro/music] (00:00:04):

We always acknowledge the giants of the shoulders we’re standing. Even if we ourselves are not directly standing on those particular shoulders. Another way to think about this, maybe it to say we should all, maybe, view ourselves as basically being required to be heroes to one another. And, anytime somebody says, “have you seen that public debt clock?” I would say, “You mean the private wealth clock?”

Geoff Ginter [intro/music] (00:01:26):

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

Steve Grumbine (00:01:29):

All right. My friends, this is Steve with Real Progressives. Today, I have our friend Robert Hockett of Cornell Law joining us. Bob was really, really close to the scenes with the folks pushing a Green New Deal. He’s also very knowledgeable about the impacts of Pay-Go.

I am really excited to be able to have him on such short notice. So without further ado, I’m going to bring on my guest. Welcome to the show, Mr. Bob Hockett. And how are you today, sir?

Hockett (00:02:04):

Hey, Steven. Really well. Thanks. Great to be with you again. Hope you had a great Thanksgiving.

Grumbine (00:02:09):

Oh, it was wonderful, man. It was wonderful. It was so nice to see you in D.C. the other day at the Economists for Peace and Security.

Hockett (00:02:18):

Yeah, that almost made the event for me. I mean, between you and Bill McKibben and Stephanie, I was just in heaven.

Grumbine (00:02:23):

Well, likewise, I was really happy to be there. And now, I’m going to tell you before we get into the meat of our program. Some of the neat things that happened at that event, the gentlemen, Congressman from North Carolina.

Hockett (00:02:38):

Yeah, Brad Miller.

Grumbine (00:02:39):

He said some things in that, that really, really made me take pause, to consider the ramifications of how we approach these people, these representatives. Basically, they’re not deeply wedded to topics, they’re not deeply wedded to these ideas. They’re given cue cards 10 minutes before they go in meetings. You know, they say things, and so forth.

And I know that they have policy teams, advisors, and on… and on…and on. But as we look at where we’re headed with this very, very important bulk legislation that we’re trying to advance in a Green New Deal, you have to wonder what the impact of that kind of, very, very quick shelf life of thought is; and how we can advance such a massive proposal with an electorate that’s equally distracted.

It’s quite a lift. But, Brad Miller really, really opened my eyes to some things; cause, you know, here I am rather ideological in my own right. And I’m thinking to myself, “Sh**, you don’t have to tell me twice. I know exactly what I want and I’m going for it.”

You’re telling me that these folks are maybe not quite wedded to things and maybe they’re movable, that tells me we’ve got a lot of room to play with, or at least an opportunity, a chance to make an impact. What’s say you, sir?

Hockett (00:04:06):

Yeah. So I mean, I think there are a couple of things to say there right off the bat, right? The first is…I guess every Congress member I’ve ever encountered at least, is sort of variably systematic in his or her thinking or envisaging.

Some are quite systematic. Some have very comprehensive views with many parts and all the parts kind of are integrated together, they connect together. These particular Congress members then will be in pursuit of big visions that are very, again, well-thought through.

 At the opposite end of the spectrum, you might have this sort of purely opportunistic Congress member, be it in the House or in the Senate, who doesn’t really have many ideas of his or her own, but sort of maybe responds in a kind of piecemeal way to various initiatives or proposals that are sort of put forth by others in deciding whether to sign-on to this one or that one.

Partly with a view, or maybe almost entirely with a view to what effect it is going to have on their campaign funding, or their popularity in the polls, or their vulnerability to various forms of attack, or what have you. And then most Congress members I think are sort of somewhere in between that.

I think Brad, former Representative Miller, was very clearly, sort of, toward the first end that I mentioned at the spectrum. A very thoughtful fellow with a very sort of well thought through and comprehensive vision of where we ought to be going.

And most of the initiatives that he either proposed himself or got on board with back when he was a Congress member were very much informed by, or sort of prompted by that vision, right, that broader vision. I think much the same can be said today of Senator Sanders, of Senator Warren, of Senator Brown and a number of other Senators.

And then again, there are some Senators or Congress members who are over the opposite end, and then most of them are in the middle. So maybe that’s the first thing that’s worth observing, it seems to me. The second thing is I think you’re exactly right.

The very fact that many of these people are not settled when it comes to what their views are, at least when it comes to sort of comprehensive visions, means that they’re moveable, right? It means they can be convinced or they, at least some of them are open to being persuaded or convinced of policy choices that can be made and can be persuaded partly on the merits and, partly on the politics itself, right.

If you can say, “well, look, this is, this particular view is actually polling quite well or this particular idea is polling quite well.” You could convince them that way, but many of them you can also, I think, bring along and partly simply by reference to the actual merits.

And then that takes me maybe to the third observation that it seems to me worth making, which is that there’s a tendency, I think, this is largely the product, you’ll probably laugh, but it seems to me, this is partly the product either of Orthodox economic thought, particularly microeconomic thought or a product of the same complex that brought us Orthodox microeconomic thought.

And that is this view that voters simply walk into the room with what the economists would call exogenously given preferences. And so what is up for political figures to do, or what remains for political figures to do is simply to figure out ways of satisfying those preferences. I think that that’s a distorted view, right, of the way most typical Americans are probably thinking on most issues.

I think most of us are relatively open-minded and fair-minded on many, many issues. We come to those issues with particular values in mind that we’re variably committed to, but I think we’re largely open to how this or that proposal coheres or fails to cohere with whatever values we tend to hold.

And in so far as that’s the case, we ourselves are moveable, our preferences in other words are formable; and they don’t have to, they don’t need, or they therefore do not have to be simply satisfied as if they were exogenously given and just part of the architecture of the universe, and not changeable, right?

So given that, it seems to me there’s a lot of room for us, for people like you and me and the rest of our posse to convince Congress members who haven’t been convinced yet, say to go along with a Green New Deal or other sorts of proposals that are coherent with a Green New Deal on the one hand.

And then it’s possible for those Congress members and for us to influence the preferences of the broader public as well, when they decide whether or not to get on board and support this Congress member or that Congress member who is advancing this position or that position, including a Green New Deal consistent position. Is that responsive? Is that, does that get at the question, do you think?

Grumbine (00:08:48):

Fantastic. No, that was exactly what I was looking for and I really appreciate it. So Bob, what I want to ask you is this, we have a young crop of new Progressives that have made it into the halls of Congress now, some exciting wins with Alexandria Ocasio-Cortez, showing some real gumption going into Pelosi’s office and working with the Sunrise Movement, great marriage there.

Talk to me, what do you see as the makeup of this Green New Deal? I know that the Green Party had advanced the concept of a Green New Deal, and now the moniker is kind of stuck with this new effort here. I don’t believe the two are the same. Can you tell us what we are facing? What we’re advancing with Alexandria’s version of this? What exactly is this encompass?

Hockett (00:09:48):

So here’s how it looks to me. My guess is that you’ll get different answers from different people in the sense that it’s still kind of a work in progress. And there’s some things that I think all of us agree on, other things that maybe some of us would emphasize more than others, and other things that others would emphasize more than others.

But maybe the best way to kind of characterize the vision that seems to be emerging is as a kind of intersection or as a kind of convergence of several distinct threads that are all mutually complimentary, but they come together in a nice potent way in what’s now being called the Green New Deal idea.

So one of the threads is just that of the original New Deal itself which you can think of as being primarily about going big, right? If there’s a massive national problem to be dealt with, or a massive cluster of massive national problems to be dealt with.

Then the appropriate response by the collectivity, right, by that collective agent or collective instrumentality that is our government should be correspondingly big, right?

So a willingness to think big, a willingness to sort of restructure or to rebuild, to do whatever it takes to get us back in an economy that is much more just, much more sustainable, much more operative to the benefit of all of the citizenry, and indeed, all of the soon to be, or some day to be citizenry as well, right?

That’s the first strand. Second strand, I think, is the so-called Second Bill of Rights that FDR was planning to push right before dying an untimely death before the second world war was even quite completed.

But as I understand it, the plan was, you know, once the war was done, once the war effort was over, the nation already mobilized, right, to fight Nazis and the like, would continue to be mobilized, but in the cause of something that, oh somebody like Woodrow Wilson might’ve called the moral equivalent of war, or I guess Abraham Lincoln might’ve coined that phrase, the moral equivalent of war.

And that is basically to sort of make our society a much better and more decent society, go beyond the first New Deal and start to proceed to a kind of Second New Deal which would effectively put in place that Second Bill of Rights, which would effectively basically encompass a lot of the economic and social rights that the United States as a polity, at least as a constitutional polity, has never quite yet fully embraced in its constitution and should have done.

And then finally the third strand I think, is just the greenness strand itself, right? So the idea is, all right, look, if we’re going to have massive projects, if we need to undertake massive projects, for example, if we’re going to go big on infrastructure, as many people seem to agree that we ought to do, we can do that in ways that are consonant with and compatible with a greener vision of an economy and indeed of the world itself.

And here green of course means, partly connotes environmental considerations, of course, as it originally did. But it connotes, I think, more than that. It seems to me that the word green in this context is coming increasingly to be used in a manner that sort of embraces broad inclusivity, anti-bigotry, no redlining, for example, of the sort that we found in the case of some of the federal housing programs that were adopted during the original New Deal.

Basically a kind of New Deal that doesn’t have to compromise with bigoted southern Democrats in the way the original New Deal sometimes did so that it’s no longer racialist or ethnicist in its formulation or in its execution. That’s how it looks to me, and again, I think it’s still a work-in-progress, so probably no one characterization is going to be entirely correct, once and for all.

But I think maybe the best way to look at what is going on here, what the sort of process of the development of the Green New Deal is, is as a process pursuant to which these three distinct strands or streams are all sort of coming together, all sort of flowing into a one big green river.

Grumbine (00:14:03):

So it’s interesting because I just spoke, I guess it was on the 17th, to the Green Party of Pennsylvania, and there wasn’t too much concern there, ironically. They were very happy to see any progress being made in terms of this. But there are some people out there and I’m sure that this is not the top priority for everyone.

There are some people out there who have some hurt feelings that they feel like the Green Party was overlooked, that there wasn’t proper deference, or at least some mention of it. I personally am just thrilled to death because I’m a human being and I have children, and my concern is that we make progress here, but I can understand because I’ve had it happen to me, an idea that I’ve come up with, or at least a phrasing or whatever has come up and somebody else has taken it for their own purposes.

I can certainly understand there’s a little bit of a gripping there, a little, a chafing, if you will, How can we bring the left together? Because it seems like we have people that are willing to work together that are not partisan, that are of varying independent Green and Democrat flavors.

And we have some recalcitrants, you know, some folks that just simply are not going to — they’re going to find a way to complain that this is making it to the front lines, and my concern here is that I want to succeed. I want this to work. The IPCC comes out and says, we’ve got 12 years, not to come up with an idea, but to actually do something to mitigate climate disaster.

And folks that don’t even….it’s a struggle for me because while on one hand, I appreciate their sensibilities, the flip side is, dude I want to live! I want my kids to have a place to live. How can we bring the left together? Is the left hopelessly divided?

Hockett (00:16:04):

So I, I don’t think it has to be, Steve. But as you know, I’m also kind of “Pollyannaishly” optimistic or even metabolically optimistic so people can take any of my optimistic prognostications with the requisite grain of salt.

But I do think there are a few things that we can do to sort of optimize the likelihood that we all, that we do indeed fully come together without any sort of miffed-folk kind of carping from the sidelines or taking their catcher’s mitt and going home or refusing to play ball, or what have you.

One way to do it, one thing I think we might maybe would all do well to do, is almost make it a kind of formulaic or routine thing. Formulaic quietly overstates it, but a kind of a routine thing where we always acknowledge the giants on whose shoulders we’re standing, even if we ourselves are not directly standing on those particular shoulders.

So let’s say I was influenced by person A and you were influenced by person B. Maybe what I would do is going forward always acknowledge both person A and B, even if you’re more influenced by person B and I’m more influenced by person A; and then you might do likewise.

And indeed, if we then generalize this idea out to all of us, so that all of us, each one of us is all the time doing the best he or she can to acknowledge, right, our sort of predecessors, even those who are not our individual immediate direct predecessors that would help, right.

There is that sort of, you know — there’s, I suppose you could say, this is one of those kind of one man’s this is another woman’s that — so you sometimes hear people talk about how there’s this deep Hegelian need, or what’s often referred to as a need of a kind of Hegelian recognition, right?

We all want to be recognized for our contribution, and this having contributed in worthwhile ways; and we don’t want to be overlooked or unrecognized for what we’ve done or what we’re doing; and that’s the sort of the innocent take on the matter. The less innocent one is you can say, well there’s always the narcissism of petty differences, right?

Where, you know, sometimes some people will be really keen to distinguish precisely what they say from precisely what others say. So as to kind of stand out and be, sort of, individually and independently glorified, you know, quite irrespective of what’s happening to everybody else. The latter obviously is undesirable.

The former it seems to be as perfectly understandable and reasonable, and it makes sense. And it seems to me that the best way than for us to proceed is at least to sort of acknowledge that need for that kind of Hegelian recognition that everybody seems reasonably to have, or at least that most people or many people seem reasonably to have; by going ahead and recognizing all of those predecessors and doing it again, routinely in the sense that we always do it, right?

We make a habit of doing it. And then, you know, if we do a good enough job of that, it seems to me that the only remaining recalcitrance would be those in the grip of that so-called narcissism of petty differences. And I don’t know that we would really have to work that hard to try to get them on board.

There is probably always going to be a few of those, but my guess is that the greater number of people who feel dissed are probably feeling dissed because they actually were dissed; they weren’t appropriately or adequately acknowledged.

And so you’ve probably noticed, you know, I frequently like to point out that, you know, so and so is a hero of mine or so and so is a heroine because they are, right? I’ve got a lot of heroes. And one, another way to think about this maybe is to say, we should all, maybe, view ourselves as basically being required to be heroes to one another, right?

Grumbine (00:19:46):

I like that, Bob. I like it a lot.

Hockett (00:19:49):

And then maybe a corollary to that would be to say, then we’re all required to acknowledge the heroism of one another as well. Because let’s face it, this isn’t easy for any of us. And some of us have gone through, having endured or undertaken rather long and painful journeys even to get where we are now.

And I know that you in particular are among the many dear friends I have, you’re one of the most, I think you’re one of the most, how should I put it dogged, let’s say. Because you fought through many more obstacles than most people I know. And the fact that you, here you are, my God, I mean, again, this is why I’m not just being jokey, hokey when I say that you’re one of my heroes, you really are.

I think we kind of owe it to one another maybe as, as members of a common movement, all of us, even if this movement comes to embrace 300 million people or 250 million people in this country, and many, many hundreds, more million abroad, we should all maybe think of ourselves as being duty bound to be heroic, to want to acknowledge the heroism of one another as a kind of corollary of that.

And that sounds kind of pie in the sky and all, that I know, but it doesn’t seem like it would be that hard for us to do. And it would basically, I think, spare us from a lot of unnecessary divisions.

Grumbine (00:21:04):

I love it, Bob. I mean, I absolutely love it. Now, Bob, one of the things that I wanted to talk to you about with this is the level of effort that it takes for us to overcome, and I’m part of the struggle — I’m with you man.

So I don’t want to, I’m going to ask tough questions though, obviously many people are clueless, as we know, about how the actual economic system works. They’re so clueless that they can’t envision a better dream. And this is not on them, this has been done by design and it’s not their fault.

However, the answer to solving many of these problems is, in fact, them understanding we can do really great things and it requires a mind capable of seeing that we can do really great things to do any of this stuff. I mean, this stuff is really, to quote Hillary Clinton: “God, this is really the pie in the sky we’re talking about.”

Hockett (00:22:00):

Yeah, this is really bridging differences for you to quote Hillary. [laughing]

Grumbine (00:22:05):

We are really talking pie in the sky here when we talk about a massive New Deal of any variety, much less understanding the cataclysmic climate situation that we’re really in the midst of. I mean, we’re past an event horizon, we’re at the point now where we can only mitigate the results and that’s frightening.

So to do nothing is the riskiest proposition of all. But when you believe that the country is broke, financially broke, incapable of doing these things and you see people that are living under bridges, sleeping in cardboard boxes, tent cities in San Francisco, you see people afraid of migrant workers and immigrants, refugees coming to this country because they’re petrified they’re going to take their little teeny spot in life because we’ve painted the scarce narrative.

How do we overcome that? I mean, I know what we’re doing. How do we overcome that in government? I mean, it’s kind of like a, which came first, the chicken or the egg. I mean, they’ve got to both be activists in a sense, because they’ve got to teach the people a new way of thinking or they have to get elected, which means they have to go with the way the people think! How do we overcome this? This is a really big deal. I mean, it’s a huge deal.

Hockett (00:23:23):

Yeah. So, I mean, there are, I guess there are a lot of different ways to sort of work at it and we’re all sort of trying in our, in our distinct ways which oftentimes converge or overlap. But you know if you, sort of simple strategies that might be helpful going forward, it seems to me are, or maybe as follows are: one is maybe, anytime anybody talks about a budget constraint, or can we afford it or whatever, just systematically say, you mean an inflation constraint or you mean a resource constraint, right.

Just sort of systematically replace the wrong word with the right word. And what that does, I think one thing that can help with, is for those who are sort of not ready to kind of sit down and hear out or listen through the full and comprehensive explanation of how the fiscal system actually works. It at least helps to begin to kind of reorient thought.

It kind of can maybe bring about, or at least begin a kind of gestalt switch so that you get people kind of focusing on the focal points that deserve focus rather than the sort of pseudo focal points or the false focal points.

A related strategy, or actually this is maybe just another instance of the same strategy, I’m quite fond of Stephanie’s and some of our friends tendency to draw people’s attention or practice of drawing people’s attention to the fact that a public debt that basically public debts are private assets, right, or public liabilities or private assets. And I think we can do a lot more with that as well.

So for example, I’ve sort of joked sometimes in a kind of flippant way, how I would like if I were sort of a, something like a performance artist slash trickster or mischievous type, I would some late some night in Union Square and at various other points in New York and other cities where these public debt clocks are. I would simply cover up “public debt” sign with “private wealth” sign to say private wealth clock.

And anytime somebody says, have you seen that public debt clock? I would say, you mean the private wealth clock? And it’s just a nice way of kind of getting the point across, right? This is, Stephanie does a version of this really, really well in her presentations and in the graphics that she uses, of course, so does Pavlina and so does some of our other friends in the movement. Randy has done this too, of course.

It’s a, there’s a, it’s a very potent way of at least beginning to reorient the thinking, because again, in a single stroke, you’re doing a kind of, or enacting a kind of gestalt switch. You’re basically showing them at one stroke that it’s a duck as well as a rabbit. And the duck might be better than the rabbit, right. Or at least the fact that it’s a duck and a rabbit makes it somehow less problematic than it’s a rabbit.

So that’s, I think that’s one important strategy. Maybe another important strategy is just to sort of point out, that oddly enough, we haven’t ever gone broke before. And we don’t seem to have gone broke with other sorts of expenditures that a lot of people would admit to being urgent, right?

So a lot of Republicans will say, well, but it’s national security so we have to do it in that case. And it’s worth risking going broke on that. And then you say, well, you know, if the entire planet is about to burn down or if the entire economy is going to plummet or whatever, maybe it’s taking your big risk on that one too, especially given that the risk never seems ever to a panned out in the entirety of our nearly 300 years of history, right.

And maybe finally a third point, Steven is that in some ways I think the problem is kind of beginning to take care of itself almost as a matter of demographics. What I mean by that, and again, this might be overly optimistic, but it is beginning to look as though these sort of austerian types, both in the Republican party and in the Democratic party are getting older and older, sort of dying off and they don’t seem to be being replaced, right.

There doesn’t seem to be a replacement mechanism for this sick way thinking, thank God, right? For a while it did seem to be a kind of a self-replicating virus that just kind of spread and got worse and worse, but we seem to have passed that kind of critical period or critical mass.

And we, it actually seems to be shrinking now the number of those with afflicted by this virus and the newcomers don’t seem to be afflicted by it. And they’re getting increasingly assertive and literate I think about, they’re not having it, right. Alexandria is a great case in point, right? She’s not walking around and talking like she’s an MMT professor or something but, and she doesn’t even use those sort of MMT phrases at this point.

And that might actually be a savvy thing to do in Congress to speak the content without necessarily the terminology, in some cases might be strategically sound in some circumstances like maybe in Congress, but you probably noticed everything she says and the kinds of things that she points to and observes and kind of pulls out are exactly the things that we point to and observe and call out and it seems to me it’s really hard to imagine a lot of other people not following suit very soon in that Congress.

Grumbine (00:28:33):

This is perfect. This is, I didn’t anticipate this beauty but you’ve just set up the game for me right here. This is exactly what I was hoping for. So, you know, we get a lot of people that say, well, Steve, how come she’s not saying it specifically like this? I’m saying, listen, activists have a role. We’ve gotta be bold, brash and beautiful. And we’ve just got to let it all hang out.

And we got, but we gotta be strategic in how we do that. On the flip side, they have to get elected by people that don’t have a clue about any of this stuff. And so they’ve got a different angle by which they have to operate in different space, a different vantage point and a different role, quite frankly, in this effort. So on one hand, I don’t want to hear somebody come out.

When I hear somebody tell me that they’re going to, they come up with this intricate tax plan and how they’re going to pay for things. And we’re going to, you know, fair share this and that and all this other stuff, I kirk an eyebrow and I go, okay, you’re going to keep us back. You’re an incrementalist that’s not going to ever get a New Deal with that approach.

When I hear somebody purposefully dance with the devil and talk about these pigovian taxes, these taxes like a Wall Street speculation tax that we know good and well…[laughing] I mean, please do me a favor, cause you’ll do this a thousand percent better than me, but I enjoy it so much.

I want to hear you talk through the gamesmanship of leveraging a pigovian tax as the pay-for and the response so that it’s a non-answer, but it’s an answer. It’s like, Hey man, if you need something to pay for it, sure. Let’s go ahead and throw…do it.

Hockett (00:30:15):

Yeah. With Pay-Go taxes I always think of that is really not about revenue raising. That’s just about discouraging undesirable behavior, right? And I mean, I think anybody would tell you, anybody who’s kind of savvy about what the nature of the tax code is and what the purpose of the tax code is, would tell you that.

And of course, Stephanie says it quite well and so do a lot of the rest of our posse, right, our whole gang. That’s what we say, but the funny thing is that most lawyers, or at least most tax lawyers, and you’d think they might know something about the tax code and the purposes of the tax code.

I don’t know if you’ve if you’ve met a lot of tax lawyers, but they’re kind of a notorious group among lawyers and among law profs and so forth because they’re often thought to be quite eccentric because they spend so much time in the tax code, which is unbelievably lengthy and convoluted, very difficult to interpret at various points.

And you know, probably more students tear their hair out, more law students probably tear their hair out over their basic tax class than just about any other class, precisely because the tax code is so complex. But one consequence of this is that those who are experts in tax law and taxation, the lawyers who are experts in it, are sort of eccentric figures.

But one of the first things they’ll tell you, and this is not eccentric. This is the truth is that you can’t possibly look at the tax code and think it’s about raising money, right? It’s very clear that the tax code is in effect a gigantic social engineering tool. It’s the way we do social engineering. And so if you’re trying to discourage this kind of behavior, you tax it.

If you’re trying to encourage this kind of behavior, you help subsidize it, or you provide tax breaks for it, or what have you. And that’s the real function of the tax code. In addition, of course, to the sort of inflationary tap down purpose that it can serve in the event that you actually face inflationary pressures of the kind that this economy doesn’t seem to have faced for about 40 years now.

I think the first thing that one can say in response to pigovian taxation or, or to those who sort of talk about raising money through the tax code by imposing pigovian taxes or financial transaction taxes or whatever.

In a sort of a related point, the old Tobin tax or the Wall Street transaction tax, or the excise and various names that has been given over time, you can view that simply as a form of pigovian tax where the pollution in question, pigovian taxes are usually discussed in connection with pollution, the pollution in question, in the case of the Wall Street transaction tax, is that of hyper-speculation, right, or excess froth on Wall Street, or sort of over hypervolatility on the secondary or tertiary markets.

But note that that too then is not about raising money or raising revenue, it’s about discouraging the disfavored activity, right? It’s about cutting that pollution, right? And So I’m fine with all of that, and I’m fine with Bernie wanting to oppose a tax like that if he argues for it by reference to a form of pollution like excess speculation or churning on Wall Street.

But when he insists on, or at least two years ago, he insisted on referring to it as a pay-for, I think obviously that was, that was misconceived. And of course, as we know, it drove our dear mutual friend, Stephanie, around the bend, and sort of drove her crazy.

And I like to think he’s, little by little, moving off of that particular dime and we’ll sort of stop talking about it as a pay-for as we go forward. I’m sure he’ll get there. I just hope he gets there before he’s 95. [laughing]

Intermission (00:33:56):

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Grumbine (00:34:46):

I want to take a second for this because, you know, obviously, I don’t really follow people that are haters too much. I haven’t seen anybody ever advance the ball quite like Bernie has regardless of, of this very sore spot for us, but nonetheless, there’s nobody that’s done what he’s done, not in my lifetime and my lifetime. I’ve been surrounded by incrementalists that bleed the life out of me.

He’s the first one that invigorated me. And so from that angle, I have nothing but positive to say. That said, Stephanie was very clear when she was talking, I believe it was in Stony Brook. It was, she spoke, they asked about why Bernie keeps saying this stuff. And she said, well, you know, kind of brought me on late in the game.

We didn’t have a chance to really talk through strategy. You know, I kind of had to kind of go the flow here, you know. Obviously Stephanie is very, very hard on the pay-fors. In fact, one of my favorite tweets that she ever put out there was that she has absolutely zero patience for Robin Hood politics that chases gold coins in a fiat world. I love that quote. I mean, I use it constantly and it’s really a key thing here.

When you consider that these people have got to have some clue what’s going on. I mean, they may have been saying it for a long time, they may have been, you know, the culture is such that they can’t really shift it. But you look at Bernie and you say, “this guy’s surrounded by MMT greatness.”

 At some point in time, you have to wonder why did he select MMTers to be on his hip? I remember the great article by Zach Carter that talked about the great ideas, and so forth, the biggest ideas are coming from Kelton and so forth.

It described why they selected her and that they had taken her to that bar with all the Wall Streeters and really what it came down to was they needed somebody from the outside that could shout down the nonsense from the Republicans that had no problem walking in there and saying wrong, eh, wrong, eh, actually saying wrong also to the Democrats.

And she has done that. Let’s be fair in spades. I’ve got a treasure trove of her tweets alone that speak to this. MMT is a real game changer and it really makes your mind explode. So for somebody like Bernie Sanders has been doing this for 40 plus years, I imagine it’s a bit hard to change gears.

 You know, I imagine it’s probably quite difficult. He was very, very adamant, not me, us. So we are, you know, he said, I would tell you who to vote for, but if you did, I’d tell you not to. Vote for who you want to vote for. He’s telling us to use our brains here. I think that it’s crystal clear, like empirically so that Stephanie is bringing the goods to the table.

The truth is MMT. It’s right there. There’s no escaping it and with that in mind, cut Bernie some slack, let them be, let him be the guy that brought her to us. He brought Stephanie to the mainstream. Jamie Galbraith and him brought Stephanie to the mainstream. Let her do her thing.

Stop demanding you know, and if we can look at it like that instead of saying, “well, I can’t talk about MMT until Bernie says it explicitly,” well, it’s probably not going to happen. You know, it’s probably not going to happen. She’s going to have to figure this out through different means.

And I think that we have a fairly sizable group of people now really pumping it around the world that this Green New Deal makes the most sense when we see it as a global problem anyway. And we’re well positioned in Australia with Bill Mitchell and others. We’re well positioned in the UK now.

We’ve got people coming around with this stuff. Can you talk a little bit about the US’s role in leading the charge, not only to attack climate change, but to build these broad coalitions for economic justice around the world?

Hockett (00:39:00):

Yeah, sure. So several things, I mean, first I’m completely with you on Bernie on that, right. He did… I mean, there is a reason that he brought Stephanie on as his chief economist, right. That tells you something in itself , right?

As you say, it probably takes if he’s been basically speaking the same message for four decades, we should cut him a little bit of slack when it comes to sort of slightly retooling the vocabulary that he uses, or some of the tropes that he uses. It’s also worth noting, this is sort of an accentuation or a kind of a punctuation mark, maybe, added to to your observation about how he brought her to the mainstream.

As you know, I’ve been dealing with working with a number of different progressive senators over the last while and what’s really interesting is that every single one of the staffers who work with these other Congress members are very well aware of Stephanie and adore her.

I mean, you can’t mention her name without they’re just looking like they’re going to start sobbing with joy. I mean, they say, “Oh my God, she’s great.” They look heavenward, they cast their eyes skyward. So what’s sort of interesting is she’s kind of not, I think you use the idea of “gotten under the skin”, she’s gotten under the skin of lots of additional legislators as well.

And I think, you know, Bernie was presumably the entree or the entryway. But I think it’s just a matter of time before all of the Progressive Congress members are trying to make use of Stephanie in one way or the other, or at least their staffers will be. When it comes to, and by the way, that’s another reason for my perhaps excessive optimism.

I mean, I really think that we are seeing the top of the tip of the proverbial iceberg with the election results a couple of weeks ago, and with various others or sort of [inaudible] or celebratable developments in Washington of late. I think this is actually just the beginning. It’s going to be bigger and bigger and bigger.

With respect to the global matter and the role of the United States can sort of play here. You know, one way I sort of think about it is it seems to me that I go along with the American exceptionalists in one particular respect and that is, I think we have been exceptionally harmful in multiple ways to the world.

I mean, we’ve done, you know, obviously we’ve done our share of good in the world as well, but we’ve done an awful, a remarkable amount of ill. Given that fact, if we could be sort of out front when it comes to kind of mending our ways and sort of rectifying our errors and then also then beginning to serve as an example.

Not to [be] dictators in various parts of the world, or as an encouragement to, you know, budding popular sort of racialist or bigoted fascists or other forms of bigoted populace and the rest of world. But instead being looked at as kind of leaders when it comes to sort of rebalancing an economy in the interest of the people of the country and in the interest of the planet.

I think that would be a wonderful way to sort of expiate past sins or at least to begin, make a down payment on the expiation of past sins and also just play a role in the world that you and I, and the rest of us as Americans can be sort of proud of. I remember, I remember when Bill Clinton was president. Obviously there’s a lot to, um to repudiate from those times.

But I do remember feeling how interesting it was, how remarkable it was to feel for the first time in my lifetime that our president was as smart as other world leaders. You know, he didn’t, he at least wasn’t an idiot, right?

 Bill Clinton seemed like he was a smart guy and sort of similarly when we elected Barack Obama in many, many ways a disappointment, but I remember feeling this sense that, well, you know, but at least we have, you know, again, a smart leader, he’s not Bush. He’s like a smart guy. And also, you know, we actually, it means something right that we actually elected somebody who wasn’t a white male.

I felt, you know, it’s a very minimal kind of pride because you’d like the guy to do good stuff too. But I still, I felt a kind of pride in that and it seems to me both of those things, and I’m sure, you know, whoever the first woman is that we elect to be president, even if she’s a Republican, I’ll probably feel sort of proud at least about the fact that she’s a woman that we did that.

But in every one of these cases, it seems to me, that’s just the tiniest little foretaste of what it’s going to feel like when we can look at what our country does as a whole, you know, in a more plenary fashion and think my God, I’m proud of that. I’m pretty . . .that’s pretty cool that we did that. You know, if we could be a beacon of that sort, or at least a beacon among other beacons that are doing that kind of thing, I’d be so thrilled.

Grumbine (00:43:34):

I want to ask you another question. And this one maybe is a little tougher. I know that you talk with Elizabeth Warren and you’ve helped her out with some, getting some bills, circulated and talking about this, you know, responsible capitalism and so forth. I want to talk real quickly about Ro Khanna momentarily. I’m going to get back to EW here in a second, but I want to talk about Ro.

I got to meet Ro firsthand at the Millions for Medicare March in Washington, D.C. He and I shared the stage and I talked to him offline. I came to him. I had been harassing him on Twitter. And I told him, I said, listen, I know you know what, you know the secret handshake, man. And he smiled at me and he said, well, you know, inflation. I said, you don’t have to talk inflation with me right now.

I get it. I know the shake. But we talked a little bit about that and you see clearly that even though he says remarkably Bernie-like bad things when it comes to the tax stuff, I know he gets it. That’s why he and Alexandria Ocasio-Cortez are the only two that actually stood up against Nancy Pelosi’s Pay-Go.

This is the next part to this and this is where I think is probably the most difficult for everyone to get their head wrapped around. I spent an inordinate amount of time and Stephanie has spent months and months and months talking about the perils of Pay-Go and here we are now at the 11th hour, it looks like Pelosi is going to retake the speaker role.

Nancy is no Progressive. And she’s basically sabotaged the entire Green New Deal in one fell swoop if she is able to successfully institute Pay-Go. What do we do here, man? This is a big deal. I don’t know what, I don’t even know how to address this. This is one of those ones that makes me trip over my tongue. Literally.

Hockett (00:45:33):

No, I’m sort of a similar mind to you on that, Steven. Um, hard to say, it’s actually kind of hard to put into words, just how frustrated I’ve been about that. And I’m trying to think about, I’m looking for a, sort of a silver lining or looking for something to be kind of hopeful or optimistic about here, on the one hand; and at the same time, on the other hand, looking for strategies, strategies that we might employ or might, might try.

On the latter point first, for a little while, there was talk about how some members of the House were willing, contingently, to vote in favor of Pelosi as speaker again provided that she formed some special commission on a Green New Deal, and that she put Alexandria at that sort of head of it, that she appointed her as the head of that initiative.

I don’t know where that is right now. I don’t know whether she, whether Pelosi actually agreed to that condition and then is going to get those votes; and if so, whether she’ll follow through on it. If she does, it seems to me that we can make use of that at least to kind of keep hope alive, so to speak over the next few years while we wait for a much cleaner sweep of House and Senate and White House alike.

The second thought that I have here, I guess, is that I’m thinking that come 2020, the sweep will be much bigger. And my guess is that we get even more Alexandria’s in the House and in the Senate at that point and perhaps in the White House as well. And at that point, the problem might to some extent take care of itself, right?

Because Pelosi will no longer have the kind of, well, first of all, she would, presumably the White House itself would be against Pay-Go in a case like that, if we get the right person at the White House, and we would have even more Progressives on the House side and who knows, I mean, maybe Pelosi herself would begin to kind of be a little bit more common sense, although I’m not gonna hold my breath on that one.

The other thing is, again, I hate to sound cynical about it, but there is a demographic story here as well. I mean, she’s, presumably at some point she’s going to be too old to be doing this. Now I don’t want to wait until that time, but at least knowing that there is that kind of horizon out there that’s probably not that far distant is another sort of source of hope.

But then finally I think the final source of hope I have on this is that, and this is just, in a way, this is almost like a kind of religious faith, I suppose, but it’s, Alexandria seems to have been remarkably creative thus far in figuring out ways to get the message out there and to act in ways that get the attention of the public.

And that basically continue to build our sort of coalition, including again, that remarkable second day that she was there in the office. She wasted no time at all in getting, joining that protest right outside of Pelosi’s office.

So, you know I hate to sort of do a Hail Mary thing and say, Oh, well, whatever it is, Alexandria will save us or that, you know, the other Alexander, but I mean, that’s an additional source you might say of hope, I would say, right?

In other words, even if you and I don’t come up with every strategy that can be employed in the next couple of years to try to try to counteract that the mischief of Pay-Go and the broader mischief that is Pelosi, we ought to take at least some comfort in the fact that it’s not just you and I who are trying to figure this out.

And that some, some of those who are trying to figure out are actually right there now in office and awfully clever and energetic, especially Alexandria.

Grumbine (00:49:10):

So here, here’s my two points that I come with this, and maybe you can play off of this for me. The first one is the obvious one. Massive legislation takes time to cook in the oven. So even if she has this Pay-Go thing going, we saw how long it took to come up with a bastardized ACA; imagine a massive package like this would probably take us through 2020. It may even be the thing people run on in 2020.

So her Pay-Go for the next two years may not be anything more than a stopper against Republican tax cuts, maybe.

Hockett (00:49:52):

We could make it that, maybe, even if she doesn’t intend it that way, you know, we in theory could make it that way.

Grumbine (00:49:59):

Right. It gives us a holding pattern, not a good one. I’m not here to celebrate it. It’s not the kiss of death because we wouldn’t have a Green New Deal in that short period of time anyway.

Hockett (00:50:11):

Yeah, I think that’s right because the Senate is going to, you know, I mean the Senate, as it’s currently configured, probably isn’t going to come on board with that. And of course, I mean with the current White House, I mean, God knows, I mean, if you called it the Trump New Deal, instead of the Green New Deal, maybe he would sign on to it because he doesnt have principles, he just has nacissism, right.

And so I’ve often thought that, you know, if we, if we actually had a Democratic House and Senate, I’m sure Trump would be thrilled to go on with a Green New Deal just as long as we don’t have Hoover Dams and McDougall Dams, but we have, you know, Trump Dams.

So, but given the fact that the Senate still seems to be a problem, maybe not quite the problem that it was, but still a problem. I think you’re right, it might be that we’re really talking about 2021 when it comes to actually implementing anything anyway. And so really what the next two years are about as incubation, or cooking as you put it, right. And that is common, right?

I mean, in fact, a lot of the original New Deal itself, most of the programs of the New Deal itself, were already in effect on the shelves and had been developed or pioneered, or at least provisionally sketched out well beforehand.

In fact, one thing I’m struck by is how many of the most interesting programs in the New Deal we’re actually just scalings up of smaller initiatives that originally had been taken by either Republicans or by the Roosevelt gubernatorial administration in New York state, right?

So, you know, Francis Perkins, the first woman ever to be a cabinet officer in a presidential cabinet, and of course Roosevelt’s labor secretary, had occupied a similar role vis-a-vis Governor Roosevelt when he was governor of New York and the first form of Social Security was a New York state-based rendition, right.

I kind of like state counterpart and many other New Deal programs were again, sort of originated the sort of smaller States scaled initiatives pioneered by Francis Perkins and some of the other members of Roosevelt’s sort of brain trust. And then on the other hand, a number of them had been pioneered oddly enough, by Herbert Hoover, the Republican who proceeded Roosevelt.

But the problem in that case was that they were just, they were, as you put it earlier, incrementalist, they were very, they were just too, too little too late. And so one of the secrets I think of the Roosevelt administration that isn’t adequately or isn’t widely enough discussed, precisely because by noticing it.  

We can take more hope and also see a bit of a blueprint is the fact that so much of what it was, was just a gigantisization of what had been the humbler initiatives that had been tried or proposed either by mealy mouthed, wimpy Republicans like Hoover or by state officials who could only make things so big because it was at the state level, and of course because New York did not issue its own currency.

But, you know, once you had the Roosevelt administration and the federal government operating with a public fisk that is financed by its own currency, you could really scale up in a massive way.

So one thing we might think about the next two years as being about is as you know, incubating, further developing further articulating and schematizing the Green New Deal, getting more and more details into place, or maybe menus of options into place in connection with each particular plank or point.

And then, you know, be ready, have them, to use Obama’s old metaphor from about eight or nine years ago, have them “shovel ready” for when we take the White House and the remainder of the Congress in 2020.

Grumbine (00:53:38):

Now, I like that. Alright. So my last point to you, Bob, and I want to thank you by the way for spending this time with us, we didn’t get a chance to really advertise or let folks know this was going on. And you’re just a wonderful guy. I really appreciate you taking the time, but I guess the final final piece to this would be, you know, as we Progressives look at things and I know for me, myself, your optimism is what I need.

Not just your optimism, but the optimism of others who are actively fighting in a positive fashion towards a positive outcome, because neoliberalism has been proven, there’s studies or psychological profiles that the negativity is corrosive and literally creates mental illness.

I mean, we’re talking about something so pervasive and vile that without us really, really staying in victory, fighting for what we’re for more so than what we’re against. If we do that, I believe we have a chance to really change the world. Tell me about how we can stay in the victory and live in an optimistic way.

Party, be damned for a minute, just all partisan allegiances aside, Progressives as a larger block, how can we stay focused and committed on the positives of the New Deal, the Green New Deal that we’re all hoping for and avoid the noise, avoid the distractions, avoid the bullshit, so to speak and stay on point.

Can you, can you fill that void? Because that, to me, is where the hope lies. That’s what to me, MMT is hope. The Green New Deal is the culmination of MMT. Can you give, fill in a little bit there?

Hockett (00:55:28):

Yeah, so I think there are many things maybe, Steven, but one is, and I’m not saying this just to sort of be flattering of you, but rather to emphasize, I think, one of the very important values among many that you add that maybe doesn’t get emphasized enough, and that is that I think a certain kind of networking and I don’t mean networking like, Oh, I’m networking in order to meet a lot of people to get a better job but I mean, networking, this is forming networks and maintaining networks.

Basically maintaining conversations or discussions of the kind that you do, of the kind that, that Modern Money Network courtesy of Rohan and Raul does, and a number of other sort of networks do. One really amazingly important thing that these do, it seems to me, is they bring us all in.

First they bring us all into contact with one another, so none of us thinks that he or she is insane because, you know, he or she is the only one thinking these thoughts while being surrounded by, you know, sort of hostile forces of neoliberalism or whatever.

But even beyond that, by bringing us all into kind of intercourse with one another we basically, they enable us all in over time to form a kind of a common mind, right? There’s a sense in which we’re all on a same, not only on the same page anymore, but almost, you know, on the same book or in the same book, right. We, we began, you might say, as having our hearts all in the right places.

And so in that sense, we were all of one part, but we might not have been all of one mind because each of us had sort of been individually trying to sort of hack out or eek out a kind of a vision for him or herself in the midst, again, of a world where, you know, that it hasn’t been altogether nurturing of, or welcoming of, of Progressive thinking.

But what happens is, as we begin talking to one another, and then we form these sort of epistemic communities that we seem to come to form, and as these distinct communities gradually begin to morph and merge into one great big, you know, kind of grand epistemic community.

I think that in itself is a source not only of ideation or sort of helpful planning and helpful constructing and so forth, but it’s also itself a kind of a source of hope and non-insanity, right? Because you realize suddenly, Oh, you know, again, I’m not just some kind of isolated character, who’s just, you know, kind of, I dunno, sort of crankishly, you know, shaking my fist out here in the wilderness.

You know, out in upstate New York or in rural Pennsylvania or where have you, my God, we’re all, you know, we’re it, man. And now we sort of in, but it we’re, you know, we’re in Washington now too. We’re in Senate and House offices; we’re in congressional staffs, right? We’re on actual presidential campaigns and not even fringe presidential campaigns, presidential campaigns that almost win.

And then in the future we’ll win. Right. I mean, it’s, it’s amazing how, what a liberating effect that has on the psyche as well. When you told me when you were talking about neoliberalism as having, as being a kind of a sickness or having, you know, kind of warping or kind of constraining us, I was reminded of something, a metaphor maybe this could serve as. You maybe get a kick out of this.

So as you know, in the, in the distant past, when I was still a student, I lived in Oxford, in the UK for quite a while and the thing about Oxford is it’s in the Thames Valley, so it’s sort of below a lot of it is sort of below sea level or at least very close to sea level.

And there’s a lot of fog and a lot of sort of detritus, has a lot of sort of grime, how should I put it kind of gravelly sediment that sort of blown off the old buildings by the wind, and it kinda mixes with the humidity in the air. And it kind of hangs as this kind of ugly kind of black phlegm in a sense in the sky over Oxford, a lot of the time and people develop what’s known as the Oxford cough.

Now here’s the word, here’s the way in which that’s relevant. I would periodically jump on a bus and just go up to Stratford on Avon or go up to the [inaudible] or some other part of the, of the UK just to get out of Oxford for a week or so, or just because I had the opportunity to do it.

And what I was always struck by is as soon as the bus got past the ring road that surrounds Oxford, as soon as you were sort of out of the valley, suddenly the sky sort of cleared and there was no longer that kind of hanging phlegm, no longer any clouds and it just immediately felt it just, it was unbelievable. I felt like I was 10 times the size that I had been in Oxford.

And I think what it signaled was subconsciously I’d been kind of in a way kind of ducking. It was as though I’d been living in a place with a low ceiling without ever explicitly noticing that the ceiling was low, but just subconsciously registering it and hunching over accordingly.

And as soon as the ceiling has raised, you know, you get out of Oxford proper out of the Thames Valley, the ceiling rises, and you suddenly feel yourself expanding. You become bigger and taller, not in a kind of grandiose sense, but just in a healthy kind of deep breathing sense, right? Not only have you been waiting to exhale, but you’ve been waiting to inhale and now you can inhale, right?

And I think in a way, what we’re experiencing, all of us, with this kind of throwing over of this kind of neoliberal chastity belt, or whatever the hell it was, this kinda weird like Man in the Iron Mask thing, that it was sort of, you know, exerting on all of us. Cause I think we’re all feeling expansive, right?

We’re all feeling bigger and we’ve, I don’t want to sound too, you know, kind of hokey dokey sixties, hippie-ish here, but I almost feel myself kind of melding with the universe, right? With the world, as I sort of expand outward as this kind of artificial ceiling that was all of this kind of goofball, neoliberal crap is sort of lifted and blown away, right?

It’s like your kitchen filled up with smoke when you burned something in the oven. And so you open all the windows and turn on the attic fan and it just sucks it all out and suddenly the, oh great, nice big clean environment again.

And I kind of feel like we’re, you know, you and I, and the rest of our posse are sort of inhabiting increasingly inhabiting that space. In an effect, I think what we’re trying to do is enable the country and the world to experience the joy of inhabiting that space. Right?

Grumbine (01:01:29):

Bob, that you, you know, what I want to stop you right there and just tell you that is like the closing ticket right there. That’s like, don’t talk past the close. That was it right there. We’re not advancing something crazy. We’re advancing hope. And we want, we want people to be a part of that so badly. Come on, please. Come on. There’s plenty of room on this bus, right?

You’re just a wonderful man. I count it all blessings that you’re in my life and I thank you so much for the friendship and I thank you for your time today as well. Sir, I appreciate this. Bob, thank you for all your positivity. Thank you for your perspective. And I look forward to seeing you soon.

Hockett (01:02:13):

Thank you, Steven. As I said before, you are my hero, sir.

Grumbine (01:02:18):

You as well. You as well. Have a great day, everybody. Thank you so much.

Ending Credits (01:02:20):

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