The UK’s MMT Podcast has been an inspiration to us since well before we launched Macro n Cheese. As fellow MMT promoters from outside the academy, we consider the co-hosts, Patricia Pino and Christian Reilly, to be kindred spirits. So it’s always a treat to have them as guests on our show. This week, it’s Patricia’s turn to explain the behavior of our UK cousins as we seek to learn lessons from their most recent electoral debacle.

When Steve spoke with Patricia, she was still feeling intense disappointment and frustration in the wake of the Tory victory. Many in the Labour Party were in shock, trying to make sense of it all. Unfortunately, the most dominant voices are the least likely to admit fault. Attempting to understand Labour’s loss requires considering a multitude of layers — economic, cultural and political — historic issues of democracy which have been ignored for a long time. Patricia believes that the issues of sovereignty and perhaps even national identity, may play a stronger role in the UK than they do in the US. Britain joining the European Union was a blatant step in the continued abandonment of the nation-state.

The challenge to their national sovereignty may appear to be less significant to the UK than to the Eurozone nations because the British retained the use of their own currency. Patricia explains that while the UK has more autonomy than the Eurozone countries, the government portrays the neoliberal policies of the EU as if they were mandated or part of an international treaty. The EU has no means of enforcing rules regarding deficits or privatization, but it applies enough political pressure to direct policy in a certain direction, simultaneously providing cover so the government can avoid claiming responsibility for unpopular policies.

In both the UK and the US, elements of the right have tapped into discontent felt by marginalized members of society and gained a new throng of voters. Patricia refers to Jeremy Corbyn as a “Euro-skeptic,” which may explain why he understood the voters’ discontent in a way that other members of Labour’s leadership did not. Just as in the US, the party that was supposed to represent the interests of working people has proven to be out of touch. Labour voters had chosen Brexit; the Labour leadership was perceived as blocking it. The rank and file stopped believing their promises.

As is always the case with Steve and his guests, the discussion turns to solutions — specifically, how to deal with those people who are supposed to be on our side yet are still spreading incorrect analysis based on ridiculous assumptions, when applying the lens of MMT would bring things into focus. In the UK, even the so-called leftwing economists engage in the same kind of fear-mongering as the most dedicated neoliberal ideologues.

Patricia clarifies that not all MMTers are Brexiters, but knowledge of MMT clearly illuminates the ills of the EU and the consequences of interfering with national sovereignty. Understanding how power is wielded through control of the currency naturally leads one to be an advocate for democratic systems of government. She suggests that she’s ready to step out of the functional finance silo and plans to start working with groups who may not yet support MMT but whose causes will be advanced through knowledge of it. With 5 years of Conservative rule to look forward to, she can’t afford to sit on the sidelines. None of us can.

Patricia Pino is a London-based engineer, artist, and activist. She is co-host of the MMT Podcast and a founder of the Gower Institute of Modern Money Studies.

@PatriciaNPino on Twitter

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gimms.org.uk/

Macro N Cheese – Episode 49 
Patricia Pino Episode 
January 4, 2020

Patricia Pino [intro/music] (00:04): 

What Labour was asking the electorate to do was effectively making them choose between democracy and prosperity. 

Patricia Pino [intro/music] (00:20): 

I think it’s safe to assume that in the next five years, the Conservative Party is going to do little to nothing to tackle climate change. But you know, at the same time they’ll claim that they are as they always do. 

Geoff Ginter [intro/music] (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 (01:34): 

Yes. And this is Steve with Macro N Cheese. Today I have Patricia Pino, who is a longtime friend of mine, and she’s also co-host of the phenomenal podcast, the MMT podcast. 

Patricia Pino (01:47): 

Hi! 

Steve Grumbine (01:47): 

She is in the UK, and I want to say one thing right up front. They have one of the best podcasts I’ve ever heard between her and Christian Reilly. It is always a joy to listen to them. So it’s my pleasure to bring her on today. And with that welcome to the show. 

Patricia Pino (02:05): 

Thank you. You’re making me blush there. Pleasure to be here. 

Steve Grumbine (02:10): 

Yeah yeah yeah yeah. I’m sure. Hey listen. So this whole Brexit thing, you know, obviously this is not happening in the US but it kind of is. And I think that, you know, one of the main reasons why I wanted to bring you on here, aside from, I just liked talking to you is that we have this opportunity to maybe head off some of the lessons that you all experienced as Labour in the UK and maybe look at the parallels between what’s happened in the UK and then what’s happening in the United States.  

Be able to try to find a way to do our little small part of mitigating a disaster on a global level here. Tell me what happened in the UK here? 

Patricia Pino (02:53): 

So to begin with it’s very complicated. Okay. There are various layers to this. There are economic layers. There are issues of democracy. There are, you know, historical problems that have been ignored for some time and there are also cultural issues, kind of just all kind of making a big layer cake.  

And it’s a big mess. And I know there are parallels with the US for sure, but I think here the issues of sovereignty and issues of national identity, perhaps I’m going to venture into saying that may play an even stronger role here than they do over in the US partly because you guys are not in the EU and because you haven’t gone through that transition of enjoying something of what the EU represents, which is the continued abandonment of the nation state and going into more presumably what it was, you know, a group of nations, but in reality has worked out differently. 

Steve Grumbine (03:51): 

Well, you know, I guess that’s a great intro to this. What I’d like to know is, you know, we went into this election. Folks in the US thought incredibly highly of Jeremy Corbyn. There was tremendous affinity for the Bernie Sanders movement and the Jeremy Corbyn movement. We oftentimes blended the two together, probably erroneously to some extent, but there was a lot of similarities there.  

The democratic socialism that we have been fighting for in the US was being fought for in the UK and for all intents and purposes, you know, people around the world that were fighting for democratic socialism were looking to the UK and saying, “Please let this happen.” And instead of it happening, what you have is a total meltdown, a fiasco, and you’ve got Boris Johnson and his Tory sweep the day and literally knock out tons and tons and tons of not just progressives, but the more centrist third way type Labour. Walk us through this. Lay the seeds out for this.  

It is complicated, so let’s break it down. 

Patricia Pino (05:01): 

So I think it’s important to say that there are a lot of people out there in the aftermath of what happened – the Labour Party is in shock a little bit, and they’re all trying to make sense of it. And sadly, some voices are more dominant than others. And the voices that are dominant will also be the less likely to admit fault.  

And it so happens that, you know, a lot of blame is being placed on Jeremy Corbyn as well. And I actually think, I’m not saying he’s perfect, but I actually think Jeremy Corbyn wanted to avert to a great extent, the disaster that just happened and he actually had more foresight than others in the party.  

He started from a position – well, as you know, Jeremy Corbyn has also always been Euroskeptic – and when the membership elected him with great enthusiasm, they weren’t necessarily Euroskeptic membership, but they knew that about Jeremy Corbyn and they accepted it. But when it came to the EU referendum, the EU referendum was brought about by the Tory Party.  

So it was immediately framed as a right wing project. What had happened, of course, which is what all history will tell us happens often is that sections of the right had actually tapped into a discontent that belonged to marginalized sections of society and they were exploiting that in allegiance, of course, with other non-working class, very well off people who actually wanted to have the power to turn the UK into this kind of neoliberalism on the steroids kind of project.  

So they were kind of in an alliance, but what they did do was tap into the sentiment and it was a sentiment that Jeremy Corbyn understood because of his Euroskepticism. He understood, for example, there are interviews of him where he’s actually predicting the levels of unemployment that the Eurozone would cause.  

He was very close to Tony Benn, who for many, many years, had spoke about the EU as an imperialist project, as a project that was taking democracy away. And so all these things he understood very well, probably better than most people in the Labour Party, both in the parliamentary Labour Party and in the membership.  

But when the Euro referendum came in, I don’t think he was in a strong position in the sense that the parliamentary Labour Party wanted to get rid of him really badly. So I believe I’m speculating here, but I believe Jeremy Corbyn thought “If I turn against my membership and campaign to leave the EU, they will not support me anymore.  

And you know, I’ll be betraying them because this is what they want. So I should do what they want and if I want to stay leader, then I have to listen to what they want.” And to some extent as well, it was kind of people thought remain would win, right? So what’s the point of taking a chance on a position that is likely to lose, which is being pro-Brexit? So to me, that marked the first era in a long chain of events that led to this disaster. 

Steve Grumbine (08:05): 

This has always brought a question mark to me in a representative democracy where you have a leader and that leader is held accountable for decisions that are made. And at the same time, they’re expected to represent the will of the people. 

Patricia Pino (08:20): 

Yeah. 

Steve Grumbine (08:20): 

And so when you represent the will of the people and the will of the people goes terribly wrong, he’s accountable for the will of the people. But if he would have gone rogue, he would have lost support. And so it’s a real, no win situation, isn’t it? 

Patricia Pino (08:33): 

Yeah. I mean, Jeremy Corbyn had to balance what the Labour supporters wanted, you know, the whiter voters, he had to balance what the Labour parliamentary labor party wanted and against also what the membership wanted. 

Steve Grumbine (08:47): 

One of the things that kind of strikes me, you know, is the attacks that went against Corbyn as anti-Semite and all the other low blow really vile fights against him as a human being, not just as a politician, but as a person. I mean, dirty, filthy socialist. 

Patricia Pino (09:08): 

Yeah. It was absolutely vicious. Yeah. 

Steve Grumbine (09:11): 

It was horrible, and you look at that and you say, “Wow, what is it about this small island nation that would have so much pent-up hatred for a man trying to give them services?” I mean, is the nation ridiculously wealthy to the person or it makes no sense. So what is it about the nation itself that breeds such contempt for such a man that’s trying, in my mind, is so hard to bring about a society that would benefit all of them? 

Patricia Pino (09:42): 

I think this is where we go a little bit into cultural issues. The attacks on Jeremy Corbyn went on very systematically to portray him as somebody who wasn’t loyal to the UK and, you know, perceived as somebody who was a security threat to the UK, who would give, you know, secrets away, who would, “Oh, God not press the nuclear button.  

Oh my God, horrific that he wouldn’t dare kill other people in that way in defense of the nation.” Um, this notion as well, that immigrants had to have a decency and, and we had to care for their lives in as much as we care for British lives, there was a group to which that was immensely kind of offensive. That notion it wasn’t said explicitly, but it was implied. And that played a big role. If you see all the attacks that were done on him, most of them were on that basis.  

And the anti-semitism attacks, the underlying premise of the anti-semitism attacks was of course, that there is a hierarchy of racism and the Tory party is racist in all sorts of ways, but that’s forgiven. But if Jeremy Corbyn is even perceived, there is no, this is the thing that there’s nothing Jeremy Corbyn has said explicitly that would indicate to anyone that he has a drop of racism in his body.  

And yet it’s implied or by association, you know, he constantly drip feeding this kind of idea that he supports the views of others close to him that may be controversial in that sense. And then slowly framing him as anti-semitic. And that played a part as well but the underlying message was that there was a hierarchy of racism and that Jeremy Corbyn was trespassing through the worst kind of racism possible, which is bizarre.  

Okay. It’s bizarre because Jeremy Corbyn is like the same as Bernie Sanders, the best, the biggest campaigner, anti-racism campaigner politician that we know in recent times really. It’s crazy. 

Steve Grumbine (11:45): 

So tell me, what about remain played on the neoliberal mindset? What about the EU, well more important, let’s go back for a second for people that maybe are not familiar with that whole arrangement. Can you take us through a quick crash course in what it means to be a part of the EU, the Eurozone and Euro and what the whole Brexit story itself represented?  

Because I think that just in and of itself, the term “Brexit” was a highly successful marketing campaign. Everybody knows the word. I just don’t think it’s well understood. 

Patricia Pino (12:26): 

So there are various narratives about what the EU is and what is meant to represent. The preferred one by remainers is that the EU project was made to keep peace in Europe. And they see this as an inherent force of good across Europe of unity and collaboration. But collaboration, I mean to me, means something very different to what the EU actually does in practice, which is more like coercion in the interests of no citizens in particular simply, you know, in a very, is run in a very undemocratic way.  

And the people who run the EU run it solely in the interest of the EU project in itself, as opposed to in the interest of any particular group of citizens or their well-being. But to remainers, there’s an inherent fear that if the EU falls apart, then Europe will go to war. And I mean, I’d say that’s a valid fear, but at the same time, I see how the EU is being run at the moment.  

If you know what happened in Greece, if you know what’s happening in Italy, you know, how people are feeling more and more helpless because their ability to run the economy in their interests has been taken away from them more and more. Then you see that that’s actually causing division across Europe and that’s causing the rise of the far right.  

And that’s causing people to turn against migrants and, you know, creates this kind of environment of scarcity and people turn against each other, and societies fracture all over the seams. So I see the EU and I don’t see peace, but for a group of people who have benefited from the EU quite a lot, you know, mostly people who live in cities like myself, London, those (inaudible) city that has benefited enormously from EU membership.  

They don’t see that. They almost turn a blind eye to the EU’s internal problems. They don’t call that war. To them, that doesn’t count as violence, you know. And it’s only the fracture of the European Union that concerns them. 

Steve Grumbine (14:36): 

When I look at Europe, I don’t see war. I really don’t. And maybe it’s because I’m so far removed. When I see the United States, all I see is war. 

Patricia Pino (14:47): 

Really? 

Steve Grumbine (14:47): 

So for me, you know, I’m looking at this. 

Patricia Pino (14:51): 

In what way? 

Steve Grumbine (14:52): 

What kind of war are we talking about in Europe? A war of chess, or are we talking about hooligans, rallying against soccer matches? What kind of violence are we talking about for real? I mean, like I understand the austerity violence. 

Patricia Pino (15:06): 

Yes. 

Steve Grumbine (15:07): 

That’s the one that I would know. 

Patricia Pino (15:08): 

Well, that’s the one, obviously that you and I care about a lot, but we also have things like the yellow vests in France that have been campaigning for quite some time. And they’ve been met with quite severe response from Macron’s police and the French military. And nobody says anything about what’s happening there.  

It’s barely covered on the media. That doesn’t count as kind of brutality against people because they said we don’t show it because they don’t want to instigate that happening in other places. But at the same time, they don’t give enough coverage to that compared to violence in other places like what you’ve seen. I presume that when you say violence in America, you mean a lot of the brutality of the police with racial minorities. 

Steve Grumbine (15:56): 

That and our imperialistic approach to foreign policy. 

Patricia Pino (16:01): 

Ah, right. 

Steve Grumbine (16:02): 

Let’s go ahead and blow the nation up before we figure out whether we were right or, oops, sorry about that. That seems to be shoot first, ask questions later is the United States’ M.O. these days, and I look at Europe and I say to myself, you know, “What’s going on?” I want to redirect this slightly because in Europe, there’s several different ways of carving this up.  

And this is something that I think is also not well understood. And that is that there are certain nations that adopted the Euro as their currency. They gave up monetary sovereignty. That did not happen with the UK. UK maintained the pound. However, they did open up their borders, so to speak, to basically a free trade agreement, if you will, with this European Union. Am I misunderstanding that? Or is that a correct statement? 

Patricia Pino (16:57): 

No, that is true. We have our own currency, so we have more autonomy than other European nations do. However, I think it’s wrong and I think Bill Mitchell would probably say so that the EU doesn’t work as an external force, you know, telling Britain how to run its affairs. In here, it has been mostly kind of a double act between government and the EU.  

It has allowed UK governments to portray neoliberal policies as if they were mandated or a part of international commitments and therefore cannot be challenged or simply as a technocracy issue. So it has happened for example, that the UK is not required to fulfill, for example, the deficit criteria of 3%, which as you know, is something that they inflict on other countries in the Eurozone pretty strictly, but whenever the UK has gone over the 3% limit, the UK has signed up to an agreement that says that they will endeavor to keep the deficit below 3%.  

So whenever it does exceed it, it has received communications from the EU saying, “Oh, you’ve been naughty going over the limit.” And they demand then plans for the government for plans on how they plan to reduce that. So they may not force the UK. They have no means of enforcing these rules, but at the same time, it allows them to exert enough political pressure to then direct policy in a certain direction, and to provide cover for neoliberal governments here to then not claim responsibility for unpopular policies.  

And that has influenced UK policy. I think it would be unfair to say that it hasn’t had an influence on a UK policy. For example, I believe the Maastricht Treaty that talks about deficit restriction was signed in 92. Later in the same year that PFI, the private finance initiative, which is about getting the private sector to finance healthcare in the UK started.  

So one fed into the other, and I think that’s how it worked here, mostly as a double act, as opposed to as a foreign entity and forcing the UK to act in a particular way. 

Steve Grumbine (19:14): 

Very good. So let’s go to the next step. Okay. Now that you have basically seen the destruction of what was the Labour Party, and you’ve got five years now of Tory rule, what do you expect will be the outcome of this? Do you think people that went that route are gonna regret it, or do you think they’re going to be grateful they did it? Talk about the impacts of that election. 

Patricia Pino (19:44): 

It’s immensely sad, you know, because of course you and I know that people are not necessarily aware of how currencies work. They don’t necessarily know how damaging austerity is to the economy or to people’s lives in general. They don’t understand necessarily how those two things are connected. They’re becoming more and more aware, partly due to MMT, but also because it’s just impossible to hide.  

I think a lot of people lent the Tories the vote because Labour was perceived to be blocking Brexit and to the people that I’ve spoken to who are not naive and who understand what the Tory Party stands for, a lot of them abstained because they found that the Labour Party’s promises of prosperity and a manifesto as radical as it was, and as good as it was, meant nothing if the Labour Party could not show that it respected majoritarian vote in the referendum.  

So their position was mostly, if you don’t respect my vote, then why should I vote for you, and why should I believe that you’re actually going to do these things that you’re promising to do? Democracy came first to them. And that was a principled position in a very, I don’t say this in a happy way, because I know the price that is going to be paid for this.  

But just thinking about the next five years is enough to make anyone depressed, but they did it because they wanted to stand for something. They wanted to stand for their right of their vote being valued and respected. And to them that meant more than food, than a job, than money, or than public services, or than an NHS even. 

Steve Grumbine (21:42): 

You have that exact scenario in the United States right now when Bernie Sanders conceded to Hillary Clinton in 2016, and we watched the shattering of the progressive movement as the more libertarian strain broke off and started supporting people like Andrew Yang and Tulsi Gabbard. They don’t really have meaningful plans for addressing these big concerns, but they attack, they have the good one liners and they have the real good punches in the mouth against the establishment.  

So there’s this idea here that, because they’re willing to call out these bad actors, these bad neoliberals, which I mean, who doesn’t respect that? It’s great. Love it. Right? But that’s the beginning and the ending of how their real value to this campaign is. But unfortunately, when you have a splintered movement, it’s very difficult to build the kind of momentum that you need to be able to overcome these things.  

See you’re watching some very similar type things with this principled approach. I won’t support Bernie because Bernie endorsed Hillary. He didn’t call out the DNC corruption. He didn’t fight back against Russiagate. He didn’t this, he didn’t that. And some of these were political decisions in terms of trying to gain a majority.  

Would I like him to always say exactly what I want him to say? Absolutely, but that’s not going to be the case. And he’s given us 40 years of proving that. So I wonder sometimes if people realize what is at stake when they make these kind of you call it principled, I call it myopic. I think that there is a moment in time there where you should be able to see clearly the cause and effect, the cost benefit of a certain move, and I think that there’s almost like an arms-folded, stomping-the-foot, sticking-their-tongue out kind of thing, and I don’t mean to belittle this, but it does start feeling like there’s… 

Patricia Pino (23:56): 

It is like that. 

Steve Grumbine (23:58): 

It’s almost ridiculous. I’m trying very hard not to be too demeaning, but at the same time though, it’s very frustrating to see that, and there’s so much at stake and yet, bam, here you go. The splintering of a movement and it assured the Tories would win in the UK. And I’m quite afraid that it will assure a second term for Trump in the United States, as the Democrats fat finger their way through an impeachment proceeding that was ill-advised to say the least, because it took the focus off a Green New Deal.  

It took the focus off of free college, took the focus off of all these life saving programs, Medicare For All, you name it and it is put it squarely on the guy that just trying to get rid of. And in fairness, these myopic moments are even more difficult to swallow with the knowledge of Modern Monetary Theory and with the knowledge of what we could do, if we just kept the focus on the right things. 

Patricia Pino (24:58): 

Yeah. 

Steve Grumbine (24:58): 

I imagine it’s maddening for you in the UK as well. 

Patricia Pino (25:01): 

I mean, it is, and we all come from different backgrounds, right? And I try as much as I can to understand perspectives from a form of living that I’m very unfamiliar with. Obviously I’m a city person and it’s already challenging to try to understand, for example, life in the towns in the UK up north, for example.  

It doesn’t come naturally necessarily, but I try and as much as I can to understand their position. And when the Labour Party changed their stance to from respect in the referendum to a, what they call a people’s vote or a second referendum, at that moment, I felt like the movement had been poisoned mortally.  

It had been inflicted a mortal wound, and that we were not going to recover from that. And I expressed it by being angry and by trying to make as much noise as possible within the movement of warning them that it was the wrong thing to do. And the reason why I said that, like I supported the Labour Party anyway during the election, as you say, I could not afford to leave the Tory party to lead the country for five years, knowing what they could do, regardless of how disappointed I was with Labour’s decision to support a second referendum.  

But I knew that the moment Labour did that, what Labour was asking the electorate to do was effectively making them choose between democracy and prosperity. And the moment you do that, I mean, it may not be everyone, a lot of people like myself still supported Labour, but you’re going to shed a lot of voters. 

Steve Grumbine (26:49): 

Yeah. 

Patricia Pino (26:50): 

And that was enough to give the Tory Party a majority. 

Intermission (27:06): 

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. 

Steve Grumbine (27:52): 

I think this brings us to a really important point here that we probably more so in the Modern Monetary Theory community understand, and that is in the United States, the Republicans, they get so many things wrong, right from jump. Their perspective is wrong, blah, blah, blah. But they get some things fundamentally right with understanding, no, that deficits don’t matter.  

They can spend whatever, maybe at the state level, you know, the fiscal conservatism really matters. But when you come over here to the Democrats side, they get the social side of it, correct. They’re like, “Hey, we want to lift all boats,” and blah, blah, blah. And these say these things, but then they come right around with this fiscal conservative crap that literally undermines their entire platform.  

And so you’re stuck. You’re always in this position of, “If I vote for higher deficits, chances are the economy will boom better.” And you see a very, very unequal, very crappy economy that looks good on paper under Trump. And the flip side is that when the Democrats take office, they create recessions because they have this weird sound finance minded thing while they’re simultaneously saying they want to give everyone healthcare.  

And they’re mutually incapable of meeting the requirements that they put forward to their voters, to their constituents. And so they start off from a point of being so incorrect that it doesn’t matter how aligned they are with our sensibilities on social issues, their fiscal issues destroy it. And it makes it even more painful to watch them in their ineptitude make these bold proclamations that are founded in neoliberal austerity.  

It’s just maddening. And when I look at what you all are going through there, let’s be fair. Your Labour economists over there. I mean, these people are not shooting with a straight gun. They’re not playing with a full deck. They’re out of their minds. I watch them on Twitter. I read their stuff. They literally do not get this and they don’t want to get it. 

Patricia Pino (30:09): 

They were part of the problem. 

Steve Grumbine (30:12): 

They are. Yes. Talk to me about the economists that are advising Labour today. 

Patricia Pino (30:18): 

Well, most of them supported the second referendum, you know, outright. They did that and their support for a second referendum is linked to their views on the economy and how the economy works, which is obviously null. It’s a view that is incompatible with MMT in, you know, what you and I know. They believed a lot of them, Paul Mason specifically, would often say the economic predictions carried out with very questionable methods and assumptions, assumptions that for example, that the government would do absolutely nothing or that the government was powerless to respond to a recession, you know, or that the inflation would go up and then the government would have to raise interest rates at such a ridiculous level that the housing market would collapse and everything would basically destroy itself.  

So these models that were done on Brexit, a lot of them were based on the assumptions that you and I know to be wrong. And a lot of them are neoliberal assumptions and yet they were picked up by lefty economists as justification for wanting to remain in the EU. So that is problem number one, that, that when it came to the EU, they were happy to accept the assumptions of the neoliberal establishment that they claim to be fighting.  

And the second was of course, that there was a crisis of confidence in Labour and that they really didn’t believe that the state was powerful enough to take care of its people in the event of a recession or to take care of Brexit. So there was very little conversation, for example, in parliament, about anybody in Labour demanding that Boris prepare for a no deal Brexit, or prepare for all eventualities of leaving the EU in an economic sense.  

There was more demand simply to stop Boris’s Brexit. And it was perceived amongst the wider electorate as simply an excuse to try to stop Brexit, these kind of warnings about the economy. If they see them trying to sell Brexit, and then they say, “Oh yeah, because the economy will collapse,” but then they’re not actually making any efforts to try to prepare for such a collapse as if they were powerless to do anything about it.  

You know, it doesn’t come across as believable. 

Steve Grumbine (32:36): 

Well, their mind is soggy. It’s filled with erroneous things. So their decision making is based on faulty foundations. So when they do the addition, it comes out, you know, two plus two equals four to them. But in reality, it’s founded in very, very faulty foundations. And so their models are poor.  

Their models don’t predict anything. Their models are not in any way, shape or form real world. They don’t address any of the actual problems. They’re rational expectations and all these different funky, just completely erroneous things that there’s absolutely no evidence they have ever worked. And yet they hold onto them for dear life. 

Patricia Pino (33:23): 

Yeah. And as you know, a lot of lefty economists, they believe that the market is the only place where value is created is in the private sector. So . . . 

Steve Grumbine (33:35): 

What a FUBAR idea. 

Patricia Pino (33:37): 

So that’s the premise was, the premise was that if there was Brexit and GDP fell as a result, then government would not be able to raise as much taxes or not be able to borrow as much. And therefore not being at capacity to fund public services as much as it could have been before Brexit happened. 

Steve Grumbine (34:00): 

I gotta tell you reading some of these economists. I don’t want to give them any airtime for their name, even, but reading their stuff and hearing them talk about, well, you know, we’ve got very good interest rates to finance deficits and I’m listening to them and I’m just like, “What do you care about interest?  

What does that have anything to do with financing deficits? What are you talking about? What do you mean borrowing?” I mean, the way they approach it is so anathema, it’s so completely, it’s almost impossible to listen to without laughing. And I’m not an economist at all. I mean, I have an MBA and that in a bag of chips gives you about $127,000 of student debt.  

These people genuinely, they literally don’t get the most fundamental basics of how the system works. It’s maddening. And I watch you with great care, breaking out your scalpel, carving off pieces of this fallacy that they push forward. How does this work? I mean, how do they maintain their jobs? It’s just unfathomable to me. 

Patricia Pino (35:08): 

It is incredible. 

Steve Grumbine (35:11): 

How much of a mind control they have over the population. 

Patricia Pino (35:15): 

It’s because we don’t have any. What you’ve got all the good economists over there. The big names here on the left all seem to be in agreement of these kind of, of the market as the primary source of value generation and austerity and government having to borrow to spend, you know. They don’t contradict each other at least.  

And they all seem to be pretty much in agreement. So, you know, somebody like me without a degree comes along and says, “No, you’re wrong. We’ll be fine after the Brexit depends on us, depends on what the government does.” And you know, if you are a, an activist who hasn’t heard of economics before, who are you going to trust?  

I know you’re going to trust the people with the books written and “The Guardian” articles and with the authority that the establishment grants them. You’re going to do that. You can’t blame people for doing that, but it does mean that, you know, I hold them greatly responsible for luring the Labour movement into a ‘remain position’ or into a position where it’s defending the old guard.  

But most people don’t necessarily understand how the two are connected; how this vision of the economy is connected to lend support for the EU. 

Steve Grumbine (36:41): 

You know, I think I’m fundamentally heterodox in general. I listen to Tool. I listen to Rush. I listened to long music that, you know, probably bores people to death. The complicated rhythms. The complicated time signatures. I can’t stand pop music so I’m naturally given to heterodox thinking. And so for me, being a rebel, being a metal head, being a guy that doesn’t just go with the flow, it was easy for me to not have to go with the flow cause I never go with the flow.  

And when I heard of MMT, it was a challenge. Let me be clear. It wasn’t like I just walked in and said, “Oh, makes sense. Oh no big deal.” I mean, when it hit me having been trained classically, having gone through grad school and having to study the garbage that passes for economics, it was a lot of unplugging.  

And I started at a libertarian side. So I got to hear the Ron Paul of the world, the sound finance, and the metalist perspective of currency and the gold standard thinking. And it did take some effort to unplug me, but it wasn’t because I was resistant because it was difficult for me to understand.  

I connected the dots and the other way, and I had to unconnect the dots. And there was a lot of dots that had nothing to do with economics, from which person championed what idea. And it’s like, “Oh my goodness, that was very pro Reagan. What does that mean? And I have to unpack that.” So there was an incredible amount of unpacking that had next to nothing to do with MMT although MMT served as the catalyst for that exploration of what my changes were going to be.  

And I look over there at the UK and thank goodness for the Gower Institute, GIMMS, and you and Bill Mitchell who spends an inordinate amount of time going back. He’s just a wonderful man, and of course, Warren Mosler and others who have gone out there and invested incredible amounts of time, energy, the Modern Money Network and others in trying to get the UK into some right thinking, correct thinking, I should say.  

Talk to me about the Modern Monetary Theory movement in the UK, and what kind of a take rate you’re getting and what is the temperature? Whenever I see these events, I see full rooms. It’s amazing. So there’s obviously some energy, some desire for it. 

Patricia Pino (39:06): 

I think, I mean, it has been a slow progress, partly because as I said, we don’t have the great academics that you have in the US. You hold them all. But I think that we’re making inroads. We certainly need more organizing that’s for sure. The MMT Podcast has proved popular from what I hear. And now I get even colleagues at work telling me that they’re listening to my podcast and it’s a little bit embarrassing, but I can see it’s nice, but I can see that it’s spreading and that can only be a good thing.  

But the issue is, of course, that is not spreading fast enough as fast as we wish it did. Now, a lot of MMTers were actually on the side of the ‘leave supporters’ and they were contradicting at the time, the people who advocated for ‘remain’ on the basis of their understanding of monetary policy and the sovereignty of the UK in terms of using its own currency.  

And they understood that, you know, we could respond to any eventuality after Brexit. So I think now that people are seeing that Brexit, you know, wasn’t a necessity, and that MMT has may have been on the right side of history on that, that would help. Now, as you know, not all MMTers are Brexiters, but I would say that it’s a link between being an MMTer and at the very least understanding the ills of the EU and the limitation that that poses.  

And I like to think as well, the MMTers are big advocates for democracy, for the very reason that they understand power and how or at least wield it through currencies and they then advocate for democratic systems of government. So I think all that plays in our favor, but maybe it’s time to branch out from the just simply operational aspects of MMT.  

You know, this is how currencies work in a neutral basis to more going into, you know, emphasize the democratic aspects. What effects is that going to have in society in terms of your participation in society, in terms of your sense of identity, whatever that may be. So there is a scope there to grow, and I would be looking to work as well to other groups within Labour and activists in general, you know, who may not be necessarily MMT focused, but whose causes we can maybe help and support each other in a way as forming networks.  

And I guess that’s a bit like what Rohan and team do in the US if I’m not mistaken. 

Steve Grumbine (41:42): 

Yeah, absolutely. You know, it’s interesting, the real catch 22 of the whole democracy and the unwashed masses and so forth has always been from the bourgeois and the power elites, etc. has always been, “They don’t know.” I mean, even the church didn’t want the parishioners to read the Bible because after all, how could they possibly understand it?  

And here we are, as activists trying to explain this very complex role of money in society, and to be fair, it’s really not that complex. It’s made complex by fiscal rules and all these other ideas that people have tried to insert in there. But in reality, it’s quite simple. And I think the obfuscation that has taken place is not by accident.  

I mean, I believe it was Henry Ford who said something to the effect of if people ever knew how money was created, there’d be a fricking war. There’d be a riot. People would go crazy. And you look at this and I think that people have been genuinely kept in the dark. You look at the Social Security and people believe they pay into it so that it sticks around.  

This is the US of course, and you look at many of the myths and legends that have become just core logic, core part of society. And the core part of the narrative that we exist and we wake up, the sun rises, pay taxes. It pays for things, and we go to bed at night and it does this, that, and the other.  

But you know, one of the things that I’ve noticed, I really want to attack this because I think a large part of the outcome of this Brexit vote, if you will, I’m going to call it a Brexit, but I know it was more than Brexit, but in this Brexit situation, the austerity that I’m already seeing, they’re like, “Now we can tear apart NHS”. 

Steve Grumbine (43:28): 

Now we can get rid of these things. Now we can do that. And they’re being quite bold in it because they feel like they’ve got a referendum. They didn’t realize they had a referendum simply on Brexit, or maybe they do have a referendum to tear it all down. But once again, this is a core concern I have with giving the veil of legitimacy to our friends and Labour or the Democratic party who push a neoliberal agenda that is founded in austerity and founded in poor economics.  

To me, this is a very, very difficult period of time because we are like an island amongst a bunch of floating continents of ignorance. And we have to be delicate in some respects. And yet, in other ways, as our friend Ellis Winningham has said in the past, the orthodoxy didn’t come to power gently.  

They came to power with war. They came to power with guns. They came to power at gunpoint and knifepoint, etc. And in reality, it was violence that the orthodoxy became the orthodoxy. 

Patricia Pino (44:35): 

Yeah, but ours is more of a guerrilla war, I suppose, to the orthodoxy that, you know, parked its tanks in front of all the institutions, you know. It’s slightly different, but I see your point. 

Steve Grumbine (44:48): 

But if you think about this, right? I mean, going back to Luther, even banging his 99 theses on the wall. I mean, you’ve got a situation here where in our podcast’s song, “People are dying,” and they are, and you had a recent, a recent being relative. You had a couple year old study, it came out and showed 120,000 people died from austerity in the UK alone.  

And you look at this and it’s like, “Okay, I understand you don’t understand, but let me explain this to you because this is no longer just a joke, apparently, and I could be wrong, the climate change, the IPCC report came out and said this a couple of years back that we had 12 years. I think we’re down to 10 now.  

And that’s to not just have something in place, but to actually start mitigating the climate change. And between austerity and death and the people without healthcare, this is war. It’s not a gentleman’s game of chess. So whether it be the economic side, or whether it be the political side, or whether it be just the social side, the yellow vest and others, people are suffering across the board.”  

And I don’t know how to bring that to light so that people see the cause and effect. Because to me, I think that if people genuinely understood the connection and it wasn’t a loose connection, wasn’t an abstract idea. It was a one for one: we reduce spending, people die. Here’s how it happened. If we could show that in a more direct fashion, I really do believe that people would make different choices.  

And so we go back to the democracy statement that we talked about, and we do believe in democratizing the power of money, and democratizing institutions, and democratizing workplaces, democratizing all these aspects of our life. But with neoliberal mindset, democratizing these things without a lens, we’re just as bad off in many ways from the good guys as we are the bad guys. How do you make heads or tails of that? 

Patricia Pino (47:01): 

As I said, if I think too much about what the next five years are going to bring, it’s just dire, but the issue of the climate change, it’s one of particular worry. I think it’s safe to assume that in the next five years, the Conservative Party is going to do little to nothing to tackle climate change, but you know, at the same time they’ll claim that they are, as they always do.  

And I think there’s potential for more conflict, more division. And I think they’re going to mess up on the economy and there’s going to be a recession soon, I’m pretty sure. And when that happens, they will scapegoat minorities, migrants. They will cause more division; and in order not to be blamed for what’s happening; and they will likely privatize the NHS, all of this.  

So it’s a disaster of immense proportions, but how do we get out of this frame? I mean, in terms of how angry one gets, I get really frustrated at the economists on the left, who I believe should know better, and who often act out of, I’m not afraid of saying it: They act out of ego more than out of duty.  

And it’s immensely frustrating that even now after the general election disaster, they are all over the media writing columns about what to do next, you know. Providing their advice and say, of course, putting the blame elsewhere. And you know, there’s no introspection, no humility, no self-criticism at all.  

They had nothing to do with what went wrong even though they were the guys who were influencing the movement the most. And that makes me despair far more than the Tory Party in power, because I don’t see there’s anyone near ready to tackle what comes ahead. 

Steve Grumbine (49:00): 

I think that’s the most painful part, what you just said. 

Patricia Pino (49:04): 

Well, members discuss what happens next and who we’re going to elect as leader of the Labour Party next. And that very sad reality of what happened in the general election is that the people who advocated for a ‘remain’ stance were also the members of parliament who were in ‘remain’ seats. So the most likely to keep their seats.  

And all the members of parliament who said, “No, we need to respect the referendum,” they were the most likely to have lost their seats during the general election. So they paid for someone else’s mistake. And the people who brought us the general election ruin are now the people who are even more numerous, more dominant in the Labour Party.  

So the situation is dire and that a lot of members are feeling disheartened at the lack of prospective leadership material in the Labour Party, as it stands. We’re still seeing there may be one or two that are promising depending on whether they’re willing to run or not, but another Jeremy Corbyn, you know, somebody of that stature of, not necessarily exactly the same as him, but with the track record that he has, it’s very difficult to find at the moment in Labour.  

So I think members are considering what happens now. If the Labour Party chooses somebody to go back to the Blair years into the kind of mainstream economic consensus that they did – neoliberalism, ‘pro-Remain’ party – then we’re looking at a state of wilderness for decades to come, you know. And if so, then it may be the case that a lot of Labour members decide to go elsewhere and either form their own parties or formed their own campaign groups elsewhere.  

So we’ll see what happens. But at the moment, things are looking very, very dire. And I really hope that the same does not happen in the Democratic Party in the US. 

Steve Grumbine (51:07): 

That was what I was going to go with next. Having experienced it yourself, what is the lessons you would give to people in the United States that are listening to this as they consider Bernie Sanders and other aspects of Donald Trump and our climate. What would you say to US voters who maybe don’t understand the lessons from Brexit? 

Patricia Pino (51:36): 

I would say, “I think there are various lessons.” I dunno if you have, you know, similar comparable experiences, perhaps, but if I could give ourselves advice a year ago, I would say “Respect the democratic process, because people will expect you to, and people will not respect the party that is not perceived to respect democratic process.” Second, do not turn this into a war of culture.  

So I’m not saying culture isn’t important. There are cultural elements, which are important, but one has to work through them. You cannot, you know, run over them. You cannot call somebody who lives in a town backwards simply because they disagree with you who lives in the city and then tell them, “Oh, well, you’re an idiot for not voting for Labour,” and then leave it at that.  

Because if that happens enough times, then people will turn against you, against the party and I’m all for criticizing the guys at the top. But when it comes to voters and the people whose vote, I need, I hold back from that, from my frustration. And sometimes I know it can be mentally frustrating when people hold erroneous views, you know, ill-informed views.  

When it comes for example, economics, in our case, it can be immensely frustrating; but by alienating them, you’re only going to make things worse. 

Steve Grumbine (53:05): 

It’s definitely a crossroad that we’re going to face in the United States. We still, and I’m just going to be blunt about this. The United States still has not had an effective answer to the question of “How you’re going to pay for it?” even though people have said it repeatedly, the politicians themselves, they’ll keep coming out, saying very erroneous things that further existing beliefs.  

And ultimately it gives all the ammunition to the naysayers to say, “Yeah, I don’t want to pay my taxes for it. I’m not letting you do it. No, I’ll vote against you.” And it’s a shame because it’s right there. It’d almost be worth losing the election, so to speak, to bust this wide open so that we have a chance.  

Then it would be to protect the election and allow people to keep carrying this forward for generations, because we have an unprecedented danger in climate change. We have so much wealth lost in the minority communities of America from the Great Recession. We have so many people that are in dire shape right now, but the idea of allowing that lie to continue in any way, shape or form, I believe it may be the most problematic aspect of it all.  

I’ve talked to people that you would call Tories, but they’re Republicans here in the United States and had discussions with them. And when I break down MMT, they’re like, “Oh, wow. I still don’t want my tax dollars . . .” Well, I hear you, but they genuinely have a different perspective. And they’re like, “Oh, I gotta think about that.”  

It’s far more frustrating to deal with people within your own “tribe” who should know better, who should be fighting for the same things and they don’t. I oftentimes find the complete opposite. Conservatives will hear that message if for whatever reason easier than our own progressive community. And it’s baffling. 

Patricia Pino (55:10): 

Also, perhaps not reducing people to simply a bag of economic needs is very important because during the ‘Remain’ campaign, the ‘Remainer’s’ biggest argument was that “I don’t care what Brexit is about. It’s not worth losing money for.” You know, that was their whole argument. And the ‘Leavers’ proved them, re-iterated over and over again, that they would be willing to lose their jobs if it meant having democracy, that having power over their own destiny.  

They stated it in many, many different ways. And ‘Remainers,’ the most kind of ardent ‘Remainers’ didn’t understand, or didn’t want to understand that. They didn’t see why anybody would care about anything other than their salary at the end of the month. So I think that MMT is incredibly important to help people make informed decisions in terms of what is best for their prosperity in a way that countering all this neoliberalism has actually made people vote against their interests.  

But also, the MMT argument has to be framed around people’s values and they will not always be the same. So we have to have different ways of framing MMT, according to things that are important to different groups. And that means empathizing obviously with, you know, minorities and people who care enormously about feminism and gay rights and all these causes; but also empathizing with people that we know don’t necessarily have much in common.  

Because if they’re not voting for us, they’re voting for Trump, you know? 

Steve Grumbine (56:55): 

That is very powerful. I love the way you ended that right there. With that, Patricia, thank you so much for joining us again. I look forward to talking to you in the future. You’re just amazing. And thank you so much for taking the time to be with us. 

Patricia Pino (57:12): 

Thank you for inviting me, always a pleasure and all the best of luck. 

Steve Grumbine (57:16): 

To you as well. Say hello to Christian. 

Patricia Pino (57:20): 

I will. Bye. 

Steve Grumbine (57:23): 

All right. Bye bye. [inaudible] 

End Credits (57:30): 

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 Progressives Patreon account. If you would like to donate to Macro N Cheese, please visit patreon.com/realprogressives. 

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