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Oct. 12, 2018 - Jimmy Dore Show
01:00:40
20181012_1011_TJDS_Podcast
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Hey, everybody.
This is Jimmy, myself, talking to you right out of my own head.
And I'm going to tell you about this new app to get your news.
It's called News Voice.
It's revolutionizing the way people read news.
And it's cool.
News Voice.
You get all your news in one place.
It's an app.
Go to newsvoice.com/slash Jimmy.
It's free.
So go get it.
Download News Voice at newsvoice.com/slash Jimmy.
A cool way to get your news.
Get ready for an outstanding entertainment program.
The Jimmy Dore Show.
What a nice surprise.
John Boehner's on the line.
He used to be Republican Speaker of the House, you know.
Hello.
Answer the Boehner phone, goddammit.
Stupid jackass.
What's the holdup?
I'm here already.
Boehner here.
Only now you may address me by my new title, Speaker of the Board of Directors at Acreage Holdings Incorporated.
Acred Holdings, what's that?
Let me answer that question with another question.
If you'd asked five years ago what the quickest way to Jupiter was, what do you think my answer might have been?
I don't know.
Increasing NASA funding?
Hell no.
I would have said, fuck Jupiter.
We're going to Pluto, motherfuckers.
So it's a space company?
Yeah.
As in, wow, dude, bro.
I'm in a good space.
But what do you know about space exploration?
All right, you dip shit.
It's a weed company.
How many hits do you need anyway?
A drum circle reference.
That's right.
I'm going to be selling weed, Spliff, Ganja, Blast, Mommy's Night Visitor, Snake Farts, Puff the Magic Dragon, whatever you little shits are calling it nowadays.
I'm going to be rich.
Don't you know we're riding on the Bayer Kush Express?
They're taking me to Bayner Kush, the Bayer Kush Express, all aboard the Kush.
Yeah, Boehner Kush, baby, I'm back.
Oh, by the way, I've also changed my position on turmeric.
Turmeric?
The spice?
Sure, Brick.
Yeah, bring it on.
Sprinkle it on my salad, shake it on my pudding, gently apply it to my dingle-dangle.
I'm all for it.
But weren't half a million Americans arrested for selling pot during your term as speaker?
Boehner used to think legalizing pot would result in the increased abuse of other drugs like alcohol.
Boehner has a different perspective now.
What changed your mind?
I realized it's a physical impossibility to abuse alcohol.
That's a very controversial claim to make.
Let me explain.
First of all, there's never enough of it around.
Second, it's simply too delicious.
And third, I really need it badly.
Okay, that makes sense.
And I can make a lot of money off it.
But your partner, Bill Weld, is a former prosecutor who used to argue pot was a gateway drug.
He still does.
And by that, he means gateway to craploads of cash, my friend.
Boehner's going to be rich.
But you're already rich.
Yeah, money's just like booze.
You can never have enough.
I'm about to drop my new concentrated pot extract called Boehner oil.
Now, under most conditions, most people would recoil at the thought of a substance called Boehner oil, right?
But this Boehner oil is a miracle cure for all sorts of things.
Really?
Like what?
My boring retirement.
Don't bow guard my Boehner.
All right.
You know, you're riding on the Boehner Kush Express.
They're taking me to Bayner Kush Express all aboard the Kush.
I've been waiting all my retirement to take me there.
I can smell the ganja in my hand.
It's the Jimmy Door Show.
The show for Lux.
The kind of people that are.
Tom Bench may be on Tearing Down Our Nation.
It's the show that makes Anderson Cooper save.
And now, here's a guy who sounds a lot like me.
It's Jimmy Dore.
Hi, everybody.
Welcome to the Jimmy Door Show.
We have a very special guest with us today.
Her name is Stephanie Kelton.
She's a professor of public policy and economics at Stony Brook University.
She's also chief economist on the 2015 U.S. Senate Budget Committee for the Minority Party staff and an economic advisor to Bernie Sanders' 2016 presidential campaign.
She founded the new economic perspectives blog and is a leading proponent of modern monetary theory.
Politico named her one of the 50 thinkers, doers, and visionaries transforming American politics in 2016.
Welcome, Stephanie Kelton.
Thanks for being here.
Thank you for having me.
All right.
So I know what trickle-down economics is, right?
So that's what Ronald Reagan brought us in the United States, which was if you give more money to the richest people in the country, they'll spend so much it will trick.
It'll trickle down.
Sir, may I have a trickle?
Just a little.
It sounds horrible, and it is.
And that's why we're but before that, we were doing a version of Keynesian economics, if I'm correct.
So you can correct me.
That's why you're here.
But that's like demand side.
It's like what FDR did.
He put money in the pockets of workers, and so then they went out and spent it.
And I was always told that was a demand economy.
How am I doing so far?
You're doing well.
Oh, okay.
So now there is.
Passing grade.
Okay.
So now there is a new theory coming along, and it's called modern monetary theory.
And it really shifts, it turns your head upside down on how people have normally come to think about economics because people still, even though we're not on the gold standard, people still think like we are, and we still act like we are.
So if you can explain what I'm talking about, how about that?
Yeah, so I mean, there is, there definitely is a big divide in terms of the way different economists approach, you know, how government can be influential in the economy.
You talked about trickle-down economics.
This is, you said trace back to Ronald Reagan.
That is for sure correct.
So the idea being that the tax cuts go mostly to the so-called job creators.
So you have to skew the benefits to the people that we most revere, the people who will go out and do the big spending into the economy, hire workers, and give that big boost.
Keynesians tend to be, I think, associated more with big government spending.
But you could be a Keynesian and also be in favor of tax cuts, but you would want to see tax cuts that are skewed, like you said, to the people who you can put more money in their pockets and they'll go out and spend.
And a tax cut would be just a fine thing to do if you were putting more money in the hands of the pockets of the people who are the real job creators.
And in our economy, the real Job creators are the American consumers because that's where most of the demand comes from.
I said it.
It's you, it's me, it's regular old people who make less than a million dollars a year and spend virtually everything they get.
So, if you give an extra bit of money to those folks, they're going to turn around and spend virtually all of it back into the economy, creating demand for the goods and services that our businesses produce.
They get swamped with customers, their revenues go up, their profits go up, and lo and behold, they decide I better hire some more people.
I need to invest some more because I'm swamped with demand for my stuff.
So, that's a pretty Keynesian way to do it.
It's just, I think we've come to believe over time that Republicans are always the party that favors tax cuts, and Democrats are always the party that favors more government spending.
And MMT kind of comes in and says, actually, both would work provided that you're spending on things that will materially boost economic activity.
They're not boondoggle projects.
You're doing good types of spending into the economy, providing things that people actually value and that will lead to some job creation.
And if you want to do some tax cuts as well, that's okay too.
But make sure the tax cuts go where they'll do the most good in the economy.
And that means to the people who will turn around and spend virtually everything and not turn around and pad their 401ks, buy more real estate, buy more shares of stock and the like.
So what modern modern terror, what modern monetary theory I think hinges on, or the kind of way people need to start thinking about this in a different way, is that the budget of your house is much different than the budget of a government that prints its own currency.
Right.
And so, Go, can you explain the difference?
Yeah, so that's why the federal government could afford to do both, to spend more into the economy and also provide some additional tax cuts if it wants to sort of create more jobs and see more activity.
Because unlike a household, it can spend more and take in less at the same time and still end up all right.
Whereas if you and I went around doing that time after time, oh, I'm going to take fewer hours this week.
I'm not going to work as much.
I'm going to let my hours fall and my income will go down.
And oh, by the way, I'm going to spend more as well.
We'd run into real problems.
But because the federal government isn't like a household, it isn't like a city like Detroit.
It's not like Puerto Rico.
It's not like the state of Kansas.
The federal government is where the money comes from.
So because, you know, and everybody actually deep down in their core, they know this.
Everyone knows that Congress has the power of the purse.
We use the term, the power of the purse.
And somehow we just sort of don't connect the dots and come to fully appreciate what that means, which is that they can never run out of money and we can.
So people don't really understand.
It's hard for me to wrap my mind around it too, that since the government, the United States government prints our own currency, that's why we can deficit spend when we go into a recession, unlike countries like Greece, right?
So Greece right now is in trouble because when their economy tanks, they can't spend deficit spend to boost the economy because they don't print their own money.
They're on the Euro.
So when they want to deficit spend, they actually have to borrow the money that they actually have to pay back, whereas the United States just prints the money.
Now, that's going to blow a lot of people's minds, right?
So yeah, it does tend to blow a lot of people's minds.
And not only does Greece have to go out and borrow the Euro, which is a foreign currency, effectively, for the country of Greece now, but they have to borrow the Euro on the terms that are set by capital markets, right?
So the bond vigilantes that people sometimes worry about, those people who finance the Greek government when they need to borrow, can demand higher and higher interest rates and say, listen, you're Greece.
I don't know if you're going to be able to pay me back or not.
So if I'm going to lend you money, I need six, seven, eight percent.
I mean, this is what happened in the debt crisis during the debt crisis, right?
And interest rates are going up double digits.
And in the U.S., on the other hand, the U.S. is spending its own currency into the economy, taxing some of it back, and then voluntarily choosing to swap out some of the money it's spent into the economy for these treasury bonds.
And we label that borrowing.
And we say somehow, you know, this is going to be a problem.
No, the government doesn't even have to do that.
It's borrowing its own currency back, and it can set the terms at which it borrows.
In other words, we have our own central bank.
So we could have the Federal Reserve say, we're not going to let the government borrow at rates in excess of 2% ever.
We did that historically.
We had something in the 1950s and 40s called the Treasury Fed Accord.
And we just instructed the central bank to serve the people.
We said, your job is to maintain interest rates at certain low rates so that governments were able to borrow the money, not drive up interest rates and so forth.
So completely different game for the United States compared to Greece.
So let me just, so a lot of people think that, oh my God, we have this $21 trillion deficit and that we're going to, we have to pay that back with our taxes.
But that's not really true, right?
No, it's not, it's not true at all.
Like I'm sitting at my husband's desk.
He happens to have a post-it notepad here.
So can I like, let's just say that I'm the government and I'm going to spend $2, $2 billion, whatever we want to call these.
I'm going to put these into the economy.
So here they go.
I'm handing them to you.
You're the economy.
Now you have these two.
I spent them in, but I'm going to take one back from you.
And I'm going to call that a tax.
So I collected this one back.
It's gone.
But you still have this one.
Okay.
So I'm running a deficit.
I put two in.
I take one out.
It's my deficit, but you're sitting holding this.
And this is your surplus.
Now, this is the money I spent into the economy and didn't tax back.
Okay.
This is your dollar.
But now I'm going to borrow this dollar from you.
So I'm going to get a different color paper called a treasury bond.
And I'm going to take this from you and I'm going to give you this.
So now you have blue instead of orange.
That's me borrowing from you.
Okay.
But the money to buy the treasury bond came from the government spending.
The money to buy this came from the fact that I gave you this.
So I'm providing both the money that you use to pay your taxes and the money you use to buy bonds from me.
So yes.
Yes.
The more I listen to you, the more I'm following this.
Here, there's one more thing I want to add.
So the point is that we, since we print our own money, that deficits don't really necessarily matter.
And that the only thing you really have to be careful of is that you don't print too much money because then let's say that the economy is already humming at like a peak.
If you put more money in, then that'll make inflation happen, Right.
And so that's what you need to be careful of.
So let me show, here's Alan Greenspan.
You actually like to show this video clip during your talk.
So I got it, and I'm going to play it here.
And you can explain it to people what he's saying.
So he's being questioned by Paul Ryan.
And Paul Ryan is trying to get him to admit that Social Security is a bad idea and that we should have private savings for Social Security instead of this public idea.
And so he's going to say he's trying to get Greenspan to admit that, yes, Social Security could run out of money and that's why we have to do it this way.
But he doesn't actually go along with Paul Ryan.
And I'm going to play it right now for our people.
Here we go.
Let's watch this.
So having personal retirement accounts is another way of making a future retiree benefits more secure for their retirement.
And also, do you believe that personal retirement accounts as a component to a system of solvency does help improve solvency?
Because when you have a personal retirement account policy, it's a company with a benefit offset.
With that feature in place, do you believe that personal retirement accounts can help us achieve solvency for the system and make those future retiree benefits more secure?
Well, I wouldn't say that the pay-as-you-go benefits are insecure in the sense that there's nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.
The question is.
Okay, so I'm going to stop it there.
Okay.
So he says, so Greenspan says, no, there's really no danger of pay-as-you-go, meaning Social Security, right?
That's what he means.
There's no danger of it running out of money because the United States government can print as much money as it wants and then give it to anybody it wants.
He just said that, which kind of blows Paul Ryan out of the room, right?
I think it drained all of the color out of Paul Ryan's face as soon as he said it.
Yes, it was a great moment.
So then he goes on.
So that's Alan Greenspan admitting kind of your economic theory.
He's kind of admitting what you and other people are pushing now, modern monetary theory, or you're working on.
I don't want to say pushing, but you're working on now.
So he's kind of admitting that the basis of what your modern monetary theory is is actually correct.
So a couple of things.
So he knows it's not a theory.
He was the chairman of the Federal Reserve.
The guy knows where the money comes from, right?
So he knows it's a reality.
And not only that, this guy follows Ayn Rand.
This is a true believer, libertarian.
You know, I mean, this is a guy who would very much like that not to be the case in a sense, that there were real hard constraints on government's ability to do more for the economy.
And so in a way, it drives him crazy that this is the case, but he's under oath.
And to his credit, he gives an honest answer.
So, okay, so that's facts.
You're right.
He does know how it works.
So now he's going to go.
And so now he's going to go on and explain more.
And I don't know a thing what he's talking about, but I'm sure you will.
And you can tell us what he means.
So here's what he says next after that.
How do you set up a system which assures that the real assets are created, which those benefits are employed to purchase?
So it's not a question of security.
It's a question of the structure of a financial system which assures that the real resources are created for retirement as distinct from the cash.
The cash itself is nice to have, but it's got to be in the context of the real resources being created at the time those benefits are paid so that you can purchase real resources with the benefits, which of course are cash.
So I don't know what he's talking about.
Can you tell me what he means?
But it seems to still upset Paul Ryan.
So that's got to be good.
So what is he saying?
That was crystal clear, Jimmy.
I have no idea.
That was the biggest word salad.
Yeah.
Yeah.
So here's what he says.
So let's go back.
The first thing he does is take the affordability question off the table, right?
He says there's absolutely nothing to prevent the federal government from caring for every future retiree, the disabled, and their dependents, as promised, in full on time for the rest of eternity.
Nothing to stop us from doing that.
So we've completely put that aside.
Then he goes on to make what is the really important point and the point that I wish we were debating instead of what we always end up debating.
The really important point he's raising is this.
Greenspan knows demographics are changing in this country.
Baby boomers are moving into retirement, leaving behind fewer and fewer people to produce the stuff that all of us will continue to buy.
So boomers will retire.
They won't make stuff, but they'll still want to buy stuff.
And Greenspan says the question is, how do you set up a system which assures that the real assets, the real stuff is getting produced in the economy, are available.
How do we make sure that we're going to have a productive enough economy in 5, 10, 20, 30 years so that when those checks go out, people can spend that money into the economy without wait for it, shortages and inflation.
If there's not enough stuff, if we're not a productive enough economy, then we're going to have the old problem of too much money chasing too few goods.
And it's as simple as that.
So that's what he was saying.
So he's saying that, yeah, we can always make sure the cash payments go to the people.
That's no problem.
The problem is, is there going to be stuff being produced in our economy for them to go buy?
And if there's not enough stuff, a surplus of stuff, then that's going to create shortages, which will create hyperinflation.
That he's saying that's the same, right?
Is that what he's saying?
Exactly.
So if we were listening to Alan Greenspan on this, we would be having a fierce debate in this country, not about cutting people's benefits and reforming Social Security, which is just code for cutting benefits, and focusing on the pay for.
How are we going to afford it?
We can't afford it.
It's the money problem.
It's the money problem.
It's not a money problem.
It's a productivity problem.
And we could fix it.
We could address it if we were having a fierce debate about whether Republicans or Democrats or whomever has the best plan.
Who's got the best economic plan to make us a more productive economy going forward?
Who wants to invest in infrastructure and education and RD and make the case that these are the things that do more to boost long-term growth and productivity for an economy than anything else?
The Republicans will say, hogwash, it's tax cuts and deregulation, but that's their story.
They're sticking with it.
But at least we would be debating the right thing, which is how to have a healthy economy, a healthy, productive economy.
Well, it's obvious that the Republicans only pay lip service to the deficit, right?
So even Dick Cheney famously said, was quoted as saying deficit.
Reagan proved deficits don't matter because Ronald Reagan was supposed to be a fiscal conservative, but he exploded the deficit.
And nothing bad happened.
And that's why Cheney said that.
They don't matter in the sense that they bring about Armageddon.
You know, when we first, you know, when Hamilton first said, we're going to buy up some state debts and we're going to have a national debt.
There was no national debt before Hamilton did that.
So we have a small national debt.
And of course, over time, $500 billion becomes a trillion, and all the hair is on fire.
And everybody's saying this is the worst thing in the world.
It's unsustainable.
And then a little bit of time passes and it's two and a half, then it's five, then it's seven.
Everybody's hair on fire.
Then, you know, Obama comes in and we go from seven to 11 to now 15 to 20 to 21.
And everybody all along continues to say the end is near.
This is unsustainable.
And nothing bad happens, right?
Inflation stays right around the Fed's 2% target.
Interest rates go wherever the Fed tells them to go.
It's like, you know, what are we upset about?
You know.
So, which also proves your theory that since nothing bad has happened since Ronald Reagan started exploding deficits, it's kind of proving your theory, right?
Well, if you mean that it's proving that there's not this tipping point that the Harvard economists a few years ago persuaded most of the policymaking world that if countries allow their debt ratio, their debt relative to their GDP, if they allow that ratio to get at 90% and higher, that that's where the vulnerability sets in.
And countries that allow their debt to get up to 90% of their GDP reach a tipping point.
And then you tip over and slow growth and all these bad sorts of things happen.
Well, you know, look at Japan.
Japan is sort of the perfect example with a debt to GDP ratio today of about 240%.
Their debt is near a quadrillion.
I don't know how many zeros I do actually, but that's a lot of zeros, a quadrillion in debt.
And they got no inflation and interest rates below 1% and life goes on.
Wait a minute.
What is a quad?
Is that a real number?
Yeah, add three zeros to a trillion and you get a quadrillion.
So to a hundred, yeah, so from a hundred trillion, the next zero up is a quadrillion.
So their debt is exponentially larger than our debt.
Well, but it's that's not dollar denominated.
That's yen denominated.
But yeah, in yen, they're at about closing in on a quadrillion.
Okay.
All right.
So now here's a couple other things that I need explained.
So when we say that the government borrows money, now you already kind of explained that before with the blue and the orange post-it.
So they don't actually go to a so they don't, for instance, we just decided to spend $80 billion more on our military budget.
Now, the Secretary of Treasury doesn't call up Jamie Dimon and said, I need $80 billion.
That's not, he doesn't borrow it from a bank per se, right?
They issue what they call treasury bonds.
And what it is, is people buy those as investments.
They're just a bond, right?
And then they can cash them in later for the interest that it has accrued.
That's how the government borrows.
Is my correct?
Well, I mean, yeah, there's a dealer market.
There are certain banks that participate in the auctions.
They're dealers.
And so when the government holds an auction, sells bonds, there are dealers that are required to bid.
In fact, you have guaranteed buyers for the bonds because they're required to bid for them.
What the Fed does, so that you have your own treasury and you have your own central bank.
And the Treasury and the central bank coordinate behind the scenes.
And they make sure that bond auctions don't fail, that treasury checks don't bounce and so forth.
So we talked about this a little bit before about how it's not like when you and I go to finance a car or make a purchase.
We go out and find somebody who's willing to extend credit to us and then we prearrange the financing and then we have the money and then we go out and spend.
The government is already spending the money into the economy.
And what's happening in the background after the authorization to spend all that money has been given is these agencies, the Treasury and the Fed, are working it out to make sure the payment's always clear.
That's kind of amazing.
That's actually kind of amazing.
Well, it's reassuring too, because the last thing we'd want are a bunch of government employees, checks bouncing and contracting.
Well, here's the second question to that, though.
So if we print our own currency, why do we even have to do the treasury bond thing?
Why don't we just print it?
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So if we print our own currency, currency, why do we even have to do the treasury bond thing?
Why don't we just print it?
And I'm not sure I have a good answer.
We're just sort of trapped in the habit of doing it.
I mean, we've been doing it this way for so long.
And I think that probably the answer has a lot to do with the fact that the people who buy these are the financiers.
I mean, treasuries are a nice way to get a little bit of a free ride, right?
You get a subsidy from the government.
They give you interest for holding blue instead of orange.
And they don't have to volunteer to do that.
But, you know, people, some people will say, oh, it's the poor fixed income, the savers living on their fixed incomes.
We have to get interest rates up because grandma is getting punished when the Fed keeps interest rates so low.
And so what we really want to do is look out for the poor saver who's trying to get by on a on a fixed income.
You know, she spot all these treasuries.
Well, okay, there are some people out there, yes, who hold treasuries, but the vast majority of these things are held by the very, very wealthy.
Okay.
All right.
So that clears that up for me.
So now, if Alan Greenspan understands how this works.
So let me, I'm going to try to explain how the budget actually works.
And then you correct me where I'm wrong.
So the legislators get together and they decide spending priorities.
Right now, one of our spending priorities is $715 billion for military budget that nobody in the country actually wants except the 1% who are stockholders and those defense contractors, companies.
So they write a budget.
They have all this.
We're going to spend this much on Medicare, this much on Medicaid, this much on the Pentagon budget, this much on infrastructure.
And they just decide.
And then they don't wait for the financing.
Like you said, the financing is just automatic because the banks have to give us the money.
And what we have to give them back is Interest on that money, but that we print anyway.
So, am I close?
Is that close?
So, what a budget really should reflect is our priorities.
And right now, it's not.
It's reflecting a false priority that we have to do some kind of belt tightening, correct?
Yeah, the budget should reflect the priorities.
And so, yes, that's correct.
If your priorities, if the Democrats swept in, presumably they would write a budget that looks quite different from the one the Republicans would write.
They would put more resources in education and infrastructure and these sorts of things, Medicaid, food stamps, you know, whatever, and so, and take some money out of defense or other areas of the budget.
So, there'd be some shuffling, but there would also maybe even be some augmenting in total.
So, they're saying to the agencies, they're saying, look, we've just authorized all of this spending.
Go start spending into the economy and all of it's going in.
But some of it just starts coming back automatically because people pay their taxes.
So, the government is collecting some of what it's been.
That's gone, right?
When you collect it back, you don't need it anymore.
You just throw it away.
So, now I've collected your tax.
I took it out.
I can always spend new money back in, but the taxes go out.
And at the end of whatever period we're measuring, like a fiscal year, there will be a difference between how much was spent in and how much came back and we tossed it out.
The difference is either the surplus or the deficit.
So, if we're putting more into the economy than we're taxing back out, the government is running a deficit, which means people end up holding some extra of these.
And because the government requires itself to borrow whenever it runs a deficit, it starts swapping these for these.
So, now they go, they go like this, right?
So, it's all kind of happening in real time all the time.
It's not in sort of on day one, this and on day two.
It's always all happening at the same time.
But at the end of the fiscal year, we net it all out and we figure out how much more did we put into the economy than we took out, and we label it a deficit.
But you know what, Jimmy, when we do that, when Congressional Budget Office and the Wall Street Journal and all these publications, when they report the government's budget deficit, they're looking at the situation.
They're telling the story from the perspective of the government.
The government's finances were in deficit, but they never tell the story from the perspective of the economy, the not government part of the story.
So, if instead of a headline reading, government deficits projected to go from 800 billion to a trillion next year, instead the headline could read, government, I'm sorry, non-government surpluses projected to go from 800 billion to a trillion next year.
And we'd all go right on, you know, like that would put it, that would chill people out.
So it sounds like the whole monetary system is really kind of based on an agreement that we all like, it's not really based on anything real.
It's kind of just based on we agree that this is what this is worth and how stuff is going to work.
But is that, I mean, am I crazy to say something like that?
Or is there any truth to what I just said?
Well, it's based on the fact that, you know, the government has the power to make and enforce the tax laws in our country.
And so we're all subject to the government's tax laws.
So it turns out that these things they're spending into the economy are needed by us.
You know, we keep thinking the government needs our money to do XYZ.
The government doesn't need our money.
We need their money, right?
The tax is imposed by them on us.
So we got to earn these things somehow in order to pay our taxes.
And it's because they very kindly normally put more of these things into the economy than they take out that we're able to walk around with some extra, that we're able to hold on to some of these and accumulate them and hold them as part of our savings.
So if the government just decided no more of that behavior, right?
We're just running surpluses from now on.
They would just be sucking the green paper, I'm sorry, orange paper out faster than they put it in, and our balances would all start dwindling down.
So, okay, there's one more thing I want you to tell people how this works.
So when we loaned money to the banks when they went, when we had the stock market crash and the banks went belly up and they're too big to fail, meaning if these banks go out of business, it will hurt our economy so much that the reverberations would be too painful for us to bear.
So the government's just going to go ahead and give them whatever amount of money it takes to make them whole, right?
That's the idea.
Well, I'll go with that.
That's a fair enough way to say it.
But the way they give them the money is so they give them the money.
They print money, lend it to the bank.
The bank then takes that money we've lent it and then buys treasuries from the United States government, which they get interest on.
And so they use that interest to pay off the loan that they got from us.
Is that correct?
It's kind of beautiful.
I mean, yeah, so a lot of things happened to deal with the way that the Fed and the government dealt with the situation after the financial crisis.
But yeah, we had a bunch of stuff that was fancily called quantitative easing, where the Fed, you know, if you like, hit the print key a lot and bought up treasuries and mortgage-backed securities from the banks, taking those off their balance sheets, giving them effectively cash instead, paying them interest on their excess reserve balances, which is just a way of topping up banks' balances with additional monies.
And so, yes, it more or less works the way you just described.
So that to me, and correct me if I'm wrong, that's why you're here.
To me, that sounds like a scam.
Well, you say scam, they say liquidity infusion.
I mean, you know, it is a way of injecting cash onto balance sheets of institutions perceived worthwhile, worthy, and needy.
Yeah.
But this is why people say things like, you know, when some of these candidates have been asked lately, how are you going to pay for this?
How are you going to pay for this?
You have this big progressive agenda.
Some of these candidates have started saying, well, we didn't have any problem finding, you know, trillions of dollars when the banks needed to be bailed out.
I don't know if you saw, you know, with the 10-year anniversary of Lehman, there were a lot of pieces written and published in the last few days.
And Matt Taibbi has a really good one in Rolling Stone.
And he goes back through some of the estimates.
You know, just how much did the Fed end up intervening?
Like, what dollar amount do we put on that?
And the highest estimate that's been provided by the Levy Economics Institute in research was 29 trillion.
When they looked at it, they say the Fed gave as much as, right, intervened to the tune of $29 trillion.
You go, okay, If we can do that, surely we can do something for veterans, something for infrastructure, something for hungry kids.
Yeah.
So when Barack Obama instructs, you know, goes along with the Fed quantitative easing, giving the banks $29 trillion and then turns around and literally does a pay freeze for federal employees saying that we have to pay for this.
That's bad economic thinking, right?
Oh, for sure.
Yeah.
I mean, there were, you know, and now there are debates.
Everybody's sort of going back and looking at how policymakers responded to the great recession.
And a lot of people, I think, are trying to do some revisionist history here and trying to sort of reshape the role that they played in the whole thing and say, oh, we really tried to do more for homeowners.
Oh, we really tried to do more in terms of the stimulus.
Yeah.
So there's a lot of that going on.
If Greenspan understands how this works, like you understand, Barack Obama must understand how this works, like you understand.
So what's in it for him?
And Trump just did the same thing, by the way.
They gave a trillion-dollar tax cut, and then he froze pay for the federal employees again.
What do you get out of doing that?
What do they get out of doing that?
I don't know, because it would be so easy to do the opposite of that and have more voters behind you.
You know, it's like it goes way, way back to the Reagan years when the Republicans used to talk about playing Santa Claus and, you know, the To Santa's theory and all this kind of stuff, that it was understood that if you can do things when you have power, that even if you're giving the lion's share of the benefits to the people at the very top, do something for the broad middle and those at the bottom.
And you carry everybody.
I mean, you have a better chance, right, of carrying everybody along with you in your program and having voter support and all that kind of stuff.
But they don't seem to care.
I mean, 31% approval or whatever.
And he just keeps hammering away at the people at the bottom.
And it'd be so easy to give them, throw them a bone.
So, I mean, FDR understood this.
And it's weird how they just, you know, FDR says, famously said here that he didn't bring socialism to America.
He saved capitalism.
And what he told his rich friends is, if you don't give some of your money away to these people now, the workers, the general people and the population, that they're going to take all of it away like they did in Russia, right?
So they went along, or he got enough of them to go along with it, and it worked, right?
So he put money in the pockets of, you know, so I just don't understand.
Again, it's these, like you can have your cake and eat it too in a sense.
And like Bill Clinton, Barack Obama, like Barack Obama's smarter than me.
So how come if he understands that, is it a class thing like Chris Hedges says, he just comes from a different class and they just think differently?
I don't know.
I mean, I didn't work for him or have any role in that administration.
I know Gene Sperling was a true believer.
I think that my understanding from people that did work in the administration that I've spoken with, I think that President Obama listened to Gene Sperling on a lot of things.
And, you know, he wanted that grand bargain.
I mean, he really wanted that thing, right?
That was going to be a sort of signature achievement.
It was sort of an only Nixon can go to China.
Only a Democrat can do the thing with entitlements.
And whether it was more of a political calculation or more of, I believe I genuinely have to do this because the economics don't make sense.
You know, he really believed that the thing is unsustainable.
And just so people know what that is, the grand bargain, tell people what that was.
Well, this was this idea that Republicans and Democrats were going to come together to tighten the noose and to say, look, we're going to put everything.
It was the everything's on the table sort of thing.
For a while, we were hearing about shared prosperity.
Well, pretty soon it became shared sacrifice.
Right.
Everybody's going to hurt.
We're going to hurt all of you.
Okay.
But the banks didn't get hurt.
The banks didn't get hurt.
No, the banks didn't get hurt.
Yeah.
At all.
No.
So this was we're going to put, we're going to make some tough, tough decisions on entitlements, cuts there.
So the grand bargain was Barack Obama, then the Democrats were willing to cut Social Security and Medicare.
Right.
That was the big, and that's the thing that they're not supposed to do under any situation.
And they were willing to do that.
Right.
Right.
That's the grand bargain.
Right.
And it really, I mean, if you're, if you're honest, I think you have to say it was the Tea Party that saved us from ending up with a grand bargain.
It was.
Because they said it wasn't enough.
It wasn't deep enough.
We won't vote for it.
So we really have the Tea Partiers to thank for the fact that we didn't gut or cut Social Security and Medicare.
So first of all, I'm really glad that we got to talk to you.
And I know you don't have a lot of time, but I have one more question.
Nancy Pelosi has vowed, by the way, she's going back as leader from California.
We're the bluestate.
We have a supermajority here, Democrats, and we keep electing corporatists, Diane Feinstein and Nancy Pelosi, which tells me that the Democratic Party is just lost, right?
So she's going to go back to Congress, and she is already committed to a thing called PAYGO, which PAYGO means is that you can never do what you're saying.
Although the Republicans do it all the time, they come in and they spend money or cut taxes and they don't care how much it adds to the deficit.
And they do all their pet projects and the Democrats never get to do it.
And what Nancy Pelosi is saying is we're going to do PAYGO, meaning whatever program we decide to pay for, we have to either raise taxes or cut that something else equal out of the budget, which cripples a progressive agenda, correct?
I could not say it better.
Exactly.
It cripples the progressive agenda.
It commits the government to saying for every one we put in, we're going to take that one back out, nothing net for you.
And it hamstrings your ability to, I think, move any kind of progressive legislation.
You're not going to do big, ambitious things under a PAYGO.
So now, is that Nancy Pelosi just being misguided?
She just doesn't understand how stuff works.
No, she's a true believer.
She went on to the House floor after Pete Peterson died, right?
The billionaire fixed the debt and the Peterson Foundation and the can kicks back with the little guy in the can costume running around college campuses, telling young people that Social Security is never going to be there for them.
This guy funds all of this apparatus of, you know, of institutes designed to go after Social Security and Medicare.
And after he died recently, Nancy Pelosi took to the House floor to give a big speech lamenting his death and thanking him for all of the great and important work he did to bring the importance of fiscal responsibility and the dangers of the deficit and all that kind of stuff.
So I think she's a believer.
So that's so no matter if Bernie Sanders gets elected president, he has to deal with someone like Nancy Pelosi.
Even if there's a blue wave and they take over Congress, Nancy Pelosi is not going to ever.
So that means we'll never have Medicare for all is what that means, because she would, according to Nancy Pelosi, we'd have to raise taxes $32 trillion.
Anyway, she's, it's just, and right, so right now in New York, Andrew Cuomo just defeated Cynthia Nixon.
So now is Cynthia Nixon supposed to tell progressives to vote for Andrew Cuomo, who the New York Times editorial board called one of the sleaziest move sleazy and one of the lowest dealers in politics.
We're supposed to go vote for that guy now.
Is that what's going to happen with the Democrats?
I don't know what's going to happen.
I live in New York now and I voted yesterday.
I doubt she's going to be speaking out vocally as a champion for rounding up votes for Andrew Cuomo, but I okay, it's just a head scratcher to me how people who can vote for Cynthia Nixon can then bring themselves to vote for the Democrat version of Donald Trump, which is Andrew Cuomo.
So, and that's why this will never happen.
And we'll all be dead soon because climate change is coming.
And the Democrats didn't do anything about that either when they had complete control.
People forget that Barack Obama had complete control of government and a filibuster-proof Senate for a few months.
And imagine if the Republicans had that, what they would do.
They would cram everything in the world in those two months in and they would get it done.
The Democrats couldn't even get a goddamn public option.
You know why?
Because their donors don't want them to have it, which is why we got Donald Trump.
He is, as Chris Hedges says, a visage of a broken democracy.
So trying to fix the, so, you know, voting for Democrats is not going to fix this problem, right?
I don't know, Jimmy.
I got to say, I got to believe.
What's the alternative?
Who are we going to vote for?
Like right now in 2018 or in 2020, how do we get to where we want to be?
I don't know the answer to that, but I see some really inspiring candidates who happen to be running as Democrats.
But they're, you know, they're winning seats, Jimmy.
They are.
They're winning House seats.
They're winning seats in the state legislature.
We just had a big victory here in the state of New York yesterday.
We got the IDC.
We're doing some things.
It's incremental.
It's frustrating.
I don't know how to do it in one fell swoop, but I wish we could.
Yeah, I know.
So the incremental is going to get us killed because climate change is coming.
So incrementalism isn't working.
That's what we've been doing.
Bernie asked for a so you know when Bernie would start off his campaign speeches, he would say, sounds like you're ready for a revolution.
And then he turned around and backed Hillary Clinton.
And now he's really doing incrementalism.
Like you said, that's what we're all doing now: incrementalism.
Well, when I meant, I didn't mean incrementalism in terms of what we reach for with policy.
I meant incremental victory.
So you win some, you lose.
We're picking up incremental, we're making incremental progress is what I meant in terms of getting the kinds of candidates I think you and I both want to see more of elected to office.
Yeah, okay.
Well, it's it's I'm really disappointed.
It's very disappointing.
It's not happening.
There is no progressive takeover of the Democratic Party.
They've met, you know, how many corporate Democrats that they've effectively primaried?
One, Joe Crowley.
That's it.
Anyway, and now, you know, Cortez has to tell people to vote for Andrew Cuomo because she's a Democrat.
It's gross.
It's disgusting, you know?
But anyway, that's not, I don't want, you're here to talk about economics, and you did.
You did a great job.
Hey, let me ask you.
I'm here to throw paper.
That's why I'm here.
But can I, let me ask you one more economic question.
So now I don't want to put my money in the stock.
Like, so retirement money, I'm supposed to put my money in 401ks.
What do people do if the, because I know it's going to crash again, right?
Well, it probably will crash again, but the reality is that it will go up after it crashes.
And you're a young guy.
So, but I've been told, and isn't this true that they've pulled all the, they've done all the tricks they can.
And because the interest rates are so low, so the next time it crashes, there's less stuff for them to do.
And it might not be, we might not come out of it like we did this last time.
Is that true?
No, no.
Never underestimate the creativity of a central banker.
Really?
Oh, yeah.
I mean, we haven't even warmed up here in the U.S. They got some real stuff going on in Japan and the ECB and Europe.
Oh, yeah.
These other countries, central banks are buying stocks.
They're buying corporate bonds.
They will find things to buy.
If we're lucky, maybe they'll buy student loan debt and we'll figure out how to get them to write it off after they buy it.
I have a paper on that.
So.
Was Jill Stein right about that?
That we could have done a version of quantitative easing on student debt.
So she was right in the sense that we could cancel it, but she wasn't right in the way that she talked about it because unfortunately she talked about it as if you could carry it out the same way the Fed did quantitative easing.
Quantitative easing was an asset swap.
It was the Fed buying treasuries and mortgage-backed securities, but it didn't cancel those things, right?
People still continue to pay their mortgage and so forth.
So you didn't get off the hook because of what the Fed did.
So in our research paper, we show how the Fed could actually buy the student loan debt and then tell students, tell people who pay their debt, you don't have to pay it back.
Okay.
And the paper walks through how you could actually do that.
Really?
All right.
Yeah.
Okay.
Well, thanks again for spending this much time with us.
I appreciate you doing this.
And, you know, you're the leading thinker on this, and it's really an honor to have you here.
So thanks for doing this.
I'm happy to do it.
Thanks, Jimmy.
Hey, I'm here with the Miserable Liberal and Ron Placone.
How you guys doing?
Hi, Jimmy.
Ron's on tour in November.
Where are you at, Ron?
Yeah, November.
I'm going to Sacramento, San Francisco, Austin, Texas, and Pittsburgh, Pennsylvania.
It takes for all those shows available at romplacone.com.
You know, one of the funny things to me is that the right wing doesn't understand that they're not rebels.
Like if you're a conservative and you vote Republican and what have you, and that's whatever, that's your choice and we can talk about it.
You know, me, I don't even vote for Democrats.
So, but you have to know that if you're inside of a movement that calls itself conservative, you're not a rebel.
You're the opposite.
You're a status quo person.
You like how stuff is.
So it's always interesting to me when they get chagrined that their heroes aren't also getting fall-in line guys.
So being a conservative, you're law and order, fall in line, listen to authority.
That's what being conservative is all about.
And so it's funny when they like people who are the opposite of that, like Willie Nelson.
So Willie Nelson, by the way, is not a conservative.
He's a pot-smoking outlaw.
So this is from the Hill.
Fans are boycotting Willie Nelson after he agreed to headline Beto O'Rourke's rally.
Whew, that's got to be tough.
Willie Nelson's not a conservative.
He doesn't love cops.
So Ted Cruz supporters are surprised that pot smoking outlaw is not a conservative.
It's not a Rubik's Cube.
He's a pot-smoking outlaw.
You think Kaepernick is an outlaw?
This guy literally is breaking laws.
That's what country music used to be about, by the way.
Anti-establishment outlaws, not what it is, what country music has morphed into today, which is every jagoff of the world trying to be elected king of the fucking Boy Scouts.
Singing about the flag and their country and their mama and their fucking dog.
There's still some good stuff out there, but that's not the stuff.
Like the stuff you're talking about is like the CMA mainstream stuff.
That's what I'm talking about.
Yeah, yeah, yeah.
There's still good country music out there, but not the popular country music.
Right.
Yeah, yeah, yeah.
Yeah.
Willie Nelson is the real deal, which is why he's not a fucking conservative.
He's the real country music guy.
He's a real rebel, which is why he stands up for the people who fight the power, not for people who use the power to suppress the people.
And if you're a conservative, you're not fighting the power.
It's like they don't understand that.
They think because they've tricked themselves into thinking that white men in America are somehow an abused minority.
Someday, Whitey, male Whitey will have his day someday.
I love even Amy Nelson, his daughter tweeted out, I'm so proud of my dad for standing with Beto O'Rourke.
They actually care about the people, unlike Ted Cruz, who is undeniably in the pocket of the private prison lobby.
Undeniably in the pocket.
So that's what the Willie Nelson and his daughter think about you guys.
Private prisons suck.
Marijuana is cool.
That's Willie Nelson.
That's a real rebel.
Not like you guys who are bootlicking conformists.
If you're a supporter of Ted Cruz, you're a bootlicking conformist who likes religion.
I actually went to the Willie Nelson Facebook page because I was curious.
And I think some of it was the media kind of taking a headline and running with it because for every comment that was like, oh, I'm shocked.
I won't support anymore.
America.
There were like three or four that are like, have you not listened to everything this guy has said for 40 years?
No, they haven't.
No.
They don't.
They just like, well, that sounds good.
Little redhead, my red-headed piano.
You know, he did a good Taco Bell commercial.
It's like the people who just heard Born in the USA.
Didn't pay attention to the verses.
That's right.
Didn't pay attention to the verses.
That's right.
Well, they used to.
Didn't Bruce Springstream tell Ronald Reagan to stop using that song at his campaign?
That did happen, I'm pretty sure.
So there you go.
Boy, there's nothing sweeter than watching a bunch of conservatives mind get blown that someone that they like is not also a boot licking rule follower.
The thing that appeals to me about stand-up comedy is that we break the rules.
There's no rules.
And if there is a rule, you break it.
You know, why am I blinking on their names?
But the Smothers brothers, the Smothers Brothers, who, by the way, got taken off the air by Nixon.
The Smothers Brothers.
I saw a documentary on comedy, and one of the Smothers brothers, they asked him, I think it was Tommy.
And he was talking about, he said, well, you know, if you tell a comedian not to do something, that's the first thing he's going to go do if he's a real comedian.
And that's always funny to me when club owners would come up to me before a show.
Hey, don't talk about this and don't talk about that.
It's the first fucking thing I'm going to talk about.
Hey, don't mention how hot it is in here.
Have you ever had that happen, Ron, at a club?
They'll come and say, don't mention how hot it is.
What do you fucking, yes, you're an asshole.
Yes, I'm going to mention how hot it is.
Hey, everybody, pretend.
You know, comedy is all about calling out what's actually happening and not pretending, but we're all going to pretend we're not sweating our balls off because the AC is broken.
Okay.
I've had a thing where in the, like, in the rider that they send you, or the itinerary, rather, they will say, don't say anything about the establishment.
Of course, every comedian does.
Don't acknowledge the mechanical pool in the back.
Of course, all of us are going to.
Yeah, of course.
First thing you're going to do.
I played a place called Moe's Pizza once in Clinton, Iowa.
And in the instructions, sometimes you get a little note, sometimes you don't.
Then the instruction was to ask for Paul if you have any questions.
If Paul isn't available, and only if Paul is not available, you are able to ask for Mo himself.
That's right.
Moe's Pizza.
And only if Paul is not available, you are allowed to ask for Mo himself.
And if you are in the presence of Mo, no eye contact.
Yeah.
It's like that.
It was like one of those things.
Make eye contact, $25 off your pay.
I do remember that show.
I remember a table full of people leaving.
And I was saying, oh, there goes a table by, folks.
And one guy turned around and goes, yeah, we have the guts to actually sit here.
We have the guts to actually leave instead of everyone else who is too polite.
They're just sitting there to be polite.
I'm like, oh, everyone here is being nice to me.
Some guy they don't know.
They're pretending to enjoy the show.
So that's what it was.
They hated me and they were pretending like everyone else did.
No, everyone else had a good time.
That's the beauty of being a comedian.
You can tell your own, the people who paid to see you to go fuck themselves.
Yeah.
Yeah.
You know what?
I had that conversation with my girlfriend once where, because she's a server, and I was like, I don't know how you can do that.
I wouldn't.
I do not have the patience.
I couldn't do that.
She's like, well, you deal with people all the time.
And I was like, yeah, except I have a microphone in my hand and can say whatever I want.
And you can make fun of me.
As long as I'm funny.
And you can't do that.
You can't make fun of them.
You can't go, hey, this soup is cold.
Nice shirt.
Where'd you get it?
I get that, a cold.
Yeah, I was a food server, and I couldn't do it very long.
You know, you frequently have to go up to a table and say, I'm sorry.
Yeah.
Yeah.
How many I'm sorries can you say until you just say, forget it.
You have to deal with entitled, hungry people.
That's like the worst scenario ever.
No doubt.
I know how I am when I'm hungry.
It's not nice.
I mean, all of us.
It's human nature.
Way to go, Willie Nelson.
Smoke pot.
Okay, I got a phone call, but I don't recognize this number.
Hello, this is Jimmy.
Hello, who is this?
This is Al Pacino.
Al Pacino, the El Pacino.
How are you?
I'm good, Al.
Thanks for asking.
I can't believe you called the Jimmy Doer show.
I know.
Hey, you know there's a lot more to that phone call, but we don't have time in today's podcast.
How do you hear the entire phone call?
You got to become a premium member.
Go to JimmyDoorComedy.com.
Sign up.
It's the most affordable premium program in the business.
Today's show was written, that's right, it was written by Frank Connoff, Jim Earl, Ron Placone, Steph Semurano, and Mark Van Landowicz.
All the voices today performed by the one and the only the inimitable Mike McRae who can be found at mikemcrae.com.
That's it for this week.
You be the best you can be, and I'll keep being me.
Don't freak out!
I'm not kidding.
Don't freak out!
Don't freak out.
Do not freak.
Do not freak.
Do not freak out.
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