Just how credible is trickle-down economics?

 

A tool to control impulses (very good!)

 

America at War

America is terrific at attacking, and war-making. It's terrible at making peace. Trump is even thinking of changing the "Dept. of Defense" to the more accurate "Dept. of War." It's part of how us USians got control of the continent. Actually, Old World diseases are more responsible than military attacks for the defeat of the North and South American natives--a genocide that wiped out more than 90% of the New World's populations.

The imperialist impulse is why, between 1798 and 1994, the US is responsible for 41 changes of government south of its borders. 

Taking credit for that "victory" is what part of what drove US imperialism up until the Vietnam war, that is. 

And speaking of Vietnam: (from Naked Capitalism) "A vignette provides confirmation of Vietnam’s fierce retention of its identity during the period of Chinese rule. In the documentary The Fog of War, a not-exactly-satisfactory effort at atonement by former US Secretary of Defense Robert McNamara, he recounts how, many years after the Vietnam War, he was able to arrange a dinner with the leaders of North Vietnam during the conflict.

"Needless to say, it was a pretty tense affair. Finally, one of the North Vietnamese officials asked: 'Why did you go to war with our country?'

"McNamara invoked the domino theory, that if North Vietnam won, China and Chinese communism would advance across Southeast Asia.

"McNamara reported that his counterparts nearly leaped across the table: 'How could you go to war understanding so little about our country? We spent 1000 years expelling the Chinese.'"

Want to know the history of the Federal Reserve?

 You can read Greider's Secrets of the Temple, or (much simpler) read this from Matt Stoller.

Stoller unveils the political motivations behind our central bank's shenanigans... It's really fascinating to know, for one example, that Alan Greenspan was a consultant for Silverado Savings & Loan in addition to being a libertarian acolyte of Ayn Rand. 

Excerpt:

But the 2008 financial crisis blew up the Greenspan era, challenging the officials in charge of the Fed in a number of different ways. It was a crisis the Fed should have seen and prevented. The Fed was, after all, the institution that had regulatory authority over mortgages, which it never used. But its leaders were blinded by their obsession with the macro; Ben Bernanke gave a speech titled “The Great Moderation” as the crisis was brewing, in 2004. The blindness was a result of their obsession with macro-economic forces, and ignoring the actual banks and institutions in the real economy. Banks, even big ones, were still micro, left to the losers in the bank supervision department.



And yet, somehow, during the crisis, these banks had affected the real economy. In response, the Fed did what it had done since the Volcker era; it bailed out Wall Street. In this case, it did so by expanding its balance sheet by several trillion dollars, buying bad assets from banks and supplying cash in return. By 2022, its balance sheet had reached $9 trillion. The Fed now regularly loses huge amounts of money due to losses on its portfolio, and those losses are essentially the accounting for a subsidy to Wall Street.

The crisis generated a legitimacy problem for the Fed, since its wizards and oracles had failed, and yet the public had no way to vote them out. But rather than engage in real reform and introspection, like most establishment institutions, the professional managerial economists doubled down. Federal Reserve Independence, rather than a temporary historical phenomenon that should be eliminated as a failed experiment, became sacred, to the point that Joe Biden’s White House had a policy that no administration official could even comment on interest rates.

...

Fed Chair Paul Volcker used to carry around a card of union wage rates, as a reminder that his goal in achieving low inflation was to break union power. The Federal Reserve is responsible in part or fully for the legalization of derivatives, the explosion of subprime lending during

the 2000s, the great financial crisis, a trillion dollar transfer of wealth to big banks as interest rates increased, the institutionalization of crypto-currencies, the merger explosion of the early 2020s, and the failed regulation of Silicon Valley Bank, among other problems. It’s also a highly political institution, pushing free trade and defending large banks; in the 1990s, Fed officials secretly bailed out Mexico so as to protect Citibank and pass NAFTA.

...

here’s more. After the crisis Congress required the Fed to place compensation limits on bank executives. Jay Powell simply refused. The Fed fostered a giant corporate merger wave in 2021, intentionally sabotaged its own payments network, FedNow, because it might be cheaper and better than the system run by large banks, and didn’t block a single merger application of the over 3500 it received from 2006-2021. This choice, as I noted years ago, “includes Silicon Valley Bank in 2021 buying Boston Private Bank and Trust, which the Fed board unanimously justified by noting that SVB would not ‘pose significant risk to the financial system in the event of financial distress.’” Speaking of which, the Federal Reserve’s chief legal officer, Mark Van Der Weide, helped author the legislation that removed regulations on Silicon Valley Bank, and the Fed, and Jay Powell, lobbied for it.

There’s just an endless amount of bad behavior from the technocrats, so the opponents of Trump, asserting that we must protect the “independence of the Fed,” are really missing the point. And I fear that their goal, after Trump leaves office, will be to “restore the independence of the Fed.”

 

 

The Real Homeless Situation: The Housing Hunger Games. (long, but worth it)

From The Intercept (go to the link to hear the interview or read more than the excerpts below)

The Housing Hunger Games

Author Brian Goldstone talked to The Intercept about homelessness. A few excerpts:

"Homeless sweeps have become the go-to, bipartisan performance of “doing something” about the U.S. housing crisis — a spectacle embraced by Democrats and Republicans, city halls, and the White House alike. But sweeps are not a solution. They’re a way to make homelessness less visible while the crisis deepens.

"The roots stretch back decades. President Ronald Reagan’s Tax Reform Act of 1986 pulled the federal government out of building and maintaining public housing, paving the way for a fragmented patchwork scheme of vouchers and tax credits. The result is the system we live with today — one that does little to stem the tide.

"Last year, more than 700,000 people were officially counted as homeless, the highest number ever recorded. Nearly 150,000 of them were children. And that number leaves out the “hidden homeless”: families doubling up in cramped apartments or bouncing between motels.

“What causes homelessness, in the 1980s as now, is a lack of access to housing that poor and working-class people can afford,” says Brian Goldstone, journalist and author of the new book “There Is No Place for Us: Working and Homeless in America.”

The housing emergency is no accident; it’s the product of deliberate political choices: “It’s an engineered abandonment of not thousands, not hundreds of thousands, but millions of families.”....
"[Homeless woman] Celeste’s story begins in a really dramatic way. One day, she’s driving home from work with her children. She’s just picked them up from school. She’s left her warehouse job, and her neighbor calls to say that her rental home is on fire.

"And by the time Celeste makes it back to her rental, it has burned down. The street is closed off, and the family loses everything. The only possessions they have left are the few things that were in the kids’ backpacks and a few loads of dirty laundry that Celeste had thrown in her Dodge Durango that morning, intending to go to the laundromat after work. They’ve lost everything else.

"And it’s later determined that an abusive ex who Celeste had recently taken a restraining order out on was responsible for the fire. And even though this fire was kind of the first domino that fell on Celeste and her children becoming homeless, I think it’s really important to note that it wasn’t the fire, it wasn’t even the domestic violence that led them to become homeless.

"What led them to become homeless ultimately was the fact that months after the fire, Celeste was applying for apartments and she was denied. She was told that there was an eviction that had been filed against her, and she said, that’s not true, I don’t have an eviction on my record.
"Come to find out that after this fire took place, Celeste called her landlord, which was not just like a mom-and-pop landlord, it was a private equity firm called the Prager Group. They owned tens of thousands of rentals across the south. And when Celeste called to request that she be put in another home in their portfolio, they told her that in order to “terminate her lease” on this house that had just burned down, she would have to pay not only the current month’s rent — the fire had happened at the beginning of the month, so she hadn’t yet paid her rent — but an additional month’s rent as well. And she would lose her security deposit. And Celeste had hung up in disgust. But yeah, like months later, found out that after she hung up, they filed an eviction against her for nonpayment.

"In Georgia, a tenant doesn’t even have to be notified of an eviction in person. The sheriff was able to carry out what’s called tack and mail dispossessory. And when she actually drove to the house that had been burned down — it still hadn’t been repaired — in the mailbox, she found an eviction notice on which the sheriff had written “served to fire-destroyed property.”

"So at this point in her story, Celeste realized that her chances of getting into an apartment were basically destroyed. And her credit score — this three-digit number that has come to determine whether millions of people in this country have access to something as basic as a place to live — she realized her credit score would basically lock her out of the formal housing market.

"So at that point, when Celeste realized that she was locked out of the formal housing market, she was desperate to get out of her car. And she did what scores of other homeless and precariously housed families and individuals in America are doing: She went to an extended stay hotel.

...."Like many people, Celeste, up to this point, she thought that these extended stay hotels that she was passing by every day as a resident of Atlanta were hotels....These hotels … are actually extremely profitable homeless shelters. … They’re really concentrated in regions of the country intentionally, where working people are most likely to be deprived of a stable place to live.”

...."The weekly rent at this place was almost double what she had been paying for the rental home that had just burned down."

...."And even the Department of Education actually categorizes families and children living in these hotels as homeless, along with families and individuals or children who are living in doubled-up arrangements with others in apartments. They consider that homeless because school social workers and teachers saw over the years that this was just as volatile for children, just as precarious as being in a homeless shelter or being on the street.

"So the Department of Education considers them homeless, but HUD does not. And the caseworker tells Celeste, “I’m so sorry. If you want to be considered homeless and therefore qualify for assistance, you have to go with your kids to a shelter.” But then the kicker comes in where Celeste says, fine, we’ll go to a shelter, and the woman says, wait, you mentioned your son just turned 15. None of the shelters in Atlanta allow boys over the age of 13. So he would have to go by himself to a men’s shelter. And of course, Celeste is not willing to do that.

"The point in saying all of this is not that this was some bizarre aberration; this was just a tragic falling through the cracks. This is an engineered neglect. It’s an engineered abandonment of not thousands, not hundreds of thousands, but millions of families just like Celeste, who are homeless. But they have been written out of the story we tell about homelessness. They literally don’t count. And one of the shocking things that I discovered in the course of working on this book and reporting it was that there’s this entire world of homelessness that is out of sight that we’re not seeing. And what that tells us is that as bad as the official numbers on homelessness are, the reality is exponentially worse.
 

...."All of the people in this book, they are working and working and working some more. But their wages — which are effectively poverty wages — are not enough just to afford this basic human necessity. 

...."Celeste, when she’s diagnosed with ovarian and breast cancer, she’s having to decide, do I go to my warehouse job or do I go to my chemo appointment? Because if I go to my chemo appointment, I don’t get paid because I don’t have sick leave. And if I don’t get paid, me and my children go from living in this awful extended-stay hotel room to being on the street or being back in our car.

...."It’s helpful to remember that mass homelessness, as we know it, is a relatively recent phenomenon in America. It erupted in the 1980s, during the Reagan administration. And from the beginning, there was a concerted effort on the part of that administration, and the part of those in power at that time, to control the narrative about homelessness — to shape public perception.

"So even though at that time the fastest-growing segment of the homeless population were children under the age of 6, these ideas that homelessness is caused by mental illness, by alcoholism, by addiction, or as Reagan put it, by a “lifestyle choice” — a refusal to work. Those really became the dominant narratives in this country about homelessness.

"By the end of the 1980s, the New York Times and CBS News conducted a poll asking New Yorkers at random what causes homelessness. And the number one answer was psychological problems. The number two answer was a refusal to work. Not a single person mentioned housing.

"Never mind the fact that the Reagan administration, as many listeners will be aware, ushered in this neoliberal experiment in slashing, decimating the social safety net, gutting assistance for housing, especially low-income housing. Researchers, scholars who wanted to study the effects of a legacy of racist housing policy or the gutting of the safety net on this burgeoning homelessness crisis, they were systematically not funded. They were not given grants. But scholars and researchers who wanted to look at alcoholism or addiction or mental illness in relation to homelessness, they were the ones who were funded. To the extent that the journal Nature actually had an article called “Reagan versus the social sciences” because of just how concerted that tactic was to make a certain kind of research and therefore a certain kind of knowledge possible. That attempt to control the narrative was very much successful. And I think we’re living under the legacy of that today.

...."What causes homelessness, in the 1980s as now, is a lack of access to housing that poor and working-class people can afford. That is the variable. That is why we see huge rates of homelessness in places that are very, very expensive or where affordable housing does not exist, and we don’t see it in places that might have high rates of drug use, like certain areas of Appalachia, but housing is still relatively available. That is the variable, is not having access to housing that people can afford.

...."Part of what I’m trying to argue in the book is that the current homelessness disaster that we are witnessing is less a crisis of poverty than of prosperity — a particular kind of prosperity. It’s the product, not of a failing economy, but a booming economy, a thriving economy. It’s just not thriving for the people I’m writing about. 

...."The signs of growth and corporate profits are everywhere, and yet the people I’m writing about in this book, they’re not just being pushed out of the neighborhoods they grew up in — formerly Black working-class neighborhoods — they are increasingly being pushed out of housing altogether. And that is a trend we see across the nation.

...."One of the astonishing realities that I encountered in reporting this book over many years was the fact that private equity firms, Wall Street firms, they’re not just buying up vast swaths of America’s rental housing stock. That is something that I think has become familiar for many of us. But that in itself is shocking and the tactics that are employed once they take over this housing is really startling.

...."One of the families in the book — Maurice and Natalia and their children — they end up in one of these apartment complexes owned by a private equity firm called Covenant Capital based in Nashville. And they are the victims of this automated eviction system where if you’re just a couple of days late on your rent, there’s no human to call and talk to. They tried to call. They only got [an] answering machine. Instead, an eviction is automatically filed against the tenant.

...."What was truly astonishing was that they’re also buying up the places where families and individuals are forced into once they are pushed into homelessness.

...."It’s just yet another example of how every single turn in these family stories, there are entire new business models designed to profit off their suffering and, I would argue, to ensure that their precarity continues.
...."When I finished the book, when I finished the reporting, I really thought, “It can’t get any worse.” Surely we as a nation will turn a corner soon and begin to meaningfully address this catastrophe of housing insecurity and homelessness.

"What we’re seeing under this administration is gasoline being poured on this crisis and not just where housing assistance and the way that homelessness is treated is concerned, but with these massive cuts to the safety net more generally with Medicaid cuts, with cuts to food stamps. The families who I wrote about in this book, they and the millions of people like them, their lives will become worse as a result of these budget cuts and the sort of continuation of what Ruth Wilson Gilmore calls an organized abandonment.

...."We’re not talking about the working homeless on the one hand, and these people who are on the street on the other.

"This is better conceived, I would argue, as an entire spectrum of insecurity. Homelessness in America is a spectrum of insecurity. One day you could be in a hotel with your kids. The next night you might be in the car with them. A month from now you could be in a tent on the street. That is how quickly families and individuals can cycle through these conditions.

...."And so I really want to emphasize that this is not a distinct population. Those who we see on the street in a tent or in these encampments, they are just the tip of the iceberg of homelessness in America. And yes, the people I’m writing about in this book are those who comprise the much, much bigger portion of the iceberg that is under the water surface that is not just invisible, but that has been actively rendered invisible.

"If we just criminalize homelessness and we don’t address homelessness at its true root source — which is an unavailability and a lack of access, again, to housing that people can afford — then that entire world that’s under the surface is going to continue to spill out into the open. 

...."There are so many low-hanging-fruit policy solutions that can ease people suffering immediately, that can both keep them in the homes they already have and that can get them into new homes that they don’t yet have much easier, much quicker.

...."We’ve allowed for [housing] to be hoarded up...But we don’t call that by its proper name, which is price-gouging — price-gouging amid a national emergency. We just call that supply and demand economics.

"And I think until we encounter housing in this country with fresh eyes, until we are shocked out of the complacency of continuing to treat housing this way, this crisis will just continue to spiral. The true scale and severity of homelessness is, to put a number on it, actually six times greater than the official figures. So we’re talking about 4 million people right now in this country who have been deprived of housing.

...."It’s to say, let’s no longer kid ourselves that these nibble-around-the-edges solutions — a few tiny homes over here, 20 percent units at 70 percent, 80 percent AMI [Area Median Income] over there — that this is meaningfully addressing this crisis at scale. Building more market-rate housing and hoping that eventually someday affordability will trickle down to those who are in most desperate need of a place to live — I think that that is misguided. I think we do need all [the] solutions on the table. We don’t have the luxury right now of having this kind of Manichaean vision of, it’s either the market or government intervention.

"I think we need it all, but I do think that we need to be clear-eyed about the true scale and severity so that we can say, and this is what I believe: Public housing redone, public housing done right — which many refer to as social housing — which would be not, again, hundreds of thousands but millions of safe, dignified, affordable housing units owned by the public, owned by the government, built on government-owned land. That is really the only way we are going to get out of this catastrophe.

...."[B]efore we can fix the crisis, we have to feel the crisis.

Are Poor People Disgusting?

 (c) by Mark Dempsey

"In its magnificent equality, the law forbids rich and poor alike from sleeping under bridges, begging in the street and stealing bread." - Anatole France  

Poor people are disgusting, they may even smell bad. And never mind the mental illness and addiction! You can barely stand to be in the same room with them and be comfortable! That's what's become of poverty in the US. The disgusting poverty is supposedly the result of poor individual choices by the poor themselves. 

But the truth is our current beggar-on-every-corner economy is the result of a series of public policy decisions that drove masses of people out of their homes, out of care, and into the street. In the '70s Nixon stopped the federal government building affordable housing, and in the 80's the Reagan administration cut HUD's affordable housing budget by 75% as he cut taxes on the wealthy roughly in half (and, with his successor, raised payroll taxes eightfold). The local homeless charity, "Loaves and Fishes" began in the '80s. The US hasn't had such a homeless population as it currently has since the Great Depression.

As governor, Reagan also closed California's asylums, sending the inmates out to the street. This movement to evict the mentally ill poor is bipartisan too. JFK had a policy to close the big federal asylums and replace them with smaller transitional housing that would prevent the abuse isolated asylums experienced, and integrate the mentally ill back into the community. Congress approved closing the asylums but neglected to fund the transitional housing. Then Senator Daniel Patrick Moynihan called it the most shameful episode in all his years as a public servant.

The majority of the homeless are just too poor to afford rent, not mentally ill or addicted, but homelessness poverty also induces its own form of PTSD, so their mental condition is not always optimum. Homelessness is often attributed to too few houses, and blamed on zoning restrictions, but in the USA, there are more vacant homes than homeless, five times as many in San Francisco. The problem isn't too much regulation, it's the heartless distribution of the fruits of our civilization.

Writer Mark Kreidler describes how even the current meager support the poor receive now is diminishing. During the pandemic, "federal policies directed stimulus payments to households, enhanced and extended unemployment insurance, expanded both the Child Tax Credit and food and housing assistance programs, and made health care more accessible. As a result, the U.S. experienced a historic reduction in poverty rates, both overall and for children, despite a crisis that shuttered businesses and put millions out of work."

So...it's possible for public policy to address homelessness, just as it addressed air pollution in Southern California. But as long as the public views poverty as exclusively the result of some individual's bad judgment, it's unlikely public policy will change, no matter how important such policy is. 

Meanwhile, a technician who worked on affordable housing told me he was disgusted with the way the poor treated their housing. "They trashed it," was his comment after he returned to maintain it. 

But poor people are not that concerned with material things--its why they're poor--and the public funding for maintenance in their housing is notoriously skimpy. One could blame the poor for not taking care of their material surroundings, but failure to provide adequate funding for anticipated maintenance is a kind of covert sabotage. It also confirms that "disgusting" observation to do that.

The public's disgust also shows up when mixed-income neighborhoods are proposed. Four- or eight-plexes among the mansions! Are you kidding! The income monoculture of suburban sprawl is the rule, now, because respectable people can't live adjacent to the poor. The idea of poverty as a virtue, practiced by countless generations of monks, has been abandoned.

But poor people have something to contribute. They are typically generous--one reason they're poor. In fact, my poor in-laws would literally give you the shirt off their back, even if it was their last shirt. We definitely need such generosity rather than the scrooge-ified public policy we now have, and we certainly need to perceive the people who are traumatized as human beings. It's what the Good Samaritan did, and it's the least we can do. Pursuing profit, or advantage, at any cost has led us to the current dog-eat-dog economy, and the suffering of the poor.

 

Virtue Signalling is what Democrats are good at

That's "signaling," not "providing concrete benefits to society at large."

 Hoisted from Naked Capitalism's comments section:

Yesterday, I learned that we opened the DNC Summer meeting in Minnesota with a land acknowledgement. That American settlers had stolen the land of the native tribes in Minnesota, the Dakota, who had lived in happy harmony with nature for thousands of years. This was literally the very first thing done at that meeting – almost like an opening prayer or Pledge of Allegiance was done in my youth.

Since I no longer take anything done or said by this party at face value – the lying, dissembling, exaggerating, distorting, virtue-signalling, etc has become too much and affected the lives of so many around me – I did a little research.

The woman chosen to do this land acknowledgement was named Lindy Sowmick. Although she mentioned the Dakota tribe in passing – I did a bit of research and noted that she was from the Chippewa-Saginaw tribe which is basically in Michigan. The way this Chippewa tribe is referred to in some quarters today is the Ojibwe. I learned a lot about the Ojibwe from the website of the actual Minnesota Historical Society –

https://www.mnhs.org/fortsnelling/learn/native-americans/ojibwe-people

The Ojibwe were apparently one of the most populous tribes in North America all over the Northeastern Seaboard hundreds and thousands of years before there were any European settlers. Again, this woman, Mrs Sowmick, was a member of a branch of this tribe. I will reprint below the first paragraph of the website from the Minnesota Historical Society –

The ancestors of the Ojibwe lived throughout the northeastern part of North America and along the Atlantic Coast. Due to a combination of prophecies and tribal warfare, around 1,500 years ago the Ojibwe people left their homes along the ocean and began a slow migration westward that lasted for many centuries.

Upon further research on multiple other websites, one learns that the Ojibwe were actually one of the most violent of tribes in North America. They were propelled by some kind of apocalyptic religious animus – described in the website above as “prophecies” – and it was the Ojibwe themselves that drove the Dakota out of their ancestral home and into the Northern Great Plains – centuries and centuries before there ever was a European settler to be seen. This woman, highlighted by the DNC, is actually a member of the actual tribe that displaced the Dakota from Minnesota.

The sad fact for the Democratic Party who continue to make this land acknowledgement an issue is that land displacement, war and forced moving is a part of human history in every corner of this planet. It is in our DNA. Maybe, just maybe, one day we will evolve and not engage in this behavior. But having judgmental and virtue signalling about it centuries after it happened – and then having a member of the perpetrating tribe be the one doing the scolding is the very definition of lunacy.

When the Democrats start paying to attention to real issues affecting real people in this country, this Dem will start paying attention again. Until then – it is a better show than the clowns in the circus. And that is tragic. We really need some kind of counterweight – but that is certainly not to be had with this group.

Today's Joke

 Q: What happens when Popeye's girlfriend joins a nunnery?

A: Extra Virgin Olive Oyl. 

Links for this week

(Principally from Ian Welsh's "Weekend Wrap")

• A reminder that "The law, in its magnificent equality, forbids rich and poor alike from sleeping under bridges, begging in the street and stealing bread." 

• From Cory Doctorow: 

https://pluralistic.net/2025/08/20/billionaireism/#surveillance-infantalism

Excerpt: "...the ultra-rich (and the states they have suborned) have a fundamental understanding that the more unfair a society is, the less stable it is. The more unstable a state is, the more its ruling class have to expend on private security. No captain of industry wants to arise from his sarcophagus of a morning, only to discover a mob of hoi polloi building a guillotine on his lawn.

As Thomas Piketty argues, there comes a point where it's cheaper to make society more fair – say, by building hospitals and schools – than it is to pay for all the gaiter-wearing gun-thugs you'll need to weed out the guillotine-building projects that spontaneously erupt under conditions of gross unfairness:

https://memex.craphound.com/2014/06/24/thomas-pikettys-capital-in-the-21st-century/

Mass surveillance shifts the guillotine equilibrium in favor of being greedier, by making it cheaper to identify and neutralize incipient guillotine-builders, which means that you can raise the greediness floor without seeing a concomitant rise in your guard labor bill.

And there's lots of money to be made by raising the greediness floor, the corollary of which is that any time you fail to act with sufficiently shameless greed, you leave a ton of money on the table. That's the substance of the shareholder lawsuit against Unitedhealthcare, alleging that after Luigi Mangione allegedly murdered United CEO Brian Thompson‡, United failed to screw enough patients hard enough:

https://www.nbcnews.com/business/business-news/unitedhealthcare-sued-shareholders-reaction-ceos-killing-rcna205550" 

• The following headline speaks for itself:

Trump’s DC Occupation Costs 4 Times More Than It Would Take to House City’s Entire Homeless Population

 

12 Bar Blues, Monk Style

 

Thelonious Monk turned wrong notes into the right ones. pic.twitter.com/YfZLuv5y3q

— Melodies & Masterpieces (@SVG__Collection) August 19, 2025

The Tragedy of Outlying Development

(c) by Mark Dempsey

On August 20, 2025, the Sacramento County Board of Supervisors will hear a proposal to develop even more of the North Natomas basin, the Airport South Industrial Project. As the map indicates, other proposals are still pending too, and all are bad ideas.

 

North Natomas is directly north and west of Sacramento's downtown, and has already been developed east of Interstate 5. It remains a floodplain surrounded by levees that were originally so weak that a grant to expand regional sewer contained a $6 million penalty if that capacity were used to serve North Natomas.

The land speculators controlling North Natomas were unfazed by the penalty and went all the way to then-vice-president G.H.W. Bush, who made it pay-as-you-develop installments rather than the prohibitive up-front charge. They also got $43 million in levee improvement grants to bring levees up to pre-Katrina standards. 

The residents of North Natomas must now pay to improve levees to post-Katrina standards. Meanwhile, the speculators got $43 million for $6 million in installment payments. Gosh, I wonder who this arrangement favors!

What motivated these political maneuvers? The land speculators, often referred to as "developers," purchased North Natomas land for approximately $2,000 per acre. Once they got the rights to develop it, they were able to sell to builders for as much as $200,000 per acre. That egregious 10,000% profit is called the "unearned increment," and it can be completely untaxed if they exchange their stake in the land they're selling for other income-producing real estate.

In Germany, if they want to build on outlying land, the developers must sell the agricultural land to the local government at the ag land price, then repurchase it at the development land price. All of the unearned increment accrues to the benefit of the public rather than enriching a few speculators, as it does here. And Germany has excellent infrastructure, not collapsing bridges, and free college tuition. Just the arts budget for the City of Berlin exceeds the National Endowment for the Arts for the USA.

But never mind enriching the plutocrats and impoverishing the public realm, developing that outlying land is bad for other reasons. First, the longer roads, pipes, wires, etc. in the infrastructure are roughly twice as expensive to maintain as infill. Second, the Sacramento region has roughly 20 years of unbuilt infill. And third, the longer commutes contribute to global warming.

In other words, outlying development is harmful now and in the future, and we have plenty of alternatives within the current urban form. Let's do something sensible and reject this development.

Lawyers

Engineers solve problems, lawyers often spend their time with problems that are essentially un-solvable.

Hoisted from comments in Naked Capitalism:  

'By 2020 all nine members of the Chinese Politburo’s standing committee had trained as engineers.’

In the US, there are over 1.3 million lawyers, so about 4 for every 1,000 people. In fact-‘In terms of absolute numbers, the American legal profession was the largest in the world as of 2015, and it is thought to be the largest in the world in proportion to domestic population.’ (Wikipedia)

A common law system requires legions of lawyers while a civil law systems require legions of clerks as the first argues about every facet of the process, while the latter just checks if laws where broken and if so, assigns a predefined penalty.

China uses civil law. Civil law lawyers are trained to see that the process is fair and legal, not to argue what the process should be, so they don’t really make good politicians.

One other US vs. China comment: some of the dominant donors on the right are engineers--the raise-by-a-Nazi Kochs. Yes, the Koch's nanny was a member of Hitler's party.

But Charles and David Koch are engineers of extraction (actually chemistry, but predominantly petroleum). Petroleum engineering remains one of the areas in which the US maintains international dominance. Herbert Hoover was another engineer of extraction (mining), so perhaps that's a common thread in US politics too.

 

Thanks Obama! Democratic precedent cuts a half billion dollars from Medicare

 I've written previously about the Obama scandals (here) but the latest is that the Trump budget will cut Medicare thanks to a precedent the Democrats supported and Obama signed. From Wikipedia:

‘The Act was introduced in the House of Representatives on June 17, 2009, by Majority Leader Steny Hoyer (D-Maryland) and has been cosponsored by 169 of the 257 House Democrats. The Act had initially passed the House of Representatives 265–166 as a standalone bill in July 2009, then was attached in the Senate to legislation raising the debt limit to $14.3 trillion. A majority of 241 Democrats supported the bill while a majority of 153 Republicans opposed it.’

https://en.wikipedia.org/wiki/Statutory_Pay-As-You-Go_Act_of_2010 

So thanks Obama and the Democrats.

This is double cruel since the federal government can make the money to fully fund healthcare without raising taxes. For those worried about inflation, Medicare-for-all would actually cut healthcare expenses.

Note: Obama also proposed cuts to Social Security. https://www.cbsnews.com/news/obama-proposes-cuts-to-social-security/ 

Update: “People of privilege almost always prefer to risk destruction, total destruction, rather than surrender any part of their privileges. Intellectual myopia, often called stupidity, is a reason There’s also the invariable feeling that privilege, however egregious, is a basic right. The sensitivity of the poor to injustice is a small thing as compared with that of the rich.” – J K Galbraith 

A reminder: Trump is nothing new, he's just doing domestically what the US has done internationally

 

The thing about US power under Trump is that the capriciousness everyone in the US is experiencing, is exactly what folks in the tri-continents have experienced under even urbane presidents like Obama.

— Laleh Khalili 🇵🇸 (@LalehKhalili) August 14, 2025

How is the US doing with minimum wage?

 

Who's the sh*thole/banana republic now?

This comes from an article describing how Mexico doubled its minimum wage.

Entertainment recommendtions

My wife was laid up with a broken patella and came across a Dae Jang Geum ("The Jewel in the Palace") marathon on the Asian channel. This is a Korean Drama (AKA "soap opera") of more than 50 episodes, so it's lengthy. You can stream it here. If you do get a chance to see it, I'll also warn you it is slow starting. It takes about eight episodes before things really heat up.

Partly as a joke, I suggested my family buy the DVDs for my wife. They did, and we ended up watching them (three times!). I lent them to my brother. He and his girlfriend would visit Korea after they saw it. He started learning Korean.

It appeared in Hong Kong, and the Philipines, and was number one in both places, as well its country of origin, Korea. 

The story itself is has a historical basis--although it's obviously fictionalized--and is set in medieval Chosun (Korea). In it, a young Korean woman who started out in the King's kitchen, ultimately becomes the accupuncturist to the king, when only males were eligible for that role. 

Spunky women are popular in Korea!

If you'd like a less-demanding sample of K-drama, here are some recommendations, often with better production values. All are modern, and about 16 episodes except for Yanxi Palace:

Netflix:

Because this is my first life (nerd rom-com)

Crash Landing on You (Romeo & Juliet with a better ending. North & South Korea are the Montagues and Capulets)

Extraordinary Attorney Woo (Autistic attorney succeeds!)

Amazon Prime Video ... Also YouTube (free!)

The Story of Yanxi Palace (Chinese, and like the palace intrigue of Dae Jang Geum, lengthy. The heroine rises from humble beginnings as an embroidery maid, avenges her sister's death, and more. Another spunky woman!)

...

These asian shows demonstrate lived Confucian philosophy, so offer a genuine alternative example to the Marvel Comics' / might-makes-right way of conducting one's life. The Path: What Chinese Philosophers Can Teach Us About the Good Life is a nice introduction to that philosophy, if you're interested.

As an illustration of what the alternative might mean a tweet from Arnaud Bertrand suggests the Chinese had a problem in their province just east of Afghanistan, Xinjiang. Islamic Jihadists among the muslim population (Uyghers) were disturbing the peace. 

In Afghanistan, the US employed its standard remedies to deal with their Jihadists--bombs and bullets--but in Xinjiang, the Chinese had "re-education" and some forced labor. It probably wasn't pleasant for the Uyghers, but they eventually got jobs. Xinjiang is now a tourist destination. 

The US lost Afghanistan to the Taliban. Larry Wilkerson, Colin Powell's retired chief of staff, says he doesn't believe the US foreign policy establishment has an operating brain. The asian dramas demonstrate repeatedly that there are thoughtful solutions to problems, although there are certainly threats and force in them as well.

Which reminds me: according to Twitter user William Huo, 90% of Chinese own their own home. They used to have beggars in their cities (i.e. homeless people), but they gave them jobs, and now homelessness isn't a problem. So...not just threats and force.

In the US, the government built affordable housing until Nixon put a stop to that, and Reagan, as he was cutting taxes on the wealthy roughly in half, cut HUD's affordable housing budget by 75%. The "Loaves and Fishes" organization serving the homeless began in the Reagan era. Make no mistake, homelessness in the US is the result of public policy, not the addiction or bad behavior by the people themselves.

One Key Chinese innovation: Banks are nationalized, fund long-term / infrastructure projects, and don't manage currency issuance around short-term profit for billionaires. Economic note: banks issue "credit money," they do not lend the deposits they have on hand. In the US, we've privatized that function. 

 

 

 

 

 

Today's Bee Letter: California's Restaurant Mandates

Responding to California health care mandates burden small businesses - by Lorraine Salazar, co-owner of Sal's Mexican Restaurants page B10 8/8/25

Lorraine Salazar, co-owner of Sal's Mexican Restaurants writes to protest California's requirement that employers provide (more expensive) healthcare for workers. She omits mentioning the way restaurants often refuse to provide full-time hours and health benefits for their workers now. That means their workers must work multiple jobs and either work sick or rely on Medicaid--health care for poor people, whose coverage has been reduced by the Trump administration. 

Rubio's restaurants protested the California minimum wage too, closing all their restaurants in the state. They omitted mentioning that private equity bought the chain and encumbered with so much debt it couldn't afford to pay its workers and the loans. The lenders got priority.

The omissions are as important as what was said.

 

How accurate are our perceptions of crime?

From: Views on Crime Will Turn Me into the Joker–and Might Be Harming Democrats More Than Some Think by mikethemadbiologist

A couple weeks ago, this poll by YouGov asked “Since 1990, would you say murder rates in U.S. cities have…?” The answer:


By the way, the correct answer is “Decreased a lot”, but even if we lump the ‘decreased’ answers together, it’s really bad–three out of four people got it wrong; if we grade more strictly, only one out eleven knew the correct answer.

Update: The same point, with lots of city by city detail here. Excerpt: "In New York City, for example, the number of murders so far this year is down 85 percent relative to 1993. Last year, murders were down 83 percent relative to 1990. You have to ask yourself: When avatars of the right like Charlie Kirk proclaim that the city is intensely scary, is that a reflection of the city or of Charlie Kirk?

Murders, happily, are down in American cities. But there’s a lot of investment and political utility in suggesting that they are not. Americans, unfortunately, tend to believe it."

How did that Gaza war begin on 10/7?

 

An Israeli soldier from the Golani brigade has testified under oath at the Knesset that 10/7 was a false flag, and that he was ordered to stand down from 5:20am to 9am the day of the attack. pic.twitter.com/yJ6SYyZE36

— Truth_teller 🇷🇺 (@Truthtellerftm) August 2, 2025

Sad to say, this isn't much of a surprise.

A Chinese Tweet about Milton Friedman (the "Menschenfiend") + the 1990s Russification of the US

 

Milton Friedman was a Menschenfeind. His doctrine reduced America to quarterly earnings and stock valuations. China chose Confucius. We chose financial nihilism. That’s why we’re losing. (12/12)

— William Huo (@wmhuo168) August 5, 2025

The US might start experiencing what Russia has gone through in the 90s, something that was coined as "the great brain drain", but for completely different reasons - "failing to promote a research environment free of anti-Semitism and bias" - for instance. https://t.co/g9mbHEVCs5

— Olga Bazova (@OlgaBazova) August 4, 2025

Is the Deficit a Problem?

 

Very much agree with Joe here. Chapter 4 of The Deficit Myth is all about this. https://t.co/XBUZiIost2 pic.twitter.com/0eTgCUpqFN

— Stephanie Kelton (@StephanieKelton) August 4, 2025

The Crypto Controversy (Is It Really Valuable?)

(c) by Mark Dempsey

Cryptocurrency--bitcoin and others--is very much in the news, but the stories about it often overlook some critical path information about currency design that has been known since currency-as-score-keeping has existed--that's roughly since 3500 B.C.E. 

That date is when obligation/credit became precise, partly because the fertile crescent needed labor to maintain its irrigation system. It was a civilization. You can still see the bar tabs and pay stubs from Uruk (current Iraq) in the clay tablets archaeologists have discovered. Incidentally, credit preceded money (coins) by millennia. This is exactly the opposite sequence of the "invention of money" myth, which says barter led to tokens (coins), and eventually led to credit. But mythical thinking is what guides most orthodox economics currently...

The problems inherent in tracking obligations with precision became evident shortly after credit was invented. One immediate consequence was that while interest on credit extended compounds to infinity, the real economy, which is the basis of repayment, has limits. (Note to history nerds, the word "interest" was not yet invented, but charges for the loans issued still existed B.C.E.)

The consequence of compounding: some loans become unpayable as a mathematical inevitability. This is why there's a biblical prohibition against usury (now called "interest").

So what happens to borrowers who have unpayable loans? Babylon opted for jubilees, society-wide clean slates (bankruptcies) typically announced when a new ruler took over. The Jews in Babylonian exile adopted jubilees too when they were repatriated to Judea (see Leviticus 25). 

The alternative to jubilees or bankruptcies was to turn ever-larger sections of the population into debt slaves. The big question then: Who would defend against the barbarian invaders? If everyone were debt slaves, the answer to that question would be: no one.

Part of the current debate seems to be about whether economic (not magical) currency should be commodity-backed, whether it's with gold and silver, or with energy-intensive calculation (e.g., crypto). 

The limitation on the commodity, whether gold, silver, or energy, makes the currency scarce, which makes it inevitably tend toward deflation. If compounding approaches infinity and the currency has built-in limitations on issuance, then it's not difficult to anticipate a deflationary train wreck. As bad as inflation can be, deflation is much worse, so that's why central banks in most advanced economies can issue fiat currency--Dollars or Yen or Pounds--literally without limit. If the economy makes more valuable things--which is the point of having an economy in the first place--and the amount of currency doesn't expand accommodate added value in the economy, a deflationary train wreck is the consequence.

Since crypto is, in effect, a commodity-backed currency, it behaves like gold, restricting the money supply and creating a chasm between creditors and debtors that, often enough, is unbridgeable. Political economist Mark Blyth says states can either have commodity-backed currency or democracy, not both. 

Such currency design sabotages anything like citizen equality, and society becomes divided between an oligarchy of creditors and the debtors, who are often historically debt slaves or debt peons. 

This is especially relevant now: BLS data shows the bottom 80% of Americans spend 105% of their income on basic necessities. The bottom 20% spend 181% of their income on essentials - food, clothing, housing, transportation, education, and healthcare. They're surviving only through government subsidies and debt.

If that's not enough to dissuade you from supporting cryptocurrency, its background in speculation, gambling criminality should provide an extra boost to disfavor it. (See this article for details)

Often, the not-so-hidden agenda of cryptocurrency is to bypass anything resembling government supervision of markets. As David Graeber reports in Debt: The First 5,000 Years, in all of human history, there have never been economic markets without some supervising authority, whether the temple or the king, or the state. It may be possible to invent some non-state market enabler, which is what the crypto fans want to do, but it hasn't happened in the 5,000 years or so markets have been around.  

Here's a comment from a Naked Capitalism account of "Abundance": from "redleg" who recounts his experience as a supervisor/regulator, and the reason deregulation is so strongly resisted.

July 23, 2025 at 11:14 am 

As a former regulator who had to issue and enforce permits, I can describe that 95% of the job is telling rich people and richer corporations no. During my time as a regulator for a US State, some of that 95% was informing local governments that the permits they were about to issue violated their own laws. We even sued a city and issued a citation to a county for following through with their permits (that only benefited rich people, of course).

The minute “red tape” regulations are weakened, and I mean minute as in 60 seconds, the squillionaire class and their class-adjacent 1%-ers will embark on building sprees of ridiculous vanity that will utterly trash entire regions. For example, a water pipeline from the Great Lakes to the US southwest (or wherever). “Red Tape” is currently the only thing preventing this, not the $5B price tag, as that’s bus money for someone like Elon.  

A Final Comment: Context is important! Midas Disease is everywhere!

Overlooking for a moment its use in such criminal activities as ransomware, crypto enables transactions between willing buyers and sellers with as little supervision as possible. Anyone who brings up those inconvenient truths about how such commodity-backed currency favors creditors, or enables thievery, is immediately discounted with an assertion that bitcoin is somehow valuable despite its problems. It's valuable! (A variation on "only gold is valuable").

Such assertions of value discount the context. Imagine the Castaway Tom Hanks played in that movie had a stack of gold bricks, or a thumb drive with lots of crypto on it. What good would it do him?

If we destroy the society--or indeed, the planet--that provides us with the goods and services we need, having a bigger stack of gold bars, a larger 401K, etc. will do us no good. We need the real wealth, not just the symbols of wealth--which is what all that public and private money is. Even the ten commandments prohibit giving one's devotion to a symbol (idol). It's pointless to discuss value without context. 

Update: AI-fueled crypto scams are booming, up 456% — and no one is safe, expert warns NY Post

 

 

Corbin Trent's Broadcast Touts "Abundance," But Mentions Accurate Things Too

Watch now

Excerpt:

Noah Smit and I chat it up: The Math of Middle-Class Life No Longer Adds Up
He tells me that economic progress 'utterly indisputable' while families spend 181% of income on necessities. This is the expert-reality gap breaking American politics.

I just spent an hour with economist Noah Smith, who declared generational economic progress "utterly indisputable." Meanwhile, I'm looking at BLS data showingthat the bottom 80% of Americans spend 105% of their income on basic necessities. The bottom 20% spend 181% of their income on essentials - food, clothing, housing, transportation, education, and healthcare. They're surviving only through government subsidies and debt.

Noah's response? We're "living like kings" compared to the 1950s because we have bigger houses and more food.

This conversation showed me it's not a policy tweak problem - it's about understanding how far from affordable life actually is. If politicians don't understand how far from affordability people are, there's no chance of them fixing the problem because they won't understand the scale of it.

It's like the difference between a candle you can blow out versus a house fire that needs the fire department. The scale of the problem determines the scale of your solution. But according to most economists, we don't really have a problem at all. When they talk about affordability, they mean minor price adjustments, not making life actually affordable again. There's no real solution required because economically speaking, we're in a prime spot.

When families spend more than they earn on necessities while experts celebrate progress, you get Trump. You get January 6th. You get people willing to burn it all down because the math of their lives doesn't add up, and the people who understand economics keep telling them they're wrong about their own reality.

The purchasing power of the median income has collapsed across every necessity. Housing now requires 5.6 years of median wage to purchase, compared to 2-4 years from the 1940s through 1970s. Healthcare costs have increased 10-fold per capita relative to median income. College costs have risen 252% in real terms since the 1960s. Childcare now consumes 27% of typical household income, nearly four times what experts consider affordable.

But here's what makes this crisis deeper than individual household budgets: we're also facing a public affordability crisis. Healthcare exemplifies both problems simultaneously. Those costs don't just hit families directly - they're dispersed across multiple sources: personal payments, employer contributions, government programs. Combined, our healthcare system will cost $77 trillion over the next 10 years, reaching 20% of GDP by 2033.

...

[Conclusion]

The growing unrest we see - from Trump's election to January 6th to widespread protests - reflects working people's recognition that the old promises no longer add up. But that discontent could be mobilized toward prosperity if people believed there was a real path forward for their families, communities, and nation.

The math of middle-class life is broken. We can't sit around hoping the market fixes things - it won't. These interconnected crises require coordinated solutions at the scale of our greatest national mobilizations. The question isn't whether we need a Mission for America. The question is whether we'll build one that serves working families or continue to think we're living like kings while everything falls apart.

 

The US Central Bank: The Federal Reserve (AKA "The Fed")

Many people believe the Fed is somehow a private entity. In some sense, that may be technically true, but presidents report Fed leaders, and the Fed follows the dictates of Congress to the letter. Yes, it has private shareholders, and it often does things congress and the public don't like, but it always creates the currency at the direction of Congress.

To find out about this institution, you can read William Greider's Secrets of the Temple: How the Federal Reserve Runs the Country, but without a framework of understanding, it comes across as just historical gibberish--both too much information and too little connecting the dots.

A better look at the Fed and its recent history is Matt Stoller's column about it "Federal Reserve  Independence is Bad" Subtitle: "Donald Trump wants to fire Fed Chair Jay Powell. He should be able to do so. The Fed needs to be controlled by elected leaders, not Wall Street. Even if those elected leaders are bad."

Stoller is no Trump fan, but he notes that this important institution has for too long been immune to electoral accountability for things like encouraging exploding derivatives, or bailing out banks despite legislative attempts to put an end to that (e.g., Dodd-Frank). It's supposed "independence" is a smokescreen for favoring the financial sector repeatedly.

Says Stoller: "I think we should respond to bad leaders by electing different leaders, not by removing important areas of politics from political control. I also think Trump, yes even Trump, will do a better job at managing the central bank than a leadership group insulated from political control.

"When it is not, there are three problems. First, Americans lose faith in democracy as a meaningful system. They want their elected leaders to deal with prices, but their elected leaders have foregone any control over the institution tasked with doing so. Second, the Fed operating without direction from elected leaders gives politicians bad habits. For instance, Joe Biden’s administration was crippled in part by his refusal to take control of monetary policy, giving him an excuse not to even try addressing inflation. And third, Federal Reserve leaders and the institutional culture, without political control, become dedicated to consolidating financial power."

Stoller then puts history in context, recounting the Fed's misbehavior, and its relatively recent independence from more political control. 

More Stoller: "Since the Federal Reserve became “independent” of political control in the late 1970s, America has not coincidentally undergone a period of dramatic financialization. And that was intentional. Remember, Fed Chair Paul Volcker used to carry around a card of union wage rates, as a reminder that his goal in achieving low inflation was to break union power. The Federal Reserve is responsible in part or fully for the legalization of derivatives, the explosion of subprime lending during the 2000s, the great financial crisis, a trillion dollar transfer of wealth to big banks as interest rates increased, the institutionalization of crypto-currencies, the merger explosion of the early 2020s, and the failed regulation of Silicon Valley Bank, among other problems. It’s also a highly political institution, pushing free trade and defending large banks; in the 1990s, Fed officials secretly bailed out Mexico so as to protect Citibank and pass NAFTA. " 

..."In 2020, I noted that every single board member of the central bank is a multi-millionaire. This institution is organized to represent creditors and debtors, and yet what “independence” really means is that millionaires make choices out of the limelight of anyone but Wall Street."

Steve Keen on the Fed:

1. Evaluates Fed policy (and it doesn't bode well for continued "independence"):

 

 2. Evaluates Powell's motivation.

 

Today's Bee letter: Utilities

Responding to Sacramento Bee 7/17/25 p.20

Editorial writer Tom Philp wrings his hands over a Chamber of Commerce study that says solar incentives may cost 14% of a "typical ratepayer bill." Heavens to Betsy!

This is straining at a gnat while swallowing a camel. Publicly-owned SMUD is 35% cheaper than privately-owned PG&E. The savings from publicly-owned utilities beats the solar "cost" calculated by one of the most conservative organizations in the country by more than double. 

We'd save big from public ownership, and wouldn't have an incentive for executives to boost profit by skimping on maintenance. PG&E executives were concerned they would have to face negligent homicide charges for their maintenance failures like the exploding pipeline in San Bruno and the fire that burned down the ironically-named town of "Paradise."

Priorities, please.

Copaganda part II

 Alec Karakatsanis, author of the Copaganda book in a brief talk (from here)

 

 

 Here's an excerpt from the text in which the video was embedded:

 

"As I suggest in the video, our civil rights work is about many things, including getting as many people as we can out of cages. But the work we do in courts and jails across the U.S. is also about something else: it’s about ensuring that, no matter what kinds of grotesque stuff starts to become normalized in a society that imprisons Black people 6 times the rate of South Africa at the height of Apartheid and all people 5-10 times other comparable countries, there are always people prepared to say “2+2=4.” The moment people stop saying this, everything is lost.

"One reason various institutions are crumbling and the people in charge of them so unpopular is that the material reality they defend is so different from their own professed values. They claim to value the “rule of law” but only enforce some laws against some people some of the time. They claim to value “public safety” but pursue policies that make most people less safe. They claim to value liberty but jail hundreds of thousands of society’s poorest people solely because they lack access to cash. They claim to value equality but ensure a small number of people control nearly every major decision. They claim to value evidence but pursue policies that defy evidence. They claim to value health but let us all be regularly poisoned and then destroy the opportunity for most people to get quality health care. They claim to value merit but ensure that fealty to power is what gets rewarded in elite institutions. As a result, establishment politicians, university presidents, and pundits are constantly speaking gibberish instead of being real with people."

" 

Warren Mosler Evaluates Trump's Policies

 (The graph is the unemployment rate)

Not anywhere near 'crash' levels but early stage evidence of DOGE cuts, Federal dismantlings, mounting tariffs, business uncertainty, reluctance to fill low paying jobs openings, etc. All consequences of Trump policies: pic.twitter.com/qFrF2FqoLT

— Warren B. Mosler (@wbmosler) July 13, 2025

Links 7/14/25 - Too good to overlook

First, there's Matt Stoller's analysis of the Trump administration's refusal to release the Jeffrey Epstein files.

Excerpt: "Over the last twenty years, a larger-than-life myth has floated around the American political scene, that of Jeff Epstein, a wealthy New York City-based sex trafficker with a murky job and deep connections to some of the most powerful men in America, England, and Israel. Continual revelations around Epstein have fueled MAGA suspicion of big media, big tech, and big government, fostering a mini-ecosystem of Donald Trump-supportive podcasters and influencers. Trump would, they posited, finally expose a Deep State conspiracy, the center of which was this man, Epstein.

Epstein with Uber-Neoliberal "Economist" Larry Summers

"Last week, however, Trump did something I thought was impossible - he managed to turn his own core supporters against him. He did so by denying that there is anything conspiratorial or hidden about Epstein’s life or the circumstances of his death. Specifically, Trump said there were no government files worth releasing around Epstein, and the idea of such files was a Democratic party plot. I looked at the replies to his post on Truth Social, as such posts are always full of supporters offering praise. This time, it wasn’t. His most hard-core supporters did not take it well." 

Then, there's actual economist Michael Roberts' evaluation of crypto entitled Crypto corruption and un-Stablecoins.

Excerpts:  

“Bitcoin is a speculation and not an investment. Not regulated, not backed by any asset, only worth what someone is willing to pay.” — Matthew Stephenson

“It’s totally absolutely crazy, stupid gambling” — the late Charlie Munger, speaking in 2023.

“Cryptocurrencies are highly volatile and therefore not really useful stores of value and not backed by anything,… It’s more a speculative asset that’s essentially a substitute for gold rather than for the dollar. ” Federal Reserve Bank chair, Jay Powell

“Bitcoin, it just seems like a scam…. I don’t like it because it’s another currency competing against the dollar.” Donald Trump, June 2021.

"It’s crypto week in the US. And the price of the leading cryptocurrency, Bitcoin, has hit a record $120,000 as the US Congress prepares to consider bills aimed at creating clearer regulatory frameworks for digital assets. In the next five days, US lawmakers will consider the Genius Act, the Digital Asset Market Clarity Act, and the Anti-CBDC Surveillance State Act. The aim is to make “America the crypto capital of the world”....

"From the start, cryptocurrency craze has been riddled with fraud, criminality and corruption – the cases of which are too numerous to mention all. In an annual report last September, the FBI revealed that fraud related to crypto businesses soared in 2023 with Americans suffering $5.6bn in losses, a 45% jump from the previous year. Sam Bankman-Fried, who founded the now bankrupt FTX crypto exchange, was sentenced to 25 years in prison in March 2024 by a New York judge for milking customers out of $8bn. Last month, the US Securities and Exchange Commission charged Unicorn, an investment platform that promised cryptocurrencies backed by real estate, with a $100mn fraud that misled more than 5,000 investors.

"The dream of the techno enthusiasts that cryptocurrencies would replace state-issued currencies like the dollar or the euro and so free individuals from the ‘heavy hand of state regulation’ in a new free world of money has never materialised. Instead, what has happened is that the mega financial institutions have taken over control of these currencies and are turning them into what they hope will be a highly profitable set of financial assets to suck in investors."

 

. 

 

A (belated) Look at Finding the Money [The MMT Film]

July 10, 2025

Steven D. Grumbine

My friend Maren Poitras’ Finding the Money does the vital work of dragging Modern Monetary Theory (MMT) out of academic journals and into the public square; but like a union rep forced to negotiate at a table built by bosses, the film’s framework bends under the weight of capital’s myths. Stephanie Kelton rightly hammers that “currency issuers can never run out of money” (Kelton 2020) while the documentary pulls its punches where it hurts most: exposing how the ruling class weaponizes deficit hysteria to strangle working-class futures. The blame for this shouldn’t be laid at Poitras’s feet; it’s an unfortunate element of many MMT stories.

The film brilliantly shows dunces like Treasury officials wringing their hands over “funding” Social Security, as if the government is some broke diner owner counting pennies rather than the creator of the dollar itself. This is where Finding the Money needs Clara Mattei’s razor-sharp class analysis: when she writes that “austerity is not economic necessity but class war” (Mattei 2022), she’s naming the game. That’s the peanut butter to MMT’s chocolate! The documentary lets politicians and bankers off the hook by framing monetary ignorance as mere confusion rather than what it really is: a systemic con job to make workers believe schools and hospitals are “unaffordable” while Pentagon budgets bloat like a corpse in summer. This secondary confusion myth is a recurring hyper-courteous MMTism that sometimes diminishes its own walloping wake-up call.

Where the film truly shines is its demolition of household budget analogies – those capitalist fairy tales that pretend the US Treasury operates like a family choosing between groceries bills and rent. Kelton’s explanation of money creation is the sledgehammer this lie deserves. But when it comes to showing who benefits from these myths, Finding the Money treats monetary policy like a faulty appliance needing repair rather than a butcher’s knife held to labor’s throat. It also leaves the viewer with the notion that all private sector savings are the same rather than the class war that can be truly exposed through an analysis of stratification.

To add context, consider what’s missing: the footage of Wall Street bankers high-fiving over interest rate hikes that jack up their bond yields while crushing indebted workers. The montage of CEOs blaming “inflation” for price-gouging as they report record profits (Weber 2023). The truth Mattei exposed – that economic “rules” are just class weapons dressed up in math – gets lost in the film’s focus on educating elites rather than arming the working class.

The documentary’s biggest blind spot? It doesn’t follow the money all the way to the picket lines. It doesn’t show the folks without teeth skipping dental care because of austerity. The student debtors losing their homes. The broken families. Auto workers striking for wage hikes, CNBC screaming about inflation. When tenants demand rent control, landlords howl about “market fundamentals.” Every time workers fight for more, capital shrieks “we can’t afford it” while amassing profit they didn’t earn but extracted. How much more powerful would the film be if it connected these dots?

This isn’t just about understanding money. It’s about seizing it. The film could’ve shown Puerto Rican workers building solar grids after privatized power failed them (Rapin, 2023) or Jackson, Mississippi’s solidarity economies (Cooperation Jackson, 2019) – proof that when we stop begging and start building, the “money” magically appears. We get plenty of talking heads but not enough torch-bearing workers marching on central banks which work for, and at the legal behest of, a completely captured Congress.

Finding the Money is a good first step, like a union organizer’s introductory pamphlet. But unless it names capitalism boldly and without reservation as the counterfeiter of artificial scarcity, unless it shows workers how to wrestle the decision making and money-creation power from the suits who’ve captured congress and hoarded it like dragons on a pile of gold, it’s only telling half the story. The other half? That’s written in the streets. But the streets need the information in this wonderful but inadequate documentary. Everyone needs to see this film; then start investigating class.

Watch Finding the Money for free on YouTube.

It is also available to rent or buy at findingmoneyfilm.com

References:  
Kelton, S. (2020), The Deficit Myth  
Mattei, C. (2022), The Capital Order  
Weber, I. (2023), Taking Aim at Sellers Inflation

Katherine Rapin (2023), The Grassroots Movement That Built Puerto Rico’s First Community Owned Microgrid
Cooperation Jackson (2019) The Just Transition, Economic Democracy, and the Green New Deal
Austerity, Class War, Inflation
Economic Justice, Film Review, Op Ed

Randall Wray on Modern Money Theory: Heuristics versus Paradigm Shift?

(from here)

This is a slightly revised version of the purposely provocative keynote presented at the FDR library for the Levy Institute Summer Seminar on Money, Finance, and Public Policy. References have been added. The Levy Economics Institute Working Paper Collection presents research in progress by Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals. Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic research, it generates viable, effective public policy responses to important economic problems that profoundly affect the quality of life in the United States and abroad. Levy Economics Institute P.O. Box 5000 Annandale-on-Hudson, NY 12504-5000 http://www.levyinstitute.org Copyright © Levy Economics Institute 2025 All rights reserved ISSN 1547-366X 

Heuristics versus Paradigm Shift? 

Mainstream economics is in disarray. As Frank Hahn remarked four decades ago, “The most serious challenge that the existence of money poses to the theorist is this: the best developed model of the economy cannot find room for it.” He was speaking of General Equilibrium theory, but his claim applies equally well to Dynamic Stochastic General Equilibrium theory, which is used by all the major central bankers of the world to model the economy. 

Let that sink in. Our central bankers use a model to understand the economy that has no money, no banks, and no financial system. The Queen of England asked why none of the mainstreamers foresaw the Global Financial Crisis. Their failure was baked into their model. 

Remarkably, even insiders at the Fed recognize the dismal failure of orthodoxy. Jeremy Rudd began a recent Fed research paper, claiming, “[n]obody thinks clearly, no matter what they pretend […] that’s why people hang on so tight to their beliefs and opinions; because compared to the haphazard way they’re arrived at, even the goofiest opinion seems wonderfully clear, sane, and self-evident” (Rudd 2021). 

He goes on to list ideas that “‘everyone knows’ to be true but that are actually arrant nonsense”—including all the main ideas of orthodox theory. They are all nonsense. All accepted as dogma. 

To paraphrase what Keynes said a century ago, mainstream theory’s application is not only limited to a special case (i.e., an economy that does not use money), but is also dangerous when applied to the “facts of experience” to formulate policy. The evidence is plain to see all around us: in an era of multiple pandemics that threaten the continued existence of human life on planet Earth, we are stymied by imaginary constraints concocted by economists. 

Over the past 30 years, Modern Money Theory (MMT) got much of it right. Its proponents foresaw the fatal flaws of the euro. They predicted the oncoming global financial crisis and warned that the policy response would be insufficient, so the recovery would take much longer than necessary. And when the COVID-19 pandemic hit, they offered a policy response—targeted spending to address problems without setting off inflation. 

In that last crisis, at least some policymakers listened to MMT. Former Congressman John Yarmuth (D-KY), Chair of the House Budget Committee, had embraced MMT and helped to usher through trillions of dollars of pandemic relief without worrying about “pay-fors.” As he correctly argued (as quoted in Wray 2021), “Historically, what we’ve always done is said, ‘What can we afford to do?’ And that’s not the right question. The right question is, ‘What do the American people need us to do?’ […] Once you answered that, then you say, ‘How do you resource that need?’” 

He went on to argue that, as the US government issues its own currency, finance is never the problem. What matters is resource availability. 

As MMT predicted, trillions of dollars of deficits did not cause interest rates to spike, or the dollar to crash, or attacks by bond vigilantes, and did not force the US government to default. 

All the finance was keystroked, all the treasury’s checks cleared, all the bonds were taken-up, and the dollar remained strong. The deepest recession on record was reversed with the fastest recovery. MMT was in the news, again, but this time occasionally with a positive spin. The pandemic response was claimed to be the first real world experiment that applied MMT. 

However, the pandemic lingered on longer than most expected—with continued supply chain disruptions, new viral outbreaks, organized political resistance to science, and price-gouging by mega-corps with pricing power. 

Inflation rose. MMT was blamed. In truth, the policies were not what we advocated—spending was not well-targeted, jobs were not created directly, capacity was not enhanced. 

As Yarmuth warned, all eyes need to be focused on resources, not on finance. 

A chief architect of the neoliberal world order, Larry Summers, announced with fury that he was offended that the “newspaper of record” would devote space to MMT: “I am sorry to see the nytimes taking MMT seriously as an intellectual movement. It is the equivalent of publicizing fad diets, quack cancer cures or creationist theories.”[1] 

Jason Furman—a favorite of Democratic administrations—fumed: “I don't think MMT makes any sense. I also don't think it's played a role in shifting us on deficits.”[2] 

And now, of course, we are back to the deficits—two of them (trade and government budget), both chronic, both seemingly intractable problems. As I have explained, [3] the two are inextricably linked, although not in the way that conventional analysis claims. 

I do think they have become a problem and I think MMT needs to clearly address them. Too often MMT proponents have responded to critics with simple heuristics—a list of talking points that are meant to represent descriptions of reality—freed of theory or policy recommendations. 

While heuristics are useful in introducing MMT to beginners, they cannot substitute for careful economic analysis. We might have relied on them excessively. Let me give some examples of problematic heuristics: 

• Taxes drive money 
• Government spends currency first, then taxes it back 
• Imports are a benefit, exports are a cost 
• Bond sales are just a reserve drain 
• Government sets the price level 
• Floating exchange rates maximize domestic policy space 
• There’s no financial crisis so great that fiscal policy cannot resolve it 

While there’s a kernel of truth in each, all are historically, theoretically, and practically problematic. Each follows logically from carefully constructed assumptions. None strictly applies to the economy we actually live in. 

It is often said that MMT is mainly a description of the way things work—and that theory and policy can be added as desired. I’ve even said (Wray 2024a) that MMT is for Austrians, too! 

I want to walk that back. Description without theory is not possible. Theory without a paradigm is not possible. We need a paradigm to formulate theory, and a theory to formulate description. Once we have got all that, only then we can tackle policy. 

Both the University of Missouri—Kansas City and the Levy Institute have played a big role in the development of MMT and share a paradigm that has shaped our approach. I’ll briefly outline the building blocks: 

• From Marx, Keynes, Veblen, Minsky: Marx’s M-C-M’; Keynes’s Monetary Theory of Production; and Veblen’s Theory of Business Enterprise. 
• From the Institutionalists (Veblen and Minsky): money is all bound up with power: to do good and bad; Money is the most important institution in Capitalist Economy 
• From the (Post) Keynesians (Keynes, Davidson, and Minsky): money and uncertainty; Money and contracts; Holding money “quells the disquietude” (as Keynes put it); Endogenous money 
• From the Chartalists (Knapp, Innes, Goodhart, and Minsky): state money and currency sovereignty 
• From Functional Finance (Lerner and Minsky): state money and the approach to fiscal and monetary policies 
• And, finally, the Sectoral Balances approach (Godley and Minsky): focus on balance sheets and macro balances; balances do balance! 

TOGETHER: that is MODERN MONEY THEORY 

As Minsky used to say, a general theory is useless. While Keynes called his revolutionary book The General Theory, Minsky argued it to be a misnomer—it is a theory of the capitalist economy where money plays a special role. 

James K. Galbraith has argued that Keynes purposefully borrowed his title from Einstein as he was trying to do for economics what Einstein had done for physics. 

But economies are far more complicated than the physical world. Many heterodox economists argue that biology is a better analogy because the living world is always evolving—from a past that we can sort of understand to an unknowable future. That better captures what Keynes was doing—a Darwinian Revolution. 

As Minsky insisted (Wray 2017), capitalism evolves—there are 57 varieties—and our theory must continually evolve along with the facts of experience. Money is at least 5,000 years old, as David Graeber (2012) claimed, and its role changed significantly over those thousands of years. For most of economic life, money didn’t matter much—until modern capitalism was incubated by the New World’s slavery on the backs of captured Africans. 

All the modern institutions we associate with capitalism came out of slavery—modern finance, administration, accounting, labor discipline, policing, and warfare, as well as the peculiar form taken by American democracy (Wray 2025a). 

Thus, our theory needs to be institution-specific. Our paradigm is monetary production: unlike in all previous economic systems, the purpose of production—from the perspective of those in control—is to start with money to end up with more money. Satisfaction of needs is not the goal of those who control capital. 

We need a countervailing power—to use Galbraithian (1956) terminology—to ensure that needs are met, which can include government, labor unions, and social service organizations. 

Government in capitalist economies has always served two masters—the capitalists and the rest of us. 

Left to its own devices, capitalism is highly unsustainable—economically, socially, environmentally, and politically. Unlike tribal society—which could sustain itself for thousands, maybe millions of years—capitalism would self-destruct within a generation if it were abandoned to the invisible hand. 

That is what we saw, with depression after depression, once every generation until Roosevelt’s reforms and the creation of Big Government with what Minsky called Managerial Welfare State Capitalism and what Galbraith called the New Industrial State. 

In its modern guise—which we can date to 1870 (what Robert Gordon uses as the date for the beginning of the “special century”)—capitalism has gone through four or five stages according to Minsky. This final stage, Money Manager Capitalism, has run its course. We stand at the edge of a cliff, with no bottom in sight. 

Trump wants us to jump off. 

Let me return to the heuristics to explain why I believe they present obstacles to further advances in MMT. I am only going to tackle a handful of them here—but I think that many others also need to be critically assessed. 

Taxes Drive Money. We have often used the metaphor of the colonist who imposes a tax in his own currency and enforces payment with his gun. There are certainly historical examples, in Africa for example. 

And we often use the American colonies—that would pass two bills, one imposing a new tax and the other authorizing the issue of paper currency. All this is true. But money already existed— this cannot be an origins story and doesn’t shed the proper light on its nature. 

Money has existed for 5,000 years at least. As best as we can determine from historical evidence, it was invented as a unit of account to measure debts, for internal record keeping in the temples of Babylonia (Hudson 2018). This was before evidence of taxes or markets. 

What difference does this make? The first draws attention to illegitimate force—the evil colonizer. More importantly, it emphasizes money as something that exchanges hands: government spends a currency that then can be used to pay taxes, make purchases in markets, or hoard for later use. 

The second emphasizes record keeping, credits and debits. Modern governments do not spend physical currency, and taxpayers use only trivial amounts. Most of it is outside the US—used for illegal activity. Young people today have never bought anything except by flashing their smart phone. 

And the US government never spends currency, at least in America. Washington spends cash when they invade a country and want to pay mercenaries or bribe officials. 

I used to make fun of a prominent Post Keynesian who objected to MMT before a roomful of legal historians, saying: “I never think of taxes when I accept a US dollar—I accept dollars because I want to buy ice cream.” We all laughed at the superficial critique of MMT’s claim that taxes drive money. 

But the complaint resonates with 99 percent of the population—who never think of taxes as driving their demand for money. They want ice cream. And they don’t use currency to buy it. 

We need to move away from thinking about money as something that goes from hand to hand. The better metaphor is the baseball scoreboard, with banks replacing the Babylonian temple as the score keepers. Money isn’t something that you have or do not have. It is all about keeping track of debits and credits. And, as Minsky said, anyone can create money—the problem is to get it accepted. The question is whether the scorekeeper will give you a credit. 

As Minsky said, banks are not money lenders. They make payments for their customers. The “money” is created when they make the payment. Banks follow rules to determine whether they will make a payment for you. And they tally up what you owe—just as the Devil tallies your sins to determine whether he takes your soul. 

The central bank is the scorekeeper for the scorekeepers, and also for the government. It also follows rules that determine when and how it will make payments for banks and the treasury. Money is not something of which the government, the central bank, banks, or you can run out. As Mat Forstater says, the dollar is like the inch (or centimeter)—we cannot run out. 

I want to address three additional areas where I think overly simplistic logic leads down the wrong path—at least when it comes to developing an understanding of the way our form of capitalism works. First, there is the claim that as monopoly supplier of the currency, government can set any and all prices. The logic follows from the taxes-drive-money assumption. By imposing an obligation on you, government determines what you must give up to get the currency to pay your tax. As I have argued (Wray 2024b), this sounds a lot like the labor theory of value: if it takes an hour to earn a dollar, then the dollar is worth an hour of labor. 

This is the main idea behind the buffer stock approach to the job guarantee: government can maintain a buffer stock of workers paying a base wage to prevent the wage from falling and “selling” labor to private employers at a markup over that. 

By analogy, government can do the same for every other thing bought and sold. 

Well, what would that look like in the real world? A real mess. People joke about the Soviet Union’s attempt to regulate market prices but this would be that on steroids. 

It is completely inconsistent with capitalism. And as I have tried to make clear (Wray 2024b), the basic wage—the wage for ordinary labor— will not map directly to price. Capitalism operates according to a logic that generally tries to equalize rates of profit and exploitation—not according to the whims of a government that wants to set all prices. 

The second claim—that we can always counter a financial crisis by ramping up fiscal policy is wrong for the kind of financialized economy we had both in the gilded age before the Great Depression (often called Finance Capitalism) and since the unraveling of the New Deal institutions—beginning in the 1970s. This Money Manager Capitalism stage, with everything financialized is—to use the metaphor again—finance on steroids. 

 The Fed spent and lent $29 trillion dollars to save global finance (Felkerson 2011). The next financial crisis might take even more. 

You could say: well, just let the whole darned financial system fail. The real economy will still be here. That’s what we did in the Great Depression. As Minsky used to say: yes, the economy might recover, but by way of hell first. 

To be clear, I don’t support the way the Fed responded—it was a mess, much of it was illegal, and none of Wall Street’s criminal class was prosecuted. The money managers came roaring back and rebooted the bubblicious economy. 

But merely ramping up a fiscal response, alone, wouldn’t have saved our pension funds, our investments in our houses, or our university endowments. Even excluding all the fancy derivatives and other crazy financial products that total up to the hundreds of trillions of dollars, we have financial assets that are at least five times greater than the so-called real economy. 

We have to keep in mind that, in capitalism, the financial is more real than the real. This is a system based on producing money value, not one directed at satisfying needs. 

I’d like to change that—but we need to approach it sensibly, not by bringing on another Great Depression. 

Finally, there’s the MMT dismissal of the twin deficits problem. Since government cannot run out of money, budget deficits aren’t a problem—we might as well run them up. With a floating currency, trade deficits are a sign that we are winning: we get the stuff, they only get dollars. 

Trump says we are losing; MMT says we win. 

Minsky’s writings during the Reagan years showed great concern about both deficits. This has led some MMT proponents to argue that Minsky cannot be a guiding light for MMT. I have discussed Minsky’s views on this in two Levy publications (Wray 2018; 2025b). Let me quickly summarize his points. 

Creation of a large and chronic trade deficit means—by the sectoral balances identity—that we will have a large and chronic budget deficit. 

Minsky was worried that rival currencies could substitute for the dollar, so its value could fall— potentially irreversibly—forcing the Fed to keep interest rates high, while also putting inflation pressure on the US. The combination could lead to secular stagnation. 

What we saw, however, is that our two rivals—Germany and Japan—both dropped out of the running. 

Germany committed suicide by joining the euro and embracing austerity; Japan’s private sector ran out of steam and stopped investing, in part because the government also embraced austerity in an attempt to balance the budget. 

In the meantime, the US lost its industrial advantage (first to Germany and then to Asia). This was only partially due to trade—it had more to do with financialization of the economy—but contributed to inequality, the weakening of labor unions, and the rise of neoliberalism. 

We did get the secular stagnation that Minsky warned of, only relieved by serial bubbles—as Michael Hudson (2014) said, we became a Bubbles-R-Us economy. Propped up by serial bailouts by the Fed and growing budget deficits. 

For two decades, the Fed kept rates low, fueling the bubbles, but since COVID, the Fed has kept them high. And that means—as Minsky warned—that more and more of government’s spending is inefficient—going to interest and transfer payments, with much of the spending going abroad. 

The joke is that Uncle Sam is now just an army with a welfare system attached to it. Contrast all the recent presidents with FDR: his government made America great. His accomplishments are still all around us. 

Reagan successfully convinced us that government is a problem, not a solution—and the Democrats have largely reinforced that belief by doing little to nothing to help the working class (Tcherneva and Wray 2025). 

And, yet, the DOGE tech boys could not find any waste because we have created the most efficient way to run an inefficient system. 

As I said earlier, Minsky worried about secular stagnation. We temporarily staved that off during the Clinton years and for some time after by boosting finance—to the benefit of the FIRE sector (finance, insurance, and real estate) and what Citigroup (Kapur, Macleod, and Singh 2005) called the new Plutonomy—those billionaires who have taken over the government and the economy. 

A handful of counties around the US boomed while most of the country got left behind and turned red—as Pavlina Tcherneva and I have shown (2025)—even as Trump and Musk try to turn the country into a banana republic, with Trump’s favorability rating somewhere around 40 percent, the approval rating of the Democrats is stuck at 27 percent. 

A major exception to the stagnation was Silicon Valley: over the past two decades, tech is the sector that boomed alongside Wall Street. Interestingly, some of the early tech firms were involved in the payments system. That has come full circle with the second coming of Trump. This is, I think, the true aim of DOGE—to merge the financial and tech sectors, to financialize our data. 

We no longer live in a world of production of commodities by means of commodities[4]— including, most importantly, labor power. Capitalism is still driven by the quest for “more money” but the main source is not production of commodities. The labor theory of value doesn’t strictly apply: monetary wealth has been freed from production. Neither income nor profit flows are important for our plutocrats—as investigations by ProPublica (Eisinger, Ernsthausen, and Kiel 2021) have shown. Billionaires like Musk pay no income taxes because they have no income. 

Data is now the most important commodity in the world and DOGE has apparently developed the capacity to merge all the data collected by the government (including the IRS), banks, social media, and the insurance sector—especially health managers that deny your claims and startups that have your DNA and all other health records—into a one-stop shopping mall for sale to the highest bidders (Randles 2025; Chayka 2025). 

DOGE got hold of the payments system and can push the red stop button on any payment. They tested it on New York City—they actually shut down payments that Congress approved to help with the costs created by the clown governor of Texas who bussed immigrants and dumped them on the city (Tankus 2025). 

The Trump administration has paid over $100 million to Palantir (Frenkel and Krolik 2025) to consolidate all the government’s data on individuals, presumably to make it easier to go after the millions of Americans who could be added to an enemies list. To use the metaphor one more time: this could be Nixon’s enemies list on steroids. 

Am I paranoid? It is a strange new world. Capitalism is a system based on exploitation. While Marx focused on exploitation of labor, capitalism also exploits the environment, the family, the “others” outside its system. But the proponents of tech foresee a near-future in which labor is no longer needed as AI increasingly takes over all tasks. 

They don’t need your labor, they need your data, and maybe your eyeballs. 

AI’s most important task now is to accumulate all the data in existence. What then? It will know everything we know; it will be able to do everything we can do. And MMT teaches that it will be able to afford to do so. 

Maybe we should keep that a secret? 

But I don’t want to end on that note. Let me conclude. 

Conventional macroeconomic theory—of both the orthodox and (unfortunately) of much of the heterodox variety—takes an excessively “high in the sky” view. Unemployment is caused by too little spending. Inflation is caused by too much. Keeping taxes aligned—more or less—with government spending ensures it will not be inflationary. The solution to inflation is to cut spending or raise taxes. 

MMT is dangerous because it lets the cat out of the bag: taxes do not finance government spending. This gives politicians a license to run up spending that will cause inflation. Best to keep the wool pulled over the eyes and insist on tax “pay-fors,” or let the DOGE boys stop the payments. 

MMT’s view is different. The composition of both taxes and spending matters, and so there are two reasons that trying to match them is misguided: (1) government doesn’t need the revenue, and (2) there is no reason to believe that matching them means government’s impact approaches neutral. 

Spending on unemployed resources puts them to work with little inflationary consequence. Spending on a fixed price-floating quantity basis reduces further the inflationary danger. (That is what the Job Guarantee does.) 

Spending to increase productive capacity also reduces the danger of inflation, and can raise the danger of deflation. Clearly, no tax hikes are required in that case—we might need tax cuts if productive capacity grows to exceed what can be supported by spending. 

A good example is healthcare: Medicare for All would cut spending in half—from over 18 percent of GDP to perhaps 9 percent, the amount typically spent by other rich countries (Wray and Nersisyan 2020). We would need a big tax cut to offset the disinflationary impact. 

Likewise, it matters what kind of tax is imposed. A financial transactions tax, or a billionaire wealth tax, or a tax surcharge on millionaires is unlikely to take a significant amount of demand out of the economy—no matter how much revenue they raise—so are not likely to reduce inflation (Wray and Nersisyan 2020). 

Forget billionaire taxes to raise revenue. Instead, tax billionaires to destroy their wealth—impose a 120 percent wealth tax to take all of it, and send them a bill for the rest. Incentivize them to try to work their way out of the debt. 

On the other hand, a broad-based income or consumption tax will reduce demand significantly. Other methods can also be used if desired: rationing, patriotic saving, or postponed consumption. 

All this is important to support a transformative Green New Deal—or any other large scale government initiative. As Yarmuth insisted, we need to identify the resources needed and then release them from current use as necessary. 

We can use taxes for that purpose, although we might need to include other methods—such as banning oil drilling and fracking, or conscripting resources—to obtain the resources needed for the public purpose. 

We then spend to put those resources to use. If we have matched resources to purposes well, then there will be no significant inflationary pressures no matter the budgetary outcome. 

This sort of analysis must be undertaken, but it scares both orthodox and heterodox economists accustomed to relegating decision-making to the “invisible hand” of the market. 

Yes, planning will be required. Yes, it is difficult. Yes, mistakes will be made. But there is no alternative. 

A half-century of neoliberalism has brought the world to the brink of collapse. Only concerted effort and cooperation by the world’s governments provides any chance of survival. Understanding MMT does not make this easy. But it helps us to recognize what the true constraints are: resources, initiative, politics, imagination. And whatever it is that AI plans to do with us. 

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Footnotes: 

1 https://twitter.com/LHSummers/status/1490424193611141121. Accessed 5 November 2022. 

2 Jason Furman: https://twitter.com/jasonfurman/status/1083394281547722752 . The New York Times article also stated, “’M.M.T. was already pretty marginal,’ said Jason Furman, a Harvard economist, noting that, in his view, most policymakers and prominent academics ignored it already.” (Accessed 5 November 2022.) 

3 https://www.levyinstitute.org/publications/ratings-agencies-downgrade-the-dollars-exorbitant-privilege/ 

4 As Saffra put it. 

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Eisinger, J., J. Ernsthausen, and P. Kiel. 2021. “The Secret IRS Files: Trove of Never-BeforeSeen Records Reveal How the Wealthiest Avoid Income Tax.” ProPublica, June 8, 2021. https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seenrecords-reveal-how-the-wealthiest-avoid-income-tax. 

Felkerson, J. A. 2011. “$29,000,000,000,000: A Detailed Look at the Fed’s Bailout by Funding Facility and Recipient”, Levy Economics Institute Working Paper Series, No. 698. https://www.levyinstitute.org/publications/29000000000000-a-detailed-look-at-the-fedsbailout-by-funding-facility-and-recipient/. 

Frenkel, S. and A. Krolik. 2025. “Trump Taps Palantir to Compile Data on Americans.” The New York Times, May 30, 2025. https://www.nytimes.com/2025/05/30/technology/trump-palantir-data-americans.html 

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Kapur, A., N. Macleod, and N. Singh. 2005. “Equity Strategy: Plutonomy: Buying Luxury, Explaining Global Imbalance.” Citigroup, Industry Note. https://delong.typepad.com/plutonomy-1.pdf. 

Randles, J. 2025. “23andMe’s Bankruptcy Puts 15 Million Users’ DNA Info on Auction Block.” Bloomberg, March 24, 2025. https://www.bloomberg.com/news/articles/2025-03- 24/23andme-s-bankruptcy-puts-15-million-users-dna-info-on-auction-block. 

Rudd, J. B. 2021. “Why Do We Think That Inflation Expectations Matter for Inflation? (And Should We?)” Finance and Economics Discussion Series 2021-062. Washington: Board of Governors of the Federal Reserve System. https://doi.org/10.17016/FEDS.2021.062 

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Wray, L. R. 2025a. Understanding Modern Money Theory: Money and Credit in Capitalist Economies. Edward Elgar Publishing: Cheltenham, UK. Wray, L. R. 2025b. “Ratings Agencies Downgrade the Dollar’s Exorbitant Privilege.” Levy Economics Institute, Policy Note 2025. https://www.levyinstitute.org/publications/ratings-agencies-downgrade-the-dollarsexorbitant-privilege/. 

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