Please cover the ex-prisoner of Guantanano who says Ron De Santis was in military there, then and laughed at him when he was being tortured there in that prison. Thank you!

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Naomi Prins is as always, truly brilliant. Ralph is always insightful and educational. Will ask re: public banking of any would be office holder.TY

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I like the 10-item news roundup in Episode Details. It's very useful.

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These discussions are getting very tangled every time they're approached. Okay, we all know that the monetary system (first monetarism from mid-70s, then revised monetarism when they realised the money supply control theory was a failure, then New Monetary Consensus which is the current iteration) runs the shady issue of government bonds as so-called 'debt', but this is not specifically why it is issued. It is issued as a drain for excess bank reserves in the banking system. This simply because banks can't earn profit or interest on excess reserves. Though we know that post 2008 the Fed (the government's bank) did pay direct interest on these reserves.

That the shady financial sector uses bonds as a safe base investment (won't default) for running their dodgy portfolios is something else, and an argument for abolishing the issue of bonds, which government doesn't do and doesn't need to do anyway in order to spend. Any economist or economic historian worth their salt knows that economists in the 20s and 30s were all well aware of the mechanism of fiat money issue and were neither in a panic about it nor thought it was 'odd'. See e.g: McKenna Post War Banking Policy 1928 for this view taken as normal by a mainstream economist. Keynes knew it. Whereas today where everyone operates on the monetarist assumption - nonsense such as 'loanable funds theory', potential national bankruptcy, that the government 'borrows' it's own currency from the markets (whilst also supposedly being able to create it out of thin air!). Those earlier economists knew simple facts such as loans create money, or government spends by decree when it is currency issuer. The left's problem, or the progressive problem, today is falling into this pit of 'oh no! money gets created out thin air!'. So what? It's normal. It isn't something that especially happened after 2008. What's being referenced here is QE, but QE is nothing but putting the reserves back into banks which existed as bonds (and which was previously reserves!). In that scenario there are supposedly not as many bonds (though they are always sold in the mechanism I stated). And it is these holding up everything financial crooks use or build upon for their activities. This is indeed a sham and the way to end it is to stop selling government bonds and stop having central banks setting a fake, arbitrary overnight interest rate target.

There are two main considerations which should follow: where does money issue go? Is the tax system operational in that it can remove money effectively (for inflation control)?

The first clearly references, and criticises, the failed notion of 'trickle down' which pushes money for so-called investment into corporate pockets on the privatisation assumption that this will furnish public goods and services. Effectively government shunting all responsibility for meeting the entire public purpose onto the private sector and illusory 'market forces' mechanism. Which is insane. The second consideration is a discussion about tax evasion/avoidance and corporation lobbying and getting tax law favourable to their desire to hold onto as much money issue as they can. This does not mean issuing money as a mechanism in itself is therefore bad or somehow illegitimate , it means it is abused. It means steps must be taken to ensure normal money issue for spending is used to both purchase and encourage economic activity for the public purpose.

Nomi Prins is correct about government needing to just rid itself of the fake independence of the Federal Reserve. It is effectively an arm of government as all central banks are and recognising this means doing away with the fairy story that it is a separate institution to somehow prevent governments from being money issue crazy. Rid it of shareholders and appoint its staff, all of them as part of the treasury. In the UK Thatcher, a nasty woman, but not stupid knew she needed control of the Bank of England. Blair/Brown did what even she didn't do, went along with the neo-liberal claptrap of 'central bank independence'.

Let's be clear though, apart from direct spending by government which is essential, there is actually a limit on money creation in the form of loans, since banks only want to lend to creditworthy borrowers. Hence the development of unsafe lending at the tail end of the 80s, through the 90s up to the 2007 crash. Finding ways to extend loans (create money) on a false pretence of creditworthy borrowers. Banks don't need 'extra reserves' to make loans.

It points to need for regulation and oversight. Also if people want money issue to go to the 'real economy' they need to vote for government platforms which say they will create direct employment by purchasing labour the private sector can't/won't. It's the only way to thwart the idea that goods/services/infrastructure must always be 'created' by private enterprise, which is the core of privatisation/trickle down.

Unfortunately Nomi doesn't properly understand modern monetary theory. It hasn't been 'kicking around since the 70s' . It was only in the early 90s that many of it's concepts came together and several of them have never been stated before. Warren Mosler single-handedly developed an understanding of the both the function of 'debt' issue and brought clarity to the concept of: tax liability first, spending issue second. MMT does absorb lots of post-Keynesian economics, but much more than that. I take the point that under the current system money issue can and is a problem, but this has nothing to do with the observation of fiat money within MMT! Which is not a 'policy', but a theoretical understanding of the operations a modern monetary economy.

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From Ralph's recent blog, Boomerang- Big Business Style:

To date, the Democratic party has rarely done so [rolling back these anti-people travesties] ....

Persistent democracy does take work, doesn't it? Oh people!

Ralph also correctly points out that demanding that the Deathocrats do so is useless.

The reason that it is useless is that both the Deathocrats and Republikillers are controlled by their big money corporate paymasters.

So endless blogs and Radio Hour segments on the symptoms are not doing the work that persistent democracy requires and is useless. Oh Ralph !!!!!!

Let's get the work started on the cause of the symptoms (big money controlling both halves of the one big money party) by demanding that all politicians not take big money in order to earn our votes.

After all, Ralph has said many times that politicians want our votes more than big money.

As Not Sure says in Idiocracy- Lead, follow or get out of the way.

If you, Ralph, take the lead people will follow and we can get the big money charlatans out of the way.

If you don't we won't have to wait 500 years for Idiocracy to become a reality.

We can't keep killing the crops (democracy) by irrigating the crops with Brawndo (big money politicians). We have to use water (a demand for small donor politicians enforced with our votes) to make the crops grow.

It won't work instantly, but the longer we wait to get started the longer it will take for it to start working.

Boomerang- Democracy style!

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Ferdy - There is plenty of very useful information on both the Fed and Treasury website on how the process works. It's not a secret. The only thing the Fed can legally "issue" (a vague and loaded word) are reserve balances as liabilities held in a member bank's master account at the Fed. It can only create these mainly as either a loan at the Fed window or through the swap of financial assets such as during QE.

Yes, banks don't look at the static reserve position to decide whether or not to create additional money in the private economy through a loan. But what they do do is have a solid analysis of the statistical cash flow based upon many factors. This is what bankers must do. People confuse reserve balances with money. The concept of reserve balances was specifically created by the 1913 Fed Act to act as payment vehicles, NOT stores of money. Money stores exist as commercial bank liabilities to depositors. Hence reserves held at the Fed accounts(M0) are dwarfed by bank money (M2) in the economy.

Of course banks borrow from each other to essentially "top off" expected daily reserve shortfalls. This has nothing to do with chronic shortfalls as in the case of SVB whose capital requirements were poorly managed. Capital, such as bonds, can easily be transferred (sold) for reserve balances but can still be insufficient to satisfy payments (withdrawals), especially if that capital loses value due to Jerome Powell's shenanigans. That is the definition of being illiquid.

By your lingo you are apparently an MMT follower. MMT has its own language which I don't find helpful or illuminating. For the rest of us, its easy to go to the Treasury website and see that spending can never exceed income through taxation or borrowing from the private sector.

What some explainers do is incorrectly lump money creation with money payment. In a second, a bank can create a trillion dollars in liabilities to a borrower with an account at the lending bank. But the moment the borrower wants to pay to an account at another bank, then and only then do reserve balances come into play through the settlement system. This is the way the system is designed to work. Prior to the Fed, banks had no way of trusting each other's ability to pay, hence the creation of a sanctioned "reserve" system that was verifiable via the Fed master account system. When a payment is actually made, this reserve account balance is verified electronically to be sufficient or else the interbank payment is rejected. Again, this is easy to see on the Fed website.

Look at the percentage of you tax bill that goes to service the US debt. (Lots of pie charts on the web) Has nothing to do with austerity. You and many MMTrs claim that this is just an illusion. My bank account after paying taxes says otherwise.

And absolutely regarding MMT support for bank money creation via credit. This is support for the current failed and easily corruptible system that must be changed. The problem with the "theory" of overt money creation is that it does not exist (except for a decade during the 1860's.) If some insist that that it does, that will create enough confusion among the public so that the goal of direct money creation by the Treasury will never be achieved.

BTW I've spent several years studying MMT literature (included Stephanie Bell's papers from the 1990's). I don't think the average citizen is going to plow through tombs of academic theory that is very much contested and subject to interpretation. Lincoln had it right - the farmers who made up the bulk of the Populist Movement got it.

(BTW, by now, no one is paying attention to this thread)

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Apr 2·edited Apr 2

Ralph Nader you said there's no sales Tax to buy Stocks. Starting around 3 to 5 years ago most Banks now are also brokerage firms and it cost to trade stocks is zero dollars. We must re-install The Glass-

Steagall Act. Thank you Nomi Prins to state the obvious that most economist never mention.

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Apr 2·edited Apr 2

It was heartening to hear that Ralph did his homework and seems to have learned about the Greenback movement and the Progressive movement in the late 1800's to change the money system. Quashed by the bankers who created the Federal Reserve Act in 1913 to save the banks from themselves.

Prins if great. But, as Ferdy point out, she wallows in the pathology of our byzantine and corrupted banking industry and fails to reveal the fundamental driver: money creation is outsourced to the private commercial banks who dole out that money to the CREDIT WORTHY, not for public purpose. There is no other way now to get money to where we, as a country, need it.

Of course there is a limit on Fed creation of reserves since the supply of willing borrowers of bank-created money is limited. But it is true that money gets maldistributed into the "casino" not the real economy as Prins points out. There is no "mechanism" to get money in the real economy by design. Realize that Prins makes the common mischaracterization by implying the "real economy" (credit worthy borrowers) is the same as public purpose economy.

Ferdy's comment tries but fails to simplify the problem. Central banks don't create money that is used in the real economy - private commercial banks do. This needs to be ended. The leading economists of the 30's and 40's tried to get FDR to see this - instead he cobbled together a banking fix that eventually failed.

Google the 2011 bill, HR2990 Kucinich. It cuts through all the crap we get hung up on when hand-wringing over derivatives, the IMF, bank bailouts, Glass-Steagall the World bank, Sun Valley, regulation up the whazoo, etc., etc. We are so drawn to the drama and catharsis of good vs evil that the simple mundane solutions aren't sexy enough for the modern angry progressive to entertain. Good fodder for endless podcasts. Instead of only promoting authors, why doesn't Ralph interview Dennis Kucinich or Elizabeth Kucinich or experts from the American Monetary Institute or Alliance for Just Money, to get a solid perspective on the root causes?

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When I try to open Capital Hill Citizen website I get a message from Safari that states that the website is unsecured and therefore it won’t allow me to open it, what’s going on 🤷‍♂️

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Two programs in a row about economics! I am impressed, keep up the good work! We cannot begin to formulate solid economic policy without an understanding of economic theory. In reality, economic policy is related to almost all important policy, including foreign policy, so it is vital that we understand these things.

Ferdy’s comment astutely covers a lot of ground so I won’t repeat what Ferdy wrote and what I wrote in reply to Ferdy’s comment. I would like to cover a few other points though. I have not read Dr. Prins’ books, so perhaps she covers this, but why is there not discussion of how Iceland handled the Global Financial Crisis? Iceland is an important global ally and one of our closest western neighbors. Iceland liquidated their failing private banks and jailed some of their bankers. This led to a great dispute between Iceland and the rest of the west, including the IMF, the UK, and the Netherlands via the Icesave dispute when the neoliberal leaders of those countries/organizations sought to punish Iceland for their policies. It even spilled over into questions about NATO. Anyway, it seems this important global event from not long ago gets very little discussion here in the US when it probably deserves some discussion.

I also somewhat dispute Dr. Prins’ commentary about the Belt and Road Initiative as being one-sided. Yes, China’s efforts are certainly not altruistic in nature, but that cannot be said without discussing that the IMF and World Bank’s initiatives have a long history of not being altruistic in nature either. The IMF and company impose harsh monetarism (austerity) on countries receiving western aid. The same is true of the EU and their governance over southern/eastern EU members, but in the case of the IMF, the foreign debt burden on developing countries is crushing and forces countries to abide by the very non-altruistic wishes of western countries. This is why the developing world is looking towards China and Russia for assistance. That support might come at a cost, but countries have to weigh that cost with the known high costs of being assisted by the IMF and company. Some developing countries, especially in South America, don’t help their causes by engaging in economic malpractice by pegging their currencies to the Dollar, or any foreign currency, or by embracing cryptocurrencies.

I also dispute Mr. Nader’s continued use of the term ‘money printing’. As Dr. Prins used more accurate terminology for money creation. It really is just an entry of data on a computer and nothing more. ‘Money printing’ is not only an inaccurate description of the process, but it is a right-wing, corporatist term meant to evoke thoughts of the Weimar Republic, Zimbabwe, and other circumstances of hyperinflation which have no relation to what was discussed on the program. A progressive using ‘money printing’ to describe this process would be like a progressive using ‘climate change’ to describe the climate crisis. I strongly advise against using such terminology unless it is to say why the term should not be used.

That said, Mr. Nader’s example of the people he met campaigning in Arkansas is a telling one. Just as it is easy for government to bail out banks, it is easy for Congress to pass solid policy for universal healthcare, nationalization of the military industry, full employment, and so forth. It may not be direct payment to the public, but funding for those aforementioned initiatives is actually much more beneficial in the long-run! We must not lose focus on that point. We must tackle corporate corruption, but we must also work to pass social spending legislation which benefits the public. Really, the former won’t happen without the latter. The latter naturally works to oppose the former.

I hope my fellow RNRH listeners appreciate that the show staff respects us listeners enough to give us discussion about truly important points when so many other political talk shows discuss trivial matters. That said, I encourage the RNRH staff to dig deeper into economic theory and the application of it towards progressive policy. I’ve suggested many potential guests before, such as Randy Wray and Bill Mitchell, and I hope to hear from these voices here at the RNRH in the future. The economic expertise of these economists combined with the policy expertise of Mr. Nader may lead to stunning eye/ear- and mind-opening discussion.

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First thought: the formation of the FRB. How much money do these people get to raise or lower an interest rate, beyond the control of congress? Who gets paid to sit on that board? To sit at a table with lots of water and breaks, to decide lives while re-hydrating themselves every 15 minutes. Talk about the history of this, Dec 23, 1913

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