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What Good Is The Federal Reserve?

Ralph welcomes former Deputy Secretary of the US Treasury and Federal Reserve governor, Sarah Bloom Raskin, to talk about how we should really measure the health of the economy and how America’s central bank influences that for good and ill. Plus, Ralph pays tribute to the late political and economic reporter, William Greider, the man who among many things, coined the term, “Nader’s Raiders.”

Sarah Bloom Raskin has been a Commissioner of Financial Regulation for the State of Maryland, who then went on to serve as a governor at the Federal Reserve from 2010 to 2014. From there, she became the first female Deputy Secretary of the United States Treasury from 2014 to 2017. A graduate of Harvard Law School, Ms. Raskin is currently a Rubinstein Fellow at Duke University.

“The metrics that this president (Trump) likes to point to [are] a booming stock market and a low unemployment rate. Well, unfortunately, there are more metrics that go to economic well-being. And one of the first orders of the day is to make sure people understand that there is more to measuring the economy than just market performance or the unemployment rate… If you think that those two measures alone can underscore for Americans some of the real anxiety and hardship that different communities are feeling right now, I think you’re on another planet.”
Sarah Bloom Raskin, former Fed governor & Deputy Secretary of the Treasury

“Even though they (the Federal Reserve) lower the interest rates for the banks, borrowing from the Fed, that doesn’t mean that credit card debtors don’t get hit with huge interest rates, spiking to 10, 20, 30%, payday loans, rent-to-own rackets etc.”
Ralph Nader


  1. Tom Larsen says:

    Ralph and Nader’s Charaders- Great Show. Always time well spent.

    Themes that continue to trouble me are how “complexity” is frequently created to be a barrier to common understanding.

    For instance, medical insurance is chock full of artificial complexity and it is confounded with the organic complexity of injury and illness.
    “Your money or your life” is the general proposition. It’s not a friendly condition for a government created on the basis of equality to “Secure life”.

    The social security insurance model is obscured in medical insurance, because money collected in the first year, if not spent, is taken as profit instead of added to the rainy day fund. I had a Blue Cross plan from 1994 to 2006. It was about $3000/ year for my family. We were all healthy and our annual check ups were covered by us due to the “out of pocket deductible”. In 2006, I was diagnosed with colorectal cancer at age 48(2 years ahead of a covered colonoscopy-not that I was looking for one). Providers billed $95k* for Dr visits, radiation, chemo, surgery and 4 days in a hospital. Blue cross had that down to “allowed” $36k. Blue Cross paid $30 k and I paid $6k out of pocket. I might have paid $3k, but my treatment was From Sept of the first year to March of the next, so ….Happy New Year!, the out of pocket zeros out.

    But the point is, I paid Blue Cross $36k in premiums in the 12 years prior to the cancer-so I paid for the whole deal myself and they still got $6k in profit The law of large numbers not only works across the pool, but across time. My wife and 2 children incurred no medical expenses in 2006, but our premiums went up 25% for 2007.

    *Do the providers or Blue Cross get a tax break on the difference between what is billed and what is paid? Never found out.

    Another factor is that most everyone has multiple health insurance policies. There is medical liability coverage on you auto insurance, your home insurance, your business, your church.The policy is for anyone other than yourself or a relative. In the event of an injury to anyone, the lawyers from all the related insurance companies start making themselves useful to argue which one will pay what. These lawyers and these other insurance policies go away with single payer. These policies would see their premiums cut in more than half if “property damage” was the issue.

    There is artificial complexity infused in every issue that has a profit. The subtle cultural shift of everything in the direction of materialism.

    Have you heard “Tell your smart speaker to go to NPR”? How does Apple and Amazon get to that kind of product placement? But this is a culture where “smart speaker” means something different to you and I.

    There is paved surface from every town in the country to Wall St, but they just keep changing the names of all the roads so you are not aware it is Wall St.

    • Jerry D Leigh says:

      I agree with you. Good comment.

    • Bruce K. says:

      This is what I call private taxation. Income streams that go to the “rulers” competing with and taking over the public government to destroy the public sector so people are dependent on the private sector, and so vulnerable to extortion and exploitation their whole lives. Not only is the system rigged, but the way we even perceive it is rigged, and by the time we get a clue to what is going on we are too old to do anything about it, and no one will listen.

  2. David Hutchinson says:

    I was trying to listen to this while doing some straightening. I had to focus on the chore pretty much, but I could nevertheless tell I was missing MANY insightful things. When it came to where the money for QE comes from I started really paying attention (and now I will sound like the guy with the money theory, but I think I can lay it out in plain terms). Yall danced around inflation. “Full faith” I grant you must be an attribute. But we all know where, say, “dominionists” (like Pence) can go with “faith.” It’s the most obvious thing in the world that the amount of dollars have to represent commensurate value items existing, or commensurate value items we can REASONABLY predict will come into existence. Levees not built right are not value items. In the long term frack wells will cost the overall economy more than the value items (fuel) they’ll yield to the overall economy [they’re pretty much subsidized, right?]. F-35s are not value items [nor 737 Maxes], yet tell me the $1.2 trillion (total program, 10 or 20 yrs?) appears without creating money. Richard Wolff was pointing out the other day that if you made $4.20 IIRC in the 60s…to buy what you could buy then with $4.20 today you’d have to make $23 per hour.

    If Trump’s revamped Treasury like he’s revamped so much else, they’d do QE just as Wall Street wanted it done (if it became an answer again). Yet IF it was a normal Treasury, then Kucinich would be right all over again, and IMO (to date) they should do the creating.

  3. Afdal Shahanshah says:

    Government handouts are not “socialism”. According to socialists, the problem with capitalism is not that it needs to be bailed out regularly by the government–that’s a Keynesian concept that has nothing to do with socialism. According to socialists, the problems with capitalism are systemic and unresolvable–socialists want an entirely different way of organizing production, i.e. socialism. Here, Ralph, listen to Noam Chomsky on the subject. He’s a very smart man whom you’ve had on the show before:

    Afraid to click a Youtube link? Economist Richard Wolff also has a new book out called “Understanding Socialism” that can clear up your chronic confusion. It’s a short, easy read. Give it a try! If you like it, maybe even consider having him on as a guest.

    • Jerry D Leigh says:

      Yes, Wolff is a good economist. I never miss his weekly podcast, nor Ralph’s.

      • Mark Hughes says:

        I too subscribe to Wolff’s Economic Update podcast. That and David Harvey’s Anti-Capitalist Chronicles. However I haven’t been terribly good at keeping up with Wolff’s Global Capitalism: Live Economic Updates (but that’s a YouTube video and not a podcast).

  4. Donald Klepack says:

    Great show, for a different point of view, Ron Paul would be a good guest.

    Ralph hit a home run discussing Moral Hazard by giving Big Banks a break but not home owners who lost their homes. Middle class also suffers losing their Pension, and low interest rates on savings, and loss of benefits, and cost of health care.

    One measure that would help is looking backwards. Income inequality which is worse now than any time in history.

  5. Thomas Wilda says:

    Thanks for asking Paul Lebow’s question. Money is created through banks making loans. That makes all money debt. We need to democratize the creation of money rather that allowing the banks to create money through lending based on the creditworthiness of a borrower. This process does not address the needs of society.

    Dr Tom Wilda

  6. Alan Myers says:

    Thank you for the Federal Reserve show with Sarah Bloom Raskin (SBR). Now the comments.
    At 5:30 Nader said the Fed is the most powerful regulator in the Fed Govt. No. The Fed is absolutely not part of the federal govt. The Fed is totally private.
    At 11:31 corporate crime in banking. You don’t really know and did not discuss the full extent of their crimes. That is because you are not discussing the bookkeeping of banking.
    At 20:00 Nader asks SBR how money is created in our economy. What SBR said is not correct.
    Later you bring in Paul Lebow and what he said about money creation, that money is created by banks, not the Fed or Treasury, when the banks fund loans. SBR agrees.
    The Fed does not create money (M1), the Fed creates Reserves. Reserves are not money and Money is not Reserves. They are two different mediums of exchange, items of barter.
    Approx 37:00 The Fed has a Dual Mandate that includes 3 things – (1) Full employment of people and resources, (2) Stable prices, (3) Moderate long term interest rates. If you have inflation you do not have stable prices. The Fed is a Failure.
    39:48 Nader asks where did the Fed get $3 Trillion of money for QE. SBR got it wrong. First the Fed does not have or use M1 Money. Two, the Fed acquires all assets and satisfies all expenses by creating Reserves. The Treasury is not involved and there is no printing involved. This is nothing more than a bookkeeping journal entry. You want confirmation, listen to Bernanke, March 2012, 4th lecture to students at the GWU School of Business when he describes how the Fed went into the marketplace to acquire $2 Trillion of Treasuries post 2008. He describes a journal entry.
    If you truly want the full discussion, if you truly want to help educate the people, you will contact me. And the conversation we have can be understood by the rank and file and not just the Harvard elites. The monetary system is the most important system in our country because everyone and everything is connected to it. Lets gets this simple basic discussion out into the general public.
    The 3 metrics that tell me we have a monetary system that is a failure are Inflation, Federal Income Taxation and Natl Debt. Our natl debt is more than $23 Trillion, is un-payable and eventually un-serviceable. I am hopeful you will contact me to begin this discussion. May you be and stay, safe and well.

    • gary schnakenberg says:

      You nailed it ..None Dare Call It Conspiracy,by Gary Allen in 1972 tells the steps of how are corrupt monetary system was formed..thanks

    • This is to Allen Myers at 10:24 . (?)
      Great comment.
      Ralph is unfortunately preventing the discussion about the money system that we really must have in order to fund our stewardship of the planet earth.
      Not on purpose, of course.
      He so far comes up short on money.
      But at least there’s no MMT there.

      • Mark Hughes says:

        Re MMT, I only have a very basic knowledge of it so I’m confused as to whether MMT is just stating fact when it states that money is infinite (which it essentially is) or if it outright advocates it. One of my few specific understandings is that MMT states that if money printing (i.e., QE, which is permanent now) is used to fund our endless military misadventures and giving all kinds of goodies to the rich, then it certainly can be used to eliminate personal debt at the individual/society level. Makes sense at least on the surface.

        But as the folks at state, if all debt was paid off then money would disappear altogether. Actually vanish into thin air. Why? Because the way our warped monetary system works, money is debt. It’s no longer based on gold, nor petroleum ala the petrodollar, certainly nor any cryptocurrency; it’s based on debt. And in the sphere of that construct, wiping out debt wipes out money. Which if it did, that would bring our society ironically one-step closer to utopian communism (one of its tenets is the lack of money, all resources would be in the commons).

  7. Mark Hughes says:

    Glad Raskin was corrected, in that the vast majority of money is indeed created by banks when they make a loan. They call it money, others call it debt, same thing, which should tell us volumes about how our system actually works. I think it was Max Keiser who said a while back that we don’t have an economic system, we have a monetary system. Can’t disagree. So Open Market Operations creating money isn’t exactly the most accurate description as far as the origin of the majority of money/debt creation.

    Our money is thoroughly fiat, been so since 1971 when Nixon severed the tie between the USD and gold. Once that tie was severed (one reason he severed it was because he was running out of real money to continue the Vietnam War so this opened up infinite amounts), we get things like the Great Recession, the Dot Com bubble, the Savings/Loan scandal of the late 1980s, the petrodollar, and other garbage.

    On inflation, it’s no surprise few of us understand it. Me included. What I do know is that housing costs, healthcare and perhaps college educations are not counted in the formula. And this is intentional; if inflation counted these things we’d be looking at 8-10% inflation rate today and that would expose the banks (as if they haven’t been exposed enough). That other countries’ GDPs are calculated differently than others, not surprising. One would think international law would address this, not sure if it does.

    Ralph called the Fed giving freshly-printed money (i.e., QE) to Wall Street “stunning”. Indeed to most of us Americans, yes. But this phenomenon goes back roughly 300 years to what’s called The Cantillon Effect, named after Irish-French economist Richard Cantillon. Basically this Effect is described as that the first recipients who get newly-created money are the ones at the top. By the time it ‘trickles’ down to the bottom, it’s worthless assuming it gets there to begin with.

    My personal recommendation to fellow listeners regarding our monetary system is to go to and go through their Banking 101 videos. All 5 or so videos are just a few minutes each and makes things so very understandable. It’s a British site, but just about every bit of it still applies to America nevertheless. When Steve said that much of our monetary shenanigans is over the head of most people, I agree but it doesn’t have to be this way.’s Banking 101 makes it very easy to understand. Couple of critical links:

    Ralph is indeed correct in that our presidential candidates are economically ignorant. However this accusation can be correctly levied against not only all other politicians but also against the majority of American citizens. I say this as one who doesn’t claim to be an expert at all, but at least I know that capital runs, and for hundreds of years has run, this world, and I believe that one cannot get a good grasp on our political landscape and international environment without a working knowledge of capital. A lot of what’s going on today has been written about long ago (Marx, Smith, Ricardo, etc). Not everything, but a lot. Even fiat money isn’t new to today’s global economy; my understanding is the ancient Romans did this and it precipitated their fall.

    Now we know why politics and economics, as David and Steve discussed during the Wrap-up (a great discussion between the two, frankly), are treated as separate entities, neither one appearing to have anything to do with the other. Because the fact is we’ve been lied to; they’re inextricably intertwined. This manufactured separation between the two is why Americans are obsessed with politics, and that’s because nothing gets done regardless of who’s voted in or out, and that’s in turn because capital is the engine that drives this country. Politics, not so much. Politics has no power to control capital; capital controls politics. If Americans understood this, that would be disastrous to the elite to the point of an actual revolution.

    To bring an end to my TLDR post here, I can’t stress enough to RNRH to get Marxist economist Richard D. Wolff ( on as a guest. Really makes things easy to understand while dispelling many myths we’ve been indoctrinated with.

    • Positive Money WAS into monetary reform from about 2010 to 2015.
      Then they shifted to banking.
      Like MMT.
      And now to central-banking.
      Today, their whole shtick is about Central Bank Digital Currency (CBDC) – how’s that gonna make a revolution ?
      You know, like broadening the wealth and prosperity base to the working class …. rather than debt for the masses, and greater and greater wealth for the One Percent?
      Sorry, Positive Money WAS.

      For the Money System Common.

  8. Carolyn Kaufman says:

    Great show as usual. I tell everyone The Ralph Nader Radio Hour is not to be missed.

    Maybe this is on topic, and of interest to you.
    I learned about this newsletter posted online a long time ago from academic economists writing articles for newspapers like Paul Krugman at the NY Times:

    Shadow Government Stats at
    I found it interesting. They compare employment using the methodologies (yardsticks) the government labor department used in 1994 and compare it with today’s official U3 & U6, using very different methodology. The scary thing to look at the wildly divergent picture of US unemployment these two methods produce after the crash in 2008.

    I think your job fair story is a first hand observation that’s similar to what this chart shows graphically.

    I think Michael Hudson (economist, academic, researcher, former Wall Street analyst, author) has written a lot on this subject, and would say that economics has always been political, and all politics is economic.

  9. margomcbride says:

    I have been listening to your pod casts for several weeks. It is always the highlight of my week. I tell everyone I can about the program.
    I have always loved Ralph Nader. I consider him the greatest public advocate ever. I always listen to every program many times.
    Would like to go back and listen to all past programs again and again so I can remember them.
    Margo McBride

  10. Tara Carreon says:

    Re the wrapup: please do not let David have the microphone for more than 10 seconds. It was most awful.

  11. Patrick Maley says:

    New Zealand’s wonderful Prime Minister Jacinda Ardern has been working on changing their metrics and their budgeting processes to get away from the “growth for growth sake” nonsense. You can learn about it here:

  12. James says:

    These criticism while valuable seem milktoast. Have someone like your friend Judge Napalitano, Ron Paul, Tom Woods or Bruce Fein on to really get into the problems with the FED.

  13. gary schnakenberg says:

    None Dare Call It Conspiracy by Gary Allen ,,,my copy is brown because it was published in 1972. The info will make you see how corrupt are clowns in DC are…

  14. Tara Carreon says:

    I have been thinking about the so-called “moral dilemma” of the Feds, or anyone else with power and money, giving us The Great Mass of Poor People, what we need to live comfortably. It’s a big mistake to think that giving people what they need is a “moral” dilemma, ESPECIALLY when They the Corporations, Mafias and Governments, have cut off all our routes of self-benefit. As everyone knows, we now live in a world where everything is controlled by a very few people, where all our commons have been stolen, leaving us the people with nothing at all. We could only wish to be as lucky as the hunters and gatherers of old who were able to wander the unregulated, unpolluted, ownerless land, and use its resources as they needed.

    Where are our options to get what we need for ourselves? We have all been turned into beggars, because the less than 1% insist insist on selfishly controlling everything for themselves.

    Let’s get one thing straight: they have NO MORALITY.

    So there is no “moral dilemma.” They should just give us what we need, and stop using the excuse of morality, God, and laziness, when there is no where else for us to creatively go to provide for ourselves. They created this fucked-up world, not us. It’s not our fault we don’t have anything, it’s theirs, and they damn well know it.

  15. Ralph Nader Radio Hour with Sarah Jane Raskin

    I never missed a chance to vote for Ralph and proudly counted as one tiny part of the Nader landslide that caused the Bush presidency.
    And everything that followed. Right there with ya all the way.

    But I am a little perplexed to hear Ralph’s ado with Ms. Raskin on his understandings of the powers of the Fed, unless he is speaking rhetorically.
    Either way, he has reversed the importance of the Fed’s number one mythical kind of power – that of independence. It’s one that needs more light.

    In the future we do not want an independent central bank.
    We want an integrated public money system, working to solve society’s real problems, where the central bank functions in accordance with the direction of the people, and not the banks.

    The overall ‘independence’ situation was clouded further by Ralph’s perhaps inadvertent venture into the “financial” independence of the Fed.
    That’s what it’s supposed to be all about.
    No, Ralph, they don’t generate their own income by selling services and collecting fees. That’s actually a loser.
    That ‘theoretical’ independence scam is largely responsible for a 50-year monetary status quo – benefiting the bankers.

    In reality, Ralph, we the people pay all the costs of running the Fed system. And not just the salaries, pensions and the rents, but also the interest-on-reserves(IOR) payments that are now over $50 Billion per year.
    Someone you know – maybe Wendell Potter – should read the annual Consolidated Financial Statements of the Federal Reserve Banks.
    And fill you in.

    There you will see that all but a smidgen of Fed income comes from holding Treasury securities – which it buys with its own money – and that Fed income comes directly from the pockets of we the taxpayers.

    The reason the Fed doesn’t need to worry about its independence powers is because the Congress is bought in to their scheme. The bankers pay the politicians, who do not make the laws as well.

    And, finally, sorry but neither the ‘independent’ Fed nor the government regulates interest rates in the country. The Fed sets a target range for interest rates – but only for the overnight borrowing of inter-bank reserves, central bank credits. But then the Fed pays interest on those reserves – and that rate largely influences if and when banks will lend.
    Remember we the people pay the cost of the Fed’s Interest On Reserves(IOR) program.

    Maybe this stuff ain’t important enough to explain to people and we want the Ralph Nader radio show to promote the reigning, but errant, notion of how things work at the Fed. But I’m hoping for a substantive revisiting of the money question. Please.

    I also don’t think Bill Greider would agree, dare I say.

    Joe Bongiovanni
    Harborton, Virginia

  16. Afdal Shahanshah says:

    Money has always been based on debt, Mark. Currency arose as a means of quantifying debt, and it is essentially a form a debt that never gets repaid. Whether it is “based on” gold or some other precious metal doesn’t really matter. What makes a currency function is a state’s ability to collect taxes in the form of that currency. Check out the book Debt: The First 5000 Years for a great history lesson on the meaning and function of debt and money.

    • Mark Hughes says:

      Thanks Afdal. I’ll add that book to my growing list of reading material. That book would pair well with Michael Hudson’s new book “And Forgive Them Their Debts”. I’m in the middle of Adam Smith’s “Wealth of Nations”, which I decided to read after finishing all 3 of Marx’ “Capital” volumes since the latter takes aim at the former (and at David Ricardo). Marx is right about a lot of Smith, mostly that the latter is too shallow in his analyses, which is true. Nevertheless Smith makes some great arguments that does not exist today (he calls for regulations, for capitalists to pay their taxes, etc). Worth the read.

      Word to the wise, if anyone wants to read Smith’s WoN, my strong recommendation is to avoid getting the Barnes & Noble edition, because it is missing vast amounts of material (Book III only has Chapter 1, thereby missing Chapters 2-4, also missing an “Article 2” section in Book V as this section only has 2 paragraphs but clearly has far more). It also lacks an index. The reviews section for this book on B&N’s website is loaded with criticisms going back years, clearly they have not corrected their printing error in all this time. I normally take Ralph’s advice and avoid Amazon, but B&N’s edition of WoN is atrociously lacking. They do sell other editions, which I presume are fine.

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