The Chris Voss Show - The Chris Voss Show Podcast – Money From Nothing: Or, Why We Should Stop Worrying About Debt and Learn to Love the Federal Reserve by Robert Hockett, Aaron James

Episode Date: December 20, 2020

Money From Nothing: Or, Why We Should Stop Worrying About Debt and Learn to Love the Federal Reserve by Robert Hockett, Aaron James A major work of financial theory and practice with immediate relevance to the rebuilding of the economy, and restoring the promise of equality When the government decides to spend money, it simply creates the necessary funds for itself--as if out of thin air. That's how we pay for interstate highways, post offices, wars, social services, and economic stimulus packages. If it's that easy to make money . . . can't we all get more of it? Absolutely. And we should. So argue financial regulation expert Robert Hockett and bestselling philosopher Aaron James in this eye-opening, irreverent, and inspiring exploration of what the dollar really is. And better still, they show how we can build an economy that works for everybody without unwanted taxes and added regulations. In the process, we learn how disingenuous the political rhetoric surrounding inflation can be, how the demonized concept of the deficit is really just another way of tallying our collective national wealth, and how a strong central bank could free us from the abuses of private banking. With broad historical background and ambitious yet practical institutional proposals, Hockett and James offer a new vision of public finance--people's banking for a people's economy. Armed with this new outlook, we can even stop worrying debt and learn to love a strong, accountable, and transparent Federal Reserve as a cornerstone of our democracy.

You wanted the best. You've got the best podcast, the hottest podcast in the world. The Chris Voss Show, the preeminent podcast with guests so smart you may experience serious brain bleed. Get ready, get ready, strap yourself in. Keep your hands, arms and legs inside the vehicle at all times. Because you're about to go on a monster education roller coaster with your brain. Now, here's your host, Chris Voss. Hi, this is Voss here from thechrisvossshow.com. The Chris Voss Show.com. Hey, we're coming to you with another podcast.

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multiple groups on facebook if you search for multiple groups on linkedin there's a giant 135 000 group on linkedin Check that out over there. Lots of C-class brilliant people as well. And this episode is brought to you by IFI Audio and their new NEO IDSD. The NEO is the new wave of digital sound listening for your desktop, music, gaming, and bleeding-edge Bluetooth, even MQA audio file decoding. We're using it in the studio right now. I've loved my experience with it so far. It just makes everything sound so much more richer and better

and takes things to the next level. IFI Audio is an award-winning audio tech company with one aim in mind, to improve your music enjoyment of quality sound, eradicate noise, distortion, and hiss from your listening experience. Check out their new incredible lineup of DACs and audio enhancement devices at ifi-audio.com. Today, we have a couple of gentlemen on the show, and one gentleman who has actually made a prior appearance for his other book. The title of the book that they have written is money from nothing or why we

should stop worrying about debt and learn to love the federal reserve book is written by robert hockett and aaron james welcome to the show guys how are you hey fine chris thanks awesome sauce it's good to see you guys again. Aaron was here with his book on assholes and stuff like that. That sounds really subjective. He was talking about Collins, but it was a book about just assholes in public, correct?

Yep. So you can Google that on the Chris Voss Show along with the 700 other shows that we have on there. Be sure to read them all over Christmas or listen to them all. So, guys, let me have you guys introduce yourselves and give us your bio rundowns. Great. Well, I guess we can go alphabetical.

So, Robert Hockett, I'm a professor of law at Cornell and of finance at Georgetown's McDonough School of Business. That reflects the fact that I'm sort of back and forth between New York City and D.C. And the reason I'm in D.C. a lot is I do a fair bit of work, consultative and legislative drafting-wise for various Congress members. And before that, background at the New York Fed and the IMF. And before that, a background in philosophy, which is one of the ways that Aaron and I came to know each other. There you go.

Yeah. And so me, I'm Aaron James, a professor of philosophy at UC Irvine. And for a long time, I've worked on sort of the intersection between political philosophy and economics. And then eventually got much more interested in money and finance and public finance. And then so this book reflects like the collaboration with Bob about how to put a bunch of different ideas together from philosophy, from law, from finance, from, you know, current problems and, you know, and package it all together so we can all understand it. And you guys wrote this book, Money From Nothing. What motivated you guys to want to both get together and write this book? A couple things, maybe. So first of all, I had reached out to Aaron in connection with this assholes book

because I had been kind of thinking for a bit about a big project that I was imagining sort of unfolding over time. I was thinking of it as the asshole proof governance project, the idea to come up with ways of basically structural means of sort of screening out or avoiding or quarantining assholes in various forms of organization at various sort of levels, you might say, of political organization, you know, from small companies all the way up to an entire national government. And, you know, Aaron's book made it clear that he was, you know, way ahead of anybody else when it came to sort of dealing with the asshole problem. I was aware of Mr. Sutton's book, of course, The No Asshole Rule. There were a few other kind of

interesting asshole books, but nothing quite captured the problem in its sort of totality and its full generality than Aaron's book. And I was familiar with Aaron already, thanks to his global justice writing before that, because that's another realm in which I've done a lot of work in writing. So I reached out to him and we just ended up sort of collaborating on lots of things. But it occurred to us that money would be a good place to start because a better way of maybe understanding the nature of a republic and the nature, therefore, of the polity that we all constitute, a really interesting angle on understanding what a polity is and what a polity's potential is, is precisely by approaching it from the point of view of that which it issues in the form of a money. So in a sense, it was meant to be a kind of a political theoretic and political practical project right from the get-go.

Pretty mean. I can add, so Bob had this event at Cornell, and then it also occurred to me at the same time that John Walker was working on the documentary that's based on the book, Assholes. It's also called Assholes. And then Bob was an ideal person to sort of bring in to do Wall Street assholes and stuff like that. So during that time, and then bob was an ideal person to sort of bring in to to do wall street assholes and stuff so during during that time and then we also went to new york city and did filming too and then during that time bob and i were constantly like talking you know about finance and law and you know an asshole the asshole management problem and asshole capitalism and all these different topics and sort of realizing we're like totally on the same page

about all kinds of things and a kind of amusing a little bit amusing john walker you know while he's producing all these shots was having trouble getting us to not can you guys stop talking like it's like stay on the like well i need you just to say this thing you know like uh but uh so anyway that that seemed like such a great confluence of like ideas and collaboration that we sort of thought oh well we should put all that together in a book where you can kind of put it all in there. Whereas in academic stuff, it's more confined by methodologies. In this case, the book was supposed to lay out a bunch of ideas that you can't really put all together anywhere else. But it is, in a way, a response to the asshole problem because we think of the asshole political problem as a response to underlying economic and social

problems. And then a really neglected part of the solution to those problems is our things that we can do with money, things we can do with the central bank, things with ways that financial markets, ways banks need to be reined in. If we get those things right, then we'll have a much better sort of social contract a much better set of economic conditions and we're less likely to sort of become assholes sort of fighting over scraps and you know and status comparisons and things like that like in a more prosperous promising a kind of economy there you go and for my audience the book and documentary film we're referring to is entitled Assholes, a Theory. So you can go and Google that as well.

So lay a foundation for us, if you would, as to what the, I guess, maybe thesis of the book would be in short form as to what the thrust of you guys are talking about here. Sure. I mean, maybe one approach would be to say that, you know, as I noted before, we think of a money as something that a polity issues, right? Something that a polity produces or puts out there. And insofar as a money is that, it makes for a nice or interesting angle from which to approach the nature of a polity or a republic. But one way to lay the foundation then is to sort of say a little bit more about what that means to say that the money is the public or the republic's issuance. So our particular take on it is it's essentially a way in which the members of a republic spot credit to one another, right? So one way to think about this is, you know, anytime you're going to

produce something, right, if we're producing material abundance over time, if a civilization is producing material abundance and material wealth over time, by far the greater part of that activity is done on a kind of credit. You basically borrow the resources that you need to put to work to produce more resources, to sort of grow and wealth. And unless everybody's already born with plenty of material resources out of which to construct or build things, you're not really going to have any way of getting any productive activity of that kind going on, unless you have some way by which people can kind of spot one another credit or give one another temporary access to resources they don't already have in order to put them to work to produce yet more resources. And it turns out, for a variety of reasons that we might get into over the course of our chat today, that the most efficient and straightforward and functional way to do this is for the members,

for the republic itself as a whole, to issue, in effect, that credit, those sorts of claims on resources, and to sort of manage that sort of issuance, right, that kind of allocation of productive credit. And in a way, that's sort of what the book is about, right? That's why we start with the idea that money is a promise, right? Credit, the word credit, of course, comes from the Latin credere, which is the same credere you find in words like credo, right? Basically believing, finding credible. And if you think about it, money is a kind of credible public promise, a kind of commitment that we make to one another. That's very abstract sounding. As we sort of elaborate, of course, we'll get more concrete, but that would be a sort of a first pass,

maybe it's sort of laying a foundation. Yeah, that's the big picture. You can get to that just from the simple philosophical question, what is money? Which very few people know how to answer. What is money exactly? Like, what's the thing that you're spending your life chasing, organizing your life, your whole life and work, and you're taking this job to get more money. You're worried about school or career or relationships to get money. What is that thing? People think, does it have something to do with gold and silver?

No, did it used to? Not kind of, only indirectly, not really. It hasn't for a long time, 100 years. So what is money? What is this mysterious things that we're all organizing our lives around? And then here's a simple way to start getting an answer. Well, look, look on money, the U S a U S dollar dollar bill and see what it, see what it tells you about what money is. Assuming there's maybe something

to learn there. And as Bob and I know in the book, and both of us like to point that note in classes along the, along the top of the bill, it says federal reserve note is what it reads across all of the different denominations of dollar bills. And that note, which people, that word note is a legal term. It's legalese for promissory note. So the dollar bill itself is telling you that it is a note that stands for a promise on, well, who's promised to whom? Well, it's the government's promise, and in particular, the Federal reserve's promise. What's the federal reserve? What's the federal reserve? Well, it's a central bank. It's a public bank established in 1913 it never had been before in 1913 and so the dollar a dollar is a is a public promise from our public bank to to whoever holds the the dollar in your

hand over you that hand so it's a dollar it's a it's a debt of the government and a credit in your hands an asset in your hands when you have it, what's the promise to? Well, in part, it's just the government will accept it back in settling debts to it, say taxes, fees, and fines. It'll take that in payment, right? It's a promise to accept it in payment.

And that's pretty important since, you know, if you want to get out of jail or pay your taxes. I need those dollars. You need dollars. I see why out of jail or pay your taxes. I need those dollars. You need dollars. I see why those dollars were created for, taxes. Only dollars. And then since that's important to all of us, we use those credits with each other, you know,

in paying each other money and working for, we do work for other people in dollars and employment relationships, buy and sell things in these dollar credits. So these are basically promissory credits on when we have debts of the government, promissory debts of the government, that we're circular around. That's the basis for all of the commerce,

all investments, the whole global economy as well, since the dollar has a special role there. So- Like that vertical dimension makes possible a horizontal dimension, right? It begins as a kind of creditor debtor relation between each member of the Republic, each citizen on the one hand, and the Republic as a whole sort of at the top on the other hand. So there's like a vertical relation between us, and each of us and our own polity. But once you have a credit instrument like a public promissory note called the Federal Reserve Note that functions in that kind of vertical way, since everybody

has to have it for that vertical relation, since all of us relate in that vertical way to the polity as a whole, we now also have a kind of foundation for then horizontal relations, horizontal monetary or payment relations. And so we all use that same instrument in that way. And what's sort of intriguing historically is every money historically seems to have operated that way. Every money seems to have started as a vertical relation between individual members of some kind of political organization or religious organization on the one hand, which then quickly comes to be used horizontally, precisely because it's universal in as much as literally everybody has at least that vertical relation to that political authority or that religious authority. So every money seems to have started that way, including the so-called

precious metal monies. People think that basically that gold became a money because it was precious, but it's really more accurate to say that gold became precious because it became a money. And the reason it became a money was because that material, gold itself, is sufficiently malleable as to have a sovereign's image stamped into it and is also corrosion resistant, right? It won't rust in the way that iron will. Same story with silver. So all of those so-called precious metals seem to have become precious in part, not simply because they were shiny or attractive as jewelry, but because they were ideal physical media into which to stamp monetary symbols, as it were.

But anyway, so every money seems to have a history very much that sort of replicates this kind of functional vertical to horizontal story that Aaron and I tell in the book. And so in the book, you guys are defining what money is, a relationship with, and everything else. And then you guys have some theories or presentations on a better way to maybe do things that don't involve maybe money or ledgers or other things of that nature. Is that correct? Yeah. You want to start with that, Aaron? Yeah. Well, so one thing you think of, if you think about what money is, it's a kind of promise. It's a kind of public promise. And then you realize that it's maybe not as scarce as you might otherwise think. If you think of money as like a scarce gold or metal, you know, scarce silver, there's only so much of it in the

ground. In order to get more money, we have to dig up more of that or wait for gold miners to go dig up this stuff. Like that, that picture of money is it's inherently scarce. There's only so much of it. If government wants to do something, you know, it's got to get money from somewhere, like from somebody who already has it. Right. It's got to, it's got to tax people who already have money or it's got to borrow it from them you know somehow like those are basically the ways you can get money or you know other than like just digging gold up and then fashioning it into you know gold notes that stand for money so that

picture is totally wrong if what we're saying is right money is just a promise and in that case like money isn't in inherently scarce in the way that, you know, yellow rocks are because promises aren't inherently scarce. I mean, so are my capacity to promise. I mean, how do I how do I create a promise? Well, I can create it from nothing. If I'm if I I'm authorized to make promises about my own whereabouts, say that I can say, hey, I'll meet you, you know, at 11 mountain time. And then what happened? Well, from nothing, I created an obligation for me'll meet you at 11 mountain time. And then what happened? Well, from nothing, I created an obligation for me to meet you at 11, and you gave you a claim against me. So there's a real change in our relationship, a real promissory debt, a real promissory claim on your part.

And that comes from nothing just because on my say-so, just because I decide to, I can exercise that authority. And that gives you the basis to understand what the real constraint is, right? I mean, constraint isn't how much, how many gold rocks there are, or how much material substance of one kind or another there is. The real limit is your capacity to fulfill your own promises, right? So Aaron and I are very fond of pointing out that you can create promises literally ad infinitum, right, from nothing, hence the title of the book, Money From Nothing. There's a limit you can overcommit, right? If we tell you we're going to meet with you at 11 o'clock mountain time, but we've also

each told a couple of dates we're going to meet them for coffee at 11 o'clock mountain time, we can't do all of that at the same time unless we can buy locate. And in that sense, we can overcommit. And if we make a habit of doing that, people begin to discount our promises. And you can think of that as a form of inflation, right? It's the kind of the basis of inflation with money, right? Similarly, though, just as in monetary relations, there's deflation, not just inflation. There's the possibility of a kind of promissory deflation as well. That would be if each of us, let's say, Aaron and I fear commitment, or we're afraid we're not going to be able to live up to our obligations. And so we always like Chris contact Chris Voss contacts us and says, hey, you guys want to talk at 11?

And Aaron and I both say we kind of fear commitment. I don't want to look. I don't want to commit. You know, I might not be able to if you made a habit of that, if that was your way of life, you would basically be impoverishing yourself, right? Because we'd be denying ourselves the opportunity of personal enrichment and intellectual growth through conversation with you, Chris, and with all the other things that we do. And so if you think about it, there's a kind of wonderful Aristotelian golden mean that most people strive for when it comes to making commitments to others, right? We don't overcommit, but we also don't undercommit. We just try to do it just right in that Goldilocks way. And if you think about it, money management by a polity, or in other words, the central bank's job is just that, to find that Aristotelian golden mean between overcommitting, i.e. inflating too much, putting out too much money on the one hand, and putting out too little money on the other,

which is just basically economic doldrums, right? That's what a slowdown is. It's just not enough money, not enough promising. Right. And here we can add that for the past 10 years in the United States, we've been in basically a deflationary environment. That is, there hasn't been enough money out chasing goods. And so we're sort of suffering. We're not getting as rich as we could be getting, not doing as well as we could be doing, because there's not enough money out there. And so, well, how do we solve that problem? Well, just create more money. You just make more promises. If your life is impoverished because you haven't made enough commitments, you just commit to more things. You find out some worthy things, find which are the most important things that are worth doing, and you just decide to do those things. That's something the central bank does whenever the government just decides to spend money. It just creates those dollars from nothing and injects them into the banking system, or it's authorizing private banks or nominally private banks that are chartered and authorized to issue dollars in the form of loans. That creates too so you just you just decide to do that and make sure that the the promises go to the right places they go to sort of the more productive

activities um you know and then that that as a result is how you make that's how you address the problem of there being too little money you just make more promises the way you can from nothing and now there could as bob's, there is a potential problem of having too much money chasing too few goods, inflation in the economy, but we're really far away from that problem right now. And we don't have to worry about a typical thing you hear in financial discussions as soon as, and actually just recently, the Economist just put out an article about inflation, you know, is inflation around the corner? The standard thing to do is, you know, as soon as the government starts spending a little bit more money, like it has during the, during the pandemic, you know,

is to start worrying about hyperinflation and, you know, like, and say Venezuela, Greece, that, you know, like Dr. Strangelove, that's why we patterned the title and ongoing joke in the book about Dr. Strangelove. It's about that kind of um fear-mongering and sort of parent the paranoid style of american politics really um this hofstetter but but but in the book we lay out a bunch of reasons why um the things both the fed

can already do and with new tools you can get it we can guarantee that there's not going to be a problem of hyperinflation yeah we can manage that we can manage it, we can guarantee that there's not going to be a problem of hyperinflation. Yeah. We can manage that. We can manage it. Right. We can make sure, we can make sure that we can get a lot more money in the economy just by letting government just spending a lot more money into existence in the right places, the right places. And then we can be sure, we can be certain that it's not going to be, there's not gonna be too much money. We can hit the Goldilocks balance. And the other thing and manage all that.

Yeah. And the other thing maybe worth quickly appending in this connection, Chris, is that if you're doing, Aaron and I both keep saying, directing it to the right places, spending it in the right ways or in the right places. One way of understanding or sort of defining what should count as the right places is by understanding one of the critical, one of the most important means of preventing inflation. And that is by spending the money in places or in ways that produce more goods and services to essentially absorb the new money itself, right? People tend to think oftentimes of inflation or even deflation, if they think about deflation at all, as something that's just

kind of absolute, right? You have this much money, now it's inflationary. If you have that much money, it's not inflationary. But that's a mistake. Inflation, the best, I think, meme for people maybe to remember to get this right is to remember that inflation is a relation, right? It should be a bumper sticker. Inflation is a relation. It's a relation between, you know, very roughly speaking, the money supply on the one hand and the goods and services supply on the other. And that's why we have those colloquial expressions, too much money chasing too few goods or too little money chasing too many goods. What you want is to maintain a kind of parity, right? So if you're basically issuing new money, if what that money is doing is financing new productive activity, which is in turn producing

more goods and services, then you got this rising in tandem with this. And as long as they're, you know, roughly proportional in that way, you don't have an inflation problem at all. The inflation problem only happens when one of these goes up and the other doesn't, or if one goes down and the other doesn't, right? That's deflation, that's inflation. But as long as you're doing this, you don't have an inflation or deflation problem. So, you know, if you're spending, if the government is, let's say that the public is issuing a lot more credit money in order for people to gamble on Wall Street, right, to buy a fixed number of financial instruments that are already out there,

that's just going to drive up the prices of those instruments. That's essentially a hyperinflation in the financial markets. We have a more common word for that. We call it a bubble, right, a financial bubble. But all a bubble is is a hyperinflation in a particular market. But if instead of directing the money toward the financial markets, it's being directed to the productive sectors, then you're actually producing more stuff that will absorb that new money.

And so you can go way, way, way, way, way out there before you have any sort of inflation problem at all. It's really unfortunate to me that a lot of people don't learn about what the Federal Reserve is. I was fortunate enough that early on I went to be a stockbroker and had to learn how that worked. And then I owned a mortgage company for almost 20 years. So Alan Greenspan was either my friend or my foe. And so a lot of people don't understand, you know, M1, M2 money policy.

They don't understand how the Federal Reserve even works. You know, we've seen them pour trillions into liquidating the market or keeping it stable on the stock market. And there's been times in the U.S. history where we've accumulated a lot of debt, like World War II, and we've been able to just absorb it back into the system without it causing too much trouble for us. I think some of what your guys' discussion in the book, too, is how we can change it to where maybe, I don't know if you guys talk about maybe a flat income or some sort of income that supports people. I was just watching someone in Canada who was making a joke about how our government wants to give us 600 bucks on top of the original 1200. And they're like, we've been getting $2,000 a month from the state of Canada.

If you don't have money, same thing with my friends in Australia. And so tell us a little bit about that, if I'm correct in that yeah i can do that yeah so one of our one of our big ideas um aside from just spending a lot of new money in productive ways like for client for green energy investment or for new jobs and stuff like that that's that's a big part but another sort of maybe a little farther out thing but just as obviously important is just for us for the central bank to just give us all money, right? And the easiest way to do that is for us to have accounts with the central bank in just the way the big banks now have accounts with the central bank. So right now, they have accounts with the central bank, we have accounts with the big private banks, right? But so

you just cut out the middleman and we all have accounts at the Fed citizen accounts, as we call them. And then at that point, the Fed can just give us money just by typing in two thousand dollars a month or just automating the keystrokes. So two thousand dollar a month appears in our account every month. And then you can have some, you know, it'll just show up online. You'll see that in your account and then you can have a digital wallet to spend it in various places and things like that. And then, crucially, the Fed can do the same thing it does with the big banks now to manage inflation or interest rates by just by attaching interest rates on those accounts. So it can, it can just the way our private bank accounts all already have interest rates attached to so it can raise or lower those interest rates when it wants us to save or spend. So if it wants us to save more money, it raises the interest rate.

So there's more of an incentive to keep the money in the account. If it wants us to spend money, it just lowers the interest rate. And there's lots of other things it can do with these accounts to basically run monetary policy more democratically via all of our accounts. So that's, that's like a much more efficient mechanism than what it does now. So it's more efficient economically for its monetary policy purposes, but it's also better for everybody because we all get free money, right. And, and, and sure money. It's not just that it's free, it's sure. So it's stable, you know, basic income grant available to everybody, all citizens or anyone, you know, who you let in.

You'd be taking care of the unbanked and underbanked problem at the same time. Right. It'd be very easy. So here's here's another thing we sort of point out in this connection. Right. A lot of most Americans don't know this, but anybody who wants to, who already has a bank account, at least right now now could open an account with the U.S. Treasury Department. It's called Treasury Direct. And you can buy U.S. Treasury securities through that account. And you can redeem U.S. Treasury securities through that account. So you can basically buy and sell vis-a-vis our own treasury right now. Anybody who wants to do it, just Google Treasury Direct. You'll immediately get that site and you can open your account in less than 10 minutes. Now, here's the kind of cool thing.

If you talk to people at U.S. Digital Service, which is essentially a federal agency, an executive agency, that works to sort of update the technology across the government, right, across all departments of the government. I've talked to U.S. Digital Service. They say that within a month or so, they could upgrade all of those Treasury direct accounts into digital wallets. They could convert them, in other words, into horizontally accessible or transactional P2P wallets rather than they're just being currently vertical accounts. Right. So in effect, we could give everybody in the country a digital wallet through Treasury within a month. Right. Like basically before before Valentine's Day, if we were to decide to do it right now. And then those Treasury direct account or Treasury direct wallets could be migrated over to the Federal Reserve. It always takes the Fed a little bit longer to kind of gear up to do something new than the Treasury. For some reason, Treasury is more nimble. But in any event, you could migrate all of that over to the Fed once

it's ready. And then these wallets would be effectively what Aaron was just describing. Everybody in the country would have a digital wallet, which would basically be the functional equivalent of a bank account. But you could use your phone or any other device to manage it. And we can make payments to one another horizontally over the through those wallets at the same way that we could pay our taxes or receive federal benefits through those wallets. And as Aaron was just suggesting it also, that would make monetary policy work much more efficiently, too, because we cut out the middleman, right? The way it works now is if we as a polity through our Fed want the three of us, for example, to spend more money, we basically make money cheaper to the banks. And then the hope is that the banks will then lend to us more cheaply.

But that, of course, doesn't work if we don't want to borrow. And it also, even when it does work, it's just there's an extra step interpolated. So it's not efficient. But if instead the Fed just said, hey, let's just put more money in people's wallets to get them to spend more, like because the CARES Act finally passes or the HEROES Act finally passes, or if it says let's lower the interest payments on those wallets or let's raise the interest payments on those wallets, depending on whether we want people to spend more or save more, it's all much more direct and immediate. And so we think it would make for better monetary policy too, in addition to taking care of the problem of commercial and financial disenfranchisement that the problem of the unbanked basically is and so it might get us through a

bottom that we're going to go through we're starting to really go through with this with this thing or the crisis and stuff like that is this some of the steps that biden should maybe take in the new administration absolutely yeah he should yeah i mean one there's people that are still waiting around for their first round of checks. They're still waiting because it's like, that's a creaky inefficient system, you know, and then other people had to wait for a long time. It was only certain people, you know,

had certain connections through already getting their like social security deposit checks deposit. So in a fairly creaky system, it's very hard to get people money quickly when you need it quickly for relief or to stimulate the economy. And so like that's this is all stuff we should have been starting to do to streamline that process, like for just to just ease the pain of the of the pandemic. And we should we should. It's, you know, that's kind of planetary is 20 years ago. The next best time is now. So we should we should start now doing know best time to plant a tree is 20 years ago the next best time is now so we should we should start now doing this this stuff too um and then you know and and but a big idea for the book in our book is that that these kinds of you know basically a free money through

using central banking um and us banking with the central bank isn't just an emergency measure it's a long-term solution. And we can sustain it for the long term. It's not just, okay, like in war, you know, the World War II was paid for because a lot of money was created. And then it was pulled out of the economy with war bonds. That's how it was paid for. It wasn't through taxes, right? And people understand that to some extent.

And they say, okay, during wars and emergencies, you can do that. Okay, pandemics, maybe that's an emergency. We we can do that we can create a lot of new money but then later we got to go back to uh you know a balanced budget or something like that um um and we got to go back to the old ways and now there's there's conflicting tensions in that within even among centrist type people or democrats like and there's a certain number of people that are going to quickly say no inflation is a problem or balance but debt's a problem and what we're saying still is we like all the we like we we need more emergency measures but what the kinds of emergencies we measures that were that we recommend can work for the long run too they're

sustainable over the long haul the Fed can use existing tools and new tools to manage inflation for the long run. And as long as we're directing spending in the right ways, partly through central bank policy, partly through good spending on climate change adaptation and new jobs, green jobs and clean jobs, clean industry, things like that, then that's something we can make work for the long haul. Or if you will, it'll, it's not just, we can respond not just to the COVID emergency, we can respond to the climate change emergency and also the democracy emergency because, you know, democracy is like not doing so well

and it's kind of falling apart and we've maybe narrowly averted its demise, but, and we've got another chance, but we can't assume that, you know, even if Biden won and there's a chance for, you know, to repair the Republic, we've got to take that chance and pull out all the stops and really go for it in a big way. So. It's like a variation on the, on the idea of not wasting a crisis, right? I mean, there's a, there's a kind of a cynical take that one could take on that, but there's also a noble

take that one could take on that, but there's also a noble take that one could take on that, right? The cynical take is one's being opportunistic. That's what disaster capitalism is all about. You know, you can take advantage of a crisis to sort of cut social programs or eliminate things. That's the shock doctrine idea, of course, that Naomi Klein is associated with, which is very insightful. But the kind of the noble counterpart to that is to say, look, there's some big problems that need to be solved, but it's kind of hard to get the public's attention focused on them in ordinary times, let's say. And, you know, the ship of state, so to speak, when the state itself has a population of 300 plus million and occupies the entirety of a continent,

it's kind of hard to get the whole thing to sort of change course just sort of on a whim. You need something to kind of galvanize attention, make people kind of get serious and to make people focus for a little bit longer than they do on a TikTok video because it's a sort of a longer term sort of thing. And a crisis can be the perfect opportunity to do that because now people are on it, so to speak, at least for the time being. And so a lot of the things that Aaron and I are pushing,

we both have argued for a long time should be being done. And we argue now should have been done 20 years ago, so to speak, like when it was the right time to plant the tree. But now that we do have, now that we have your attention, now that, you know, the sort of the public's attention is drawn to what Senator Warren often refers to as deep structural reform, this is the time to do it, right? And indeed, just to go back to the digital wallet idea that Aaron and I have in the book, you know, you might remember back in March when the talk was, basically when the CARES Act was passed, and they're saying, well, how do we get these relief checks to people? Well, part of the problem was that, you know, some people, they couldn't track down, but other people just didn't even have bank accounts or whatever. Right. So you have to find their addresses. Then you send them paper checks. You have to wait for six months until Donald Trump can get around to signing them because he wants to make sure his name is on everything in the same way that the dog has to lift its leg at every fire hydrant.

And so everything, you know, is kind of sitting around waiting. But, you know, Aaron and I were saying back then, you know, actually, if we'd had this digital wallet structure in place, this would be a non-problem, right? You just immediately credit everybody's wallets. But then when you find out that U.S. Digital Service could convert Treasury Direct accounts within a month into those, and you think, well, why isn't this done before June, right? Why didn't we do this before summer even? And to add one last point here, which is kind of fun and cool, we all know a lot of things about our new vice president-elect. But one thing that people don't tend to know, because

it's kind of obscure and nerdy sounding, but she's like this total fan girl, fan boy, fan girl of U.S. digital service, right? This entity I mentioned before, which was something that Obama put into the executive department. It was an Obama era innovation. And she just thinks that's like the coolest executive agency around. And yet, almost nobody's heard of it. But the stuff that it could do, the stuff that U.S. Digital Service, now that we have a vice president coming in who actually cares about it and loves it, I mean, the sky's kind of the limit this coming spring, it seems to us. Yeah, there needs to be, you know, I watched the fallout from the 2008-2009 crisis and, you know, the bailout and all that stuff. It seems to be like the Federal Reserve really is there to bulk up the rich

people in this country. The moving to a system like yours, you know, a lot of my millionaire friends, they, that's what they talk about. They go, I need to preserve wealth because at this point it's just taxes,

just eating me alive. Does this devalue their wealth and are they going to be in for it? I can address it. Yeah. Yeah. I mean, like, so that we agree that the bailouts then were inequitable and that, you know, Wall Street wasn't really addressed. And to some extent, a lot of these ideas would address some of those problems.

Now, to some degree, the sort of bailout type stuff that the Fed has been doing has been inequitable, too. Even if we agree it was the right thing to do in principle the way it was managed, you know, not enough of the benefits flowed to sort of ordinary people, working people, you know, people with rent or mortgages to pay, or even small businesses, you know, like they didn't really benefit. Now the potential means were there, like the facilities to help cities and states get really cheap money, but that was sort of hobbled to some degree by penalty rates imposed by the treasury, things like that. So it's kind of a more mixed, still a mixed case. But so if we think through, well, let's think about how to make our money, the dollar

and our public bank work for all of us in a way that's more, not only more efficient, but also more equitable. Then that sounds like a great thing. We're kind of inching our way there. You know, like the problems aren't as bad this time with bailouts as they were for last time. And new technologies are only making it more obvious like of how we can do it. So, for example, you know, with like digital ledger technology, you know, which has become sort of pretty important.

You know, a lot of central banks, like 80% of them around the world, apparently are looking into some version of it. A lot of them are, you know, already starting to, you know, already starting some measure of it and maybe it's inevitable. And once you start thinking about that, you know, then a lot of the sort of stuff we can say, we're saying we should do becomes really natural or even easier to do. So it's even easier to do efficiency and equity without the big problems of the bailouts once you're sort of relying less on the sort of hierarchy that we have within the system as we have it. And another thing maybe worth noting here, Chris, for the benefit of your wealthier or all of our wealthier friends is that what we're

advocating in a lot of ways goes a lot easier on wealthy folk than various other proposals that have been out there, right? So if you take the state of New York, for example, as a contrasting case, right? New York, of course, does not have the capacity to issue its own currency. It can't kind of generate money. There is no central bank of New York that has that capacity. If there were, it would be engaged in counterfeiting. And what that means is that New York actually does face a budget constraint, right? Whereas the nation as a whole only faces what we think of as a resource or production constraint, not a money or financial constraint. But a state does face a budget constraint or financial constraint. And for that very reason, the new supermajority Democratic caucus within the New

York legislature is talking about passing emergency tax the rich legislation before Christmas, right, because the state budget's in serious trouble because of all of the pandemic abatement costs and pandemic response costs. And so it's looking as though there might be a significant new tax hike on millionaires and billionaires in New York. I myself am not opposed to that, but I'm only bringing this up raising taxes, right? Because in effect, what we're talking about here is adopting measures that are stimulative without being inflationary. You simply issue more money, but you do it in a way that's directing it towards sectors of the economy that will then boost production and hence money absorptive capacity. And thus, you can get lots more public spending going on in a noninflationary

way that then doesn't require you to tax a bunch of people for a sort of counterinflationary offset, which is the principal function, of course, that federal taxes play, or at least one of the two principal functions. The other has to do with social policy. If you want to discourage drinking, then you tax liquor or whatever. But the main function of taxes, apart from, you know, sort of affecting social policy by changing the costs and benefits of doing things, is essentially kind of suck some of the money out of the economy if too much has been put in and it's generating inflationary pressure. So if you do things of the kind that Aaron and I are pushing for the federal government to do, that really actually puts, you know, puts off or it sort of postpones indefinitely the time at

which you would have to raise federal taxes, right? And so in that sense, we think millionaires or billionaires should be kind of happy with what we're pushing. And again, as long as it doesn't get inflationary such that their savings are effectively wiped out, they're actually sitting pretty, they're doing fine. So what happens to the banks? I mean, not the Federal Reserve banks, but the underlying banks that they make a profit on the market? banks, but the underlying banks that, you know, they make a profit on the market. Well, in the book, we say something sort of like, we think we should cut out the middleman and rely less on the bank. So that doesn't mean, so just do a lot more with

public banking via the central bank. And now that means that including taking over the payment system for the most part. Now, private banks can still piggyback on that. And we'd all have sort of effect credit lines of $2,000 a month or whatever in the form of a basic income payment. And now if you need credit beyond that, you need credit money beyond that, you could go to a private bank to get that for a car or for a house or whatever. So they could still have a role there. And in fact, that might improve the business of banking because people have sure money and they're better lending bets. There's less risk involved if you can count on that sure money. Employment is less of a shock, things like that. So there's a potential role for them, but you can still argue that they're a lot less necessary. And they're also maybe valuable as a hedge if people are worried about,

there's two worries about privacy. One is, you know, private banks profiteering with your data. And then our idea is, well, if you have a public option, public option, well, you've got to check on that so you can keep money over on the public bank. But if people are worrying about prying eyes of government officials, you know, then you might think you want a private alternative. So there's kind of like the kind of two public private option system seems like that might help create accountability between both. So those are some of the functions, but it does mean that we can just rely a lot less on the private banking system and hold them and make them much more

accountable and much less opportunistic, you know, and much less likely to be, you know, purely speculative in a way that's been destructive for the economy. Yeah. Another thing maybe worth noting in this connection, Chris, two other things. One benefit that the private sector banking industry could enjoy is that, you know, we know from lots of empirical research that people who have previously been sort of commercially disenfranchised, that's to say sort of not involved in the private banking system, when they are given bank accounts through some charitable organization or some kind of program, like a pilot program in some city, and they get into the habit then of maintaining an account of some sort where they save money in it and they spend money out of it and so forth. They often transition in time once they have built up enough wealth into using

private sector banks that they wouldn't have used previously because they just hadn't saved enough money to do it or they just had never been introduced into that sector. So if you had the public option of the kind that we're talking about, but let's say this was an option that was only available for amounts up to $5,000 or $10,000 or whatever. Some people who benefit by using that public option, once they kind of get into the flow of things, might want additional bank accounts. Lots of people, of course, who do have bank accounts have more than one with different banks. And so you can imagine there being some spillover into the private sector banking business, basically new clientele that the public option has, in effect, brought into the practice of banking type behavior in the first place. And then the second thing I was going to note is that

another way to sort of think about at least the banks that do what we want them to do, that's to say actually make loans in order to sort of spark new enterprises, new businesses, more production. One problem with the system that we have now is that the lending criteria that banks adopt are themselves a function of regulations that we place on the banks, right? And the current regulatory imperative that we operate with now is that the loans that banks make have to be profitable. Now, in an earlier time before financialization, to be profitable and to be productive were sort of extensionally equivalent. It was almost the same thing, right? You basically couldn't be profitable unless you were productive. But with financialization and with all of these sort of primary, secondary, tertiary derivatives financial markets, there are lots of ways to be profitable now without being productive. And so another way to look at what Aaron and I are

pushing is to say, well, what we might do is say, look, private sector banks are still going to be in the lending business. They're still going to be in effect lending Fed money to private sector enterprises. But we would slightly adjust or amend the criterion. Instead of saying that these have to be profitable loans, we would say they have to be productive loans, since lots of profitable loans are not productive. And then we could say you still do what you've always done. You could be lending. And in effect, you'd be doing what you guys all used to do primarily before the 1980s, right, before financialization really kicked in. To be a profitable lending bank was to be a productive lending bank. So we just say, we want you guys to basically play the kind of role or have the social function that you had before the 1980s. And nobody thought that bankers were starving or a disadvantaged group before the 1980s. It was considered to be a very lucrative profession. You know, it was the old bit, I can't was it the I think it was the rule

of three or something. I can't remember. But you work three days a week. You go home at three o'clock. It was a pretty low key business to be involved in. And yet you still make good money at it. And, you know, I think going back even to something like that, you could imagine doing with what we're proposing and doesn't seem to be if I were a banker i wouldn't view that as uh you know some terrible onerous disadvantages being in play uh placed upon me i just think well it's going back to a better time uh what's your response to people that would say to that uh you know giving people a minimum thing that's communism and you're gonna have those people you know right well i mean i did a lot of misconceptions about yeah what's communism or socialism i mean for starters uh well you might think about well the idea of giving people free

money is milton friedman you know sort of arch you might think of him as milton friedman yeah yeah he was a favor of a negative that became what we in fact have as a negative income tax in the form of the earned income tax credit. That was, you know, that made it into law basically because of his influence. But what we're doing is sort of saying, yeah, let's do that. But let's let's make it let's just be more explicit about what we're already doing, which is a public bank giving people public money. Like so is it public money? Well, here's socialism. In 1913, over 100 years ago, the dollar was socialized, meaning a public bank was created and publicly

issued. And now that became the backbone of American capitalism, that public money, the dollar, the US dollar. It is a publicly issued instrumentality. It's our money. Margaret Thatcher was just talking confusion when she said there is no public money,. It's our money. Margaret Thatcher was just talking confusion when she said there is no public money. There's only taxpayer money. Taxpayers have their money, but they all have dollars and the dollar is ours. That's the Republican idea. Maggie apparently never gave a pound note, right? Her and Ronald were sleeping together. Yeah, that's right. Yeah. If Margaret Thatcher had looked at the pound note,

she'd see the picture of the queen on the note. it's like oh it was you know that was already it wasn't her you know it's not any particular person's you know uh any um but anyway so like uh the the dollar was already socialized in 1913 now is that was that like a death blow to american capitalism no it was the basis of it it's not anymore a threat to American, you know, as like public beaches, public libraries, you know, which got established in big, big time, but public parks all over national parks, you know, public mail services, you know, like this is economy that's what that's what made america great during the post-war decades um and all we're doing is saying look it's where we already have these public menstrual mentalities we're using we're developing them a little bit further in fact not that much further from the the mechanisms that we already have um to basically do you know to basically give everybody make sure everybody has money, purchasing powers to

make good on America's basic social compact, the ones that, the one that it hasn't been making good on, you know, during, after the Reagan and Thatcher era. Another thing maybe worth noting here, Chris, is that if you divide roughly between the money part of the economy, let's say the money layer of the economy on the one hand, and then the sort of real productive layer on the other, of the economy, let's say the money layer of the economy on the one hand, and then the sort of real productive layer on the other, you can say, look, you can imagine four possibilities, right? You could have socialized production and socialized money. You could have totally private production and privately issued money, or you could have privately issued money and publicly done production, or you could have publicly issued money and privately done production. And what could have publicly issued money and privately done production.

And what seems to be the most stable combination through history is the case where you have essentially a kind of socialized money, right? So the money part of the economy is indeed handled publicly. And that ends up being, interestingly enough, a kind of prerequisite to the stable functioning of a privatized or privately managed productive sector of the economy, right? So in other words, in our past history, like if you go back to the 19th century, before the 1860s, when the first federal dollar was issued, the so-called greenback that the Treasury issued, starting during the Civil War, before that period, we were having boom and

bust cycles of basically seven years. Now it's like 20 or 30 years. But there was a crash like every seven years. And it was a really fits and starts sort of economy and kind of a slow development before the Civil War. The big industrial explosion in this country happening after the Civil War. And that was partly technologically based. But it was also partly because we now had a national money system for the first time after three enactments in the 1860s, the Currency Act, the National Banking Act, and the Legal Tender Act. And that's what gave us the proto-Fed, and the Fed just sort of finished the job 50 years later. But anyway, going back to that early part of the 19th century,

all that constant crashing was happening because you not only had privately ordered production, but you also had privately issued money, right? There were as many current paper currencies at that time as there are cryptocurrencies now, right? It was a total tower of Babel of money. And so, you know, Pecos Bill Bank issues its own money. Rattlesnake Bank offers its own money. Daniel Webster Bank issues its own money. And these were all differently valued relative to one another. And if you went to buy something at a store or the general store, you know, the guy running the store or the gal running the store had to pull out a big book, the size of a telephone book, and look at all of your different currencies in the book and find out

what the discounted value of them was, because they were all discounted relative to par. So a Pecos bill dollar might be worth 25 cents. A Rattlesnake Bank dollar might be worth 10 cents. And they'd have to count up all these discounted amounts and then figure out the total value that you'd laid out on the counter. That did not, needless to say, that did not facilitate rapid and efficient commercial transacting. And that meant it didn't facilitate rapid productive activity or productive development, right? So one way to look at the nationalization of the currency in the 1860s is as our countries finally have, and by the way, Abraham Lincoln, the first Republican president, was the brains behind this. He was the guy who really pushed it. It was the recognition that in

order to have a privately ordered productive sector, you need to recognize that the monetary piece of that or the monetary overlay is essentially a public good. It's like a public infrastructure. And so that has to be socialized. So you could say, arguably, I think both Aaron and I would argue that in order to have a capitalist economy in the productive sector, you have to have a socialized economy in the monetary sector. You need socialized money, in other words. And that's all the dollar bill is. Again, as Aaron pointed out, it's the queen who's on the pound note. It's George Washington who's on the dollar bill. He's not a private sector guy. He was the president, right? That's why he's on there. He's not on there as a gentleman farmer from Virginia in the 1840s, I mean, the 1740s. He's on there as the first

president of the U.S., which is, by the way, socialized governance, right? You could think of a nation state is just the socialization of governance. We don't all privately govern ourselves. We join together into a polity. And a polity, it's a res publica, right? That's what a republic is, a public thing. That public is the same as the socio in socialism. that's what we do collectively in order to make it possible to do various things privately that we otherwise couldn't do because it would be total chaos the uh you guys bring some up some interesting points in fact i just realized what you're talking about with the the earned income credit being a socialist

thing because um you know it really rewards breeding one of the things that i hate being a single guy is that i pay just shit loads of taxes and yet if you go out and just uh knock up as many bitches as you possibly can you you you know you don't pay any taxes yeah all right that was like a rap reference there or something i don't know what that was um you know you guys uh the other thing too is margaret thatcher every time someone brings up margaret thatcher to me i i think of the iron lady reference and how she might have earned it clearly she had a steely dan those of you don't get that joke you can go look at the fuck up um but uh yeah i don't know right so uh two last questions i have for you one is is what happens to all the currency?

Because there's like China owns a shitload of treasuries. A lot of countries around the world own a lot of treasuries in us. It's part of the global debt. What happens to all that shit with the ledger? And does it destabilize the world? You want to take first crack, Aaron? Oh, yeah, sure. I mean, I think.

Yeah. He throws that to you. Go for that one yeah no i just short answer is it it makes it makes no difference i mean because those are already just ledger entries those guys and then uh um i mean in fact what what what we've done is is like so we've spent money into the economy right and then the amount that you don't tax back that's that's the deficit but some of the money gets borrowed back temporarily, which is to say the US says, you know, issues a treasury. So someone buys a treasury. If you give us these dollars, we'll give you a promise

to return at a later time with a little extra, right? That's a treasury security, right? And then so it can be exactly the same. I mean, those are, instead of having dollars, which are liquid public debts, treasuries are just less liquid, you know, public debts. So it's the same thing, but it's sort of which account do you want it? When you hold a treasury, you hold a dollar. It's just, you're having one account

rather than another at the central bank. Now, if you like, if the accounting is all the same, but if you change the platform for the accounting, make it on a different technology, then it's as long as the numbers are the same, then the debt obligations are the same. So it doesn't change all this thing. I mean, once you're clear about this, you can think that we don't have to rely as much as we do on treasuries. We don't need it to get money in order to pay for stuff to spend money. You see that from what we're talking about. But otherwise, like, yeah, the favor that the government is doing in issuing treasuries as a safe asset, it's doing that's a favor for capitalists. That's socialism for the rich, by the way.

And it makes Wall Street function, right? Because they benchmark against that as a stable asset in all their models. You know, we can keep doing that. You know, we don't have to do that. We don't have to do that to get money to pay for public spending, but we can keep doing that. And there's no reason we have to change it per se from what we're talking about.

Yeah, there's sort of a couple of significances, I think, Chris, that people sort of overlook. Significances of treasuries and their popularity all over the world as a global reserve asset. So one is that they are, to use that phrase that Aaron used a moment ago, safe assets. They're the so-called safe assets par excellence. And the term safe assets is a term of art among financiers and in the financial markets. And the basic idea is, you know, all the people who have portfolios, people who have enough money to hold financial portfolios, there's always some particular, some specific portion of the

portfolio that is held in the form of so-called safe assets, right? And there's a huge demand for these, right? And the U.S. Treasury security just is the global reserve safe asset. It's the most demanded one to the point where there's typically more demand for these treasuries than there is supply of them. And that, in turn, has two very important significances, I think, for our purpose. One is that there's again, this is another sense in which or another reason that it's true to say that there's not some sort of debt problem that the U.S. is facing or some looming debt crisis. If there's that much more demand for treasuries than there is supply of them, that's just another way of saying that people are dying to borrow to us. People want to lend us more than we even want or need, right? And sort of secondly and relatedly

is, you know, it's a great way to determine whether there is inflationary pressure up ahead is to just look at the market for treasuries, look at what the yield on those things is, right? If the yield is low on treasuries, that's just another way of saying that the borrowing is very inexpensive for us to do. And if that borrowing is really inexpensive for us to do, that suggests, again, that there's a huge demand for our debt, right? More demand than there is supply for it. And you can go even one step further on this. And you can note that treasury puts out two different kinds of, lots of different kinds, but two kinds salient for our purposes, is there's a so-called inflation indexed Treasury security, usually referred to as a TIP. That's the acronym T-I-P-S, TIPS. So basically, you know, inflation indexed Treasuries basically are

Treasuries that pay out in a way that takes account of inflation, right? It's effectively they afford you a kind of inflation protection. And what that means in turn is that if the yield on an inflation protected treasury is higher or significantly higher than the yield on an ordinary treasury, that suggests that the market is anticipating inflation because they're basically buying inflation insurance by buying tips, right? Well, as it happens, the spread between tips and ordinary treasuries has been almost zero for well over a decade now. And that tells you that all these market professionals out there just don't see any inflation on the horizon.

So that's another significance. Maybe a final significance about the treasury market and the Chinese holdings of treasuries in particular is that basically the high demand for U.S. treasury debt leads to upward pressure on the dollar. And so the dollar ends up being overvalued as a global currency when it comes to global trade. And that's one reason that we've had these basically these long sustained, rather remarkably lopsided, so-called current account deficits, better known

as trade deficits, with certain trading partners. Because if there's high demand for treasuries, there's high demand for the dollars that you use to buy treasuries. That drives up the price of the dollar relative to other currencies. That then makes U.S. goods more expensive. So probably an important piece or important part of the incoming Biden administration agenda when it comes to monetary policy is going to have to take another look at the role that the global treasury market is playing in overvaluing the dollar. And thus saddling American producers and exporters with a disadvantage when it comes to currency values. But that's the opposite of inflation. No. Right. It's an O an overvalued dollar is the opposite of an inflated dollar, right? So if we've got an overvalued dollar out there, you can't say that at the same time that you say, Oh, there's an inflation problem. It's a bit like talking about

a round square. You're just talking incoherently. If you talk that way and a lot of weird, you know, money cranks out there basically say both of those things and they can't both be true. There you go. Money cranks. I like that. When I used to, when I used to, when I was growing up, my father had all these books and he had great books like girl, nine gallon Forbes and different things that I read, but he also had a shitload of these books that were like, how to save for the coming doomsday crash. And what was funny was he buy all the books and i put the books together in stacks and like these are the same authors and they're just reissued every four fucking years yeah the doomsday crash hasn't happened that's how you save you publish those books there you go and they just like uh it's gonna happen next year it's kind of like you know the seventh day at

venice you know the world ends on tuesday and then yeah i predicted 10 of the last two crises right yeah um so my my last question is a big question it's a loaded question we want people to go right read the by the book and read it of course um but uh let's see if i can pack all this fucking shit into this the question um how do we get this to work and i'm hoping the biden administration will have some new approaches. I feel pretty comfortable that, you know, they did the last rescue and they saw hopefully what didn't work and what did

work. And they'll maybe you guys should go talk to them. But how do we make this work in what we have is almost an oligarchy right now. We have unfettered capitalism i'm an entrepreneur i love capitalism but we have unfettered fucking goddamn capitalism this is way out of control in this country between health care and everything else uh you know the works jobs the value of jobs i mean right now the market's up but you know i think today we had another 885,000 people file for unemployment.

The, you know, so anyway, but there is power behind this. It's not just about money. It's not just about, I mean, you guys have this beautiful picture you guys paint in the book of like, we should hug everyone and give them money. But there is an element to this behind this that is power. I mean, if you've read The Prince, Machiavellian, or different things, there is a certain aspect of control, money, and power. And if I have a lot of it, I really don't want to share it with you very much, and I don't want it to be dissolved. You have organizations like the Betsy DeVos thing, which is, if you've studied the Betsy DeVos Council, which is, you know, if you study the Betsy DeVos Council on National Policy,

I think it is, and the 250 or goddamn whatever PACs that are underneath that thing, their agenda is to basically subjugate the American population into indentured servitude, just like colleges have with the thing, to not pay higher wages and to keep that control under the thumb there. We have politicians that pander to the donor class, those billionaires, those millionaires and stuff. As long as you've got Mitch McConnell in fucking control, unless something extraordinary happens in Georgia, there you go. And even Democrats, I mean, I'm a Democrat, even Democrats played at the donor class a little bit. Um, there is a protection of money and wealth in this thing in the perception that it supports the thing. Um, but it's also about power. And there's, and there's racism people that can't get loans at banks or can't get a bank account because they're you know they've been raised in poor maybe ghettos or different despondent areas they don't have credit they don't have good credit so they can't get money to spend money uh etc etc you know it's one of the arguments that i've saw with the immigrant argument everyone's

always like well immigrants come here and they get they take money and jobs and they take all of our they they take all of our services and it's like no they aren't there's actually a net i think it's 86 billion or 68 billion net profit that they put back in a thing because no one ever talks about how they go spend fucking money for goods and the you know what goes around comes around rising tide rides on boats so how do we fix this shit or adopt to maybe a closer element of what you guys are pitching in the book with all these evil motherfucking people who just want to keep everybody down so they can keep themselves up? Well, yeah, I mean, Bob, Bob has a, we'll have maybe a lot to say about this, but well, this is related to our, the asshole problem, asshole capitalism, right? Is how do you, like, once you're, you're devolved into asshole capitalism, how do you like dig yourself out? Like, isn't it self-sustaining because greed, you know, greed and malice and entitlement are sort of just self-reinforcing

but i mean here's i mean if you've got a moment like where there's a chance of like bootstrapping your way out money talks so like a great way to change power relations is to throw money at the problem i mean if you need things to change and there's otherwise like recalcitrant politics, the money incentives really can go a long way that can work at sort of all these levels. I mean, at the level of like, you need certain, you need a lot of trees planted, you need a grid electrified, you need transportation, you need, how do you, how do you get people to do all those things? Just pay, pay them. Oh, okay. That's just my arm. Give me some money at the state or state level or a city level,

like there's pet projects, like someone who's reluctant to do a massive energy transformation in their area, in their community or their state or whatever, right? Well, if they have pet projects, things that they get, well, you can have a federal incentive so that they get a lot,

they get money for that stuff that they like if they take on the new investment regime. So basically legal bribery can go a long way. And at the level of Congress, for example, this can work too, because where people might have been reluctant to vote, now there's like people want sort of certain, like there's a lot of in principle support for sort of climate change sorts of stuff but if there's you need money to where he's terry sweetener so so senators or congressmen need to

take money home for for whatever reason to their states or whatever you can whether you throw money at that problem too right um and that's not a dangerous thing right now because we're not spending enough money we need to get more money and if the way to get money flowing in the right places is by sort of like legally bribery or horse trading with money, then let the money flow. So in some sense, money can help ease, anyway, the power dynamics and get the power dynamics working in the right direction, at least with a moment of possibility, which we potentially have right now. Yeah, just two quick follow-up thoughts, Chris. The first is that what Aaron was just saying, you can almost look at this as sort of coming full circle, right? We began by noting that the fundamental error that people make about money is to think of it as a fixed quantum, right? The economic term is to say people look at it as exogenous, right? There's an exogenously given stock of it. It's the number of gold rocks or the number of silver

bars or whatever. And then that's it. So basically everything is contestation over that fixed sum. And so the game is zero sum, to use the game theoretical lingo. But as soon as you realize that that's just not the case, right, that money is, to use the economic term, endogenously generated, not exogenously given in a finite amount. As soon as you realize that, then you realize, well, you don't really have to think of politics as being contestation over some scarce resource that everybody's trying to get their piece of. Instead, we can think of political action as organized activity to grow the stock of wealth. And if there's some places where people are under endowed and other places where people are sufficiently endowed, we just say, well, let's do the growing right now in the areas where people are under endowed. So we're leveling up rather than leveling down. And that makes things a little bit less, you know, kind of nasty. And then secondly, and relatedly, just to get back to this word republic that Aaron and I keep using, people who are familiar with that word tend to think of a republic as a political form.

It's a form of political organization that you can contrast with various other political forms, like an oligarchy, for example. have forgotten is that in its original articulation and theorization by the early Roman Republicans and then the Renaissance, people like Machiavelli and Guarnicini and others who sort of revived the Roman Republican tradition, is it's an economic form as well as a political form. That's to say, the ideal of the Republic was that of a polity basically operated by or constituted by people who were roughly equal, right? Not strictly speaking equal, but at least equal in the sense that they were all basically materially independent. So then they could participate in public decision making, which is what a republic does, on their own terms, so to speak, rather than as the sort of agents of somebody else on whom they were dependent,

right? If you were a peasant dependent on a landlord, and then you were engaged in political activity, you basically be pushing the interests of your landlord because you're dependent on him or her or landlady, let's say. But the ideal of the Republic was that nobody is a peasant to some landlord. And then that way, everybody is a landlord, so to speak, everybody is materially independent, so that they can be politically independent as well. And thus all contribute to that kind of general deliberation that is Republican decision making and Republican action. Now, one way of looking at what Aaron and I are doing or saying is let's rediscover the economic aspect aspect of Republicanism. And let's put in place the means by which people can be sufficiently materially independent to be citizens, so that they're actually participating in politics as themselves, rather than as spokespeople for the people who control them or on whom they're

dependent. And that in that sense, our book, again, this is sort of a nice way to close the observation about the book is, that's the sense in which it really is a very republican book not capital r but lowercase r it's really about a republic and it's about rediscovering the monetary and economic aspect of this form of organization to complement the political aspect of this form of organization that some people are at least relatively familiar with now here's the here's the catch on that again going back to my original question i'm not re-asking the question but i'm referencing it is if you're giving people political freedom or power that's something that there's a lot of people in this country don't want true so so trying to overcome i mean the beautiful what you guys have laid out is beautiful it makes sense i mean even

for me if i was like the tyson foods billionaire or elon musk i mean elon musk probably really adopted to something like this to a certain degree i don't know he's starting to really become um sort of uh a poly nationalist poly uh internationalist globalist where the you know these guys once you read this billionaire static you don't give a fuck about the u.s government or capitalism or anything else anymore you're just about like i'm selling shit and this is the history of of what we are but but i could look at from an aspect that if you hey if i can get the government to give people some fucking money they'll spend more money to buy my shit and i'll get richer but there also is the con the conversion of that where a lot of these people think from a scarcity uh

level of like well then people get richer and i might fall a couple notches on the forbes 100 list you know um and then there's like i said there's just power but whether it's racism behind the power or uh organizations like betsy devos who want to turn us into a theocracy. Or, you know, that's always what it comes down to, money and power. Yeah, I mean, I think we agree. But a way of putting it is that the choice that we're faced with now is as stark as ever is are we going to be a republic or not? Right. That's the fundamental choice. It's not Republican Party versus Democratic Party. It's not left, right, conservative, Democrat. It's Republican or not right that's the fundamental choice it's not republican party versus democratic party it's

not left right conservative democrat it's republican or not really we're saying what it means and by way of economics for and use of money for us to really be a republic and the people who are resistant to it yeah like you're saying just for power reasons just to preserve their place higher in a hierarchy are just just don't want a republic they don't want the enemy you don't want people voting in structure and they're higher in the hierarchy either for money reasons or race reasons or sex you know and they just want to keep it that way and so they like the rhetoric of a republican party and freedom and equal because it legitimates their position and makes it easy to defend arguments and people will do stuff for them, you know, like, or not fight them or try to kill them. It won't threaten their power or whatever, but that really is the choice.

Like, are we going to be a Republic or not? Yeah. There's going to be some, you could almost partition the class of momentary opponents into, into two groups, right? One are those who just haven't thought this stuff. One, one group of advantaged oligarchs are probably people who just haven't thought this stuff through and don't realize the entailments of their own legitimate Republican commitments, right? And if you can then explain to them or sort of draw out for them those logical entailments, they'll see, oh yeah, you're right.

This is actually going to be good for me and good for the republic. It's not what I was thinking because I just wasn't thinking clearly. And there probably are such people, right, who are operating in good faith. They just haven't thought clearly about this stuff. And when you point it all out and draw it out, then they see you're right. And then they're going to act in what we used to call their enlightened self-interest as distinguished from their unenlightened or uninformed or ill-informed self-interest. And I suspect there are a lot of those people, right? And Elon Musk could very well be one of them, or at least in the past, he certainly seemed to be, right? And somebody like, what's that guy, Mark Cuban seemed like that in the past too, and maybe he still is, right? On the other hand, there are probably some others, like maybe Betsy DeVos is one of them,

who they know perfectly well what they're doing. And they basically, as Aaron was just describing, they basically are at the top of a hierarchy, and they want to stay there. And they understand that an actual republic doesn't have a hierarchy. And so they're basically anti-Republican, and they're counter-Republican people, but they're perfectly happy using the word Republican, especially the capital R version, because then it sounds like they're paying lip service to something that people can actually cotton on to and agree with and affirm, but they're really just lying. And those people, I think, just are the enemy, right? We just have to sort of bite the bullet and say, well, you guys are, you're basically a counter-Republican group within our Republic. And that means you're a fifth

column. And that means you're basically a kind of unwelcome parasitic presence. And our job as actual citizens of a republic is in effect to quarantine you, to sort of cordone sanitary, to put in a kind of cordone sanitary to ensure that you're not able to exercise influence of a counter-republican sort. And there's a sense in which our Constitution itself validates our doing this if we decide to do it. People don't talk, you know, one of the forgotten clauses of the Constitution until recently, and even now that it's being remembered, it's unfortunately being remembered by the wrong people, is a clause referred to as the Guarantee Clause. And the Guarantee Clause puts upon the federal government a responsibility to guarantee to all the states a, quote, Republican form of government. Now, back in the 18th century, when that word Republican with a small r was used, they were referring specifically to what

Aaron and I are referring to. They're referring to the Roman Republican tradition, the pre-imperial Roman Republic, where citizens were rough equals and citizens all, again, materially independent and thus capable of being responsible citizens. So there's a sense in which we are committed, even by our own constitution, to being a republic in that full economic and political sense that Aaron and I are trying to recover and to advance. And insofar as that's the case, then if somebody like Betsy DeVos is just literally against Republican government, she's against our constitution. And she's in that sense, a kind of enemy to the United States.

And I don't want to sound paranoiac and say, and I say, therefore let's throw in Guantanamo Bay, which is a very anti-Republican institution. But it is to say that we don't have to listen to that crap that she says. We can say, no, you're in the wrong country for that. This is a republic, right? That's not something that we recognize. What you're pushing here is alien to our fundamental

values, that which constitutes us as a polity, hence the word constitution. There you go. There you go. Anything you want to throw in there, Aaron, before I wrap? No, that's good. That's a nice sum up. Yeah. There you go. And I like that sum up because it puts me right into this is an important reason to buy the book, read about it, educate yourself, educate your friends, relatives around you, use it as a gift for Christmas. Christmas is around the corner as well. And get to know what's going on in our society. I've really been exploring in my head, and of course a lot of great authors like yourselves that we've had on, is how this ultra class, these billionaire classes, they use the scarcity element. They control through super PACs and everything else they do, the Betsy DeVos designs and things. And we've had a lot of this Wizard of Oz crap peeled away in the last four years where we've realized what's going on behind the scenes but uh uh this is a really important aspect to read the book and educate

yourself because i see so many people that run around and they parrot shit and they're just average broke citizens they parrot like oh we don't need to pay 15 now that's socialism and communism or yeah i'm for big i'm for less government and less regulations and you're like do you understand that that puts lead in your fucking water but what it does for betsy devos elon musk or all these you know neo uh globalists whatever um it makes it so they don't have regulations you know we're seeing right now mitch mcconnell's trying to make it so that tyson foods and all those companies that bragged and took jokes and bets about how many people would die

with coronavirus in their fucking facilities i think there's like i can't remember the figure but there's a thousands figure right now of open lawsuits that are out there and he's trying to appeal to his donor class and block these lawsuits with legislation and stuff and they're doing it just to take rich people. And the average American doesn't sit around that, that parents that bullshit and realizes that it's the fuck them. And that they are at the deader servitude of these, these, these, you know, this billionaire classes. They're like, yeah, yeah. Let's,

regulations are bad because I could go up a couple more digits on the Forbes 100 list, et cetera, et cetera. So that's my wrap on that, guys. Check out the book. Thanks, guys, for being on the show. This is a brilliant discussion we've had, Robert and Aaron. Thank you, guys. It's been a joy, Chris. Thanks so much.

Thanks so much. And hopefully everyone learned something. Order the book up. You can get it from a lot of different places, money from nothing, or why we should stop worrying about the debt and learn to love the federal reserve. Give us your plugs.

If you guys got any.coms, you want people to go check out. Well, you could just, I mean, if you Google either of our names, certainly if you Google my name, you'll find a lot of stuff out there.

And if you Google a book's title, you'll find a lot of stuff. And then Aaron, I Google a book's title, you'll find a lot of stuff. And then Aaron, I think you have a whole on assholes website too, right? Yeah, that's, I haven't updated that much recently, but there's plenty of assholes content out there or the documentary is widely available on platforms for watch. So that's a, that's a quick way to get up to speed on assholes. And then of course,

buy the book as well if you want or buy our money book for the full, for what to do about the asshole problem right this is a boolean with an or or an and google both of our names with an and and you'll get tons of money for nothing or money from nothing stuff and then do us or and you'll get a ton of related stuff that we've each been doing for ages yeah there you go there you go i i loveoles movie, by the way. I watched it. What was funny is it tied into some other authors who we have came on where we talked about fascism and Silvio

Berlusconi. I always have trouble with that name. It talked about him and some of the different things and really tied into a lot of issues we're doing. Check out the movie as well, guys. Thanks to my honors for tuning in. Pick up the book Money for Nothing or Your Chicks for Free or something.

There you go. Guys, thanks for being here. Go to YouTube.com for just Chris Voss to see the video version of this. Follow us on Facebook.com The Chris Voss Show. Follow the groups over there and also on LinkedIn as well. There's a show page on LinkedIn as well.

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