Chekhov’s Coin with Rohan Grey (New Transcript!)

In this special episode, Rohan Grey joins Billy Saas to discuss the latest episode in the #MinttheCoin saga. Rohan Grey is Assistant Professor of Law in the College of Law at Willamette University.

Read his article on the trillion-dollar coin in the Kentucky Law Journal titled “Administering Money: Coinage, Debt Crises, and the Future of Fiscal Policy” here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3536440

John Stewart on the trillion-dollar coin in 2013: https://www.cc.com/video/t24pv8/the-daily-show-with-jon-stewart-the-trillion-dollar-coin

James Buchanan and Paul Samuelson in John Maynard Keynes: Life, Ideas, Legacy documentary: https://youtu.be/JpIJvAt3dTc?t=3105 

Visit our Patreon page here: https://www.patreon.com/MoLsuperstructure

Music by Nahneen Kula: www.nahneenkula.com

Transcript

The following was transcribed by Richard Farrell and has been lightly edited for clarity.

William Saas: Rohan Grey, thank you for joining me for this special episode of Money on the Left.

Rohan Grey: Thanks for having me.

William Saas: So, first question: #MinttheCoin, have many people been saying this?

Rohan Grey: Yeah, a lot of people have been saying it, and louder and louder. The reality of it is this is not even the first time, not even the second time, but probably more like the third or fourth time that this issue has come back around. It’s really run the gamut from tragedy to farce, to impatience, and I think now to maybe inevitability at some point. The underlying problem just continues to get more ridiculous. And in doing so, I think a lot of people who thought of the idea of using a kind of crazy accounting gimmick or something that would look silly in the eyes of the public, or the rest of the world, the risks associated with that have gone down relative to the risks of just continuing with this absolutely ridiculous charade indefinitely. We are a decade into these kinds of debt ceiling games and there’s no ending in sight. And the Biden administration’s approach seems to be pretty much exactly the same as the Obama administration’s approach was a decade ago. So if this is the best that we’ve come up with after ten years, then why not start being more creative?

William Saas: Yeah, can you give us your sort of elevator pitch for #MinttheCoin?

Rohan Grey: Yeah, so the idea is that we continue to run up against a legislative and operational log jam, where Congress tells the executive, the Treasury secretary, to spend a certain amount in accordance with the congressional budget directives, to tax a certain amount, and then to make up the difference with some sort of financing. Typically, the way that would happen is the Treasury secretary would spend a certain amount, and then, to make sure that there’s enough funds in its account at the Fed that it spends all the money out from, it will sell Treasury securities, Treasury bonds, Treasury bills, Treasury notes, or what we collectively call the national debt. Then, the funds that come into its account when it sells those to private dealers become the funds that then go to people for Social Security checks or government employee checks. But in an instant where the debt ceiling limit prevents issuing more Treasury securities, the risk is that the general account will run out of funds. And if it does so, there is another law on the books prohibiting the Federal Reserve from allowing the Treasury to run an overdraft on that account. So, effectively, the Treasury secretary is in this sort of awkward position where they have to keep spending because Congress has told them to spend, their job is to execute Congress’s directives, but they also can’t change the accounting and spending operations in a way necessary to ensure that happens.

Interestingly enough, there’s a part of the Coinage Act that was passed in 1996 as part of a commemorative coin bill that gives the Treasury secretary clear, plain language, no caveats, no asterisks, the power to mint and issue platinum proof coins–proof, here, meaning highly polished coins–of whatever denomination they wish, of whatever amount that they wish. So a lawyer named Carlos Mucha, when he was going under the internet moniker “Beowulf” on a MMT blog picked up on this idea from earlier writers, like Ellen Brown, and there was also a politician who kind of proposed it in the 1990s named Bo Gritz, to use this statutory authority to mint a series of very high value coins, trillion dollar coins, or multi-trillion dollar coins, have the mint deposit them at the Fed, the Fed then credits the Treasury for the face value of those coins, because once they’re accepted they’re legal tender, and then those funds would be available to ensure that the checks go out and the spending happens just like selling treasury bonds. And the important note there is that coinage, including all the coins that we use today, including the coins that we’ve minted and issued for hundreds of years, are not subject to the debt ceiling. So this would be using a parallel source of financing that is legal on the books to make sure that we honor our spending commitments without some catastrophic default or government shutdown.

William Saas: Do you think parallel is the best kind of metaphor or explanation for it? Or what do you think of things like end run, circumvention, or roundabout? I don’t know, what do you think?

Rohan Grey: Yeah, I think using the trillion dollar coin to avoid a debt crisis–a debt ceiling crisis, I should say, because it’s not a debt crisis. It’s the ceiling itself, which by the way, virtually no other country has in the world, and certainly not in the way that the United States has it. And if you look at the debt ceiling history, it was actually originally designed to give more flexibility to the Treasury. So up until the early 20th century, whenever Congress wanted to spend on, you know, new bridges, a war, the postal service, or whatever else, it would direct the spending to happen, and say, “Hey, executive branch, spend X amount,” and it would have specific authority. It would say we authorize you to issue a certain amount of bonds, or collect taxes or customs, or mint coins, or whatever it is. And each spending directive would have a specific financing authority. But then World War I comes around, and it becomes very difficult to manage all of the different spending commitments in a very large scale way with basically a thousand different spending authorities. So Congress says, “We’re gonna make it easier for you at the Treasury, we’re gonna roll all that up into one big spending authority.” It’s sort of like having 20 different credit cards, or 20 different bank accounts, and then rolling them all up into one. Then, you can move around the funds. And if you’ve got excess from one spending commitment to another, you can move it all around without having to come back to us each time.

So the original debt ceiling was actually designed to make it easier for the executive branch to discretionarily adjust its financing operations as needed. In that sense, the debt ceiling was always not intended to become this political football, but once it was created, like so many other things, its purpose got twisted. But the coin, I think, is definitely a workaround to the twisting of the debt ceiling. I would perhaps argue it’s more faithful to the spirit of the original debt ceiling and the longer term trajectory of the Treasury, which is to get more and more discretion on how to finance spending. One of the things I argue in this paper I wrote that we’re going to talk about later is that, even as Congress was giving the executive branch greater discretion in its financing, it was exercising strict control over how much was spent and on what. So it’s not a matter of letting the president, or the Treasury secretary, go crazy and do whatever they want. It is more about how, when we tell you to spend a certain amount and tax a certain amount, you have to do that. But in terms of how you do that, we’re going to leave that to you because the world is complicated, the administrative state is complicated, and we’re not going to micromanage the day to day financing activities. So as long as you spend what we tell you to spend, we’re going to give you latitude in working out how to do that the best way. In that sense, the coin is a workaround to the perversion of the debt ceiling.

But to the broader point, the mint’s authority to create coins and to generate financing capacity through the power of seigniorage is a parallel power to the issuance of Treasury bonds and the reliance on the Federal Reserve and the bond market to be a part of that process. The mint is the oldest monetary institution of the United States government. It was created years after the country was created. The Federal Reserve only was established in the early 20th century. So the mint has always been there. And nowadays, when people say, the government can create money, they usually think that it has been basically exclusively delegated to the Federal Reserve. So the Treasury is sort of reduced to, like you and I, someone that has to ask permission to access this power that the Federal Reserve has, or can only indirectly access it through the Fed, and that the Fed’s job is to protect the boundary very closely and guard this power from abuse by elected officials. This is the idea of central bank independence.

My argument is, whatever may be true or not about central banks, it’s never affected the mint. The mint has been part of the Treasury for a very long time. And that power to issue coins has never been taken away from the Treasury. It has never left the Treasury. It’s never been something that the Federal Reserve has taken over. So this is not so much the power grab away from the Fed, as it is a resurrecting a somewhat dormant power and using it for creative purposes in a moment of crisis. Of course, the mint has been issuing coins the whole time, and has been returning hundreds of millions of dollars in seigniorage to the Treasury into the same account that the funds from selling the bonds go into. But we’re talking about going from hundreds of millions of dollars to trillions of dollars, and that is obviously an order of magnitude difference. But it’s a quantitative difference. It’s not a fundamentally different kind of operation or a different kind of power. So in that sense, I would say, yes, that the coinage power and the central banking power have existed in parallel for a long time.

William Saas: Right, so the trillion dollar coin resurrects this authority, or reanimates it, in interesting ways. To carry through that metaphor, it seemed like in February of 2021, Mike Lee wanted to kill it dead again by striking that obscure 1996 provision that granted the mint authority to create coins in any denomination. I’d like to get an update from you on the status of Mike Lee’s attempt to do away with that provision.

Rohan Grey: I haven’t heard any progress on it. There was a Republican congressman, seven or eight years ago, that did something similar, and that went nowhere as well. In part, this is posturing for them. It’s part of their kind of fiscal conservatism. It’s the same kind of reason that half of these Republicans put out gold standard bills every now and again. They don’t actually want that to happen, but it’s good posturing. I think they’d be fine if the coin statute was eliminated, but the point of that was really to give them a platform and to express outrage that this could even be considered. I think this goes to the sort of larger underlying ideological difference of trying to pretend that there is no such thing as public money, there’s only taxpayer’s money, and that you can only either tax or borrow. Those are the only two ways to get spending capacity. You have to be clear about how you will rob Peter if you’re going to pay Paul, and all of this austerity, scarce-money framework that their entire political ideology is based on. Even if we don’t use the coin today, even if we don’t ever use the coin, the existence of the coin, the fact that it’s there on the table, the fact that it gets talked about, is of great discomfort to them, because it keeps open the space for different kinds of politics, different kinds of discourse, where we don’t have to be thinking in purely zero-sum terms, and that things like the debt ceiling are not actually a limit on borrowing from our grandkids and government spending run amok as they like to pretend.

They are, in fact, as I mentioned earlier, just an operational part of a financing process that could be done a whole range of different ways. And whatever craziness the idea of minting a coin worth a lot of money might have sounded a decade ago, we’re deep into the world of crypto and digital currencies nowadays. Everybody is creating their own coins and these kinds of things. I think the larger imaginative and metaphorical threat that the coin presents is part of what needs to be attacked by these people’s perspective, because we’re right in the middle of a discussion about creating a government digital currency, a US digital dollar. So should this digital dollar look more like a bank account or should it look more like a coin? A coin is anonymous. It’s even more anonymous than a paper currency which has a barcode on it. They tracked the Lindbergh baby through the barcodes of the money, right? You can’t do that with coins. It was historically seen as something that you put in your pocket and you can carry it wherever you want. So the metaphor of a coin, of a public coin, the idea that the mint might have more to teach us in this moment of digitizing currency than complicated central banking operations, I think, is deeply threatening beyond just the immediacy of the debt crisis itself.

William Saas: We’ve referenced it before, and we’ve talked to you twice in previous podcasts, but I don’t think we’ve had an opportunity to talk to you since the publication of your Kentucky Law Journal article, which is called “Administering Money: Coinage, Debt Crises, and the Future of Fiscal Policy.” So I wanted to discuss that just a bit. Getting into the notion of the trilemma, as you outline it here, as others have outlined it, and how you position and frame your argument in this Kentucky Law Journal article as a supplement to that, can you walk us through the idea of what a trilemma is, or the trilemma is, when it comes to a president’s available options when faced with something like what President Biden is faced with today?

Rohan Grey: Yeah, sure. First of all, big shout out to Carlos Mucha, who was the guy who coined the idea so to speak, and to people like Joe Firestone who have been really pushing this for a long time. A lot of this paper is collecting and organizing existing arguments, and then adding my own around the edges and trying to put a spin on the whole thing. But a lot of the paper is really in dialogue with another paper by a law professor, Michael Dorf, and an economist, Neil Buchanan, called “How to Choose the Least Unconstitutional Option.” It was a Columbia Law Review article from about 2012, and it was one of the ones that was discussed in the White House when they were dealing with these crises. Their argument is that, when Congress directs the executive branch–the president and the Treasury secretary, specifically–to spend a certain amount, to tax a certain amount, and then not to borrow more than a certain amount, that that can create, essentially, a paradox. That is, you have to spend 100, you can only tax 50, so there’s 50 left, but you can only borrow 30. So what do you do with the rest? This is an ongoing process. What do you do every month for the 20 that’s not being accounted for? Or, eventually, you can borrow no more, and so, what do you do for everything after that?

Their argument is that, in a moment like this, something has to give. And of those three different options–spending, taxing, and borrowing–their argument is that the spending and taxing powers are core congressional powers. They are the core of the power of the purse. This goes back to your political science 101 classes with the power of the purse and the power of the sword. And that the debt ceiling is, relatively speaking, a kind of administrative, procedural, technical, and operational thing that has evolved over the years, has been basically dead letter for a number of years, because nowadays the way that we actually lift the debt ceiling periodically, which we used to do as a pro forma issue, is to suspend it, and then retroactively raise it when we increase it again. It’s sort of like saying, you have a credit card that has no limit. But next month, we’re going to retroactively impose a limit that’s exactly the amount that you happened to spend last month. And then, we’re going to do that for 30 minutes, and then we’re going to suspend that for another month. And then, next month, we’re going to impose it again for 30 minutes, and it’s going to be exactly what it was this last month, and then we’re going to suspend it again. It just makes a mockery of the whole thing. It allows politicians to grandstand every few years, but it’s not actually designed to put a limit on anything on a daily basis.

So their argument is, when you’ve got these three options, and you have to violate one of them as the president. Because the alternative would be to ignore the will of Congress, to ignore your clear legal obligations, to execute the laws unfaithfully under Article II of the Constitution, and that would provoke a separation of powers crisis and would be the president engaging in a unilateral kind of power grab and doing whatever they want. So if you have these three choices, you should choose the least unconstitutional, which is to violate the debt ceiling. Keep the spending, keep the taxing, just blow through the debt ceiling, and keep issuing treasury bonds tomorrow like you were yesterday. I agree with that argument on its face. That is to say, I think if you have to blow through one of the three, then the debt ceiling is the obvious one to blow through. There is a very good argument that taxing and spending is a higher sort of constitutional power to be separated and that the debt ceiling is already kind of a joke at best, operationally speaking.

But my argument is that we have to be careful that we’ve exhausted all the alternative legal options first. And if the coin is, in fact, the legal option, then that allows us to avoid this paradox whatsoever. It allows us to avoid the idea that we have to violate the constitution in some way, or that all we need to try to do is choose the least bad. In fact, we could do something that is legal. Buchanan and Dorf engage to quite a degree with the coin. They say they think it isn’t legal, it would probably count under the debt ceiling, and that even if it was legal, it would cause the population to question the value of the currency, and in doing so, could basically promote a catastrophic economic outcome. So the president should consider that and say, “What’s the cost of a catastrophic outcome versus just a little bit of unconstitutional behavior?” Relative to that, we should do the low grade unconstitutional thing rather than the technically legal but functionally catastrophic thing. I spent a fair bit of the paper pushing back against that and unpacking some of the assumptions in that claim. Is it true that minting a coin would cause the markets to kind of freak out? Is it true that it would cause runaway inflation? Is it true that it would actually have these effects? Or is that just a bunch of speculation by people who have a very strong commitment to a very liberal and scarce theory of money? And that what they’re actually saying is, we should be discounting any action that could reveal to the public how money really works?

We all know that money works like this. Look at the central bank of Japan. It’s been buying up stocks and government bonds hand over fist. You look at the Federal Reserve with quantitative easing and things. We’ve been “printing money,” we’ve been monetizing government debt and the world hasn’t collapsed. But the public maybe hasn’t fully grasped it all and fully caught on. So should we be avoiding any legal action that might tell the truth here in the name of the noble lie, that the public can’t handle the truth? My argument, and I think this is the strongest argument, the most unique contribution that I try to give in this paper, is that this is really dangerous. This is really dangerous to democratic governance and to an informed electorate. Because now you’re having a situation where the executive branch is openly and explicitly violating the Constitution, and violating their directives to do what Congress tells them, on the basis that they’ve got no other option. And this is in knowing full well they have another option, but believe that they are not required to entertain that option seriously because the public can’t handle it. To me, that is in the same category as the secret Pfizer courts that have warrantless surveillance, that nobody can hear because it all needs to be redacted. Chief Justice Roberts gets to sign this thing, nobody else gets to read it, and it’s in the name of democracy. But it’s in the name of democracy that we couldn’t possibly let you see.

It’s in this realm of “there are weapons of mass destruction.” Trust us. We can’t show you the materials, but we just have to do it because the alternative would be so catastrophic. Just trust us. I think it’s a very dangerous precedent when there are monetary theories that the public supposedly can and cannot handle–not economic theories. Remember, we’re not saying that this would be inflationary. We’re saying that the public would think it’s inflationary, therefore, we should be afraid of doing it. Because rather than educate them, rather than work through the truth, we should indulge their delusion and reinforce their delusion. And that is sound governance, even if it allows us to violate the constitution whenever we want to and use this as an excuse. My argument is that is the moment where we have to be really careful and where we need to be saying that the executive branch actually doesn’t have this discretion. They are not empowered to choose whether or not to tell the truth to the public, and if they decide they don’t want to, to then go and violate the constitution.

The thing that the coin is actually protecting us from is an imperial presidency that can basically threaten a government shutdown rather than admit that this is all a stupid game and that they’ve always got an escape clause. And the Democrats, I think, to their credit, they don’t want the government shutdown. They want the Republicans to cave. They want the Republicans to break, to cry uncle, and to stop playing these stupid games. But again, how many years in now are we to watching the Republicans play nihilistic, willing to blow everything up games? And how reasonable is it to hope that they’re going to come to the table and be a working partner in governance? It’s that kind of “fool me once, shame on you; fool me twice, shame on me” thing, but now we’re at like fool me 55 times. And Biden’s big solution is to say, like, “Come on, man. This is unreasonable. We want you to be adults.” You’re talking to Mitch McConnell, who’s saying to your face things like, “I want you to implode and fail as a president.” And if that means blowing up half the American economy along the way, so be it. This isn’t sound governance, this isn’t adult strategy, and this isn’t some genius, 11th dimensional political chess by the Democrats. This is just them wanting to play the only playbook they know how to play even if it means marching us into catastrophe.

William Saas: And it’s pervasive and entrenched. When I got to this point in “Administering Money,” where Buchanan’s talking about how maybe it’s better to preserve the myth than to let it out, that the government does have this money creating authority, there’s that documentary with Paul Samuelson that we’re all aware of on John Maynard Keynes, where we have Paul Samuelson, author of the most circulated or widely used economics textbook, talking about the need to preserve the myth of the balanced budget in order to reinforce discipline with the fisc. But immediately before that clip, James Buchanan is talking–was this James Buchanan, or is this the other Buchanan? Anyhow, I think this is a really good point of transition. You’ve sort of summarized this already, but you put it very nicely in the article. You say, “Taking the trillion dollar coin proposal seriously–if not necessarily literally–allows for consideration of the deeper constitutional implications of replacing the ‘trilemma’ with a four-dimensional conceptual framework that includes money creation alongside spending, taxing and borrowing.” Alongside that quote, and your narration of the “Lucy with the football” history of the Democrats and Republicans in recent decades, I want to play a clip for you from Pod Save America, January 2017, an episode rather ominously titled, “Obama’s Last Interview,” which, as far as I know, is not correct. But by this they mean his last interview as president on his way out of the White House.

Pod Save America: When were you most scared in the White House? What was the scariest moment?

Barack Obama: Well, I think it was that moment when John Boehner didn’t seem to be able to generate the votes to make sure that the US didn’t default. We had to start drafting the speech. And we were having these conversations with Jack Lew and others about what options, in fact, were available. Because it had never happened before. And there were all kinds of wacky ideas about how potentially you could have this massive coin. I mean, it was like something primitive, like out of the stone age or something, and I pictured rolling in some coin. For those who are listening, it gets pretty technical but there was this theory that I had the authority through the mint to just issue this massive, trillion dollar commemorative coin. And then, on that basis, we could try to pay off US Treasuries. And it was a very realistic possibility that we couldn’t get the votes for that and we couldn’t get those debts rolled over. And we would be in a situation where, technically, we’re in default. And at that point, you were in uncharted territory. What was also true was that, in addition to talking to Jack Lew, treasury secretary, and my speech writers about a speech, there were also questions about whether any actions that I took might be violations of the law. So we had to be talking to lawyers about potential challenges and legal actions and lawsuits from bondholders around the world.

Pod Save America: Not fun.

Barack Obama: It wasn’t my favorite night, yeah.

Pod Save America: What was your favorite night?

William Saas: Okay, so a lot to talk about there. Do you have any initial impressions or things that you’d like to reflect on from that clip?

Rohan Grey: I mean, yeah, there are two things. One is, and Obama did a great job of this during his entire presidency, and of course, he’s talking to his kind of people in this interview, but just the idea that anything that’s outside of his worldview is crazy and that anything within his worldview is eminently sensible. Talking to lawyers about what happens if we default and then we get sued by millions of bondholders, that’s serious. Minting a coin, that is wacky. Boehner not having the votes is a grave, serious problem. Him not playing hardball with the powers that he actually has, that’s wacky. That kind of rationality being the limits of his own worldview is something that is just an enduring theme of the Obama administration to me, and I think it really manifests here. The other thing that’s interesting here is just this idea of Jack Lew telling me what we could do, the lawyer is telling me what we could do, I’m always constrained, and I don’t have any power. But the reality, of course, is that, whether or not we pursue these things and try, is his choice. I think that kind of powerlessness is an enduring theme of his presidency.

Well, what do you expect me to do? I’ve tried nothing, and I’m already out of ideas. It’s that kind of mentality of the reason nothing ever gets done when I’m in charge is because everybody else is stymying me rather than because I am not taking responsibility for actions. It’s just very interesting when we’re talking about something that he has a constitutional requirement, a mandate, to do. He signed on, he put his hand on that Bible, and whatever. But when the time comes, when the rubber hits the road, it’s someone else’s problem. The limits are someone else’s, and all he can do is turn and face different parts of the prison that he’s caged in, while, of course, laughing at anybody trying to help him out of it, while, of course, having nothing but smug derision for any possible option that could have gotten him out of that. And I think it’s notable that he calls this the scariest moment in his presidency. The global financial crash, that’s not that scary. Presiding over the decline into warrantless surveillance and drone striking, that’s not that scary. The failure of the Paris Agreements, or whatever, that’s not that scary. It’s just very interesting that of all the things that really reached the limit of his ability to keep a cool head, it was the bloody debt ceiling.

William Saas: It’s stark, too, when you consider the other ways that executive power expanded and continued to expand throughout his presidency. There’s this disavowal of executive authority when it comes to domestic financial and fiscal problems, and then just unstoppable expansion when it comes to military adventures abroad.

Rohan Grey: Yeah, you accidentally drone strike an American child. Oh, well, whoopsie, mistakes happen. But God forbid that we do something that doesn’t sound very serious when it comes to preventing a catastrophe. And he’s talking about Boehner there, and of course, Boehner blissfully peaced out of the political scene when Trump came on the scene. And McConnell’s still around and was a big part of the story then. But I think it’s important that, at that point, the Republicans did blink. When the Democrats played hardball, their gamble paid off. They put a gun to the head of the American economy and said, “We’ll pull the trigger. We’ll do it if you don’t tell us to step down.” The Republicans said, “Fine, step down. The polling is hurting us.” This time around, I don’t think McConnell will do that. But I think the other thing that’s important is that, since then, we’ve made some strides now that this is on the table in crisis preparation. And at that point, there were these debates about, well, how are we going to prioritize different kinds of payments? Can we actually ensure that people who hold government debt will continue to get paid even if we have to sequester the government, employees, Social Security payments, and things.

Well, make sure the finance guys get paid even if everything else gets cut. That was a very hard operational challenge at that point. I don’t think it’s as hard now. And I think that certainly McConnell does not want the bondholders to not get paid. But I think he would be fine if this time around a government shutdown completely stopped Social Security checks, government employee paychecks, and things. If they could show that next time there’s a debt ceiling crisis, or next time there’s one of these crises, the only people that will actually potentially suffer, are the welfare state, the kinds of things that they love nothing more than starving, that will be a big win for them. Because in that moment, putting a log into the spokes of the wheel of the budget machine is just one more tool to starve the beast that they’ve been trying to starve forever. So I think that’s something to be very weary about. In transposing the fight that happened in 2011 and 2013 to the present is the stakes are higher, that the republicans are willing to draw more blood, and the people that are likely to be most harmed, if we do go across that Rubicon moment, will not be the international bondholders first, it will most likely to be the people who receive benefits from the government or employee salaries.

William Saas: Yeah, another one of the differences between 2011 and 2013 is we didn’t find out that the trillion dollar coin proposal was considered by the President, by the executive branch, and the President specifically, until after the fact until everything was resolved. Whereas, last week, we had Michael Gwin, a White House spokesman, telling Politico that, “There is only one viable option to deal with the debt limit: Congress needs to increase or suspend it as it has done approximately 80 times, including three times during the last administration.” So upfront, he is saying it’s on the table but it’s not on the table.

Rohan Grey: Yeah, we’re taking it off the table. It could have been on the table, but for us. I think you’re even noticing that in the journalist treatment, as well. The first time around, people like Joe Weisenthal, who were really at the forefront of this, they were kind of out there on a limb talking about this, but with eight or ten years of just watching how insane everything else has gone, watching the kind of sea change in macroeconomics, and watching not only the response to 2008 but the response to COVID with the New York Times printing articles saying, “Printing money’s on the table again,” and this kind of stuff, it urns out, when we need it, there is “infinity dollars,” as Neel Kashkari at the Fed says. It makes it harder to sustain that underlying scarce money myth. And the coin suddenly becomes, while still in the realm of wacky fantasy, a little bit closer to reality than it was the first time around and people have been somewhat desensitized to it and that kind of thing. Nowadays, Politico and others are reporting on this, as well as Bloomberg. And the reporting says the White House is choosing not to consider the coin. That’s the framing this time. And I don’t think that was the framing last time. The framing was, is this even something they can consider?

William Saas: Jon Stewart’s coming back too late.

Rohan Grey: That’s right. He’s not here to bring his brand of common sense. I don’t have much love for Paul Krugman, but there was just an absolutely insane moment where Jon Stewart ends up having this multi day spat with Paul Krugman about the coin, and Krugmn said, “Yeah, it’s economically fine. We should do this. The Republicans are playing hardball.” It’s one of those rare moments where I agree with Paul Krugman’s political strategy. And Jon Stewart is just playing the comedian, right? “Well, I’m just a dumb clown, what do I know?” But this seems silly to me. You’re not being a dumb clown in that moment. You’re trying to shut down ideas by appeals to common sense, but not informed common sense, rather this gut instinct, populist kind of what you think sounds like common sense. “You’re telling me that injecting a bit of a virus in you is supposed to make you less likely to catch a virus? That sounds crazy!” And it’s like, that’s just what a vaccine is.

There’s an appeal to common sense that was a lot more bipartisan a decade ago than it is today. “I’m a social liberal, but a fiscal conservative” was a smart sounding thing to say in 2010. And nowadays, it’s a cruel joke. Yeah, Jon Stewart’s rally to restore sanity looks hilarious at this point when you know that Trump’s five or six years are coming down the pipeline. “I disagree with you, but I don’t think you are Hitler.” Well, turns out that some of them are literally white nationalists with pitchforks and ramming cars into people. So do you still think they’re not Hitler? Do you still want to have a reasonable debate there while you’re simultaneously calling Paul Krugman an idiot on economics? And again, I’m in a very weird position to be defending Paul Krugman on economics, but relative to Jon Stewart’s pop-libertarian, you know, “Ron Paul has some good ideas,” kind of bullshit, he is certainly more of an adult there.

William Saas: Yeah, well, he’s coming back just in time, it seems like, for relevancy.

Rohan Grey: I think one other point on this is just that Biden was in the room for all of this as well. He was the VP for this. And while people might have thought about the coin being stupid, saying, “Well, this is stupid, we should just get rid of the debt ceiling,” of course, we should get rid of the fucking debt ceiling. But when has that been on the table? When has any democrat been interested in fighting that fight? We’re eight to ten years after these crises moments and the first round of debt ceiling debates and the democrats have not upgraded their strategy. They haven’t done anything. This is rolling exactly the same way as it did last time. And if that’s their solution, to shut down anything that would actually fix the problem, but offer nothing for a whole decade. Their solution is just to say, “No, this time around, just like last time, we’re just going to expect eventually to find that last 1% of humanity in Mitch McConnell, or those last vapors of a commitment to institutional norms, and that that will save us.” It’s like, whatever you thought about institutional and social norms in 2010, if you still think that we’re in the same place in 2021, you’ve been asleep, you’re completely delusional. A lot of people who might have been willing to give the genius President Obama, the Harvard law professor, the benefit of the doubt, that he’s playing some 11th dimensional chess that they can’t possibly understand, I think people are less willing to believe that average Joe has got some genius plan in there, especially when everything looks exactly the same as last time.

William Saas: McConnell will fold or a trillion dollar coin–one of these is whimsical.

Rohan Grey: That’s right. One of these is the kind of thing you should be laughing about on a podcast about politics and the other is a proposal to mint the coin.

William Saas: I do want to pause for just a moment on the question of common sense and what common sense was 10 years ago versus common sense today. Because common sense to Jon Stewart in 2011 or 2012, I don’t know that it’s going to look that much different in terms of understanding the fiscal situation. I’d be interested in your perspective on this, especially, because the reception of the coin, like you say, the idea, is a little bit more staid this time around. Whereas before, it was like, “Isn’t this interesting?” And, “That seems like a meme, right? Let’s talk about it and laugh.” Although, at the same time, it’s very serious, and there’s a spectacular quality to it. Whereas now, having, as you said, appeared, reappeared, and disappeared so many times over the past several years, I feel like the reception is not as strong today. And I think that this question of reception of the idea is maybe central to the whole project of things like Modern Monetary Theory. Is it chipping away over time until it becomes so banal that it just gets taken up without reflection? Or is it something else?

Rohan Grey: Yeah, I mean, I don’t have any faith that it’s going to be adopted this time around. When I say I think it’s closer, I don’t think it’s closer to being enacted. But I think that it’s less shocking to people that have been so shocked. People sort of say, “Oh, if you take a lot of MDMA, then your serotonin receptors have been blown out. There’s nothing left for them to fill up with.” Well, we’ve kind of just been shocked about the spectacle. There’s just nothing left now to raise us to eleven after seeing just a complete shit show over the last few years and seeing the climate crisis and everything else. But I think the difference is that, this time around, the focus is less on the coin and more on the decision of why not to use the coin. And it’s not that that’ll necessarily be enough pressure to cause Biden to change. But I think it feeds now into this larger narrative of when are we finally going to play hardball to save the planet, save ourselves, and to fight back against this kind of Republican and reactionary nihilism. And when Biden got into power, I don’t know if everybody voted for him for this reason, but a big part of his shtick was I can work with people across the aisle and nothing is going to fundamentally change, right? I’m a bridge builder, let’s get America back to being harmonious, and let’s heal our divisions. I think this is just making a mockery of that. This is showing that, once again, this wasn’t an adult, serious political vision. This was just some naive bullshit that was going to give the Republicans power to continue to set the agenda and continue to threaten to blow things up.

And if it’s not the debt ceiling, if it’s not minting the coin, it’s going to be something else. And if it’s not Biden, it will be someone else, if there even are other elections in the future, before Trump 2.0 stops them from happening or whatever. I think if we’re gonna get out of this descending spiral, something radical needs to change in how we are willing to use power, to take power, and to fight strength with strength. I think the coin is going to continue to stand here as an example. If rustling the feathers of nervous nellies, as Neil Buchanan says, is a bridge too far, then everything else is a bridge too far too, right? Then, Greta Thunberg is a bridge too far. Then, canceling student debt is a bridge too far. Then, reparations is a bridge too far. And if it’s not the coin, then when are we going to finally start saying, “No, those are the kinds of politics we have to be willing to play or we’re just going to keep losing, we’re just going to keep ceding ground, and eventually, we won’t be able to cede ground again.” Yeah, eventually, the next group that they come for, the next issue they come for, you’ll look around for allies and there won’t be enough left. So I think that’s the big thing for me. Yes, it’s not that eventually it’s gonna become so banal that we can slip it in without people noticing or something. It’s that eventually these contradictions are going to get so unavoidable that something will have to give. And the coin will continue to be here as proof that this issue, like so many others, is not as intractable as it seems.

William Saas: I think that’s a great place to leave it. Rohan Greywrong, thank you again for joining us again on Money on the Left.
Rohan Grey: Thanks for having me. It’s great to see you. Take it easy.

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