Rising Tides Sink All Boats

By David M. Fields

So, what is the Fed’s deal? Has Jerome Powell fallen prey to inflationary paranoia and hysteria for all the wrong reasons? Or is a “strong’ dollar a manifestation of a particular response to a policy choice that is more calculated and direct? By facilitating aggressive monetary austerity, the Federal Reserve is ensuring the US dollar is a safety asset to insulate the global rentier from cost-push-markup inflationary unpredictability.

The US dollar is surging to new heights. For instance, the US Dollar Index, which values the greenback against a basket of currencies, has advanced considerably. One of the burning questions is whether this will last? For now, I think, yes, it will, simply because there is no alternative for global trade invoicing and financial accounting. Aggressive monetary austerity policy from the Federal Reserve, a project aimed at using unemployment to tame cost-push-markup inflation, is pushing rival currencies lower, particularly in emerging market economies that suffer from balance of payments constraints, as investors from around the globe rush to purchase US Treasuries for security in the face of world-systemic economic uncertainty.

This scenario is vastly different than the monetary policy from only a year ago or so. Then, to cope with the Covid-19 pandemic, central banks around the world cut interest rates sharply — to near 0 — and governments deployed aggressive fiscal support of their economies. As a result, Federal Reserve actions were important in stabilizing world financial markets, specifically with respect to Fed swap lines and the establishment of the Foreign and International Monetary Authorities (FIMA) Repo Facility, which ensured a “buyer of last resort” for foreign central banks desiring to sell U.S. dollar reserves. Capital flowed throughout the world and the dollar fell sharply. In a sense, this was to be expected, and was seen as temporary. Eventually, the dollar was bound to bounce back up. And now it is. And the post-pandemic world paved the way.

Indeed, as the world economy reopened from pandemic lockdowns, supply chain bottlenecks arosecoupled with pandemic profiteering, generating worldwide upsurges in inflation. The response from the Fed, as mentioned, has been to raise the federal funds rate, which has translated into a sharp dollar appreciation as a result of global capital inflows, as the US dollar is a reserve asset to cope with worldwide economic uncertainty.

Yet, is this influential role of the dollar in the world economy an indication of the United States’ core commitment to internal price stability and external cooperation for the deliverance of efficient world capital markets and global trade links? Or acute deposition of the monetary power of the United States? In my view, the answer is the latter.

Here’s why.

The Fed is the world economy’s central bank, which acts as the safety valve for mass amounts of international liquidity. The role of the US dollar in international markets, and the advantages that come with it, are the spoils of its monetary hegemony. The provision of this asset allows the United States to become the source of global demand, and to insulate itself from fluctuations and contradictions of perilous cumulative disequilibria that may arise in the world economy, like the adverse price effects of supply chain bottlenecks and financial contagion that stem from foreign currency devaluations. The US dollar is the numeraire currency in international markets, which is not emblematic of credible macroeconomic performance that fosters confidence, but an arbiter of authority that regulates and dictates the flows of international financial commitments for global economic activity.

Given the current state of world economic dynamics, along with the foreseeable future, there does not seem to be a direct challenge to the dollar’s preeminence, in the same vein as the Euro was not a likely contender given its fallout from the Great Recession. There is not any indication of the greenback’s fall from grace as the dominant international currency. This does not preclude, nevertheless, eventual dollar dethroning, just confirms that the process is (very) long-term.

Despite hysterical contestations of inflationary fragility, the US dollar insulates the United States from global fluctuations and contradictions that may arise. This provides the country the effective means by which the world economy can be stabilized with global demand expansion, without spurring assumed demand-pull inflationary spirals. So, what is the Fed’s deal? Has Jerome Powell fallen prey to inflationary paranoia and hysteria for all the wrong reasons? Or is a “strong’ dollar a manifestation of a particular response to a policy choice that is more calculated and direct? By facilitating aggressive monetary austerity, the Federal Reserve is ensuring the US dollar is a safety asset to insulate the global rentier from cost-push-markup inflationary unpredictability. As such, expectations of future dollar depreciation arising from a return to loose monetary policy is, unfortunately, unlikely.

I hope I am wrong.

***Republished from the Monetary Policy Institute Blog***

Debt Cancel Culture: Media Strategies for Democratic Coalitions (ft. Erica Robles-Anderson, @fstflofscholars)

Will Beaman (@agoingaccount) is joined by Erica Robles-Anderson  (@fstflofscholars) for an examination of the Biden Administration’s public communications around student debt relief. If Trump-era communication was characterized by direct broadcasts from the Tweeter-in-Chief, this new style uses public policy to strategically hail online discussion. Erica and Will read “This You?” debtor discourse as an example of how political media forms can be suited to coalitional, democratic politics.

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

Music: “Lilac” from “This Would Be Funny If It Were Happening To Anyone But Me” EP by flirting.
http://flirtingfullstop.bandcamp.com
Twitter: @actualflirting

Austin Credits with Jonathan Wilson (White Paper and Podcast Interview)

For this special episode of Superstructure,  cohosts Will Beaman (@agoingaccount) and Andrés Bernal (@andresintheory) are joined by Jonathan Wilson (@DeficitOwl24601) to discuss his new white paper, “Proposal for a Local Currency Issued by the City of Austin,” which proposes a complementary currency for the city of Austin called Austin Credits.

Jonathan’s proposal contributes to a developing conversation in the Austin City Council, which was tasked by recent legislation with exploring possibilities for new public banking and payments structures by a resolution. The conversation delves into the proposal’s legal design and implementation strategy, while also contextualizing its political meaning and stakes for progressive politics. 

Proposal for a Local Currency Issued by the City of Austin: A White Paper by Jonathan Wilson

In 2022, the need and desire for alternative visions of economic organization is higher than it has ever been. Undemocratic national governments and international crises have taken agency and power away from local communities and diminished their ability to protect and nurture their citizens as they see fit. In the United States, the prevailing economic ideology at the national level has committed to trading quality of life for nominal price stability, pursuing policies which deliberately exacerbate unemployment and refusing to make robust use of programs to provide liquidity to local governments. The time to develop local alternatives to this system is now, and this white paper will explain one such vision. In addition to providing a basic means of funding and payments for local governments and their citizens, this proposal aims to provide a new lens for how people view cooperation and interdependence. By illustrating how valuable assets can originate from negotiated credit relationships, this white paper shows how communities can express their values among themselves and between each other, opening up new possibilities for local and global solidarity.

Resolution 20220324-057, passed by the Austin City Council on March 24, 2022, directs the City Manager to explore how financial innovations can improve government processes and better serve Austinites, through (among other things) public payments platforms, public banks, and local complementary currencies. This proposal outlines how  the City can (i) increase income and employment for Austinites, (ii) increase financial inclusion by providing a privacy respecting method of electronic payment for the unbanked and maintaining an affordable means of financing and emergency liquidity for low income Austinites, and (iii) allow the City to fund public works. One way to accomplish these goals is to issue a valuable electronic financial instrument called the Austin Credit or “AC”. In order for Austin Credits to be valuable enough to supplement incomes, allow the City to create employment, and serve as a vehicle for financial inclusion, the City must ensure that they are in demand and marketable. To ensure that Austin Credits increase financial privacy, the City will provide an option to load Austin Credits onto an anonymous stored value card. Finally, in order for Austin Credits to serve as a source of financing and emergency liquidity, the City itself will serve as a lender of first resort for Austin Credits.

Of all these requirements, the most important is that Austin Credits are demanded by members of the public. The primary demand for Austin Credits will stem from the fact that the city will accept Austin Credits for all payments to the city, including utilities, public transport, local taxes, fines, and fees for any city-sponsored events on a one-to-one basis with the dollar (moving forward, I will use the term “City Bills” to refer to these payments and “City Services” to refer to actions by the City that people are paying for). To further encourage use and widespread acceptability of the Austin Credit, the city will offer a small discount of 5% for paying City Bills in Austin Credits rather than in dollars. Historically, there is precedent for a credit towards taxes or government services at a local level retaining its value so as to become a fungible, money-like object. In the 1930s, American cities which were  short on dollars circulated tax anticipation scrip which could be used to make any payment to the city. Additionally, during the Civil War, until the government stopped them, individuals used United States Postal Service stamps as a replacement currency, knowing the stamps would always have some real value so long as the post office accepted them.

To give Austin Credits value beyond paying for City Bills, the City needs to encourage acceptability of Austin Credits by businesses. The easiest way to do that is by offering businesses which agree to accept Austin Credits a small discount on their City Bills. For example, a grocery store that agreed to accept Austin Credits as payment would register with the city and receive a 5% discount on their City Bills. Additionally, businesses that agree to pass any part of this savings onto their customers would receive an additional discount on their City Bills. For example, a store that offered its customers a 2.5% discount when they pay in Austin Credits would receive an additional 2.5% discount, for a total discount on City Bills of 7.5%. Additionally, Austin Credits would be free to transfer within the Austin Credit system, meaning stores would save money whenever someone paid in Austin Credits instead of credit or debit cards. This not only gives the grocery store an incentive to accept Austin Credits but it gives their customers an incentive to acquire Austin Credits and save them.

To respond to this incentive for Austin Credits, residents would be able to buy Austin Credits directly from the City, but Austin Credits would also exist on a web and app based platform that would allow users to request and transfer from one another, similar to pre-existing payment apps, like Venmo, Paypal, and Square. Users would have the option of connecting their bank accounts or credit cards, and there would also be a market function in the app and website called the Austin Credit Online Marketplace where users could buy and sell Austin Credits with dollars, similar to a foreign exchange market. Just like with Venmo and Paypal, users would pay no fees for transfers within the AC system, and if users wanted to take money out of the AC system by transferring it back to their bank accounts, they could do so for free if they the standard option which goes uses the Automated Clearing House and settles in three days, or they could make instant transfers for a small fee. The purpose of this market is to give the recipients of Austin Credit a way to convert to dollars if they need to, which enhances the liquidity and desirability of the Austin Credit. Additionally, several public buildings in the City would have indoor and outdoor machines that dispensed stored value cards carrying Austin Credits in various denominations.

Once Austin Credits become widely accepted in the City and their demand and value is established, the City can begin offering personal loans in Austin Credit, providing an affordable source of financing for Austinites. Because the purpose of these loans would be to enhance the purchasing power of Austinites, the terms of these loans do not need to be structured with the goal of maximizing revenue. Rather, the terms should be geared towards encouraging Austinites to demand and save Austin Credits. To those ends, Austin Credit loans should have three essential features. First, the rate of interest should be zero. Keeping this rate at zero ensures that consumers will prefer to borrow Austin Credit. Because legal tender laws would require the City to accept dollars in payment for public debt, to incentivize people to pay loans in AC, the zero-interest rule would be contingent on people paying the loans back in AC. Second, instead of charging interest, to encourage frugal use of this credit facility, the City can simply charge small late fees for missed payments. Third, all loans in Austin Credit issued by the City must be collateralized by surrendering Austin Credit in an amount equal to 10% of the loan value prior to the loan being issued.

For example, if someone wanted to borrow 200 AC, he would have to surrender collateral of 20 AC and would receive the loan at 0% interest. Because the loan would carry no interest, he would prefer this loan over a payday loan, and because he needs to keep at least 20 AC on hand to qualify for the loan, he is encouraged to save at least some of the Austin Credits he receives. This feature of Austin Credit loans capitalizes on people’s natural tendency towards precautionary saving. To prevent the potential for abusing this loan facility, each resident would only be allowed to have one of these loans outstanding at any given time. In this way, residents who take out these loans will be encouraged to pay them off, not only to receive their collateral back, but also so they can qualify for another loan. Additionally, although anyone would be able to set up an AC account, only permanent residents of Austin would be able to access these loan facilities.

The value of personal loans would be capped at 5,000 AC, but eventually, the goal should be for the City to offer secured loans to allow residents to finance the purchase of large items, such as cars and homes. For these consumer loans, there would be a much higher maximum loan value, but there would be a minimum down payment amount of 35%, and the loan would be secured by the asset being purchased. Because saving for large purchases is empirically the second most important reason people save money, incentivizing Austinites to save Austins Credit by offering them a 0% loan in exchange for a large down payment will be a very powerful way to bolster demand for Austin Credits.

Once this system of acceptability, transferability, and loans has been established, leading a private sector demand to hold and save Austin Credits, the City can start using Austin Credits to supplement income and create employment. The City should establish a system that allows residents to vote on new public works projects which will pay workers in Austin Credits. As the Austin Credit system gains adoption, the City can gradually increase the amount of projects offered until it can guarantee a job paying in Austin Credits for all Austinites who want such a job. The revolutionary potential of allowing local residents to vote on spending projects that are not tied to direct and immediate taxation or borrowing cannot be understated. As long as there is idle labor and the demand for AC is not exceeded, such a program would create a means for residents to democratically participate in non-zero-sum development, motivated by the needs of communities and not merely the profit motive, strengthening the City’s economic environment and its sense of community. Moreover, the Austin Credit can be used to recognize work that is already being done but is currently undervalued or uncompensated by issuing AC to community service organizations. Additionally, the City can issue Austin Credits to the elderly, the disabled, and parents of minor children to supplement their income.

The structure of the Austin Credit system should allow people who receive income from the City in Austin Credits (either from public works jobs or from supplemental payments) to sell them for dollars if they wish. Because Austin Credits grant residents a discount on their City Bills of 5% and a discount at participating businesses of 2.5%, if enough people are using Austin Credits, they should trade in the Austin Credit Online Marketplace for around $1.00. The logic here is that if I have 100 Austin Credits, I should be able to use it to buy products valued at $105 from the City and at $102.50 from participating businesses. If I want to buy something from outside Austin, I may want to sell my Austin Credits for dollars, but unless there is an emergency, I will avoid selling my Austin Credits for significantly less than the value I transferred to pay (either in dollars or in labor) for them. Let us assume that I offer to sell 100 AC for $101. If Austin Credits have not been over-issued, other Austinites who want to buy something from the City or from a business who accepts AC should accept the offer to buy 100 AC for $101 for two reasons. First, 100 AC will allow them to buy products valued at $102.50, so they have essentially gained $1.50 in value simply by doing the transaction if they spend their Austin Credits in Austin. Second, the $101 price I offered is less than the $102 ($100 plus $2 transaction fee) they would have to pay the City if they purchased the 100 AC directly from the City. The only people who will insist on paying less than $1.00 to buy 1 AC in the secondary market will be people who do not have an immediate need to buy something from the City or from a business  that accepts AC. For this reason, encouraging private sector adoption is key because the more places people have to spend AC, the less need there will be to sell AC at a discount. 

The promise of redemption from the city will guarantee that Austin Credits have some value, but to protect this value, the City must avoid issuing too many Austin Credits. If the private sector has a net desire to save 1,000 AC, and the City net issues 1,200 (net issuance being the remaining outstanding Austin Credits after redemption), then residents will begin selling Austin Credits at a discount for dollars. If this happens, the first person to sell his Austin Credit–the person who receives the 1,001st AC–will receive a good price for it, but the last person to sell his Austin Credit–the person who received the 1,200st AC–will suffer a significant loss. That first seller might be able to sell his Austin Credit for 99 cents, but the last seller might only get 80 cents. Consequently, if the private sector has a net desire to redeem and save 1,000 AC, and the City Issues no more than 1,000 AC, each recipient of an Austin Credit will have a financial asset valued at approximately one dollar. However, if the City issues more than this net redemption and savings desire, then at least some recipients of Austin Credits will find themselves holding a financial asset valued at less than what they exchanged for it. Either they will have bought Austin Credits directly from the City that are now worth significantly less than one dollar, or they will have provided labor to the city that is now worth less than the value they placed on that labor. For example, if the City pays workers 20 AC per hour but issues too many AC, causing the value of the AC to drop by 25%, those workers might have valued their labor at around $20 per hour, but they now hold a financial asset worth only $16.

Similarly, in order for this value creation not be a net loss for the City or an indirect transfer from some citizens of the City to others, the private sector must save a number of Austin Credits that is greater than the discount given to those who pay City Bills in Austin Credits. For example, imagine the citizens in total have a City Bill of $100, and the city issues 95 AC in exchange for $95 of goods and services and offers a 5% discount on City Bill payments. If the citizens redeem all 95 of their Austin Credits to pay their $100 City Bill, then the City has essentially foregone $5 in value. In this scenario, if the city had simply never issued the Austin Credits, they could have simply accepted $100 to pay off the $100 City Bill, paid the same $95 for the goods and services, and had $5 left over. Avoiding the problem of foregone revenue is important for the City because it still has bills and liabilities denominated in USD (for example, it must pay payroll tax to the US Federal Government, and it must purchase garbage trucks from Waste Management, Inc., which is headquartered in Houston, Texas and will likely not accept AC in payment). On the other hand, if the City issues 100 AC, and the private sector redeems only 90 AC at the standard 5% discount, then the City has effectively gained about $5 in value. A City Bill of about $95 would require 90 AC to pay at a 5% discount. If the City pays for $100 of goods and services with Austin Credits, then provides $95 of City Services, which the private sector purchases using 90 AC, then the difference between the value received by the City (the $100 of goods and services) and the value given by the City (the $95 of City Services) results in a net gain by the City of $5. Because the City and its citizens benefit if not all of the Austin Credits are redeemed, some of the value from the Austin Credit System can be thought of as partially analogous to breakage revenue, the profits businesses recognize when their gift cards are purchased but not redeemed.

Therefore, to protect the financial health of the City and to maximize the value of the financial assets given to Austin residents, the City must structure the economy of the Austin Credit  to maximize the desire to save Austin Credits. As stated above, there will be a basic underlying precautionary motive to save Austin Credits because they will allow residents to benefit from a small discount on their City Bills. Additionally, residents who want to take out loans in Austin Credits will be incentivized to save Austin Credits to surrender as collateral to allow them to qualify for larger loans. In addition to these precautionary and financing motives, the City should encourage saving Austin Credits by only selling Austin Credits in predetermined amounts with a small, fixed transaction fee of $2. At any point, a member of the public should be able to buy Austin Credits at the price of one Austin Credit per dollar, but if they can always buy the exact number of Austin Credits they need for every transaction, they will never need to save any. To remedy this, the City should only sell Austin Credits through its online platform or at its stored-value card dispensing machines in moderate but equitably sized lots. To illustrate, let’s assume the lot size is 50 Austin Credits for the sake of simplicity. In that case, if a person has a monthly City Bill of $25, they will have to purchase 50 Austin Credits at once by spending $52 dollars. After paying 23.75 AC to extinguish their City Bill (leaving them with 26.25 AC), this person will have about 1.25 more Austin Credits than they need to pay their next City Bill. They could spend those AC on something else, but this would mean that the following month they would need to purchase additional Austin Credits and pay another $2 fee. 

Additionally, any one person or common enterprise will only be able to use USD to purchase a maximum of 1,000 AC directly from the City using its online platform in any given month. This minimizes arbitrage opportunities and limits people’s ability to buy AC immediately before redeeming them in payment of City Bills, which would otherwise diminish any need to save AC. Together, these elements form a structure that incentivizes residents to save at least some of their Austin Credits or to seek Austin Credits from sources other than the City, which means they will request Austin Credits in payment from other members of the public, further fueling the demand for Austin Credits.

The aforementioned fixed-lot issuance, loan policy, AC purchase limit and transaction fees are best described as non-interest monetary policy, meaning they influence the volume of Austin Credit financial transactions without primarily relying on charging interest to borrow money or paying interest to those who already have money. However, the City must also have rules for fiscal policy, meaning it must have a rigorous system to decide how many net Austin Credits it will issue in any given period. Because the measurement of value created by the City and held by its residents will be the residents’ desire to save Austin Credits and value them at or near the price paid for them, the City will know that it has issued too many Austin Credits if the number of Net Austin Credits Saved, or “NACS”, does not increase from one period to the next. NACS will be defined as the number of Austin Credits issued by the City minus the amount of Austin Credits accepted in payment by the City, and if this number is positive, it is multiplied by the fair market value of the Austin Credit as a percentage of a USD, as determined by sales on the Austin Credit Online Marketplace.

Now that I have defined what I mean by Net Austin Credits Saved, I will explain how the city will adjust its number of Net Austin Credits issued (Austin Credits issued excluding loans given) in response. The process is very simple: in any given period, the City may issue an additional number of Net Austin Credits equal to the change in Net Austin Credits Saved in the previous period. To illustrate, consider the following example. In Year Zero, before any Austin Credits exist, NACS is zero by definition. If in Year 1 (the first year of the Austin Credit program) the City issues 400 AC, people spend 300 AC and AC are traded on the Austin Credit Online Marketplace for $.95 each, then the NACS for Year 1 is 95 (400 minus 300, all multiplied by .95). The difference between NACS for Year 1 (95) and NACS for Year Zero (0) is 95; this means that the City can safely increase the number of Austin Credits it issued by 95 in Year 2. If in Year 2, the City follows this advice and issues 495 AC, and the NACS for Year 2 is 180, then the net change in NACS will be 75 (180 minus 95 equals 75), and the City can increase spending by 75 in Year 3. If the City issues an additional 75 AC in Year 3 (for a total of 575), but NACS for Year 3 remains at 175, then the net change in NACS is zero, and the City should not increase the rate of Austin Credit issuance in Year 4. 

The purpose of adjusting the total issuance of Austin Credits in this way is to ensure that issuance of AC increases when the citizens desire to save AC increases and that issuance of AC decreases when the desire to save AC decreases. It is impossible to perfectly predict the net desire to save Austin Credits going into each new year, but aligning the additional issuance with the actual saving desire of the previous period should be an acceptable proxy. Initially, the net issuance of AC needs to reflect the availability of real resources which can be purchased with AC and grow gradually. The City should start by limiting AC issuance to some small fraction—perhaps 5%—of the combined revenue of the City and the businesses that agree to accept AC. This would ensure that even if no one wanted to save AC at the outset, the supply of AC would not exceed the supply of things one can buy with AC, so people can become accustomed to viewing the AC as a stable unit of account. As the use of AC grows among the population, this formula will allow the supply of AC to naturally grow around the same pace as the people’s desire to hold it.

Because the goal of this project is to increase income for Austinites, if the change in NACS is ever negative from one period to the next, the City should not immediately reduce the number of Austin Credits it issues in the next period. It should first adjust non-interest monetary policy for at least 1 year. For example, if in Year 4, NACS declines from 175 to 140, instead of reducing Austin Credit Issuance by 35 in Year 5, the City should increase the collateral requirement for Austin Credit Personal Loans and the down payment requirement for Austin Credit Consumer Loans to encourage more saving. These increases should be proportionate to the negative change in NACS. For example, if NACS declines from 175 to 140 from Year 3 to Year 4, this reflects a decrease of 20%. Consequently, in Year 5, the City should increase the collateral requirement and the down payment requirement by 20%. For example, the collateral requirement might rise from 10% to 12%, and the down payment requirement might rise from 35% to 42% (each a 20% increase from baseline). Only if this does not work in Year 5 should the City be allowed to reduce the number of Austin Credits it issues in Year 6. Once the change in NACS resumed being positive, the down payment and collateral requirements would revert to their original values.

In addition to protecting the value of the Austin Credit, the City must ensure that the AC system benefits low income people and increases financial inclusion by giving access to financial services to those who do not already have it. The primary reason people are unbanked is a lack of income; public jobs programs and supplemental income paid in AC will help address this concern. Another reason some people remain unbanked is the combined effect of having no permanent addresses and no identifying documents. To address this concern, the City should partner with shelters and other facilities that service the unhoused to verify resident-status for people who want to open AC accounts with permanent resident privileges. Another reason that people are unbanked is physical distance from a bank, and a distrust of traditional financial institutions. To address this concern, the City should maintain manned or automated kiosks where people can purchase AC stored value cards and troubleshoot problems with their AC account at every City building that is open to the public.

As well as increasing financial inclusion at the local level, the City can use the Austin Credit to create economic solidarity with other cities or organizations. As this form of local complementary currency becomes more popular, the City can make agreements with other currency issuers. These could come in the form of swap lines, some form of reciprocal receivability of their currencies, direct exchange of surplus resources, or other forms of cooperation. Such agreements between two local communities could strengthen both and emphasize the interdependence of their residents.

If the City takes these steps in the correct order (establishing the value of the AC, protecting the demand for it, then slowly expanding issuance to meet that demand), it can create a financial instrument that enriches the population of Austin and increases financial inclusion. The combined result of all these measures will be an economy where use, exchange, and value of the Austin Credit gradually increases over time, allowing the City to increase income, employment, and credit access for Austinites while reducing its own costs, fulfilling the vision set out by the City Council when they passed Resolution 20220324-057.

Appendix: Is any of this legal?

Federal Constitutional Issues

Article I, Section 10, Clause 1 of the U.S. Constitution forbids states from issuing “bills of credit.” This is sometimes referred to as the clause which prevents states and localities from issuing their own money. However, the term bill of credit does not simply refer to any note or debt-like instrument, or indeed any instrument which circulates between individuals. The Supreme Court, in Briscoe v. The Bank of the Commonwealth of Kentucky, 36 U.S. (11 Pet.) 257, 314 (1837), held that a bill of credit is “a paper issued by the sovereign power, containing a pledge of its faith, and designed to circulate as money.” This definition contains three parts, (a) issued by the state, (b) containing a pledge of the state’s faith, and (c) designed to circulate as money, and an instrument must meet all three to be considered a bill of credit. The simplest way for the Austin Credit to be constitutional will be if it avoids meeting the second and third part of the definition.

We will begin by examining part (b) of the definition; Briscoe goes into great detail on what is meant by a pledge of the state’s faith. Id. at 320. One issue before the court was whether the notes issued by the Bank of the Commonwealth of Kentucky, of which the state of Kentucky was the sole shareholder and provider of capital, were issued on the faith of the state. Id. The Court held that the capital of the bank, even though it was in part derived from the state, had its own income stream, and together with the contributions of the state “constituted a fund to which holders of the notes could look for payment, and which could be made legally responsible” for redemption of the notes. Id. The fund was in possession of the bank and under the control of its president and directors, not under the control of the state. Id. Most importantly for the purposes of the Austin Credit, the Court held that “whether the fund was adequate to the redemption of the notes issued, or not; is immaterial to the present inquiry. It is enough that the fund existed, independent of the state, and was sufficient to give some degree of credit to the paper of the bank” (emphasis added). Id. at 321. Additionally, every holder of the bank’s notes had the legal right to sue the bank to enforce payment. Id. For these reasons, even though the state of Kentucky accepted the notes of the bank in payment of taxes, and in discharge of all debt to the state, the notes were not bills of credit. Id.

From Briscoe, we can derive the general rule that an instrument is not a pledge of a state’s faith if there exists some fund which is legally distinct from the state, which has any source of income independent of the state, and which holders of the instrument can sue to redeem the notes. To conform to the requirements of Briscoe, the City, through statute, will establish a permanent, charitable trust called the Austin Credit Trust whose stated purpose is to aid in the economic development of the City of Austin by redeeming Austin Credits for U.S. Dollars forty years after the date of their issuance. In Texas, under Brazos County Appraisal Dist. v. Bryan-College Station Reg’l Ass’n of Realtors, 419 S.W.3d 462 465, “providing services to aid in economic development for a local community” is that a valid purpose for a charitable trust. The trustee will not be authorized to make payments to the City. The terms of the trust will also state that holders of Austin Credit are persons with a special interest in the enforcement of the charitable trust and will have the right to bring suit to enforce the trust by redeeming the notes. The City, in a separate statute, will be required to place money in the trust every year, but, the trustee will be directed to invest the money in the trust in U.S. Treasury Bonds, so that the trust will have its own stream of income, independent of the City. Because the trust will be a separate legal entity with its own stream of income from investments which cannot be sued and from which the City cannot withdraw funds, the Austin Credit will not be a pledge of the faith of the City of Austin. Instead, it will be a pledge of the faith of the Austin Credit Trust.

We now turn to part (c) of the definition, which requires that an alleged bill of credit be designed to circulate as money. The case preceding Briscoe, Craig v. Missouri, 29 U.S. 4 Pet. 410, 432 (1830), which Briscoe relied upon without overruling, explained that an instrument which circulates as money is one which is “intended to circulate between individuals, and between government and individuals, for the ordinary purposes of society” (emphasis added). Additionally, a later case, Houston & Texas Central Railroad. Company. v. Texas, 177 U.S. 66, 89 (1900), holding that a warrant issued by the state of Texas was not designed to circulate as money, relied partially on the fact that “when the warrants once came back to the treasurer of the state, they were not to be reissued.” From these two cases, we can derive the general rule that an instrument cannot be described as intending to circulate as money if there is no circulation between government and individuals because the instrument is redeemed without being reissued. Austin Credits will be extinguished once used for payment, therefore they cannot be reissued and will consequently not circulate between government and individuals. Thus, Austin Credits are not designed to circulate as money.

Because the Austin Credit will neither be a pledge of the city’s faith nor designed to circulate as money in the specific context of the constitutional prohibition on bills of credit, the Austin Credit will not violate the United States Constitution. Requiring the existence of a separate fund which will pay out in dollars will require the Austin Credit Trust to have some dollars on hand, but this will not eliminate spending flexibility for two reasons. First, Austin Credits are designed with various incentives to save them built-in. Second, the City could make the face value of AC significantly below the purchase price for AC. For example, the City could sell AC for $1 that had a cash redemption value of $0.05 while still accepting AC at $1.05 when tendered in payment of City Bills. Because they would be accepted by the City at the $1.05 price in payment of City Bills, AC would trade with a fair market value much higher than $0.05, but the chance of a cash-run on AC would be virtually eliminated.

State Constitutional Issues

The City of Austin is a “home rule” city, meaning it is authorized by the State of Texas to do anything which Texas law does not prevent it from doing. Because Austin Credits will carry some legal obligation by the state, they will be classified as “public securities,” which are defined by Texas Government Code § 1201.002 as “an instrument, including a bond, certificate, note, or other type of obligation authorized to be issued by an issuer under a statute, a municipal home-rule charter, or the constitution of this state.” Because they are public securities, Austin Credits must conform to the requirements of the Texas Government Code.

There are certain types of public security which the Texas Government Code authorizes all local governments–even ones that do not have home rule powers– to issue, under certain limitations. For example, Section 1431.002 of the Texas Government Code authorizes municipalities to issue anticipation notes. However, this statute places restrictions on anticipation notes that make it not the best means of issuing the Austin Credit. Fortunately, because Austin is a home-rule city, it does not have to rely on Section 1431.002’s anticipation note authorization. Instead, it can rely on Section 1201.002’s authorization to grant an instrument authorized under a municipal home-rule charter. Article I, Section 3 of the Austin City Charter is incredibly broad and grants it the ability to “pass ordinances and enact such regulations as may be expedient for the maintenance of the good government, order, and peace of the city and the welfare, health, morals, comfort, safety, and convenience of its inhabitants.” The Austin City Charter regulates the issuance of bonds, but nothing within it governs the issuance of notes, so there are no city-level prohibitions on the Austin Credit in the Austin City Charter. If there were, the charter would need to be amended by a majority vote before the Austin Credit program could be established.

At the Texas State level, the relevant statute is Texas Government Code § 1202.003, which requires the issuer of a public security to submit a proposal to the Texas Attorney General, who must confirm that the public security was issued in conformity with the law before it can be issued. Many of the legal requirements surrounding public securities govern the calculation of interest. However, since Austin Credits will not pay interest, these regulations are inapplicable. The one that is applicable is Texas Government Code § 1202.021, which requires that the public security authorization designate a registrar who will keep records of the public security. This statute states that “a home-rule municipality with a population of more than 100,000” can be the registrar of its own security, so this will not be an issue. The City merely has to designate itself as registrar for the Austin Credit.

Texas State Law grants immense discretion as to the terms of a public security. Tex. Gov’t Code § 1201.021 and 1201.022 read as follows:

§ 1201.021

“A public security may:

(1) be issued in any denomination;

(2) bear no interest or bear interest at one or more specified rates;

(3) be issued with one or more interest coupons or without a coupon;

(4) be issued as redeemable before maturity at one or more specified times; and

(5) be payable:

(A) at one or more times;

(B) in installments or a specified amount or amounts;

(C) at a specified place or places;

(D) under specified terms; and

(E) in a specified form or manner.

§ 1201.022

(a) A public security may be:

(1) issued singly or in a series;

(2) made payable in a specified amount or amounts or installments to:

(A) the bearer;

(B) a registered or named person;

(C) the order of a registered or named person; or

(D) a successor or assign of a registered or named person;

(3) issued to be sold:

(A) at a public or private sale; and

(B) under the terms determined by the governing body of the issuer to be in the issuer’s best interests; and

(4) issued with other specified characteristics, on additional specified terms, or in a specified manner.

(b) The governing body of a county or municipality that issues bonds that are to be paid from ad valorem taxes may provide that the bonds are to mature serially over a specified number of years, not to exceed 40.”

These sections grant a great deal of flexibility to the issuer of a public security. Particularly, the fact that public securities may be payable under specified terms and in a specified form or manner necessarily means that the city can limit their redemption to credits against City Bills. This section also implies that a public security must have some maturity period and redemption, which out of an abundance of caution, we interpret to mean that there must be some way for holders of the public security to get cash, but there is no maximum statutory maturity period that applies to all forms of public security. At the longer end, maturity dates for bonds tend to be 40 years, which is why 40 years is the period at which Austin Credits may be redeemed for cash from the Austin Credit Trust. Although the Austin Credit is not a bond, the 40 year maturity provides a failsafe in the event that the Texas Attorney General does decide that Austin Credits are a type of bond secured by the ad valorem taxes of the municipality. However, because Austin Credits are ultimately payable from the Austin Credit Trust, it’s not clear that the regulations surrounding bonds apply. Most likely, because Austin Credits are not direct promises by the City to pay money, they are public securities which do not fall into any statutorily defined subcategory, but the 40-year maturity is intended as a show of good faith that should bring them into general compliance without causing them to be restricted by provisions which are more specific to certain types of public security. In the worst-case scenario, we would use the authorization to issue Anticipation Notes. However, since Austin Credits would be used for general operating expenses, under Tex. Gov’t Code § 1431.009, they would need to mature within one year of receiving approval by the Texas Attorney General. This would limit flexibility, but would not be fatal. As described in the section above, dealing with Federal Constitutional issues, Austin Credits are designed with various incentives to save them built-in, and the City could make the cash redemption value of AC significantly the City Bill redemption value. For example, people could buy 1 AC for $1, but the cash value would be $0.05, although the City would accept them at $1.05 when people paid their City Bills. This would effectively make them anticipation notes with a negative 95% base interest rate and a conditional 5% interest rate; the relevant statutes only define a maximum interest rate, not a minimum one. Because they would be accepted by the City at the $1.05 price in payment of City Bills, AC would trade with a fair market value higher than $0.05, but neither the City nor the Austin Credit Trust would ever need to worry about a cash run on AC, and the AC would qualify under the anticipation note provision.

Superestructura: Latin America Edition

Money on the Left is thrilled to release English and Spanish transcripts from our Superstructure podcast with Daniel Rojas Medellin (@DanielRMed), now Coordinator of newly inaugurated President Gustavo Petro’s transition team (@petrogustavo), and Mexican economist Jesús Reséndiz Silva (@Tlacuachito). In the episode, co-hosts Andrés Bernal (@andresintheory) & Naty Smith (@orangeasm) speak with Medellin and Silva about what it means to think beyond economic orthodoxies in Latin America. 

This episode was published originally in May 2021.

Link to our Patreon: https://www.patreon.com/MoLsuperstructure

Music: “Yum” from “This Would Be Funny If It Were Happening To Anyone But Me” EP by flirting.
http://flirtingfullstop.bandcamp.com
Twitter: @actualflirting

Transcript (English–See Spanish Below)

The following was transcribed and translated by Natalie Tabb S. and has been lightly edited for clarity.

Natalie – Hi, I’m Natalie, co-host of Superstructure, or ‘Superestructura’ for today’s purposes, as well as an editor at Money on the Left. We’re going to do something a bit different today and have our first Spanish language episode. We care a lot about centering Latin America in our analysis of international economic and political possibilities.  As an American living in Chile I’m living between a variety of worlds. I’m doing this neochartalist or MMT political education project with a mostly American collective and while we try our best to always take an international viewpoint our main network is still in the US.  So we wanted to expand the conversation a bit and bring in some more international voices. Apologies in advance for my Spanish which is still sometimes all too Gringo  even after all these years. We also have with us today my fellow Money on the Left contributor Andrés Bernal and a couple of great guests. But first, Andrés, handing things off to you; you, tell us about yourself and your story.  

Andrés – Hi everyone, I’m Andres Bernal; I’m an editor at Money on the Left and Superstructure and I’m excited to be here today to help build out this conversation about MMT and Latin America. I teach Urban Studies at CUNY Queens College and I’m finishing my doctorate at the New School with a focus on the Green New Deal. I’m also a political advisor; I worked on Alexandria Ocasio Cortez’s initial congressional campaign and I’m currently working with the Diane Morales campaign for New York mayor. Happy to be here today to have this really important conversation. We’ve been wanting to talk about international economic issues that lots of people to try to avoid or ignore, especially in mainstream economics, but you see this blind spot pop up in heterodox and neochartalists circles too. Like Natalie, Spanish isn’t my first language so who knows, maybe we’ll speak some Spanglish and mix it up a little. 

We have a couple of guests with us today; first, from Tampico, Mexico, we have Jesus Resendiz.  Jesus, tell us a bit about yourself. 

Jesús. – Hi Andres, Natalie; thanks so much for the invitation, it’s an honor to be with you all here on Superstructure. I’m an economist and I’m from Mexico; I’m a researcher for the Global Institute for Sustainable Prosperity where our friend and colleague Fadhel Kaboub is the current president.  I’ve been advocating for MMT informed policies with you and many other MMT friends for a while now, especially in my case in Mexico. That’s my principal work and I’m also a professor at the Autonomous University of Tamaulipas and have worked as a political advisor for a variety of political actors over the years in addition to my work as a social activist. 

Andrés – Thanks Jesús. We also have with us today José Daniel Rojas from Bogotá. Colombians have been glued to current events recently to keep track of what’s happening with the social movements.   Daniel; tell us, who are you, what do you do ? 

Daniel – Pleasure to join you all from Colombia and contribute to this discussion; we’re all trying to fight back in the wake of the latest crises. Now that we’ve made some progress fighting Covid it’s as good a time as any to consider whether there are other ways of managing the global economy. It’s been a contentious conjecture in Colombia. The social movement isn’t just for fun, it’s an existential necessity for us to be able to forge new paths forward. My name, as you said, is Daniel Rojas; I’m an economist and Congressional economic advisor; right now I’m working for senator Wilson Arias and I’m also part of Colombia Humana. We’re supporting the candidacy of Gustavo Petro for a new path for Colombia in 2022. We hope things work out how we hope and we have a lot of faith. The Colombian national anthem says; “The horrible night will end” and that’s what we’re hoping and aiming for. 

Andrés – Thanks Daniel. 

Jesús – I forgot to mention that I’m also on the Money on the Left editorial board. 

Andrés – Thanks ! So to give a bit of context, one of the reasons we wanted to get together was … 

Naty – …That there are indeed MMTers from outside Europe or the US. 

Daniel – Of course ! 

Naty – That’s what we’re going to talk about. 

Daniel – This is how you cross borders. 

Andrés – We want to push some boundaries because not everything happens in the US or Europe. In the MMT world we’re always getting pushback that these ideas are only relevant for countries with more monetary capacity; countries like the US that have, for example, a global reserve currency. There are really a whole series of excuses people are always giving for why the insights and ideas of MMT can be ignored.  

Unfortunately much of the world rejects the lessons of MMT precisely because they are told it’s only relevant in powerful countries like the US. We want to reject that idea and have this conversation to demonstrate how the MMT frame can help structure how we think about public policy in the Global South. We want to ask what we can take from MMT for these countries that have a history of brutal colonization; that have suffered under the thumb of imperialism; that are variously historically and politically disadvantaged.  

Naty – Most of the Spanish language MMT movement is coming out of Spain, so we wanted to expand the MMT framework to Latin America a bit. This way we can get a clearer understanding of the economic situation in countries with less monetary capacity or sovereignty. Contrary to popular belief, these are places there are MMT policies you can implement.  In Argentina for example they had the MMT inspired Job Guarantee “Plan Jefes.” But people will still say, “No, their hands are completely tied  because they’re pegged to the dollar and have foreign denominated debt.” But it’s just not true; there’s still space to spend and implement some social programs. Unfortunately, the only model in Chile for financing public spending is still just to tax the rich; this is an international impulse. I’ve been watching the Chilean elections and everything is about funding the upcoming government with taxes on the ultra wealthy. 

Andrés – As if it’s the only way you can spend. 

Nay – Exactly, and of course, that’s great ! We’re happy for the government to tax the rich. But taxpayer money is not the source of spending. 

Andrés – That’s some of what we’re gonna be talking about today. Like Natalie said, we have some Spanish MMT colleagues with a project called Red MMT, but we wanted to open the conversation up to Latin America as well. Let’s go ahead and start with Colombia, which is going through an intense time right now. Daniel, tell us about what’s going on there and the connections with issues of money, public spending, austerity, and so forth. 

Daniel – The situation in Colombia right now isn’t so different from the situation anywhere else in Latin America. We have a government that gets into power by promising to lower taxes on big corporations, with tax breaks on the wealthiest tax brackets supposedly creating jobs and jumpstarting the economy. When that government gets into office in 2018, their strategy is to get tax revenue so low that according to the dominant international model they all follow, you have to severely restrict public spending. And right in the middle of this discussion; Covid hits. We have an emergency where we need the government to increase public spending in order to meet the demands of the crisis. And they are telling us they don’t have the resources to meet the needs of the crisis;  that they’d need to raise taxes and generate revenue. And not just any tax ! No, it would have to be a tax on working class consumption and income. Unemployment in Colombia has gotten as high as 14 – 17 % in recent years, so this is affecting the middle class, the people who have jobs.  

All these factors help create a situation that leads to an “estallido social”, uprisings where everyone from the most vulnerable classes to the middle class are taking to the streets. We’ve had some really impressive mobilizations, but unfortunately the only response the government knows is repression. Some political currents have come out at this moment, including us at Colombia Humana, to say, “You know what. It’s not really the ideal moment for tax reform. There’s no reason the government needs to handle this crisis by raising taxes; we can just raise the public deficit.” The government could be increasing public spending to do things like implement  the Job Guarantee proposal we’ve brought before Congress. But increasing the public deficit is politically tricky; I assume that’s one of the topics we’ll be addressing today. MMT ideas are absolutely applicable in a Southern Cone or Latin American context. Obviously we are perfectly aware that the Colombian peso is not an international reserve currency. But we are also aware of the fact that there is no other government that emits Colombian pesos so we can increase public spending in Colombian pesos. A public deficit creates a private sector surplus. We can  stimulate demand from Colombian families and businesses. But we’ve been told we are macroeconomically irresponsible for making these kinds of proposals. 

Naty – Populists. 

Daniel – Populists, because we are proposing creating inflation. 

Naty – Venezuela ! 

Daniel – Yes, an example that gets thrown around a lot is that of Venezuela. I think there’s a good debate to be had there. Unfortunately, fights in Colombia such as the latest for tax reform have been consistently met with violence. The state’s response has never been dialogue. We could have a real dialogue, democratic debate, and ask, “ What’s your theory and what’s mine ? What’s your proposal and what’s mine ?”  But there is no debate; they simply believe that other formulas do not exist. It’s the orthodox formula or the bullet. Some of the most orthodox sectors of the Colombian academy recently put out a statement alongside some of the more conservative professional organizations, including the financial guilds, insisting there is only the classic orthodox model.  In response, 11 heterodox economists, mostly from  Colombian National University, the biggest public university in the country, put out a letter insisting that there are indeed other paths; that it simply cannot be the case that the only way forward is with exogenous money. 

The current situation has opened up opportunities for economic discussion and debate on social media. These debates have primarily remained limited to social media, but we have a real opportunity to get more of these ideas out there with the Gustavo Petro campaign.  That’s where we find ourselves in Colombia right now; there’s a brutal repression in the streets, but a really vital intellectual debate has taken root online. This is all great news for Colombia because we’ve been living under the boot of the same repressive vision for the last 30 years. There’s a Job Guarantee bill in congress that the opposition is all supporting; it may not get passed,  but a debate has absolutely taken root in the streets, the academy, and online. I think a new way of economic thinking is making its mark in Colombia. 

Naty – That’s great; they had a lot of signatures on their letter. It’s worth noting as well that MMT got its start in the 90s on social networks. 

Daniel – It’s true !

Naty – The repression reminds me of what we went through in 2019. When  I’m watching videos coming out of Colombia now I’ll notice the dissipated molecular revolutions and think “Ah yes, we have the same phenomenon here in Chile.”

Andrés – Daniel, tell us about that, about your participation in the revolution. 

Naty – It turns out that theory comes from a Chilean Neo- Nazi, by the way. I was like ‘Ah, it all makes sense.’

Daniel – There’s an important articulation between the Chilean and Colombian right.  The repressive forces of Colombia train the repressive forces of Chile; Colombian SWAT teams train the Chilean police. Then Chileans send us their Neo Nazi thinkers to teach the Colombian how to invent nonsense about molecularity. 

Naty – 80s Frenchies.

Daniel – Their goal is to seed Colombian and Chilean society with a popular imaginary where all protestors are enemies,  enemies of democracy and stability. The same way sound finance is the only way to  manage the economy, the only model of governance the regime knows is repression. You must be violent; there is no other way. 

Andrés – I’ve always thought Pinochet’s legacy manifested itself really clearly with Uribismo in Colombia. I think it’s one of the places where Pinochet’s military neoliberal legacy has had the most profound impact.

Naty – There’s people with power in Chile who are going to go out and protest if Judith Butler comes to town. They’ll be like “Oh no, there are criminals and vandals in the streets for gender!”

Daniel – The Chicago Boys would have never been able to enter Latin America the way they did without the use of military force. 

Andrés – And that’s the thing too with these so-called molecular revolutions. To give  listeners a bit more context, ex-president Alvaro Uribe has been spreading a conspiracy theory saying Colombia is in the throes of dangerous dissipated molecular revolutions. This is how deeply they fear the social movements on the streets. Speaking of Judith Butler and feminism, one of the biggest objections people made about the Colombian peace accords in involved “gender politics” as they say there. The Colombian right is terrified of feminism, of movements for LGBTQ rights;  it’s all connected. In a way these movements do share some of the strategies you’ve seen in the US from movements Black Lives Matter where there isn’t one particular leader . . .

Naty – I think a lot of popular momentum in the region was jump-started in recent years with movements like the International Women’s Day marches, in 2018, 2019;  in Argentina, Chile, Peru . . . you have “Not one more” anti-femicide protests, in Mexico too. These movements have given people experience with mobilization . . . There’s lots flowering in Latin America. 

Jesús – A question — why molecular ? 

Naty – Because of Deleuze and Guattari!

Andrés – There’s two French post-structuralists; Felix Guattari, not sure on the pronunciation, and Gilles Deleuze. We disagree with some of their ideas here at Superstructure but it’s a very different disagreement from the one these right wingers and neonazis have, it’s more ontological. Jesús, thinking further with some of these issues; Mexico is a country that’s considered very politically important in Latin America. You had a change of administration with the election of Andrés Manuel Lopez Obrador that raised a lot of expectations and hopes. Can you tell us about the experience Mexico has had since those elections ? 

Naty – Mexico was just in the news the other day, too. (with the metro crash in Mexico City)

Andrés – So what’s been going on in Mexico;  what policies have been proposed and /or put into place by Morena; what role have economic debates played ? 

Jesús – Honestly with Mexico I barely know where to begin. 

Naty – It’s a small country where not much goes on. 

Jesús – Like all the countries in the region, Mexico is a complicated place. This has been especially true with our experience of this administration.  It’s really hard to describe the sensation. First, we had so many years of PRI governments, the party of the Mexican Revolution. Then, we have a PAN government and what happens next ? Without going into too much detail, the current president AMLO ran for president in 2006 against the PAN candidate, Felipe Calderón, and lost by a small margin, giving PAN continuity in a transition from Vicente Fox to Calderón. Then, we get to the 2012 elections and AMLO runs again but this time loses to the PRI frontrunner, Enrique Peña Nieto. 

So what you have now is a president who has been gunning for the job over the course of two presidencies. In 2018, he finally wins overwhelmingly, with very high approval rates in the majority of the country. What we’re seeing now is interesting; for some people it will be surprising and for others less so. We have what Andrés, Natalie and Scott have called in some Milenio columns the “conventional left” in power at a federal level. This conventional left models its political and economic programs on the old-line economic orthodoxy. The economic platform, the macroeconomic spine, is really exactly the same as the one the previous PRI and PAN administrations had. Obviously this has created a lot of problems. The AMLO administration has tried to meet the country’s needs by financing big showcase programs like the Tren Maya or the refinery in Tabasco called Dos Bocas. 

Naty – AMLO looked very happy in that video the other day – “Look at me here with my beautiful refinery!”

Jesús – This also includes the new airport in the state of Hidalgo, Santa Lucia. All of our public economic resources have been channeled towards these projects. But now, as Daniel said, the pandemic is really laying bare some of the shortcomings of the orthodox model AMLO’s government is organized around. This is an austerity program that has explicit Fransiscan overtones, as Scott Ferguson has so often pointed out. The government is tightening its belt as if it were a private firm or household. 

Naty – And money is the devil so the right thing to do is to not spend, but from the left. 

Jesús – You have a discourse where money is literally diabolic; it can only shape and influence society for the worse. So you have to reject spending in favor of austere simplicity. In this vision it’s always important for the government to be humble, simple, and austere.

Andrés – This is the same president, Jesús, who literally gives speeches describing money as demonic. In a way you really end up romanticizing poverty. 

Jesús – Exactly, he’s pretty much adopted the Fransiscan view of money whole cloth.

Naty – Listen to Money on the Left, we’ve had episodes about the history of Latin American colonization with … 

Andrés – Franciscan thought. 

Jesús – This leads to a lot of suffering.  No resources have been put into the education, health, science or technology sectors because according to them, there’s no money !

Naty – For the police, though, I’m sure there’s infinite money. 

Jesús – Indeed,  the armed forces, particularly the army, are actually in charge of the government’s big construction projects like the Santa Lucia airport project, among others. So yea, as Naty says – for this kind of project of course there’s money. 

Naty – There’s always money for oil. 

Jesús – It’s truly wild what’s going on in Mexico right now. Last year they pseudo-raffled off the presidential plane to supposedly pay for the government’s bills. This is a plane that had originally been purchased by Felipe Calderón and then Peña Nieto used it after him. So AMLO said, I’m not going to use the plane, let’s sell it and use the proceeds to purchase medicine and pay our medical personnel’s salaries.  Of course there’s a political dynamic at play here, but the message they’re sending people is that the government doesn’t have money and has to sell off its assets to finance itself. You have people buying five hundred dollar bills to help the government. 

Naty – Perverse. 

Daniel – Unfortunately these ideas that seem funny to us have a lot of purchase in the population; people really believe that the government doesn’t have money !

Jesús – Exactly. 

Daniel – They think there’s just literally no way to pay for anything. Here our Treasury Secretary, the Minister of the Economy, said a month or so ago that Colombia had only 6 weeks left of liquidity ! Obviously, people were completely panicked;  “We’re going to run out of resources, what are we going to do, the government is out of money.”  People really think about the economy this way; as if government accounts were equivalent to a household’s account. 

Naty – In Chile, instead of actually spending public money on some sort of Covid support, they’ve had people withdraw from their private pension funds. Of course people are going to think the government doesn’t have any money if you make it seem like the only way you can get people money is by funneling some from their retirement savings. If you say, “This is the only money left,” obviously people will learn that. 

Andrés – Wait, so what’s this? I haven’t heard about this; they’re recycling or returning money ? 

Naty – Yea and this is in part a left move ! Instead of getting a public payout you have to take out money from your AFP pension fund. AFP is the private pension system that Sebastian Piñera’s brother José helped design in the 80s during the dictatorship. So we’re on the third withdrawal of 10 % of your pension savings . . .

Jesús – But the difference is that Daniel is talking about a right-wing government and in Mexico we’re talking about a left-wing government. It’s one of the worst, most surprising things to go through  what we’re going through right now. Even worse, we have heterodox economists supporting these kinds of measures. 

Naty – Like at the Treasury, right ? There’s a Marxist doing the Doug Henwood sound finance thing ? 

Jesús – They nominated a sociology professor which created a bit of an outcry from the business sector; they wanted to know how you could put a Marxist in charge of the Treasury. But as we all well know, being a Marxist hardly disqualifies you from supporting sound finance socialism. 

Naty – So tragic; such an embarrassment. 

Jesús – In the end they got exactly what they wanted. But I hope Jacobin won’t come after me now for saying that.  

Andrés –We’re in such a crucial political moment; we’re in the middle of a global environmental crisis and we have fascist movements on the ascent working to win power internationally.  But the left is all too often stuck on models that are paralyzing us and preventing us from seeing a way forward; a different path. In my eyes there’s three different formations we’re trapped in. First, there’s the left that thinks our only possibility is to redistribute a bit from the rich and then maybe we also pay for some plan or other by raffling off the presidential plane. Second, there’s the left that thinks nothing is possible without world revolution, only then will we be able to do anything. When the US is no longer the global reserve currency, then we can finally invest. 

Naty – Before that, sorry Latin America, no MMT for you.  ‘Because of colonial finance your hands are tied.’  Some of these detractors will never get the irony. 

Andrés – I think something you see a lot on the US left is people who talk about Latin America like it has no agency, as if the whole region were completely powerless.  So there’s that tendency. The third formation I see is an alliance between austere sound finance and petroleum lefts.

Naty — With resources … state resources … 

Andrés – Exactly. These are people who think the only way you can implement left policy is by getting funds from the oil companies. Under this framework you actually need the petroleum industry to be successful for your country to thrive or have space to maneuver and if prices fall you’re in huge trouble. 

Naty – It’s the same with copper, really with any of these resources. 

Daniel – Commodities ! 

Jesús– You have these generic heterodox economists whose only solution to a lack of funds is to raise taxes on the rich. These are left economists, and they’re out on social media promoting the idea that you can only fund the government with a “Tax the rich” revenue increase agenda. But it seems like there’s been more of a reaction to MMT in Colombia than in Mexico where there is a total silence. 

Naty – Chile is the same;  barely anyone has heard of MMT . . . maybe there’s some people who’ve studied abroad but there’s not really a presence . . .  Maybe when Stephanie Kelton’s book arrives? I’m not really sure. 

Jesús – That’s the elephant in the room. Like Andrés said, there are people supporting the oil sector whose whole plan is to “tax the oil rich”,  that’s literally their whole agenda. 

Naty – Yep, “tax the super-rich”;  they say it every day. 

Andrés – Daniel, what’s your experience been with the Colombian left as far as sound finance debates ? 

Daniel – I don’t think my experience has been too different; the left here tends to be pretty conservative. It’s almost  impossible to get people to imagine revenue not funding spending.  There was even a movement a few years ago that opposed any public debt whatsoever. It still exists; I’ve been to some of their meetings and the culture is just ‘no to debt because no.’

Naty – Money is the devil. 

Daniel – Well, they claim that public debt is bad because it’s a Northern tool of subjugation over the Global South. And there’s not zero truth to this; I don’t think it’s so, so, so far from the truth. But this framing puts you in a position where you have to deny that you can spend on public debt, that you don’t always need new revenue. Sadly the Colombian left is completely convinced by this frame; Jesús  is totally right about that. But you have people doing other things. Take, for example, the economics faculty at the National University, which is a public university; they’ve really made an effort to seek out dialogue with research going on in other parts of the world. This alone is already a way of saying, “Yes, there are other ways.”

Now we have this open letter that’s come out and it’s been signed by 100, 200 economists from all over the country. These are university professors who are in the academy and have been published saying, “There are other ways.” They’re not just saying in other words, “Let’s do a progressive tax reform and tax the rich.” Obviously a progressive tax reform is urgent in Colombia,  but not because we need it to generate resources; it’s more for a kind of leveling. In Colombia the rich don’t really pay taxes at all and that creates a concentration of wealth where the GINI coefficient is literally the same after taxes as before. So there’s an imbalance. But this is not the real  fiscal issue for Colombia. No, the fiscal problem in Colombia is that the state isn’t investing where it ought to be. We are working from a sound finance model that the people in charge don’t really even believe in. I think the presidential candidate Gustavo Petro gets what we’re trying to say or at least or is starting to get it. It’s certainly not immediate, but at least people are starting to be able to say, “We don’t need to fear a fiscal deficit.”

Naty – I wonder if there may be a bit more awareness of MMT once the Job Guarantee proposal gets more publicity . . .  Certainly that hasn’t always happened in the US, whether with the Green New Deal or Job Guarantee proposals. Most people still think those bills would be paid for with tax revenue. But I still think proposals like these can create some space for MMT ideas. 

Daniel – That’s right. The main question you get in debates these days is how you are going to confront the crisis. The answer we should be giving is that the central bank ought to use its power to emit money and finance the government and generate employment and stimulate demand and put some money in people’s pockets. It was like we committed heresy for the Colombian media when we said the central bank can emit money.  So now the first thing you always hear is, “Gustavo Petro prints money,” so that’s just one more thing we have to confront when talking to people. It’s easy for the opposition to distort our proposals. In Colombia they always start by conflating emitting money with printing money and then as you know, they invoke Venezuela. 

Naty – And cocaine. 

Daniel – Last year Colombian banks emitted 40 BILLION pesos via quantitative easing. You have the government basically gifting private banks with liquidity, so we’ve used this fact to say to people, “ Look, emission is not the problem. The problem, rather, is profoundly political.” I think Jesús is right to say that we’ve made some progress on these issues in Colombia. So much so that the director of the doctorate program at Javeriana University had  some choice adjectives for our program; the debate has definitely escalated in Colombia, especially in academic circles. I have faith that this escalation will lead somewhere positive. 

Jesús – You have a dynamic underway in Colombia where people are trying to take the severe adversity really all nations have been facing during this crisis, but especially countries like ours, and use this moment of crisis to challenge the dominant economic framework. The effects of the pandemic have hit Mexico really hard over the past year.  Yet some progressive left economists recommendation was simply for Mexico to take out a line of credit with the Inter American Development Bank; that’s to say, more external debt. There’s really no better illustration of how lost this segment of the left is in this regard. 

Naty – And foreign debt has a very serious history in Latin America. 

Andrés – I think it’s important to clarify some subtleties that are confusing for people, because a lot of people who are afraid of public debt think foreign-dominated debt is the same as domestic debt. And this leads people to implement sound finance policies that just creates an ever stronger dependence on foreign-denominated debt. This is why people always think  they’re dependent on the dollar as a reserve currency. To be honest, the left hasn’t really had an answer to this problem. We haven’t really led on putting forward a strategy to get us out of the trap of foreign-denominated debt or dollar debt. 

Daniel – I think we have to push ourselves to be less reticent in certain areas too. When they ask us about inflation we always say, “Well, hey, we don’t support inflation.” And that’s true. MMT is not advocating outbreaks of inflation. But in practice, for countries like Colombia where we import pretty much everything, up to and including screws,  there are certain issues we have to  be concerned about with the currency. But this is just one more battle we must refuse to be afraid of.  What we really ought to ask ourselves is how much inflation we’re willing to accept. How much unemployment do we think is tolerable ? People act as if the Phillips Curve has died, as if it didn’t exist anymore. But in countries like ours, it absolutely still exists. 

That doesn’t mean, though, that we can’t allow for some inflation to bring down unemployment. This is really the core paradox; it’s a fundamentally political question. If we want, we can keep inflation super low and decide we don’t care how high unemployment gets. We can keep unemployment at 15% and inflation at 1%. Sometimes we have DEFLATION in Colombia. It’s important to do some self-criticism sometimes and I think we’re making a mistake if we respond to questions about inflation by insisting we completely oppose inflation. No, we can permit a certain level of inflation if it means bringing unemployment down. But in Colombia the orthodox economists say that inflation is the worst possible tax you could impose on poor people. My answer is to ask whether it’s worse than leaving your population in misery; poor, unemployed and hungry. Like seriously? So what you have here is a moral debate. 

Naty – I wanted to ask you Jesús, since you’ve talked a lot with Fadhel Kaboub  who is I think the most prominent MMT economist on Global South issues; on countries with less monetary capacity that tend to import a lot because they haven’t been able to develop their domestic food or energy capacity and maybe rely heavily on commodities exports, what are some of the challenges or limits when you’re thinking structurally?

Jesús – Ever since the implementation of neolibral policies in the 80s in Mexico, technocrats here say that the best industrial policy is no industrial policy at all. That’s what they say ! So Mexico has had no real industrial policy to speak of in recent decades; no way to build up their internal market and strengthen domestic productive capacity. Instead, they’ve increased our dependence on the exterior. We’re importing goods under the framework of these free trade deals that have Mexico only exporting low value added products. 

Daniel – And petroleum. 

Jesús – Exactly. So Mexico, in terms of industrial manufacturing, is really just an assembly line. It doesn’t have the domestic capacity to produce high value-added products because we don’t invest in science, technology, or innovation. In fact the government eliminated important resources in these areas. So what I’m getting at is we don’t really have an industrial policy; this leaves us with a weak science, technology, and innovation sector, reducing the scope, range and spectrum of economic activity and capacity possible. If we keep depending on the exterior for development, it’s going to continue to cause us problems moving forward.

Andrés – And then the pandemic comes and the infrastructure collapses. 

Jesús – That’s another thing; you have poor planning and corruption in addition to this total shortage of public resources that have been allocated towards maintenance of the public infrastructure. 

Naty – What happened the other day in Mexico City with the metro. 

Jesús – In that case people had been warning the government about problems for quite some time. So of course this is the result. At the federal level the policy is austerity and budget cuts and it’s the same at the state and municipal level. You mention cutbacks on the metro line,  but what’s interesting is recent budget reports that came out show that Mexico City just didn’t spend the funds it had budgeted for the metro. A planned austerity regime creates a whole series of errors and problems. 

Andrés – I think Daniel and Jesus both open up really well some different lessons we can take from MMT. Something I really want to highlight is the way economic orthodoxy tends to conflate inflation with hyperinflation; as if it’s all the same and 1 % inflation means we have hyperinflation. 

Daniel – Disaster !

Andrés – Yes, disaster, like it’s interwar Germany. 

Naty – It always comes back to Weimar. 

Andrés – I think it’s really important to draw out some of the subtleties modern money theory can help illuminate.  For starters, our argument is that Colombia and Mexico not having international reserve currencies is not the most important thing. They will still always be able to emit the domestic currency to mobilize domestic resources, period. This is just logical. The limit isn’t that you can’t find the money;  that you don’t know where you’re going to withdraw money from next; that it’s all running out and  you have to raffle off a plane. The real limit is the question of at what point inflation becomes a real problem.  But this never happens because there is simply too much money in the economy. No, it’s a question of the country’s domestic productive capacity. So that’s one issue. The second question is what a country’s productive capacity is, whether you’re really using the resources you have at your disposal. In Colombia and Mexico both you have people and resources that you aren’t utilizing. So the inflationary pressures in these countries have less to do with public spending than they do with private power. The issue is the power of the private financial system, the monopolies and corporations that have the power to set market prices, that’s where the inflationary pressures are coming from.  So we’re not going to talk about money as if it were a solid thing with actual value like a piece of gold. Money doesn’t just have intrinsic value and we need to locate the rich people to get some of that value. It’s not like those cat memes where the cats are running around trying to escape the red light and get the white light that isn’t real, that doesn’t exist. It’s the same with MMT’s understanding of money; money isn’t like a nugget of solid gold with some intrinsic value. No, money is an institutional infrastructure, a way of organizing debt.  It’s how we mobilize our productive capacity and form our most important governing relationships. So you have that element. The last point I want to make is that, as both Jesus and Daniel mentioned, our countries haven’t invested in domestic productive capacity. Instead, we have depended on foreign investment; we depend on dollars. If we don’t have dollars, we don’t have an economy. This gets us deeper and deeper into a hole where we have to ask the World Bank for a loan or hope some American or European investor comes in from abroad to rescue us before they leave us high and dry the moment they see fit. This is the current system and it makes our currency weak. The failure to invest in public education, a sustainable energy system, just food systems, or public employment makes us more vulnerable to inflationary pressures. Without investment in these vital areas our economies are severely weakened. 

Naty – We need a Latinx Green New Deal. 

Jesús — To add to what Andrés is saying about currencies, one of AMLO’s advisors proposed a few years back that we should go off the peso and adopt the dollar as the Mexican currency.

Daniel – No ! 

Naty – That’s gone really well for Ecuador, great. 

Daniel – But this was someone from Morena ? 

Jesús – No, a businessperson. Another proposal was to anchor the value of the peso to silver. 

Naty – Back to the future, it’s the 70s, great. 

Daniel – It’s funny because you have this debate gaining momentum in Colombia; more and more people are talking about these issues from a variety of different viewpoints. Sometimes it’s a very fair, very enlightened debate; other times people are completely distorting the truth. But at least people are talking. And it’s so funny because we have these orthodox economists who a professor at the National University started calling “The Seventh” economists. This was meant to be a cheeky allusion to the US where people say there are the freshwater economists and the saltwater economists. There’s a similar professional differentiation in Colombia. “Seventh” economists are working in the seventh region of Colombia which is the Bogotá area where all these historically orthodox economic faculties are; the Andes, the Externada, the Javeriana. And when we met with this group of economists they took out Stephanie Kelton’s book and opened it up and said, “look, Stephanie Kelton says right here that in countries like Colombia that rely heavily on imports MMT doesn’t make sense.” 

It’s so ironic because these are the same people who have spent the last 30 years running Colombia’s industrial and productive apparatus into the ground. They have brought us to a point where Colombia is only producing petroleum and cocaine. Yet they are so shameless and spineless that they have the gall to then say “ Sorry, Colombia doesn’t have the right productive system to allow MMT ideas to have a seat at the table.” Really they are confessing how badly they have managed everything. They ran the Colombian productive apparatus into the ground. So of course, I really like the idea of a Latin American Green New Deal because it helps us think about how we can mobilize our society’s productive apparatus. If we don’t do that; if we keep importing everything, we are really going to have problems. Integrating Latin American value chains is really important here to break borders; it could be a really important idea. I think about something like lithium production in Bolivia, or gas and copper . . . and I think about how, of course, we really need to look at things from a climate perspective because we are in the throes of a full-on climate cris. But I think it’s also possible to generate Latin American value chains and allow ourselves to think about a Latin Green New Deal from the South. 

Andrés – Daniel, where do you think the Colombian left is heading; do you think they’ll really be able to internalize this vision we’re putting forward ? 

Naty – Tomorrow. 

Andrés – Literally tomorrow. 

Daniel – I think it’s a process. Look, I’ll tell you right now, the truth is that there are some very conservative ideas on the Colombian left. But I think Petro´s presidential campaign will have an opportunity to get people debating some of these ideas. When you’re in the midst of a crisis  and have debates where suddenly public figures are actually able to say the words “monetary emission”, that is actually a huge step forward for a society as conservative as Colombia’s. And now a lot of people are repeating it! So we need to direct more energy towards theorizing and pushing these ideas. Having the job guarantee bill in the congress can help open up some space for debate. I think we’re heading down an underexplored path, and while progress is slow, taking a step in this direction is already an important advance.  The other thing that makes me optimistic about Colombia is that we are not putting forward some singular isolated proposal. No, this is the platform of the presidential candidate who is leading the polls today. So we know there is popular support and therefore the possibility of pushing  some of these ideas and programs forward. I think the first and maybe most difficult battle is going to be with our own side; we have to defeat some conservative ideas our friends and comrades on the left still harbor.  It’s hard, but I think we can do it. 

Jesús – We are really paying for the errors we’ve made in Mexico, these issues are so important. 

Andrés – These “Seventh” economists seem to me more like, as they say, garage economists. 

Daniel – But they govern Colombia;  they’ve governed the country for 30, 40 years. 

Andrés – Jesús;  expectations for Mexico, how do you see things going ? 

Jesús – I think it’s very unlikely the current administration will change in the next term. They have made their position clear. Nevertheless, we are being observed; the world is watching us. We are being observed and furthermore there is some turn to MMT. I can say that there’s been some timid outreach to our camp. It’s slow but there’s some movement. 

Daniel – That’s great to hear. There’s a part of the Colombian left that really sees AMLO as an important referent. They say, “Wow he doesn’t use the presidential plane” and then their whole big program is to lower the presidential and congressional salaries in order to fund the government. 

Andrés – There was a time when I would see Mujica in Uruguay living in his little house and I’d say “Ah, that’s the left.”

Naty – He smokes weed and has a small house so everything with Uruguay is obviously okay. 

Daniel – It’s like with Petro; they published some photos of him wearing Ferragamo shoes and they said, “See, he’s a fake, a hypocrite;  he wears expensive shoes; how can you be on the left and not be barefoot?”

Andrés – Jesús, before we recorded you were telling me about some social justice initiatives in Mexico, can you talk about these as a vehicle for integrating MMT ideas into a Mexican social justice agenda ? 

Jesús – Absolutely, MMT in a  Latin American context;  especially in Mexico, MUST go hand in hand with a social justice agenda; you have to dialogue deeply with the sectors of the population that are suffering the most right now. It’s critical to integrate and consider the strategies social movements are using to develop the left. In Mexico you really have many different countries; every locality has its own particular problems, whether it be security, the environment, or the lack of job opportunities forcing people to emigrate to the US. For MMT to be relevant it has to take these issues seriously and make social problems integral to its framework. The issue of security is also crucial for a functioning economy; I think in Colombia you’ve had similar issues ? 

Andrés – In the Colombian case, absolutely, a vision for peace is so central. It’s the same as in Mexico where so many people have lived through really serious violence, whether it be caused by narcotrafficking or a general lack of social stability. We aren’t creating public employment opportunities; we aren’t investing in sustainability. Those are the things we need to create a serious, durable peace that is sustainable long- term.  

Naty – That’s how you actually try to get out from under the domination of the empire, right ? To defeat the ‘empire’ you can’t just keep importing more and more forever. 

Andrés – To wrap up, government accounts are not like those of a household, states have constitutional power over their currency, and you don’t need taxes to fund spending. Taxes are important, rather, to keep people from accumulating obscene amounts of wealth. 

Naty – Allowing people to purchase dissipated molecular revolutions. 

Jesus – We need to raffle off planes. 

Daniel – Lower congressional salaries . . . 

Naty – Ok, great conversation, thanks so much everyone for coming to talk with us. 

Daniel – In a world where people are literally dying in the street it’s immoral to continue down our current path. Any state can rescue its citizens and guarantee certain rights if it wants to. The fact they don’t isn’t because they can’t; it’s not because they don’t have the resources. The question is political power. The issue is political, not economic. The economy is honestly almost over-diagnosed. We have so many studies and theories that show that governments can allow themselves to rescue their citizens. So the issue is not really technical. 

Naty – Right, it’s not technical. I think at Superstructure and Money on the Left that’s one of the most important arguments we want to make, that MMT isn’t just some cold technical trick where you say, “Ah, we have the best science,” and that’s all she wrote. These are deep, serious, important social questions for everyone. 

Andrés – For us, technical issues are also social and political issues !

Naty – True, the binary is false.

Daniel – The economics academy teaches you that there is a natural rate of employment, that this is something natural which exists. This is a lie, it’s a total lie. 

Naty – And then you have your little mini-Friedmans on Twitter with their ridiculous little cartoon avatars.

Andrés – According to orthodox economics,  unemployment is like gravity; it exists in nature, just because. This is an idea the left must resoundingly reject. 

Daniel – When the textbook says there is a NATURAL rate of unemployment, you have to naturalize this “natural,” no ? They’re telling you this is something you cannot dispute. It’s a great farce. 

Naty – That’s the idea, no ? They don’t want people actually discussing these topics; they want neoliberalism to continue;  they want the hegemony of the World Bank and IMF and their friends at Harvard Business School to continue.

Andrés – The other one is the natural rate of interest . . . 

Daniel – Everything is nature. When they’re screwing you over, that’s just nature. 

Naty – Ok y’all, great conversation, thanks so much. Excuse my Spanish at times, despite living here for years my Spanish still isn’t nearly as good as I wish it were ! 

Daniel – Really cool to talk with you all. 

Andrés – Listeners, thanks for being here with us for this special episode of Money on the Left and Superstructure.

Naty – Superestructura.

Andrés – Please follow us and listen to our work;  we have a patreon you can support;  I also suggest you follow the work Daniel is doing in Colombia, especially with Colombia Humana and with senator Wilson Arias. Also follow Jesus Resendiz and his work with his column at  Milenio. 

Naty – What are your twitter handles ? 

Daniel – @ DanielRMed, from “Medellin”, but it’s just “Med.” 

Jesús – Mine is @ Tlacuachito. 

Andrés – Perfect, we’ll write those up on twitter too so people can follow you all, thanks so much ! 

Jesús – Thanks so much.

Naty – Thanks.

Daniel – Thank you all, a pleasure. 

Transcripción en Español

Natalie – Hola, yo soy Natalie, co-host de Superstructure  o Superestructura, y una de las editoras de Money on the Left. Hoy día vamos a hacer algo un poco diferente, un episodio en español. Para nosotros, es súper importante incluir a Latinoamérica en nuestro análisis de las posibilidades económicas y políticas en el mundo. Y yo como estadounidense que vive en Chile, de una forma vivo entre varios mundos. Estoy trabajando en este proyecto de educación política con respecto a MMT y aunque vivo en Chile, la mayoría de los miembros o todos los miembros del colectivo viven en EEUU  y mientras el podcast tiene un ámbito internacional, igual su red principal viene de los EEUU  así que igual quisiéramos expandir la conversación un poco. Hay que unir fuerzas y las vías de comunicación. Por cierto, disculpa mi español, que sigue siendo muy gringo después de tantos años aquí. Tenemos con nosotros dos invitados y también Andrés Bernal, que también es parte del colectivo – ¿quien eres Andrés ?  ¿ Cual es tu historia? 

Andrés – Hola, buenas tardes a todos, yo soy Andrés Bernal, editor también de Money on the Left y Superestructura, aquí también para hacer parte de esta conversación sobre MMT y Latinoamérica. ¿Quién soy yo? Bueno, yo soy un profesor en CUNY Queens College de Estudios Urbanos. Estoy terminando mi doctorado también en el New School, con enfoque en el Green New Deal y soy asesor político. Estuve un momento con la campaña de Alexandria Ocasio Cortez; en este momento estoy con la campaña de Diane Morales para la alcaldía de Nueva York. Entonces bueno,  un placer aquí estar con todos Uds. para tener esta conversación que nos parece muy importante, primero, porque para abrir el espacio lingüístico de idioma, y también para hablar de temas que muchas veces evitamos o se ignoran en el mundo del pensamiento económico y también de MMT. Entonces bueno, también, yo; español no es mi primer idioma, entonces quizás qué –we’ll speak some Spanglish– and we’ll mix it up a little. 

**

Andrés – Tenemos dos invitados aquí con nosotros, primero tenemos aquí desde Tampico, México, Jesús Resendiz, Jesús, díganos, ¿ quién eres? 

Jesús – Hola Andrés, Natalie;  muchas gracias por la invitación, es para mi un honor estar aquí en Superstructure. Bueno pues yo soy mexicano, soy economista de profesión, y soy miembro e investigador de Global Institute for Sustainable Prosperity, donde el presidente de este instituto es nuestro colega y  amigo, Fadhel Kaboub y bueno, ya llevo cierto tiempo impulsando junto con Uds., con mis amigos de la Teoría Monetaria Moderna, esta como le decimos en inglés– la MMT o la TMM en español– impulsándola en mi caso particular de México. Entonces, digamos que en grandes rasgos esto es mi trabajo aquí, y bueno soy profesor en la Universidad Autónoma de Tamaulipas, he sido asesor de algunos actores políticos, y también activista social. 

Andrés –Gracias Jesús. Y también tenemos con nosotros José Daniel Rojas desde Bogotá, que ahorita, bueno yo también como Colombiano, todos estamos muy pendientes de la situación que está pasando en Colombia– los movimientos sociales que se están viviendo en este momento. Daniel, cuéntanos ¿ quién eres, qué haces?

Daniel – Hola, ¿cómo están? Placer estar aquí con Uds. y desde Colombia integrarnos en esta discusión que emerge en medio de esta crisis ¿no ? Ahora que el mundo global empieza a soportar la crisis de Covid, está bien empezar a pensar si es que existen otras formas de gestionar y de gobernar la economía y desde Colombia también  en medio de este maremagnum de confrontaciones que emerge de la movilización social. Pues para nosotros no solamente es un placer sino una necesidad empezar a encontrar nuevos caminos y nuevas fórmulas para el desarrollo. Mi nombre, bueno como se lo dicen, es Daniel Rojas,  economista de profesión; soy asesor económico en el Congreso de la República;  en este momento trabajo con el senador Wilson Arias y también hago parte de la Colombia Humana, que es el esfuerzo de el candidato presidencial Gustavo Petro para encontrar un nuevo rumbo en Colombia en el 2022. Esperamos que así sea y tenemos muchísima fe en que va a ser así. Esto, como dice el himno nacional; el himno nacional de Colombia , dice –cesará la horrible noche– y vamos a esperar que así sea, vamos por eso. 

**

Andrés – Muchas gracias Daniel. 

Jesús – Se me olvidó decir que también soy miembro del consejo editorial de Money on the Left. 

**

Andrés – Bueno, para un poco de contexto también en esta conversación,  este diálogo y una de las razones . . . 

Naty — . . .  Parece que sí, sí hay gente fuera de Europa y los Estados Unidos; parece . . . de MMT. 

Daniel —- Claro, claro que sí.

Naty – Eso vamos a hablar. 

Daniel — Así asciendan fronteras.  

Andrés — Asciendan fronteras; no todo pasa en EEUU o Europa, exactamente. Entonces pues, en nuestro mundo de MMT o la TMM, como mi amigo Jesús aquí lo dijo, muchas veces escuchamos que solo hay relevancia para  EEUU, que simplemente es porque  EEUU tiene una moneda que es reserva mundial o una cantidad de razones o excusas porque ignorar las ideas, los –insights – que no sé como se dice en español –insights– ? 

**

Jesús –  ¿ Características, no ? 

**

Andrés – ¿ Visión ? 

Naty – Sí, percepciones, entendimientos . . . 

Andrés – Sí;  bueno, el conocimiento;  el conocimiento que nos da MMT es rechazado en muchas partes del mundo porque se dice que solamente funciona o es relevante en los Estados Unidos. Entonces nosotros queremos rechazar esa idea y poner en práctica y tener esta conversación sobre cuáles son los aprendizajes y las cosas importantes de usar  . . .  la TMM o MMT como un marco de referencia, como una estructura para pensar en las políticas públicas y las ideas basadas en el dinero;  en la función del dinero en una economía, específicamente, para países en el sur; para países que han estado en desventaja política;  que tiene una historia de colonización, de imperialismo, etc. ¿ Qué podemos aprender de MMT en esas situaciones? Entonces, bueno, Naty, ¿qué más ?

Naty – Sí, sin embargo, yo creo que hay más movida de TMM en España dentro del español, pero queremos expandir para Latinoamérica y lo que pasa es que el marco de TMM macroeconómico nos puede ayudar dar a entender cómo funcionan las cosas. Incluso cuando no haya tanta soberanía se puede usarla como en Argentina donde tenían Plan Jefes, una garantía de trabajo. Pero sin embargo, igual dicen –No, no puedes hacer nada ahi, porque estan vinculado al dólar y tienen la deuda externa y bla bla bla– pero sí, se puede hacer programas;  se puede gastar. Pero también tienen muy arraigado esta idea de que . . .  en Chile todo el mundo en la izquierda está hablando de –impuestos a los super ricos– cierto? 

Andrés – Como la única manera que hace algo para gastar. 

Naty – Sí y bacán; genial que haya un impuesto a los super ricos, cierto? Pero no es la fuente de gastar. 

Andrés – Exactamente. Esos son los temas que vamos a tocar hoy. Como dice Natalie, tenemos unas camaradas en España que tienen un proyecto de MMT, se llama Red MMT, pero nosotros aquí también queremos abrir esta conversación a Latinoamérica. Bueno, entonces empezando con Colombia;  por el momento que se está viviendo ahorita ¿que está pasando, Daniel ? Cuéntanos un poco sobre ¿qué pasa en Colombia? y ¿cómo se conecta esto con cuestiones de dinero, de gasto público, de austeridad, etc. ?

Daniel – Bueno, ya, es que lo que está pasando en Colombia no es muy distinto a lo que se está pasando en Latinoamérica, sinceramente. Tenemos un gobierno que llega y que gana las elecciones bajo la promesa de que disminuyendo impuestos a las grandes corporaciones y a las personas que están en el nivel más alto de ingresos y de patrimonio podría reactivar la economía, creando puestos de trabajo.  Y en 2018, cuando esa propuesta empieza a gobernar evidentemente, lo que hacen es disminuir los ingresos tributarios para llegar al punto en común en EEUU, en Europa, en todo el mundo: bajo la visión dominante de como hay pocos ingresos tributarios;  hay pocos gastos públicos, ¿ verdad ? Poco gasto público. Y en esa discusión, llega el Covid. Y entonces, en el momento en el que el gobierno requiere aumentar el gasto público para atender la emergencia, lo que eso nos dice es que no hay recursos y que los recursos solo se pueden recaudar vía impuesto. Y no cualquier impuesto, sino que tiene que ser impuestos al consumo y a la rentas laborales de la parte baja. Claro, eso afecta mayoritariamente a las personas que tienen trabajo y las personas que tienen trabajo en Colombia es la clase media porque el desempleo en Colombia ha llegado a unos niveles del 14 a 17 % en el último año. Entonces, en ese escenario se crea todo un estallido social porque es la clase media la clase que está –digamos, esos sectores;  esos segmentos de la sociedad que está en la vulnerabilidad; la que empieza a llenar las calles y a colmar las calles en unas movilizaciones impresionantemente grandes; que solamente tienen como respuesta el gobierno la represión. Ante ese escenario; algunos expresiones políticas hemos dicho, dentro de esas Colombia Humana, de que no es momento de hacer una reforma tributaria. Es decir, de que el gobierno no tendría porqué atender la emergencia imponiendo impuestos, sino que pudiéramos aumentar el déficit público de tal manera que el gobierno responda mediante un proyecto que hemos radicado en el Congreso de Trabajo Garantizado en el cual pudiéramos dar respuesta a la crisis aumentando déficit público. Y aumentar el déficit público tiene muchas aristas y eso creo que lo vamos a hablar en este espacio. Yo creo que, claro, estos tipos de ideas que vienen de la Teoría Monetaria Moderna tienen su grado de aplicación en los países del Cono Sur y en países Latinoamericanos. Somos perfectamente conscientes de que el peso colombiano no es una moneda de reserva; pero también somos perfectamente conscientes de que somos el unico gobierno que emite pesos colombianos y que por lo tanto podemos permitirnos a aumentar el gasto público en pesos colombianos de tal forma que el déficit público sea superávit en el sector privado y que las familias y las empresas colombianas pudieran tener un choque de demanda. Lo que se nos han dicho es que somos unas) de irresponsables, macroeconómicamente hablando . . . 

Naty – Populistas. 

Daniel – Y de populistas, porque lo que estamos proponiendo es crear inflación y ya. 

Naty – ¡Venezuela!  

Daniel – Sí, el ejemplo que sale a flote es el de Venezuela. Bueno, creo que ahí hay un buen debate para dar. Afortunadamente, en este escenario y en el que se impone esa reforma tributaria; los hechos de violencia  en Colombia han sido el pan diario. La respuesta del estado no ha sido al diálogo y miremos –¿ Cuál es su teoría y cuál es la mía ? ; ¿ Cuál es tu propuesta y cuál es la mía ?–  dentro de un marco democratico del debate; sino que simplemente no existe el debate; no existen otras fórmulas. Es el fórmula de la ortodoxia o la bala y ahora mismo salió un comunicado de la academia más ortodoxa colombiana y de los gremios, principalmente gremios financieros, en los que se decían– esta es la única vía que existe y ante eso sale una respuesta que es una carta abierta de once economistas heterodoxos principalmente de la Universidad Nacional Colombiana, que es la universidad pública más grande en Colombia, que dice — No. Hay otras formas. Hay otras formas porque no puede ser que la única manera que tengamos dinero es exógeno.–

**

Daniel – Que existen otras formas, digamos.  Y eso ha puesto que el debate económico en Colombia una muy buena discusión en las redes sociales, principalmente en las redes sociales. Pero la campaña presidencial de Gustavo Petro para el próximo año empieza a escoger estas ideas y en eso nos encontramos en Colombia. Nos encontramos en las calles una represión brutal; pero en las redes y en los escenarios de debate y de pensamiento; ya hay un debate instalado. En este momento hay un debate instalado y eso es muy bueno para lo que pasa en Colombia porque llevamos 30 años con una sola visión- Hay,  con esos términos; hay en el congreso de la República en este momento cruzando un proyecto de ley de Trabajo Garantizado que lo ha afirmado todo la oposición y que quizás no tenga suerte de ser aprobado en el congreso; pero en las discusiones, insisto, que se empieza a dar en las calles y en la academia y en las redes sociales; está ya empezando a instalarse otra manera de pensarse la economía en Colombia. 

Naty – Está buenísimo eso– que tenían hartas firmas y como también– la TMM empezó en los años noventa en las redes sociales.

Daniel – Es cierto. 

Naty – Interesante también como la represión– me acuerdo de Chile;  cuando veo videos, como es en Colombia ahora y veo las revoluciones moleculares disipadas y digo –ah, tenemos el mismo fenómeno!–

Andrés – Sí, Daniel, cuéntanos de eso; cuentanos de tu membresía en la revolución. 

Naty — Esa teoría viene de un neonazi chileno . . . 

Daniel – Aquí hay una articulación entre la derecha chilena y la derecha colombiana; las fuerzas represivas colombianas entrenan a las fuerzas represivas chilenas; los SWAT colombianos entrenan a los carabineros chilenos y los chilenos nos mandan sus pensadores neo nazis para que instruyan a la derecha colombiana y entonces se inventan  de estas cosas de la molecularidad …

**

Daniel -– Tienen como destino crear en la sociedad colombiana y en la sociedad chilena el imaginario de que las personas que están en las protestas son vándalos; son enemigos; son enemigos de la democracia;  de la estabilidad ¿no ?  Así como solamente existen finanzas sanas como única forma de tener la economía;  también solamente una única visión de democracia;  que es entender el régimen como lo demuestran y otra forma tiene que ser represivo;  tiene que ser violentado;  porque no existe; no existe otra forma. 

Naty – Se van juntos.

Daniel – Pero insisto;  aquí hay algo que es valioso y es que hoy ya la gente se está entendiendo que hay otras formas; hay otras formas de entender, tanto la economía como  la política; como el orden social. 

Naty – Sipo.

Andrés – Yo siempre he pensado que el legado de Pinochet se manifiesta en Colombia con el Uribismo como uno de los momentos y los espacios que más profundamente representan lo que fue eso. 

Daniel – Así es. 

Naty –  . . .  Es que hay gente con poder que si viene Judith Butler a hablar van a protestar, como –ahh – están andando vándalos a la calle por el género!–

Daniel – Los Chicago Boys jamás hubieran podido entrar así en Latinoamérica si no hubiera sido por el uso de la fuerza militar. 

**

Andrés – Y también como eso mismo, todo esto de las revoluciones moleculares; que bueno, para los escuchantes– el ex presidente Alvaro Uribe ahorita está hablando de una conspiración de una revolución molecular disipada; que para mi demuestra el miedo que le tienen estos grupos a los movimientos sociales que se están tomando las calles.  Pero hablando de Judith Butler y el feminismo, etc., bueno, uno de los argumentos más fuertes en contra de los acuerdos de paz en Colombia fue la política de género, como lo dicen allá, la derecha en Colombia le tiene mucho miedo al feminismo, al derechos de la comunidad LGBTQ  . . .   Está muy conectado esto. Entonces eso me hizo pensar que es la misma estrategia. O aquí en EEUU – Black Lives Matter, que es un movimiento de protesta que no tiene a un líder en particular, sino que es disipado  . . .  

Naty – Y también con 8 M – 2018, 2019;  empezó mucho en Chile y en muchos lugares– Argentina, Perú  . . . Ni Una Más, en México también– contra el femicidio;  que mucho de la práctica de movilizar viene en los últimos años de esas movilizaciones. . . . en Latinoamérica florece mucho. 

Jesús – Una pregunta … ¿ por qué molecular ? 

Naty – Por Guattari, por… Deleuze y Guattari. 

Andrés – Sí es que hay dos post-estructuralistas franceses; Felix Guattari, no sé cómo pronunciarlo y Gilles Deleuze; que tienen sus ideas y bueno; aquí en Superstructure tenemos un conflicto con ellos, pero un conflicto muy diferente  . . .  Tenemos desacuerdos ontológicos con ellos pero no de la manera que estos derechistas y neonazis están proponiendo. Bueno, Jesús … Hablando de estos temas; México, que es un país que, bueno, se considera extremadamente importante en la política Latinoamericana, vivió un cambio de líder con la elección de Andres Manuel Lopez Obrador . . . Hubo muchas expectativas, pero ¿ qué ha pasado? ¿ Qué hemos vivido desde esas elecciones ? 

Naty – Recientemente estaban en las noticias también;  el otro día, justo.  

Andrés – Exactamente. ¿Qué ha pasado en México? ¿Qué ha sido de estas políticas públicas; ¿Qué ha propuesto Morena y en qué manera los debates de pensamiento económico han tenido su función ? 

Jesés – Bueno, en el caso de México, no sé por dónde empezar. 

Naty – Un país chiquitito, no pasa nada ahí. 

Jesús – Sí. Pues bueno, como los restos de los países latinos, México también es un país complejo. Pero en el caso particular de lo que estamos viviendo ahorita, nosotros pues bueno,  no puedo explicar que – el sentido de que después de tener gobiernos del PRI, del Partido Revolucionario Institucional, el partido de la revolución mexicana. Pues, tuvimos también gobiernos del PAN, del Partido de Acción Nacional. ¿ Qué pasa ? Pues, para no entrar mucho en detalles,  en el 2006 el actual presidente de México, Andres Manuel Lopez Obrador, compite en las elecciones, en donde gana por un pequeño margen el candidato del Partido de Acción Nacional, Felipe Calderón. Entonces, pues, comienza la continuidad del gobierno Panista, que inició con el ex presidente Vicente Fox. Después, llegan las elecciones del 2012. Vuelve a competir el actual presidente Andres Lopez Manuel Obrador por las elecciones ahora, siendo el candidato más fuerte a vencer Enrique Peña Nieto del PRI y gana Enrique Peña Nieto.

**

Jesús – Bueno, pues, entonces ¿qué pasa? Pues, fueron en términos generales, que serán dos sexenios en donde, un poco más de dos sexenios, en donde la actual presidente empezó a luchar para poder ganar las últimas elecciones. Entonces gana las elecciones en el 2018 de manera masiva; con un nivel de popularidad muy elevado; con una aceptación enorme en la población, la mayor parte de la población. Y lo que vemos ahorita es algo interesante, que puede para muchos sorprenderlos;  pero para otras personas no. Lo que estamos viendo es que el actual gobierno federal, un gobierno de izquierda;  de izquierda convencional como lo hemos llamado Andres, Natalie, y Scott en unas publicaciones que hemos tenido en las columnas de Milenio. Un gobierno convencional en donde lucha o tiene su plataforma económica y política desde la ortodoxia económica. Entonces, plataforma económica que la tuvieron los gobiernos anteriores. Entonces la columna vertebral, en términos macroeconómicos, es exactamente la misma de los gobiernos del PRI y los gobiernos del PAN. Entonces esto ha generado muchos problemas porque el gobierno del presidente Lopez Obrador, para poder hacer frente a ciertas necesidades del país, incluyendo el financiamiento de los proyectos insignia por ejemplo el Tren Maya, la refinería en Tabasco que se llama Dos Bocas . . . 

Naty – Está feliz! Hay ese video ahí el otro dia— ¡Ah, mírame con  mi hermosa refinería!–

Jesús – . . . El nuevo aeropuerto en el estado de Hidalgo, Santa Lucía.  Entonces todos los recursos económicos públicos han sido enfocados en esos proyectos y bueno ahora llega la pandemia y como lo mencionó Daniel; desnuda aún más las deficiencias del enfoque ortodoxo que está inspirado del gobierno del presidente Lopez Obrador. ¿ Entonces qué estamos viendo? Estamos viendo que hay una política de austeridad franciscana, como lo menciona Scott Ferguson, en donde el gobierno está abrochando el cinturón como si fuera una empresa privada o un hogar.

Naty – Y que el dinero es como el diablo . . .  así que hay que no gastar, pero desde la izquierda.

Jesús – Hay una discusión en donde se ve al dinero como algo diabólico, como si fuera un mecanismo que va a influir negativamente en la sociedad y que por lo tanto no hay que hacerle caso y hay que ser austeros y sencillos.  También por lo tanto es importante tener un gobierno sencillo. 

Andrés – Jesús, el mismo presidente en tu discurso también invoca estas imágenes del dinero como  algo demoníaco y como una romantización de la pobreza a veces . . . 

Jesús – Si, exacto.  Básicamente se está pegando lo que es este el enfoque fransiscano del dinero. 

Naty – Escucha Money on the Left . . .  hemos tenido episodios sobre toda esta historia de la colonización de Latinoamérica con . . . 

Andrés – El pensamiento Fransiscano. 

Naty – Sí. 

Jesús – Y eso tiene a la gente en sufrimiento. No hay recursos públicos en el sector educativo; en el sector de salud; en el sector de ciencia, tecnología e innovación ¿Por qué ? Porque no hay dinero, según ellos. 

Naty – Pero para los pacos y la policía; imagino . . .  eterno. 

Jesús – De hecho son las fuerzas armadas, principalmente el ejército, el que administra y está construyendo las grandes obras que tiene el gobierno;  como ese el aeropuerto en Santa Lucía, entre otros proyectos.  Entonces algo bien, como dice Naty—para este tipo de proyecto; sí, hay dinero. 

Naty – Claro, para el petróleo siempre. 

Jesús – Sí . . .  Está tremendo lo que está pasando en México, que el año pasado se dio la –rifa no rifa– del avión presidencial y supuestamente esta rifa del avión presidencial;  que lo compró un avión;  el avión presidencial lo compró Felipe Calderon;  lo usó el presidente Peña Nieto. Entonces el presidente Lopez Obrador dijo –Yo no voy a usar ese avión; vamos a venderlo; vamos a venderlo para pagar los sueldos del personal médico y comprar medicamentos.– Sin duda hay una dinámica política detrás de eso, definitivamente. Pero el mensaje que se le está dando a las poblaciones es que el gobierno no tiene dinero y que está vendiendo sus activos para poder pagar el gasto público; para poder financiar el gasto público.  Entonces tienes a la gente comprando sus billetes de 500 pesos para ayudar al gobierno. Es realmente . . . 

Naty – Qué perverso.

Daniel – Eso que nos parece chistoso a nosotros tiene mucho arraigo en la gente. ¡La gente realmente piensa que el gobierno está sin dinero ! 

Jesús – Exacto. 

Daniel –  . . .  Que no tienen manera, ni forma. Aquí el Ministro de Hacienda, el Ministro de Economía, dijo hace un mes que Colombia tenía seis semanas de liquidez . . .  y la gente entró en pánico; es verdad, la gente entró en pánico –Nos quedamos sin recursos ¿ que vamos a hacer? El gobierno ya no tiene plata.– Y realmente la gente piensa que así como es la economía de su casa, es la economía del gobierno. 

Naty – Y con Covid; ahí Chile, en vez de dar un bono, están dando solo plata de los fondos de pensión.  Obvio que uno va a pensar que no hay dinero si hay que darme mi propia plata de mi fondo de pensión privada y me dicen –Ahí está la única plata que queda.–  Obvio también ahí van a aprender eso. 

Andrés – ¿Cómo es eso? no he escuchado mucho, ¿están reciclando dinero o están devolviendo el dinero? 

Naty – Sí y ¡ eso es la movida de la izquierda !  En vez de dar un bono;  hay que retirar plata de la AFP.  La AFP es el sistema de los años ochenta del hermano de Piñera;  Jose Piñera, Pinochetista. Pero sí, ahora están en el tercer retiro;  tercer retiro de 10 % . . . 

Jesús – Pero la diferencia es que Daniel habla de un gobierno de derecha y aquí estamos en un gobierno de izquierda . . . 

Naty – Claro.  

Jesús – Lo más sorprendente, lo más grave, es lo que estamos viviendo. Y no solamente eso, porque grupos de economistas que se dicen progresistas heterodoxos están apoyando estos tipos de medidas. 

Naty – ¿Como en la tesorería, no ? ¿ Que hay un marxista que está haciéndose igual a Doug Henwood, como finanzas sanas? 

Jesús – Se nombró una persona, una profesora,  que es socióloga . . .  Hubo muchas reacciones de  determinados sectores económicos, principalmente la empresarial, para decir;  en el sentido de que dijeron –¿Cómo va a estar una marxista frente a la Tesorería de la Federación en México? –  Sin embargo; bueno, nosotros sabemos que ese perfil de ser marxista cumple con los requisitos para cuidar el –sound finance socialism–. 

Naty – Qué tragedia. Qué vergüenza. 

Jesús – Entonces realmente era el adecuado, pero espero que con esto no se me echen encima en el Jacobin.

Andrés – Es muy importante el momento político en el que vivimos. Estamos con una crisis ambiental mundial; estamos con el fascismo por todo el mundo, se está  subiendo al poder. Y la misma izquierda está reforzando ciertos principios que nos están paralizando como sociedades mundiales de poder salir, de poder encontrar una salida diferente. Entonces estas izquierdas de las finanzas sanas; las veo yo como paralizadas o encarceladas en tres puntos. Por un camino, ven que lo único que es posible es poder redistribuir un poquito de los más ricos para hacer algún u otro plan o no sé, poner el avión presidencial en una rifa. Por otro lado; el segundo punto, hay una izquierda que no ve que nada es posible sin la excepción de una revolución mundial; sólo en ese entonces podemos hacer algo; si por todo el mundo hay una revolución y ya EEUU deja de ser la moneda de reserva, ahí de pronto podemos tener bienes públicos; ahí podemos invertir.  

Naty – Antes, Latinoamerica cagó; nada de MMT para ellos. –Por la colonización financiera, no pueden hacer nada– . . . no captan la ironía nunca. 

Andrés – Y algo que es muy común es escuchar ese tipo de izquierda; acá siempre es izquierda norteamericana hablando de Latinoamérica, como si Latinoamérica no tuviera ninguna capacidad de actuar, de hacer nada; porque todo está jodido.  Entonces está eso. Y el tercer punto creo yo es la asociación entre las finanzas sanas y este tipo de austeridad por la izquierda y el petróleo . . .  la izquierda del petróleo. 

Naty – Y los recursos . . .  estatales . . .  

Andres – Exactamente. La única manera de hacer políticas de izquierda es si los petróleos, si el sistema petrolero nos da dinero a nosotros. Entonces en ese sentido tiene que ser muy exitoso en la industria del petróleo para que los países puedan hacer cosas y si caen los precios; nos jodemos todos.  

 Naty – Y igual con el cobre, con cualquier recurso. 

Daniel – ¡ Commodities ! 

Jesús – Yo agregaría que, por ejemplo, este grupo de economistas heterodoxos genéricos, para llamarlos así, que ven;  creo que Daniel lo mencionó, que para darle solución al tema de la falta de dinero hay que instrumentar impuestos a los que más tienen, los ricos, Y que solamente así es posible financiar programas sociales. Entonces uno puede ver por ejemplo en las redes sociales este grupo de economistas de izquierda, están promocionando; están impulsando esta agenda- de –tax the rich– para poder financiar el gasto público. Y yo lo que veo es que en Colombia ha habido un poco más de reacción a la TMM, a diferencia en México. En México como que hay un silencio.  

Naty – Chile igual . . . nadie ha escuchado de la TMM . . . creo gente que ha estudiado fuera quizás . . .  es como que no hay nada de arraigo ¿Quizás cuando llegue el libro de Stephanie Kelton? No sé. 

Jesús – Ese es el elefante en la recámara.  Andrés menciona que en la parte de petróleo también está lo que es –los impuestos a los más ricos– y esa es la agenda, definitivamente. 

Naty – Si, 100% – impuestos a los super ricos–; cada día lo dicen. 

Andrés – Daniel, ¿cuál ha sido tu experiencia en la izquierda colombiana con estos puntos de finanzas sanas en el mismo grupo de camaradas ?

Daniel – Yo creo que no nos diferenciamos mucho. Acá, la izquierda suele ser muy conservadora. Y casi que es muy difícil para nosotros comprender algo distinto a que los gastos solo se pueden suplir con ingresos. Incluso, aquí hay un movimiento o hubo un movimiento muy fuerte en contra de la deuda pública. Todavía existe y yo he asistido a algunas de sus reuniones y la cultura de ellos es –No a la deuda, porque no.– 

Naty – Es el diablo. 

Daniel – Claro, es el diablo . . .–La deuda es mala porque es un mecanismo de sometimiento de los países del norte contra los países del sur– y puede ser cierto; yo no creo que sea tan tan tan lejano de la realidad. Pero te pone también en una posición política de que te niegas a que existe la deuda pública y que solamente el gasto público pueda financiarse con impuestos y una izquierda colombiana que está convencidisima de eso, convencida. Pero lo que dice Jesús es cierto, fijate que a través . . .  y esto ha sido muy importante  . . . lo digo así muy sinceramente– la Facultad de Ciencias Económicas de la Universidad Nacional, una universidad pública;  que se ha encontrado, digamos, que ha buscado, ese mecanismo de interlocución con lo que está pasando en otros lugares del mundo.  Es decir, existen otras formas.  Y fijate que esta carta que yo menciono, que hasta ya lleva la firma de algunos ciento o doscientos economistas en todo el país, gente que ha publicado; gente que está en la academia; gente que son profesores universitarios, diciendo – Hay otras maneras.– Y no solamente otras maneras de decir –Cobremos impuestos a los más ricos– o –Hagamos una reforma tributaria progresiva.– Claro, en Colombia es urgente la progresividad tributaria, pero no para encontrar recursos, sino para que haya una redistribución, porque realmente en Colombia los ricos no pagan impuestos. Entonces eso ha generado una concentración . . .  el GINI en Colombia antes de impuestos es igual después de impuestos. Entonces claro, ahí  hay un desbalance. Pero ese no es el problema fiscal en Colombia. El problema fiscal en Colombia es que el estado no está invirtiendo en lo que se debe invertir y que esa teoría de las finanzas sanas,  incluso no la creemos nosotros. Bueno, yo siento que el candidato presidencial Gustavo Petro lo ha entendido. Lo ha entendido a la forma en la que empezamos a entenderlos, los que empezamos a centrarnos en esto ¿verdad ? Que no es de forma inmediata, pero sí por lo menos empieza a decir –No le podemos tener miedo al déficit fiscal.– 

Naty –  Mi pregunta . . .  yo creo que habrá un poco mas de conocimiento quizás con esta propuesta de garantía de trabajo . . . no ha pasado todo el rato con el Green New Deal por ejemplo o Job Guarantee en EEUU . . .  igual hay gente que piensa que el Green New Deal y Job Guarantee van a venir de los impuestos, pero igual tener estas propuestas en la mente pública da un camino para abrir las ideas de TMM. 

Daniel – Así es. Y fijate que la principal pregunta en el debate de hoy es ¿Cómo piensas enfrentar la crisis? Y la respuesta fue que hay que emitir el banco central debe emitir y financiar al gobierno para generar empleo, para generar una renta, para reactivar la economía, un choque de demanda vía emisión. Y eso fue, en los medios de comunicación de Colombia  como si hubiera dicho una herejía. Los medios de comunicación, lo primero es que –Gustavo Petro propone imprimir dinero–  que es otra cosa a la que tenemos que enfrentar cuando hablamos de estas cosas. Porque tergiversar nuestras propuestas es demasiado fácil. Y en Colombia lo primero que hacen es confundir emisión con impresión de billetes. Los memes de Gustavo Petro;  está con impresor imprimiendo billetes; Venezuela, como Uds. ya saben. 

Naty – Cocaína. 

Daniel – Pero fijense en Colombia,  el año pasado el banco de la república emitió 40 billones de pesos; billones, mediante –quantitative easing–. Le dotó de liquidez a los bancos privados. Y entonces, eso lo hemos utilizado dentro del debate para decir a la gente –Fíjese que el problema no es la emisión. El problema no es la emisión. El problema es profundamente político.– Y creo que como decía Jesús, sí hemos avanzado en Colombia en dar ese debate. Tanto así que el director del doctorado de la Universidad Javeriana piensa que tiene que acudir a unos adjetivos;  a adjetivar debate, porque ha escalado en Colombia. Por lo menos en el plano académico, ha escalado. Y yo tengo la fé de que ese escalamiento nos va a llevar a un buen punto. 

Jesús – Para agregar quizás un poco, como que en Colombia se está dando la dinámica de cambiar el marco económico bajo el contexto adverso que todas las naciones estamos viviendo, especialmente las naciones como las nuestras. Aquí en México el año pasado empezaba a sentirse ya los efectos de la pandemia y de la crisis económica que llevaba  méxico arrastrando antes de la pandemia; esos economistas progresistas de la izquierda pedían que México aceptara una línea de crédito del Banco Interamericano de Desarrollo, o sea, deuda externa.  Entonces nada más para situar que tan perdida está ese segmento de izquierda en este aspecto. 

Naty – Que la deuda externa tiene una historia tan fuerte en Latinoamérica . 

Andrés – Pienso que es muy importante hacer esta diferencia porque hay mucha gente que con el miedo que le tiene a las deudas públicas, piensa que es lo mismo una deuda externa que una deuda pública doméstica. Y las mismas políticas de las finanzas sanas construyen una dependencia más fuerte de nuestros países en las deudas externas. Es el problema, que la misma izquierda no ha podido proponer una solución. Entonces por eso es que siempre están pensando que dependemos de la reserva de dólar  y que esto y lo otro, porque no hemos construido una estrategia que nos saca de esta mentalidad que el problema es la deuda externa.  El problema es que tenemos deuda en dólares. 

Daniel –  Fijate Andrés que nosotros también tenemos que despojarnos de algunas reticencias, ¿no ? Es decir, a nosotros nos dicen –inflación– y entonces, nosotros decimos –eh no, nosotros tampoco estamos por la inflación.–  Y es verdad. En la teoría  MMT no está proponiendo brotes inflacionarios. Pero en la práctica, los países, países como Colombia; en Colombia importamos hasta un tornillo. Tenemos que preocuparnos por ciertos asuntos.  Sin embargo, es otra batalla a la que no hay que tenerle miedo. Es decir, ¿cuánto inflación podemos permitirnos? o ¿ cuánto desempleo podemos permitirnos ? Es que, pareciera que en el mundo se murió la curva Philips; ya no existe. No, existe; y en los países como el nuestro existe. Pero podemos permitirnos un poco de inflación con tal de reducir el desempleo; esa es la paradoja y esa es la pregunta política porque es fundamentalmente político. O tenemos que tener unas muy pequeñas inflaciones sin importar cual sea la  tasa de desempleo.  En Colombia la tasa de desempleo está en 14,7 % y una inflación del 1 %. Las variaciones mensuales a veces son de cero; a veces hay deflación en Colombia. A veces pienso; y esto es una autocrítica, que de pronto debemos hacernos, qué cuando nos dicen –inflación– y decimos –No, no nos gusta la inflación, no nos gusta para nada la inflación.–  No, permitámonos un nivel de inflación, pero permitámonos también reducir el desempleo. Porque en Colombia los economistas ortodoxos dicen –es que la inflación es el peor impuesto para los pobres–. Y yo les digo –¿es peor que estar desempleado y en la pobreza y con hambre y en la miseria ? En serio?–  Y ahí hay un debate moral. 

Naty – Quería preguntar a Jesús que ha hablado harto con Fadhel Kaboub; que es como yo creo el economista de TMM más famoso en términos del sur, de países  con menos capacidad monetaria o también donde tienen que importar harto; porque no han desarrollado sus recursos de comida, o de energía, o tienen que exportar ¿Podrías hablar un poco de esos desafíos o esos límites de pensamiento estructurales, en términos de ser el ‘sur’ entre comillas?

Jesús – Bueno, desde que se instrumentaron las políticas de corte neoliberal a partir de la década de los ochenta, en México, lo que decían los técnicos es que la mejor política industrial es que no hubiera política industrial. Eso es lo que decían. Entonces, México, a lo largo de estos años, ha carecido de una política industrial que fortalezca el mercado interno, que fortalezca la estructura productiva nacional y por el contrario lo que se ha hecho es depender del exterior, depender de importar las específicas de los tratados de libre comercio en donde lo que México exporta son productos de muy poco valor agregada. 

Daniel – El petróleo también. 

Jesús – Exacto. Entonces México es, en términos de la industria manufacturera, una línea de ensamblaje, no tiene la capacidad para aportar ese valor agregado porque no se invierte en ciencia, en tecnología, innovación. Y a propósito de ciencia y tecnología e innovación, el gobierno eliminó recursos importantes en esas áreas. Entonces eso realmente va . . . si ya no tenemos política industrial y ahora con un débil sector de ciencia, tecnología e innovación, estamos debilitando el espectro de capacidad económica que tiene el país y eso nos va a generar muchos problemas al futuro;  depender del exterior para poder salir adelante. 

Andrés – Y después llega una pandemia y se colapsa toda la infraestructura. 

Jesús – Exactamente, sí; ese es otro tema, en donde además, obviamente de la mala planeación, de la corrupción, está el problema de la falta de recursos públicos para el mantenimiento de la infraestructura pública. 

Naty – Lo que pasó el otro día en DF, con el tren de metro. 

Jesús – Sí y la cuestión aquí fue que ya la gente llevaba tiempo advirtiendo de estos problemas. Entonces, hay resultados,  tanto a nivel federal; si hay recortes, hay austeridad, tanto a nivel estatal y municipal. Ahí se mencionaba que no había recortes a la línea del metro. Sin embargo, en la cuenta pública, de la recién publicada de las cuentas públicas,  ahí se ve que el metro de la Ciudad de México no se gastó lo que al inicio se había presupuestado. Entonces, una serie de errores; una serie de problemas que van desde la corrupción, la planeación, y desde luego; la austeridad, la política económica. 

Andrés – Entonces yo creo que hay dos puntos muy importantes de lo que dice Daniel, tanto como Jesús;   que como que nos conecta con la importancia y el aprendizaje que viene de MMT,  la TMM. Por un lado,  que la ortodoxia confunde la inflación con la hiperinflación y piensa que todo es lo mismo . . . como que si ahí crece la inflación por un por ciento, tenemos hiperinflación como . . . 

Daniel – Desastre.

Andrés – Como el desastre; estamos como Alemania antes de la segunda guerra mundial. 

Naty – Siempre, siempre hay Weimar.

Andrés – Exactamente, y diferenciar eso es muy importante  y ahí la teoría de la moneda moderna nos da enseñanzas para aprender, primero de todo, que nosotros argumentamos que no importa si Colombia o México no son las monedas reservas mundiales; siempre van a tener la capacidad de emitir su moneda en su país a los recursos que tienen domésticos, punto.  Eso es un hecho lógico. Y que los límites no son límites de encontrar el dinero o que vamos a sacar la plata; de donde va a salir, que se nos va a acabar todo, que hay que rifar un avión. Los límites son límites de a qué nivel puede ponerse problemática la inflación; pero eso no es un resultado de que existe mucho dinero en la economía, sino es un resultado de la capacidad productiva de un país, por un lado. Por un lado, la capacidad productiva de un país y si estamos usando más recursos de lo que tenemos. Pero en Colombia, como en México, tenemos una cantidad de gente desempleada y recursos que no estamos usando.  Y por otro lado, en nuestros países hay presiones inflacionarias que no tienen nada que ver con el gasto público y todo que ver con el poder privado, del sistema financiero  y de los monopolios, y las corporaciones que pueden poner precios donde ellos quieran porque tienen mucho poder sobre el mercado. Ahí también hay poderes inflacionarios. Entonces nosotros estamos hablando no del dinero como si fuera una cosa que tiene el valor, un pedacito de oro, que tiene cargado el valor y todos tenemos que ser ricos, como esos memes de gatos que están buscando la luz, que están corriendo, que tiene la luz y el gato está corriendo por todo el piso tratando de escapar la luz roja, y que nunca la puede porque no existe. De esa misma manera, la teoría de la TMM no ve el dinero como un pedacito de oro, como algo que captura el valor, sino que el dinero es una infraestructura institucional. Es una manera de organizar las deudas. Es una manera de movilizar capacidad productiva, es una manera de crear esas relaciones de gobernación;  que son tan importantes. Entonces por ese lado también, y esto es lo último que digo aquí ahora en la conversación,  es que nuestros países,  como decía Jesús y Daniel también, no han invertido en su capacidad productiva;  dependemos de inversión extranjera, dependemos  de dólares; y si no tenemos esos dólares, no tenemos economía. Entonces cada vez nos hundimos más y más en este hueco;  que nos dan préstamos el banco mundial o si un inversionista americano o europeo entra en su país y ellos se van cuando se quieren ir y nos dejan jodidos; eso es el sistema que tenemos ahorita;  eso crea pesos débiles;  eso está resultando en los problemas inflacionarios que podemos tener y el hecho de que no invertimos en la educación pública, en los sistemas de energía sostenible, en los sistemas de producción de comida justa, en estas cosas tan importante, en el empleo público;  eso es lo que nos tiene nostros como economías débiles. 

Naty – Necesitamos un Green New Deal Latino. 

Jesús – Para agregar un comentario, lo que dice Andres sobre la moneda; hace unos años, un ex asesor de la ahora presidente tenía la propuesta de quitar el peso y que adoptáramos el dólar como moneda. 

Daniel – Noo. 

Naty – Se ha ido muy bien para Ecuador, está buenísimo. 

Daniel – ¿ Pero es una persona de Morena ? 

Jesús – No, es un empresario. Otra propuesta era anclar el valor del peso a plata. 

Naty – Volvemos al futuro. Años 70, genial. 

Daniel – Fijate que en Colombia pasa algo curioso, porque como yo les decía, este debate está cogiendo fuerza, hay mucha gente ahora este debate, desde diversas perspectivas. A veces es un debate ilustrado o a veces simplemente se tergiversa sobre el mismo. Pero por lo menos la gente lo está hablando.  Y es muy chistoso que a estos economistas ortodoxos, un profesor de la universidad nacional les llama –economistas de la séptima–,un poco haciendo la alegoría, en EEUU – los economistas de agua dulce y los economistas de agua salada.– Bueno el trabajo ese es símil a la colombiana y les dicen –economistas de la séptima– porque sobre la carrera séptima en Bogotá están las facultades de los Andes, de la externada, de la Javeriana; que han sido muy ortodoxos históricamente. Y entonces decían, escogieron el libro de Stephanie Kelton y nos mostraron la página, – -Mire, aquí dice la señora Stephanie Kelton que en países como Colombia que importan mucho, nos decías no tiene ningún sentido.–  Y es muy chistoso porque son los que 30 años han llevado a Colombia a que el aparato industrial y el aparato productivo se deprima y ya que solamente Colombia produzca petróleo y cocaína, porque lo único que producimos hoy  es petróleo y cocaína y nos trajeron hasta acá. Y son tan descarados y quebraduras que nos dicen –es que fijate, no tenemos un sistema productivo como para que las ideas de MMT tengan un asiento en Colombia.–  En realidad, fijense que es una confesión,  de todo lo malo que han hecho, verdad ? Deprimieron el aparato productivo colombiano y por supuesto;  yo creo que me gusta mucho la idea de un Green New Deal Latinoamericano porque eso nos tiene que poner a pensar en cómo potenciamos el aparato productivo de nuestras sociedades; porque realmente si no lo tenemos, si seguimos importándolo todo, vamos a tener problemas. Y la integración latinoamericana; las cadenas de valor latinoamericanas, romper fronteras en ese sentido, podría ser una muy buena idea. Yo pienso algo así como la producción de litio en Bolivia, del gas, del cobre, de buscar, claro . . . esto tiene que tener una perspectiva climática, porque estamos en en el marco de una crisis climática, pero podemos incluso generar unas cadenas de valor latinoamericanas que nos permitan pensarnos en un Green New Deal Latino desde el sur. 

Andres – Daniel, ¿Ud.  piensa que la izquierda colombiana va en camino para, de verdad internalizar esta visión que aquí nos propone? 

Naty – Mañana. 

Andres – Mañana mismo. 

Daniel – Yo creo que estamos en un proceso. Mira, la verdad, como les decía ahora mismo, en la izquierda colombiana hay unas visiones muy conservadoras, pero siento que la campaña presidencial de Gustavo Petro está poniendo en el debate estas ideas. Y cuando se pone en el debate en el marco de una crisis, de una crisis, que por ejemplo el tipo sea capaz de decir, –emisión monetaria–, eso es un avance impresionante en una sociedad tan conservadora como la colombiana. Y fijate que él lo dice y ya  hay un montón de gente repitiéndolo, ¿no ? Hay un montón de gente diciendolo. A esto hay que ponerle un poquito mas de teoria, un poquito mas de fuerza, a estas ideas. Tenemos en el congreso de la república un proyecto de ley de trabajo garantizado y eso también incentiva el debate. Creo que vamos por un camino que sigue siendo un camino un poco inexplorado, pero empezamos a caminar, empezamos a andarlo, y eso ya es una garantía impresionante. Y lo otro, que a mi me hace ser optimista de lo que pasa en Colombia; es que no es simplemente una propuesta aislada, sino que la del candidato presidencial que hoy está liderando las encuestas, y eso quiere decir que tiene apoyo popular, y si tiene apoyo popular, podemos tener la posibilidad de echarlo adelante. Y de vencer, los primeros que hay que vencer es el conservadurismo de nuestros propios compañeros y amigos de la izquierda, que a veces suele ser los más difícil, pero yo creo que lo podemos lograr.  

Jesús – Y versa en nuestro caso, en el caso Mexicano, o sea los errores que ahora estamos pagando, es muy importante. 

Andrés – Estos economistas de la séptima me parecen más a mí como los economistas de garaje, como dicen por ahí. 

Daniel – Pero son los que gobiernan en Colombia, llevan treinta, cuarenta años gobernando. 

Andres – Jesús, ¿esperanzas para México, como lo ves ? 

Jesús – Yo creo muy difícilmente en el sexenio, en la actual administración, va a haber cambios. El gobierno ya ha claramente fijado su posición. Sin embargo, estamos siendo observados;  el mundo nos vigila. Estamos siendo observados, y bueno, parece ser que están volteando a la TMM. Incluso, me atrevo aquí mencionarlo, se han acercado a nosotros, al equipo de la MMT. De manera un poco tímida, pero se han acercado. 

Daniel – ¡Qué bueno ! En Colombia hay una parte de la izquierda que ve a Andres Manuel como un referente, y dicen, –Mira que no se monta en el avión presidencial–. La gran iniciativa de ellos, es decir, –Propongamos bajarles el sueldo al presidente y bajarles el sueldo a los congresistas, y ahí tendríamos recursos.–

Andrés – Sí, hubo un momento en el que yo veía al presidente Mujica de Uruguay viviendo en su casita y decía –Ah, eso es la izquierda.–

Naty ––¡Fuma marihuana y tiene una casa chica así que con Uruguay, todo está bien.–

Daniel – A Petro le ponían unas fotos porque tenía zapatos ferragamos y entonces era incoherente, una farsa,  usaba zapatos caros, mira, – ¿porque no anda descalzo si es de izquierda ?–

Andrés – Jesús, antes de esta grabación tu me hablabas de las iniciativas de justicia social, temas sociales y cosas así , ¿ves eso como un vehículo para integrar las ideas de la TMM en México con temas de la justicia social y cosas sociales ?   

Jesús – Sin duda, la TMM, en el caso Latinoamericano, específicamente  en el caso de México, tiene que ir de la mano con el aspecto social; en donde se busque platicar, dialogar con los grupos sociales que están viviendo dificultades específicas y considerarlas en las estrategias que se vayan a desarrollar. Entonces en México . . . tiene diferentes . . .   muchos países  y cada localidad tiene sus diferentes problemas; desde el tema de la seguridad, el tema del medioambiente  y el tema obviamente de la falta de oportunidades de empleo en donde las personas tienen que emigrar a EEUU para buscar mejores oportunidades laborales. Entonces la TMM tiene que aterrizarse, considerando esos aspectos y más por ejemplo,  un Green New Deal tendría fuerzas que consideran los aspectos sociales y sobre todo el marco también de seguridad que existe; la dinámica de la seguridad, en la economía, es fundamental. Y obviamente; en el caso de Colombia, definitivamente, sería algo semejante al de México, ¿no ? 

Andrés – Claro, en el caso de Colombia también creo que esta visión es fundamental, para la paz, ¿no ? Como en México, que se está viviendo violencia también; en nuestros países que han vivido tanta violencia con narcotráfico y también con falta de estabilidad social, programas de trabajo;  empleo público, inversión y  sostenibilidad;  todas estas cosas garantizan la paz de manera profunda y de manera que es sostenible ¿no ? a largo plazo. 

Naty – Sí. Y es la manera de salir de ser dominado por el imperio, ¿ cierto ? La manera de ganar al –imperio– entre comillas, no es importar aún más cada vez más. 

Andrés – En fin, amigos, los estados no son hogares; los estados tienen capacidad constitucional sobre sus propias monedas; los impuestos no son necesarios para la capacidad de gastar, son necesarios para otras cosas– para la desigualdad;  para no dejar que la riqueza se acumule de manera obscena. 

Naty – Para comprar revoluciones moleculares disipadas . . . 

Jesús – Necesitamos hacer rifas de los aviones . . . . 

Daniel – Bajar el salario de los congresistas . . . 

Andrés – Exactamente. 

Naty – Ya, muy buena conversación, gracias por venir y hablar. 

Daniel –  . . . Que exista gente muriéndose literalmente de hambre es una inmoralidad. Todos los estados pueden permitirse rescatar a sus ciudadanos y garantizar ciertos derechos. Que no se hagan no es porque no puedan;  por no tener recursos. Es porque hay poderes políticos detrás . . .  eso es simplemente político; eso no es económico. En lo económico;  está sobrediagnosticado, existen todo tipos de estudios y de teorías que demuestran que los estados pueden permitirse rescatar a sus ciudadanos.  Entonces es más moral y política que técnica.

Naty – Si, no es técnica. Yo creo que con Superstructure y Money on the Left es uno de los puntos más importantes; que queremos que TMM no sea solo como algo técnico, como ah –Mira, es solo ciencia.– Estas preguntas sociales son importantes para todo el mundo. 

Andrés – Para nosotros, todo los asuntos técnicos son asuntos sociales y asuntos políticos. 

Naty – Claro, que el binario también no es cierto.

Daniel – Le enseñan en la facultad de economía que existe una tasa natural de desempleo y es natural que exista. Mentira, eso es mentira.   

Naty – Todos los mini Friedmans de twitter – que van con sus monitos.  

Andrés – Según los ortodoxos, el desempleo es como la gravedad. Existe en la naturaleza, porque si. Y eso, como hemos estado hablando,  es algo que tenemos que rechazar profundamente como izquierda. 

Daniel – Es que cuando los libros de texto dicen –tasa NATURAL de desempleo–, ese –natural– hay que naturalizarlo ¿ no? Que es algo sobre lo cual no puedes pelear, no puedes controvertir. Es una gran farsa. 

Naty – Es la idea ¿ no? No quieren que vayan discutiendo estos temas; quieren que siga el neoliberalismo, la hegemonía del Banco Mundial, el FMI y con sus amigos de Harvard Business School . .. 

Andrés – La otra es la tarifa natural del interés; eso es la otra – natural rate of interest–

Daniel – Todo es natural. Cuando te estafan ellos,  es natural. 

Andrés – Si, exactamente. 

Naty – Ya, muy buena conversación, muchas gracias, perdon mi español a veces, llevo acá años y años  pero igual me molesta que no hable mejor. 

Daniel – Que chevere hablar con Uds y compartir. 

Andres – Escuchantes, gracias por estar aquí con nosotros en este episodio especial de Money on the Left and Superstructure. 

Naty –  Superestructura. 

Andrés – Nos veremos pronto, por favor siganos y si quieren escuchar más, tenemos un patreon y también les sugiero el trabajo que hace Daniel en Colombia, en  Colombia Humana, con el senador Wilson Arias y también Jesus Resendiz, en su columna de Milenio . . . 

Naty – ¿ Cómo se llaman en twitter ? 

Daniel – @DanielRMed de – Medellin–, pero –Med–

Jesús – El mio es @Tlacuachito. 

Andres – Perfecto, lo tendremos escrito también en twitter para que los puedan seguir. ¡Bueno, muchas gracias ! 

Jesús – Muchas gracias. 

Naty – Gracias. 

Daniel – Gracias a Uds, que estén bien, un placer. 

Superstructure 33 – Mediation is the Fourth Estate

Analyzing recent events at The Washington Post, Will Beaman (@agoingaccount), Natalie Tabb (@orangeasm), and Maxximilian Seijo (@maxseijo) develop a theory of media accountability in which heterogeneous institutions and social infrastructures are variously implicated as political participants.

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Monetary Austerity as Social Conflict

By David M. Fields

Monetary austerity, like fiscal austerity, is a top-down offensive. A monetary assault on working people is being waged in the name of fighting inflation. In similar fashion to the demagoguery that surrounds government expenditure cuts that lead to significant losses in social provisioning, a political climate of inflation hysteria has engulfed the US Federal Reserve, engendering a reactionary policy stance of protecting the wealthy at the social cost of maintaining a precarious working class.

The Fed has concluded that inflation is now its biggest challenge, but admits having no control over the actual factors underlying the current inflationary surge. Nonetheless, it defends raising interest rates as necessary “preemptive strike” to excessive price distortion, whereby severe “market imperfections” in the long run could undermine the dual mandate of price stability and maximum sustainable employment. In central bank jargon, such so-called forward-looking acumen conveys the message that anchoring inflationary expectations is the primary means to ensure market confidence or “credibility” for effective macroeconomic balancing.

The notion of an independent and knowledgeable technocratic Fed constitutes naïve faith. Monetary policy choices support some interests over–even against–others. So, contrary to what we are told, contractionary monetary policy is NOT a conventional tool to soothe market confidence in light of unpredictable inflationary expectations; it is an embodiment of social conflict, a coordinated attack on the working class to protect and maintain profit extraction. Raising interest rates, thus, is not “sound” policy in the truest sense of the term; it reduces consumer spending and economic activity at the behest of the rentier to insulate this social group from any possible unsavory transgression that may arise from economic uncertainty.

I am sure this seems like heresy to many, but let me try to convince you. The economy, as determined by the need to expand output depends on banking; the capacity for firms to purchase necessary amounts of labor and material inputs necessary for satisfying expectations of profit and for workers to receive wages is assigned by the availability of credit. Without banking, economic growth comes to a halt, since business investment expenditures stem from the need to borrow in excess of any pre-existing amount of financial resources. Credit provides deferred payment, which allows firms to manage sales, and, thus, facilitate long-run operational expansion. If there is a restriction on credit, as a matter of course, any attempts for increased production are futile.

Credit allows firms to pay out money for materials and wages to keep production and distribution going in advance of receiving profits from expected sales of goods. The implication is that firms will have to deduct interest payments from profits, which will be relegated to the banking sector. The cost of available credit from the banking sector is set by the rate of interest, which is determined by the Fed; this, by definition, determines the parameters of firm profit. A high rate of interest, for instance, would induce firms to forgo productive investment because access to credit is expensive. This would encourage firms to suppress wages, e.g. layoffs, which triggers recessionary pressures resulting from decreased production — this raises the level of unemployment, which is antithetical to working-class interests.

The decision by the Federal Reserve to raise interest rates by the largest percentage point since 1994 is, therefore, quite treacherous for working people. US Economic growth is well below full employment. The economy confronts headwinds from developments that constitute cost-push-markup inflationary processes, so we are not seeing the manifestations of so-called demand-pull inflation, that is, too much money chasing too goods, or too much wage growth, resulting from an overheating economy or overspending for which monetary austerity is requisite. There is an economically destructive rationale at play, wherein interest rates are hiked to the point that they depress wages to compensate for causes outside of the direct reach of the Federal Reserve, to put a stop to workers from taking advantage of unique historically-specific social circumstances to effectively bargain for receiving their fair share.

***This post is heavily drawn from my entry on ‘Credit Money” in the soon to be published Encyclopedia of Post-Keynesian Economics, edited by Loui-Phillipe Rochon and Sergio Rossi, see here.***

***Republished from the Monetary Policy Institute Blog***

Projections 5: In Social Medias Res

In episode 5 of Projections, Will reflects on how recent editorial decisions at The Washington Post and New York Magazine have opened both institutions to public pressure and contestation during a period of right wing media campaigns against feminism and so-called “wokeness.”

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Projections: May ’22 in Review

Catch up on the May 2022 episodes of Projections, a new series from the Money on the Left Editorial Collective hosted by Will Beaman (@agoingaccount). Projections offers short readings of current events that destabilize and contest mainstream conservative narratives on behalf of an inclusive progressive politics.

Tracklist:
1. Up for Grabs
2. The Calls Are From Inside the House
3. Grab-bags & Constellations
4. Cops Don’t Care

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Projections 3: Grab-Bags & Constellations

This week, Will Beaman (@agoingaccount) offers critical reflection on recent statements by Jacobin Magazine’s Matt Karp, in which he dismissed recent Democratic Party primary victories against establishment candidates as moving backwards to a “pre-Bernie era” of “vague constellations of grab-bag progressives.”