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Category: populism

  • Paying for Populism

    True democracy is populism—is it not? It has always struck me as odd that “populism” is used to describe a fringe politics, motivated by grievances that are viewed as illegitimate complaining. But if the not-profit-making needs of local and regional communities are determined and addressed by a democratic, majoritarian process, isn’t that what real “populism” must be? The problem, as I noted in Why MMT Progressivism is the Real Populism, is that local and regional communities have to pay people and businesses to provide the goods and services they decide are necessary for their collective wellbeing. And, since local and regional communities cannot issue their own currency, payments for their not-profit-making enterprises can only be derived by the operations of sovereign fiat money at the national level. And if that larger problem cannot be resolved—if we cannot understand how the federal government can issue fiat currency to pay for collective goods and services—how can a real populism ever unfold?

    I have spent considerable time over the last several years trying to visualize an explanation of modern fiat money that frees us from the constraints of imagining that federal spending, for the collective wellbeing, must be paid for with tax revenues—or by borrowing dollars from private commerce which must be repaid with future tax revenues. Sometimes it feels like progress is being made—that modern monetary theory (MMT) has its toe in the door guarding our normative thinking about money.

    One might even consider the current resurgence in federal spending by the Biden administration as a positive sign. It should be noted, however, that this new spending—unfunded by tax revenues—is not being explained through the lens of modern fiat money operations, but by the justification that interest rates are currently so low the federal government can afford to borrow great sums of money—and that new revenues, to repay the “loans” will eventually be found in the realm of new taxes on global corporations. So, really, not much progress is being made at all—at least on the topic of understanding how the fiat money system works, and how to use it to our collective advantage. And, for lack of progress on visualizing fiat money accurately, it is very likely we shall eventually (and perhaps at the most inopportune moment of confronting the climate crisis!) shackle ourselves, once again, in the chains of irrational fiscal austerity. Certainly, we are a long way from creating a rational payment system for genuine populism.

    A book I recently read, Double-Entry, by Jane Gleeson-White (for which I am grateful to a footnote in Tom Wheeler’s book From Gutenberg to Google) has given me pause to consider that, perhaps, another approach to freeing ourselves from the bondage of our outdated “standard money theory” is necessary. Reading the book started me thinking that attempts to explain that the U.S. government, in its “deficit spending,” does not borrow money at all and is, therefore, not required to collect future taxes to repay a “debt”—perhaps that is too steep a hill to climb. At least it seems likely we will not be able to climb it fast enough to begin meeting the new challenges we face as a collective society—challenges which are now becoming desperate. 

    Double Entry is a history of—and a crucial “sociological” analysis of—double-entry bookkeeping. Its roots are traced from the merchants of Venice, and its first codified explanation in 1494 by a mathematician monk (and close friend of Leonardo DaVinci), Luca Pacioli. This explanation happened to be written just after the moveable-type printing press was invented and was, as a result, rapidly disseminated throughout Europe. Gleeson-White’s book traces the evolution of double-entry through the Renaissance, to the Industrial Revolution, through the invention of joint stock companies (i.e. corporations) and, eventually, the development of National Accounts which today calculate the Gross National Product (and supposed economic “health” of nations). Many things jumped out at me in the reading, but two gave rise to the topic of this essay:

    First, double-entry bookkeeping invented the concept of financial “profit” which, from my perspective, is the source of the cognitive dissonance of our standard money theory. The calculation (and justification) of financial profit, in fact, was (and is) the ultimate purpose of double-entry. Second, the process of double-entry bookkeeping (and the concept of financial profit) established what I earlier referred to as our “normative thinking about money”—that is to say, the actual mental architecture with which we perceive and understand monetary operations. And it is this mental architecture, structured over centuries by the operations of double-entry bookkeeping, that makes the hill of federal “deficit spending” such a steep obstacle. No matter how hard you try to revisualize and reframe it, “deficit spending” will always be defined by the bookkeeping of our mental architecture about money as “spending more than you earn.” Period.

    Except maybe—perhaps—there is another way to consider the whole thing altogether. And, perhaps, this other way solves the problem of “deficit spending” in a manner that makes “real populism” an actual possibility.

    What is a Public Bank for?

    While reading Double Entry, I found myself pondering a recent piece by Rohan Grey at RealProgressives.org explaining the “Public Banking Act” currently proposed by U.S. Representatives Tlaib and Ocasio-Cortez. What I kept wondering about is the possibility of utilizing public banks, as they are described in the proposed bill, as a “payments system” by which the federal government buys the not-profit-making goods and services Congress determines are necessary for the collective wellbeing—what I think of as “fiat spending.”

    In a nutshell, what I began visualizing is a process whereby Congress, instead of “appropriating” dollars for the U.S. Treasury to spend, authorizes the Federal Reserve to establish “Public Asset Accounts” on its balance sheet. Each authorized Public Asset Account would be associated with a specific not-profit-making undertaking which Congress, by democratic process, determines is necessary or desirable for the collective wellbeing. The Public Asset Accounts would be established to hold collateral Public Banks trade to the FED in exchange for new Reserves (U.S. fiat money). The new Reserves would then be used by the Public Banks to establish “payment accounts” which would be used by local and regional organizations and businesses to implement the specific not-profit-making undertaking Congress has defined. Here is the crucial, bookkeeping thing:

    The “collateral” the Public Bank trades to the FED (in exchange for new Reserves) is the public good Congress has identified in its authorization—and which, for bookkeeping purposes, has been given a specific dollar value per unit. Thus, just as the FED issues Reserves in exchange for profit-making collateral (financial securities) it is also enabled to issue Reserves in exchange for not-profit-making assets that benefit the collective wellbeing. And the Public Banks then use those Reserves as the basis for “payment accounts” which local and regional organizations and businesses use to actually create the public asset.

    A quick example

    Before considering the advantages of this payment system, let’s look at a quick example. Congress, by democratic process, authorizes a Public Asset Account for “American Childcare Programs—For the Purpose of Establishing, Staffing, and Operating Free-to-use Preschool, Afterschool, and Summer Day camp Programs in every local community of America.” (As you might recall, President Obama proposed something like this in his 2013 State of the Union address. What happened next was a scramble to find new tax revenues to pay for it and the eventual, quiet abandonment of the proposal because raising taxes—to avoid increasing “deficit spending” and the “national debt”—was not politically viable. Result: a not-profit-making asset America desperately needs for its collective wellbeing was left undone—another example of the “efficacy” of our standard money theory.)

    But these are new times! Congress (I am now imagining) has passed the Public Banking Act and every state has at least one federally authorized, not-profit-making, Public Bank which is a member of the Federal Reserve banking system. To implement its decision to undertake the provision of free-to-use childcare in America the U.S. Congress, instead of appropriating dollars for the Treasury to spend, authorizes the FED to establish, on its balance sheet, a Public Asset Account titled “American Childcare Programs.” Congress also announces that local community groups can apply for “payment accounts” at state Public Banks to establish, staff and operate local childcare facilities. Congress also issues a set of criteria and parameters which must be met for local groups to qualify for the payment accounts—parameters which would include public ownership of the asset.

    In response, Parents for Santa Fe Childcare (PSFC) organizes itself, researches the parameters and criteria established by Congress, and applies to the Federal New Mexico Public Bank for a payment account of up to $300,000 per year to establish and operate a preschool, afterschool, and summer day camp childcare program. The Public Bank does its due diligence—confirming that the community group and its business plan meets the qualifying standards set by Congress. It then establishes the PFSC payment account on its books—and PFSC proceeds to set up, staff, and operate the childcare program, writing checks on its payment account as necessary.

    Now let’s walk through a quick description of how the fiat money flows. Though slightly tedious, it is important, so please try to get the rhythm of it.

    1. When the Public Bank issues “X bank dollars” and credits them to PSFC’s payment account, it also submits to the Federal Reserve X dollars of “American Childcare Programs” Public Assets as collateral for X dollars in new Reserves. The FED issues and credits the new Reserves to the Public Bank’s Reserve account at the central bank. The FED then records the X dollars of Public Childcare Assets in the authorized account on its balance sheet.
    2. When PSFC writes a check on its payment account at the Public Bank, the check goes through the end-of-day clearing process at the FED (along with all the other inter-bank transactions that occurred that business day). During this clearing process, Reserves are debited, as necessary, from the public bank’s Reserve account and credited to, as is very likely to be the case, the Reserve account of a private, for-profit bank in which the check was deposited by the vendor, or staff, who had received the check as payment.

    By this process, the decision by Congress to pay American citizens and businesses to undertake the not-profit-making task of providing free-to-use childcare in local communities is translated into concrete action.

    But why do it that way?

    There are at least three compelling reasons.

    1. The first I have already alluded to: The fiat dollars we have just observed being directed to the establishment and operations of local childcare programs are not generated by tax revenues. Nor are they borrowed from existing Reserves of private commerce, an action which the norms of bookkeeping establish as a debt which must be repaid—in other words, by definition, “deficit spending.” Because they are not “deficit spending,”these allocations of fiat money for the collective benefit cannot be subjected to the political objections and arguments about “increasing the federal deficit,” or “increasing the national debt.” They are simply Federal Reserve banking operations—part of the grand machinations of everyday enterprise and commerce that are recorded on double-entry balance sheets. (Now, however, that “everyday enterprise” comprises bothprofit-making enterprise and not-profit-making enterprise for the collective well-being.) The Public Asset Accounts can only be critiqued, therefore, on the merits of what they intend to accomplish—what Public Asset for collective society they intend to create.

    (It should be noted as well that this is not a bookkeeping “gimmick.” The Public Assets the FED receives as collateral for the Reserves it issues are real assets. In fact, it could be argued they are more real than a large portion of the assets—current or deferred—that are listed in the accounts of today’s corporate world. In the case just illustrated, the Public Assets on the FED’s balance sheet comprise a publicly owned national childcare infrastructure available, without charge, to every American family. If that is not a real asset for our modern times, I do not understand the meaning of the term!)

    • Using a “Public Bank payment system,” as described above, creates (from State to State, across the country) an apolitical, universally applied process for the allocation, disbursement, and oversight of Congressionally mandated spending programs. Political machinations over control of the spending, at the state or local levels, are avoided because the decisions are “banking” decisions in the hands of federally regulated public banks.
    • Finally, and of special importance to our title-topic, the allocation process is decentralized in a manner that directly involves the creative initiatives of local and regional communities. While the over-arching goals, criteria, and parameters of a given “Public Asset” are established at the “top” (by national democratic process of Congress) the conceiving and managing of each specific instance of its implementation are undertaken from the “bottom up” by local and regional citizen-organizations and businesses.

    A list of possibilities

    Here is a list (that comes easily to mind) of some not-profit-making “Public Assets” that Congress could authorize the FED to create an account for on its balance sheet:

    • Hydrogen & Electric Fueling Infrastructures
    • Sea-Level-Rise Mitigation & Relocation Programs
    • Agricultural Carbon Sequestration
    • Desertification Mitigation & Reforestation
    • Forest-Fire Mitigation National Guard
    • Zero-Carbon Community Micro-Grid Systems
    • National Affordable Housing Coop
    • American Childcare Programs
    • American Debt-Free College
    • Universal Health Care
    • Fully Funded Toxic Waste Cleanups

    Each one of these Public Asset Accounts (debated and authorized by the national democratic process of Congress) enables the Federal Reserve to issue new fiat money—through the due-diligence of Public Banks—directly to local citizen-organizations and/or local and regional business organizations, for the purpose of creating specific Public Assets which benefit the wellbeing of collective society. There are no tax increases required. There is no federal borrowing involved. The “national debt” clock in New York City stops clicking—and is soon turned off entirely as being irrelevant. Not-profit-making enterprise, directed by local and regional organizations and businesses, simply and quietly becomes an on-going component of the Federal Reserve banking system. This is what I would call “paying for populism.”

    This post was originally published on Real Progressives.

  • Why MMT Progressivism is the Real Populism

    Today’s “populists,”—both right and left—appear to believe that virtually anything the U.S. federal government does is an oppression of individual liberty, private rights and local control of resources and norms. Setting aside adolescent posturing—like refusing to wear face masks at the height of a national pandemic, or the will to anarchy generated by racist fears—there is a serious and legitimate side to these populist sentiments: Serious populism, it would seem, believes that getting the federal government out of the business of governing will enable local communities to grasp control of their own destinies and resources. Populism’s push to incapacitate the federal government, then, is a striving for local autonomy and control over a collective wellbeing.

    Mark Bray, a historian and lecturer at Rutgers University who helped organize the Occupy Wall Street movement, was recently quoted in the Washington Post thus: “Broadly speaking they (the populists) want directly democratic, self-managed communities at the regional and macro-regional levels. They want decision-making from the bottom up versus the top down.”

    If serious populism, then, is about empowering local and regional communities to directly engage in the decision-making about how they will manage their own collective wellbeing, there is another issue—a very important one—which populists need to consider. Let’s first, however, be specific about what we’re discussing: The idea of “managing the collective wellbeing of a local or regional community” means, among other things—but most important of all—paying local citizens and businesses to provide goods and services deemed necessary to achieve that wellbeing. Specifically, I am referring here to the not-profit-making goods and services which private commerce either cannot, or will not, provide. The important issue that arises, then, for the serious populist, is how to pay people to undertake the goals of populism.

    For example, let’s imagine a local community decides through direct democratic process to clean up a river system that for decades has been poisoned and clogged by mine tailings and uncontrolled run-off from the operations of a global mining corporation—and wants to create and maintain a local fishery to boot that will provide food, recreation, and maybe even a boutique local tourism as well. A good number of under-employed citizens can be identified who would jump at the chance to do the work for a living wage. But who would pay them? Also, there is the need for technical advice and planning, for which the local community lacks the skilled engineers and biologists—to say nothing of the dredging equipment, filters, pumps, and rock-moving barges that will have to be employed. How will they be paid for? A bank-loan is clearly not possible because cleaning up the river system will not generate revenues and financial profits that can be used to pay the loan principal and interest.

    Put aside, as well, the option of a charitable fund-raising campaign because this is not a wealthy community with deep pockets for local betterment. A diehard populist might declare the solution is for the community to create its own money—a local currency like the often-cited Berkshares in New England. Outside consultants and leasing companies, however, will not exchange expertise and equipment for a local currency—they want “real” money that can buy goods and services in their own communities (or can be used, come springtime, for federal tax payments). Until this need to start paying people is solved, then, nothing can be done to get the cleanup of the river system even started.

    The irony of this fundamental populist dilemma is this: The only way the local community could begin paying citizens to restore the river system, hire the technical experts, lease the dredging equipment, etc., is by using fiat money issued and allocated to it by the only institution capable of doing so. And what institution is that? The national federal government the populists so fervently despise and want to incapacitate! This fact, it seems to me, goes to the heart of both populism and MMT progressivism—and profoundly links them together.

    What I mean is this: if real populism has any hope of succeeding in achieving its goals, it must embrace, whole-heartedly and creatively, the processes of national democracy. Rather than decapitating the federal government, it should strive to take enough control of its processes to meaningfully participate in the allocation of fiat money to the not-profit-making goals of local communities.

    This should be neither complicated nor ideologically convoluted. It is simply a matter of (a) understanding how modern fiat money operates, and (b) demanding that elected representatives debate federal spending programs and cast their congressional votes with that same understanding. That, really, is all that MMT is advocating—and it is the foundational structure of what could become populism for real.

    This post was originally published on Real Progressives.

  • The Gamers’ Uprising Against Wall Street Has Deep Populist Roots

    A short squeeze frenzy driven by a new generation of gamers captured financial headlines in recent weeks, centered on a struggling strip mall video game store called GameStop. The Internet and a year off in this shut down to study up have given a younger generation of investors the tools to compete in the market. Gerald Celente calls it the “Youth Revolution.” A group of New York Young Republicans who protested in the snow on January 31 called it “Re-occupy Wall Street.” Others have called it  Occupy Wall Street 2.0. 

    The populist uprising against Wall Street goes back farther, however, than to the 2010 Occupy movement. In the late 19th century, the country was suffering from a depression nearly as severe as the Great Depression of the 1930s.

    The post The Gamers’ Uprising Against Wall Street Has Deep Populist Roots appeared first on PopularResistance.Org.

    This post was originally published on PopularResistance.Org.

  • The Not-So-Strange Death of Right Populism

    A string of pseudo-populist conservative movements have reverted to the same agenda of tax cuts and deregulation. Why should we expect anything different?

    This post was originally published on Dissent MagazineDissent Magazine.

  • Year Zero

    2020 was GloboCap Year Zero. The year when the global capitalist ruling classes did away with the illusion of democracy and reminded everyone who is actually in charge, and exactly what happens when anyone challenges them.

    In the relatively short span of the last ten months, societies throughout the world have been transformed beyond recognition. Constitutional rights have been suspended. Protest has been banned. Dissent is being censored. Government officials are issuing edicts restricting the most basic aspects of our lives … where we can go, when we can go there, how long we are allowed to spend there, how many friends we are allowed to meet there, whether and when we can spend time with our families, what we are allowed to say to each other, who we can have sex with, where we have to stand, how we are allowed to eat and drink, etc. The list goes on and on.

    The authorities have assumed control of the most intimate aspects of our daily lives. We are being managed like inmates in a prison, told when to eat, sleep, exercise, granted privileges for good behavior, punished for the slightest infractions of an ever-changing set of arbitrary rules, forced to wear identical, demeaning uniforms (albeit only on our faces), and otherwise relentlessly bullied, abused, and humiliated to keep us compliant.

    None of which is accidental, or has anything to do with any actual virus, or any other type of public health threat. Yes, before some of you go ballistic, I do believe there is an actual virus, which a number of people have actually died from, or which at least has contributed to their deaths … but there is absolutely no evidence whatsoever of any authentic public health threat that remotely justifies the totalitarian emergency measures we are being subjected to or the damage that is being done to society. Whatever you believe about the so-called “pandemic,” it really is as simple as that. Even if one accepts the official “science,” you do not transform the entire planet into a pathologized-totalitarian nightmare in response to a health threat of this nature.

    The notion is quite literally insane.

    GloboCap is not insane, however. They know exactly what they are doing … which is teaching us a lesson, a lesson about power. A lesson about who has it and who doesn’t. For students of history it’s a familiar lesson, a standard in the repertoire of empires, not to mention the repertoire of penal institutions.

    The name of the lesson is “Look What We Can Do to You Any Time We Fucking Want.” The point of the lesson is self-explanatory. The USA taught the world this lesson when it nuked Hiroshima and Nagasaki. GloboCap (and the US military) taught it again when they invaded Iraq and destabilized the entire Greater Middle East. It is regularly taught in penitentiaries when the prisoners start to get a little too unruly and remember that they outnumber the guards. That’s where the “lockdown” concept originated. It isn’t medical terminology. It is penal institution terminology.

    As we have been experiencing throughout 2020, the global capitalist ruling classes have no qualms about teaching us this lesson. It’s just that they would rather not have to unless it’s absolutely necessary. They would prefer that we believe we are living in “democracies,” governed by the “rule of law,” where everyone is “free,” and so on. It’s much more efficient and much less dangerous than having to repeatedly remind us that they can take away our “democratic rights” in a heartbeat, unleash armed goon squads to enforce their edicts, and otherwise control us with sheer brute force.

    People who have spent time in prison, or who have lived in openly totalitarian societies, are familiar with being ruled by brute force. Most Westerners are not, so it has come as a shock. The majority of them still can’t process it. They cannot see what is staring them in the face. They cannot see it because they can’t afford to see it. If they did, it would completely short-circuit their brains. They would suffer massive psychotic breakdowns, and become entirely unable to function, so their psyches will not allow them to see it.

    Others, who see it, can’t quite accept the simplicity of it (i.e., the lesson being taught), so they are proposing assorted complicated theories about what it is and who is behind it … the Great Reset, China, the Illuminati, Transhumanism, Satanism, Communism, whatever. Some of these theories are at least partially accurate. Others are utter bull-goose lunacy.

    They all obscure the basic point of the lesson.

    The point of the lesson is that GloboCap — the entire global-capitalist system acting as a single global entity — can, virtually any time it wants, suspend the Simulation of Democracy, and crack down on us with despotic force. It can (a) declare a “global pandemic” or some other type of “global emergency,” (b) cancel our so-called “rights,” (c) have the corporate media bombard us with lies and propaganda for months, (d) have the Internet companies censor any and all forms of dissent and evidence challenging said propaganda, (e) implement all kinds of new intrusive “safety” and “security” measures, including but not limited to the physical violation of our bodies … and so on. I think you get the picture. (The violation of our bodies is important, which is why they love “cavity searches” in prison, and why the torture-happy troops at Abu Ghraib were obsessed with sexually violating their victims.)

    And the “pandemic” is only one part of the lesson. The other part is being forced to watch (or permitted to watch, depending on your perspective) as GloboCap makes an example of Trump, as they made examples of Corbyn and Sanders, as they made examples of Saddam and Gaddafi, and other “uncooperative” foreign leaders, as they will make an example of any political figurehead that challenges their power. It does not matter to GloboCap that such political figureheads pose no real threat. The people who rally around them do. Nor does it make the slightest difference whether these figureheads or the folks who support them identify as “left” or “right.” GloboCap could not possibly care less. The figureheads are just the teaching materials in the lesson that they are teaching us.

    And now, here we are, at the end of the lesson … not the end of the War on Populism, just the end of this critical Trumpian part of it. Once the usurper has been driven out of office, the War on Populism will be folded back into the War on Terror, or the War on Extremism, or whatever GloboCap decides to call it … the name hardly matters. It is all the same war.

    Whatever they decide to call it, this is GloboCap Year Zero. It is time for reeducation, my friends. It is time for cultural revolution. No, not communist cultural revolution … global capitalist cultural revolution. It is time to flush the aberration of the last four years down the memory hole, and implement global “New Normal” Gleichschaltung, to make sure that this never happens again.

    Oh, yes, things are about to get “normal.” Extremely “normal.” Suffocatingly “normal.” Unimaginably oppressively “normal.” And I’m not just talking about the “Coronavirus measures.” This has been in the works for the last four years.

    Remember, back in 2016, when everyone was so concerned about “normality,” and how Trump was “not normal,” and must never be “normalized?” Well, here we are. This is it. This is the part where GloboCap restores “normality,” a “new normality,” a pathologized-totalitarian “normality,” a “normality” which tolerates no dissent and demands complete ideological conformity.

    From now on, when the GloboCap Intelligence Community and their mouthpieces in the corporate media tell you something happened, that thing will have happened, exactly as they say it happened, regardless of whether it actually happened, and anyone who says it didn’t will be labeled an “extremist,” a “conspiracy theorist,” a “denier,” or some other meaningless epithet. Such un-persons will be dealt with ruthlessly. They will be censored, deplatformed, demonetized, decertified, rendered unemployable, banned from traveling, socially ostracized, hospitalized, imprisoned, or otherwise erased from “normal” society.

    You will do what you are told. You will not ask questions. You will believe whatever they tell you to believe. You will believe it, not because it makes any sense, but simply because you have been ordered to believe it. They aren’t trying to trick or deceive anybody. They know their lies don’t make any sense. And they know that you know they don’t make any sense. They want you to know it. That is the point. They want you to know they are lying to you, manipulating you, openly mocking you, and that they can say and do anything they want to you, and you will go along with it, no matter how insane.

    If they order you to take a fucking vaccine, you will not ask what is in the vaccine, or start whining about the “potential side effects.” You will shut up and take the fucking vaccine. If they tell you to put a mask on your kid, you will put a fucking mask on your fucking kid. You will not go digging up Danish studies proving the pointlessness of putting masks on kids. If they tell you the Russians rigged the election, then the Russians rigged the fucking election. And, if, four years later, they turn around and tell you that rigging an election is impossible, then rigging an election is fucking impossible. It isn’t an invitation to debate. It is a GloboCap-verified fact-checked fact. You will stand (or kneel) in your designated, color-coded, social-distancing box and repeat this verified fact-checked fact, over and over, like a fucking parrot, or they will discover some new mutant variant of virus and put you back in fucking “lockdown.” They will do this until you get your mind right, or you can live the rest of your life on Zoom, or tweeting content that no one but the Internet censors will ever see into the digital void in your fucking pajamas. The choice is yours … it’s is all up to you!

    Or … I don’t know, this is just a crazy idea, you could turn off the fucking corporate media, do a little fucking research on your own, grow a backbone and some fucking guts, and join the rest of us “dangerous extremists” who are trying to fight back against the New Normal. Yes, it will cost you, and we probably won’t win, but you won’t have to torture your kids on airplanes, and you don’t even have to “deny” the virus!

    That’s it … my last column of 2020. Happy totalitarian holidays!

    The post Year Zero first appeared on Dissident Voice.

    This post was originally published on Radio Free.