Randy: “We’re supposed to believe the central bank manages inflation by using interest rates?”

Steve: “It’s ridiculous.”

L. Randall Wray, one of the original MMT economists, recently wrote a paper with Yeva Nersisyan entitled, No, the Fed is NOT Independent – It is a Creature of Congress.  Steve invited Randy for a conversation about how the Federal Reserve is, and always has been, a “creature of Congress,” and its supposed independence is a smokescreen that benefits the wealthy at the expense of the rest of us.

The Fed has a dual mandate of full employment and price stability, yet it consistently prioritizes the stability of Wall Street over the well-being of Main Street, bailing out banks while leaving workers to face the fallout of manufactured recessions.

Randy describes how raising interest rates – the Fed’s so-called tool – works to suppress wages by slowing the economy and killing job growth. Federal Reserve transcripts explicitly state that they fear “wage inflation” but see “profit inflation” as desirable.

Randy wants Congress to take control of the central bank. (Some of us don’t see Congress as independent either.) But whatever our belief in the role of the state and who it serves, the episode contains valuable information on central bank operations, how interest rate hikes discipline labor, the truth about “fighting” inflation, and the difference between monetary and fiscal policy. We need to understand the mechanics of power if we’re going to build the future we deserve.

L. Randall Wray is a Professor of Economics at the Levy Economics Institute of Bard College, and Emeritus Professor at University of Missouri-Kansas City. He is one of the developers of Modern Money Theory and his newest book on the topic is Understanding Modern Money Theory: Money and Credit in Capitalist Economies (Elgar, 2025).

The Fed As a Weapon of Class Power with L. Randall Wray

Steve interviews Bill Mitchell on the controversial concept of “Theory” in Modern Monetary Theory, demonstrating that even the most complicated economic concepts can be made accessible to the layperson. &nbsp;They take on several of the predominant criticisms of #MMT including microfoundations while taking us on a journey through macroeconomics, from Keynes and Milton Friedman including today’s New Keynesians. &nbsp; Now…. Enjoy the very first episode of Macro n Cheese! &nbsp; Special Thanks to The MMT Podcast's own Christian Reilly for assisting in audio engineering for this episode! 

Special Thanks to Geoffrey Ginter for the excellent intro song! And of course special thanks to our guest Professor Bill Mitchell, the donors of Real Progressives and our excellent staff of volunteers

Putting the T in MMT with Professor Bill Mitchell

The Covid19 pandemic is much more than a public health catastrophe; it has highlighted and exacerbated economic, social, and environmental crises on an unprecedented scale. 
 
While Congress sits on their hands, a learning-by-doing experiment is already underway at the Federal Reserve. With more than 40 million Americans out of work, the Fed appears ready to fulfill its congressional mandate to both maximize employment and promote stable prices. Indeed, the strongest signal that this time things can be different is the opening of the Fed’s new Municipal Liquidity Facility (MLF), which promises to buy both existing and future state and municipal debt.
-- from “Overcoming Covid19 Requires Rethinking University Finance” (see article link below) 
 
Our guests, Ben Wilson and Scott Ferguson, are working with others in the MMT community to develop the plan for a new university-issued currency, the Uni, with backing by the Federal Reserve. 
 
Universities are not unlike small states or municipalities. They provide jobs and living quarters, engage in commerce both on- and off-campus. They collect rent on their vast real estate holdings. They also behave like banks, providing students with accounts for purchasing books and supplies. The university’s stated mission is to contribute to the greater good, produce educated citizens, and be cooperative partners with the surrounding communities. 
 
According to our guests, the Uni’s value extends beyond immediate financial practicalities. The project can use the university as a proxy for reformulating the macro economy on a micro-scale, creating real-world experience pushing the modern money agenda forward. We can ask ourselves what we want money to do for us and how it can meet the needs of our communities. Rather than wait for the federal government to act, we can structure it on our own terms. 
 
Benjamin C. Wilson is an Associate Professor of Economics at the State University of New York at Cortland and a research scholar at the Global Institute for Sustainable Prosperity. 
 
@autogestion77 on Twitter 
 
Scott Ferguson is an Associate Professor of Film & Media Studies in the Department of Humanities & Cultural Studies at the University of South Florida and a Research Scholar at the Global Institute for Sustainable Prosperity. He is co-host of Money on the Left podcast featured by Monthly Review Online. 
 
@videotroph on Twitter 
 
https://www.boundary2.org/2020/07/scott-ferguson-benjamin-wilson-william-saas-maxximilian-seijo-overcoming-covid-19-requires-rethinking-university-finance/ 
 
Read about the Uni in the demands issued by the Resident Assistant/Peer Mentor union at UMass Amherst. https://docs.google.com/document/d/1psWUI4PGVVYOJ9flQiwsWKWHK9qhdLPFjonToNo4R7M/mobilebasic?fbclid=IwAR2pKwOHzggugNSJsrrQGFtm1Bl7D-1eYJDfQNgzD4s5yIfnu2VgmkJCTkc 
 
The Global Institute for Sustainable Prosperity
http://www.global-isp.org/

UNI's for All with Ben Wilson and Scott Ferguson

Macroeconomics has never been so ... delish!  Macro and Cheese explores the progressive movement through the lens of Modern Monetary Theory, with hot and irreverent political takes, spotlights in activism, and the razor sharp musings of Real Progressives Founder and host Steve Grumbine.  The cheese will flow as experts come in for a full, four course deep dive into the hot queso. 

Comfort Food for Thought!

The Fed As a Weapon of Class Power with L. Randall Wray

Macro n Cheese

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