 They love the framework. They love the big picture. They love the ambition They love the grand scale of it and they're not worried about paying for it. We'll get to that in a minute One second. So What is that? Well, you should be able to guess what that is, right? It's the Green New Deal The Green New Deal. The Green New Deal is this ambitious project to remake America It's actually an ambitious project to remake the world It is big, grand-joes It's a scary, hairy, grand vision for the world Now It's still short on details because Ocasio-Cortez put this up on the website and I guess withdrew it from the website and nobody's actually sure what exactly the New Deal is but let's take just a few passages from the document. She actually put up Well listen to this We're gonna move to hell with the UN tell with the Palace Accord tell with Obama's clean air whatever All of those were way too ambitious way to had no ambition They talked about reducing, you know carbon emissions and reducing all that by I don't know 30% or 32% in 20 years Or 15 years or 10, you know, that's pathetic That is pathetic The goal here is The goal here is Should be to be much more ambitious than that And the Green New Deal named after FDR's New Deal also Trying to get the zeitgeist of the Apollo project of the mission to the moon is We're going to move America to a hundred percent clean and renewable energy in ten years ten years a hundred percent No automobiles running on gasoline No power plants fueled on natural gas or core or anything Or any fossil fuels all all renewable energy and by here we mean you know, but don't you we mean Your windmills and we mean solar and we mean maybe hydro But I don't really think hydro because hydro You know, you have to build dams and stuff and that that disturbs the the ability of the of the of the worms And the snails and the others to actually to actually do something So they're gonna every single power plant is going to be solar and windmill Now just imagine what that looks like I mean, how many of these you have to build and Where right and and all the new power lines because I mean you're gonna have to build these in places They don't exist right now and the power lines don't exist I mean, basically you would have to carpet most of the desert in the southwest with solar panels I Mean the number of windmills you would have to build is so great that pretty much every known Species of large birds would be slotted and massacred and go extinct Like all those eagles that we finally got back and you know All those hawks, I mean, they're all dead, but basically the whole landscape would be windmills and solar panels I mean, you know, we can ignore the energy that it took to build the solar panels and the windmills because Because because we're thinking long term when we're not gonna pay attention to show to we're thinking long term. I mean long term these are wonderful things So no so Everything I mean, if you if you think about the magnitude of this, this is this is big audacious. This is ambitious Planet Earth is basically gonna be coated in the warm areas by solar panels and in the windy areas But but pretty much all the windy areas by by I don't know where people are gonna live I guess in between the windmills They're gonna live it. I mean, it's just wow Talk about ambitious Now think about the amount of capital the amount of money that is needed for something like this This is on the scale of trillions of dollars The infrastructure will have to be built, but this is great. We're gonna complete you rebuilt infrastructure, but she doesn't stop there That's not enough. It's not enough To have clean and you know all these new power plants We're gonna retrofit notice retrofit. So make more energy efficient every building in America and Upgrade and replace Every I emphasize every building in the United States for state-of-the-art energy efficiency every single building I wonder if they come Puerto Rico Hmm, I don't think I guess the Democrats come Puerto Rico as part of the US every building I mean imagine I mean I guess this is why they want more Immigrants from Mexico because who's gonna build all this? I mean this is this is work on a scale That humanity has never seen before this is bigger than World War two and the mobilization in World War two This is bigger than FDR's new deal by orders of magnitude. This is the biggest construction renovation Project in all of human history This is bigger than the rebuilding of Europe after World War two, but that doesn't stop there, right? because That's not enough We're gonna build out high-speed rail at a scale where air trouble stops being necessary being necessary Which means? You're gonna have to crisscross the entire United States To every small community or at least every medium-sized community in the US Everywhere that has an airport will now have high-speed rail I mean just think of the magnitude of that project I mean and I always complain that Americans are not imaginative when it has comes to you know Civil engineering projects. I mean this would be huge. I don't know what's gonna happen all the snails worms lizards rats that live Along the path of the rail never mind What happens the property rights of all the people whose land will have to be confiscated But that's okay because we can build a wall and confiscate people's lands. Let's build railroads. We did it once we can do it again crisscrossing the United States and Within the cities of course because you have to get rid of cars So it's not enough just to do not by the way. I do find it interesting that Build out high-speed rail where air travel stops being necessary now. I'm a little worried about this one. I have to admit Because I live on an island and I just think I'm gonna be completely cut off now. I have to say that There is a certain appeal To being cut off from a world where Ocavio Ocasio Cortez's vision becomes a reality Yeah, I can't get to the US good You know the US is By this point is somewhere south of Venezuela But so we're cut off Hawaii's cut off. I guess you can't go to Europe. No, I mean Europe I mean, you don't need to go to Europe. How many of you need to go to Europe? You can you can Skype with Europe, you know if you want you know, they'll do these virtual tours You'll go in and you'll put on goggles and they'll take you to Sistine Chapel You don't have to be there. You don't actually actually have to tour Europe that what a waste of carbon fuel to fly you to Europe when we can simulate all of that right So to hell with going to Europe with no more air travel, right and then of course we need to create affordable public transits So that everybody can doesn't have to drive now We are so are going to do this with a workforce that is paid a Living wage a better than living wage on ways that can really they can they can live really really well on Because after all, I mean it'll only build with unions and we have to make sure that the unions get paid well And if you're not in unit forget it, you're not going to be employed by this And and since we're going to need millions and millions and millions and millions of people to do all this work We're going to have to bring in I guess immigrants. That's horrible for you Trump guys You have to bring in immigrants to work on the project to build all this stuff and we're going to guarantee them There's really really high wage I mean everybody in the world don't want to come because the american government is guaranteeing the high wage So I you know, we'll see how this actually works out, right? Oh and by the way, by the way, the one important feature of the new deal is The green new deal is that the one source Of carbon-free energy That is efficient effective potentially cheap Can be produced added for an item without any foreseeable limit clean Safe the safest form of energy Available today. Few people have died from this source of energy than any other That is nuclear That must be completely shut down. So we will decommission Every nuclear plant with antennas So they'll be net zero zero zero Now They don't guarantee zero emissions For a number of reasons. I think one is human beings breathe And there's still not yet We're still waiting calling for the complete annihilation of the human race because we breathe out CO2 And then of course a big part of of of You know greenhouse gases is methane and the largest sources of methane is The farting of cows So we're gonna have to get rid of the of Farting cows and the only way to get rid of farting cows Is to kill them. So they get a massacre, you know kill The millions and millions and millions of cows on the planet and you're gonna have to become a vegetarian basically And this is what ocaziocortes has been preaching. This is what the left has been advocating for This is completely consistent This is completely consistent right So We're not gonna have enough food to feed people. We're certainly not gonna have enough energy So part of I think the solution here is to have Millions of people hundreds of millions of people potentially die and and now what would use co2 emissions So the ultimate way in which this is being paid for is call observes on facebook Is through human sacrifice not even the sacrifice just about dollars. We've talked about that But just the sacrifice of our lives. We're just gonna kill enough people And co2 emissions go down and you have a great new deal and actually if you have fewer people You don't have to build as many power plants. If you have fewer people, you don't have to build as many You don't have to refit as many homes as many buildings now What happens when all this construction is over? Right, because then there'll be all these people who are unemployed Well, don't worry Because they have a solution for that as well because part of the green new deal Is a guarantee That everyone gets A job a high paying job At least 15 dollars an hour probably more than a job a job with a family sustaining wage family and medical leave Vacations and retirement security and high quality health care, of course, right medicare for all Safe affordable adequate housing, so I guess the government will provide housing or at least give you a subsidy Oh, we already do that. Maybe a bigger subsidy to buy a home And this includes for people Unwilling to work So I guess that's The ubi universal basic income so you don't want to work. That's fine We'll give you enough so you can live a middle-class life without working. Don't worry be happy I'm not sure who's going to build all the power plants if we're paying them not to work But you know those are details again, we can import people but Wait a minute. Let me get this straight if people come into the country And they're unwilling to work. Did they get ubi? I guess they do the human beings We can't discriminate so We have this guaranteed job offer now you see why I think democrats will be anti immigration in the end And all these people all over the world will come here And might as well make this a you know, the united states the global not the government that would be too assertive That would be too self-interested. That would be too Making america central to the world, but we should become just the funders of the entire world We should just be writing checks to the entire world Check right and How is this paid for? all right, so You know, I don't need to go through why this is nuts. I mean, this is basically a plan to kill human life To destroy human life so this is what Ocasio-Catiz says ours is going to pay for well the same way And we paid for the new deal FDR's new deal in the same way That we paid for all the wars we've engaged in including world war two, but also the wars in afghanistan and iraq the same way We we bailed out the banks We'll pay for it the same way we did all that Which means what? And she's right She's right. We've we've done all these things. We're running right now Under trump. We're earning a trillion dollar deficit Right 800 billion. Sorry Soon to be a trillion dollar deficit Economy's doing fine deficits don't matter Deficits don't matter. All we need to do is print more money I mean I what What about why the why the constraints on this stuff? We'll just print more money And they recognize that you can't tax it from billionaires But indeed they don't think taxes are that important. We just print more money Now if only was there was an economic theory that said You can print money and as long as you spend it This is the thinking as long as you spend it on what I call productive endeavors like building power plants and building Cables and and and putting people to work even if they're digging ditches You can print as much money as you want With no negative economic consequences and actually the printing of money actually creates positive economic consequences And as long as you're not printing this money and deploying it into an economy Where there's already full employment and full deployment of all productive resources And there's never full employment if you include immigration There's never full deployment of economic resources if you include a global economy Then you can keep pouring money into the economy. You can keep printing money with No negative consequences and indeed plenty of positive consequences Now what is this economic theory called? It is a relatively new economic theory It is still relatively on the fringes But it is becoming big It is becoming major substantial There's more talking about it than anything else It's called modern monetary theory Modern monetary theory and and the most well-known advocate for this theory right now Making the rounds is Stephanie Kelton A an economist. She was the economist for bony sanders campaign last presidential election And she is making the rounds and she is Challenging other economists to show How she is wrong now. I'm not going to get into the minutiae of this Those of you interested maybe I'll do a show just on this Because it is kind of interesting because like most bad theories Really really wrong theories this elements of truth to it that they then are exploited in order to to articulate complete and utter falsehoods But modern monetary theory is an entire economic theory that basically says That under the right circumstances and the right circumstances according to Kelton, it's almost always the right circumstances. And I think Well, she can't think so so to the extent that you know When she doesn't she doesn't actually appreciate everything that she's saying If you take it to the logical extent, there is no negative content. You just print money You can do anything You can do medicare for all and use and print the money to take over the hospitals build new hospitals Because it's a productive endeavor. So you you're basically increasing the money supplied by the same Amount as goods and services that are being produced because so the effect on inflation is zero You can do the same thing supposedly with the electric grid and power plants And you can employ people as long as they're really employed. I think I think monetary Modern monetary theory would would not support a ubi ubi quite as much as support Giving people very very high wages for any job that they make they would consider that a good thing So the government does full employment act by the government where they would pay people to work if they couldn't find work They would be supportive of and and the whole theory says There are no negative consequences The government has a free right here It can go for it It has there's no problem Now there are massive issues with this massive issues There's a lack of appreciation of the effects of inflation. Just look at zimbabwe look at venezuela Look at the united states in the 1970s Although i'm sure kelton has an it has a counter to that a a a counter point to that I haven't read it yet. I'm I'm still trying to I'm still trying to read up about this To so I can give you a fuller description and a fuller repudiation of this nonsense So inflation she would argue is not a concern and if there is inflation What do you do in order to curb inflation? When inflation is caused By excess demand for a given number of goods, how do you reduce demand? You reduce demand by raising taxes So taxes increasing taxes Is a mechanism to defeat inflation So you print money as much as you want and then when inflation happens you tax now The big thing the theory completely ignores Is incentives The impact oh put aside morality put aside morality put aside printing money in a thin air that is not connected to any thing productive and and the The inevitable consequences of that and what it actually means so put aside all that But what they're ignoring from purely economic perspective is incentives They assume like all of these kind of theories that central planning is efficacious That that the government is good at printing money and allocating it appropriately so that it goes to Effective productive uses they're very good at slamming the free market for not being efficient But this is what the republic democrats are drawing on they're drawing on an economic theory that basically says there's no Effective limit to government spending government debt doesn't matter deficits matter zero And and they say look at how big of the deficit is today Economy is doing fine. Look at how big the deficit is in japan 250 percent of gdp Economy is doing fine Nobody cares about deficits. They don't matter modern monetary theory tells us So it's not even that they're big on raising taxes the only reason to raise taxes For them Well, it's two reasons one is to address the problem the problem of inequality Right to penalize the rich in other words And because the poor you can just give them money you just print money and give it to them So you don't need to tax the rich for that the only reason to tax is to penalize wealth creation And of course, let's ignore the incentive Let's ignore the behavioral consequences of that And the other reason to tax Is to reduce inflation to take money out of circulation Now there are lots of economic issues here. How does this relate to what the fed does? And you know in this but there's also Elements of truth here We've seen That there are ways in which the government can print a lot of money with Little up easily observable consequences now. That's the key easily observable one of the things that modern military theory has is a superficial Very thin layered very thin understanding of economics What they need to read is economic in one lesson by henry haslet who describes in the in the preface to it economics is a science of The second third fourth level consequences not just the superficial layer, which is all these people are focused on so This is the this is the new Keynesianism this is the new justification For massive grabs of government power All in the guise of scientific economics Stephanie kelton is particularly evil. She she has written that, you know, again Not so much mirroring alexandria ocasio-cortez because i think kelton is behind alexandria ocasio-cortez. I think she is the advisor ultimately to all these crazy political projects But uh, she had a tweet not so long ago about the fact that Billionaires are exploiters billionaires are thieves billionaires don't create wealth. They take it. They exploit it. They manipulate for it So when you hear all the attacks on billionaires that are coming out the left I had a series of articles here. Let me see if I can find them I have a series just I'll just read you the headlines of these of these articles This it just this is Stephanie kelton. This is this is the whole Atmosphere on the left right now, which I think a lot of people on the right share. This is why it's so dangerous It's not fringe anymore. This is becoming for the first time in the american history much more mainstream Here it is Should billionaires even exist? Should billionaires even exist that was in the huffington huffington post Um, where was the other one? da da da da da da Abolish billionaires abolished billionaires are not bad in the new york times And then there was a third one. I mean a lot more than these but these are three that I noticed And I just pulled out, but I can't find it Anyway, it doesn't matter that you get the gist of it, but there's a whole series of these um articles Basically denouncing billionaires denouncing the idea billionaires echoing what alexander yorkar's yorkar says has said about a society being immoral A society that allows for the existence of billionaires is immoral a society that allows for billionaires To become billionaires is immoral. She doesn't blame the billionaires. She blames us for making it possible for them to become billionaires That has been echoed over and over again in uh in the media To an excruciating uh degree Now mmt is not yet modern monetary theory is not yet that popular Even paul krugman doesn't like mmt So paul krugman Is a critic of mmt and he he uses his column to critique mmt And there's a whole exchange between him and stephanie kelton that's going on in the various publications about a discussion of mmt And and a critique uh back and forth But that leaves krugman with some work to do because krugman has to Provide a non mmt a non just print money Explanation for all these Progressive democratic programs which he supports which is a huge supporter of including the green new deal Although i don't think it's support the green new deal and it's wacky um Frame framework because i think i think what i'll do is i'll tone that down and come up with a much more Much more so-called reasonable document is something at least that's semi doable But he has to have a different framework to justify this so he uses just straight Neocains and economics to justify this so he says look The three types of government expenditures that the democratic party is advocating for category one Is investments No, right investments investments in the future category two Right is an expansion of existing public programs Or subsidies So an expansion of existing public programs like social security like the expansion of social security And he would he would consider obama care as part of that that category and the third category says Is major system overhauls major system overalls are complete changes um Completely social life medicine would categorize under a major system overhaul although he categorizes um He he categorizes medicare for all where the government just pays for the health care doesn't actually deliver the health care As just an expansion of an existing program All right So he says each one of these categories of programs Should be funded in a different way and this is where his Keynesian economics kind of theory and attitude comes across So let's start with the investments How do you fund investments? Well investment. It's easy Investments he agrees with mmt Investments you just print the money or a different way of thinking about printing the money is you take on debt You fund the investment with debt and because the investment pays you back And you use that back payment To pay for the debt. So it's easy, right? It's like a business would fund an investment Right. So he says if he can raise funds cheaply And apply them to high return projects, you could go ahead and borrow And federal borrowing costs are very low less than one percent adjusted for inflation And they are they're very low So You can do the Green New Deal Because it's a high return project You save the planet. That's a very high return And you can raise the money cheaply And it's not a problem, right? And even if interest rates rise a little bit, it's still cheap And it's so much cheaper than the benefit and how how do you pay off this debt? I mean Krugman is a realist. He's not like Sheldon Not like Kelton who believes you don't never have to pay off the debt Well, you pay it off on the returns of the investment and the returns of the investment and manifest An economic growth and in higher taxes, you know, higher tax revenues in the future She says all of this is just investment now notice Again, this assumption of a central planner the government is good at making investments The government is good at deciding what's a high return investment. What's a low return investment? It's very good at making these kind of decisions One of the reasons I was hoping that Top you remember top that was the government bailout of the banks Well, it turns out the top was a profitable investment for the government. That is The banks returned the money with interest to the government and the government got more much more than they expected to get back Because far fewer banks actually failed than the hysteria at the time justified so One of my worries about that and I think it's It's borne out is that the government is like economists like Kugman and the government would now think oh Look the government's pretty good at investing it invested in all these banks and It got a great return now notice that invested in bank investment is kind of an interesting term, right? It forced the banks to take the money at the terms the government dictated I don't call that investment I call that I don't know what you call that. I'm not sure what you call that You know, that's what the mafia does, right? That's yeah, that's what the mafia does That's what organized crime does no no you have to take my loan You don't get to choose you don't get to go to the bank You take my money and here's the interest rate and if you don't pay it back. I break your legs That's what the government did It's a mafia And he wants the mafia the government The government acting in this way to be expanded Much greater, right? both he and and Alexandria Ocasio-Cortez and everybody one of the things they recognize is That private sector can't build all these things. They can't convert All this electricity to to renewables. They can't actually there's not enough productive capacity So the government is actually have to gonna buy the productive capacity By the way, this is a straight route towards socialism and real socialism not Denmark socialism real Venezuela, soviet union, type socialism the government is not just gonna have to invest It's gonna have to buy the means of production in order to get the production ramped up to the levels that they wanted to achieve With this, you know, green new deal What we need today what I called a new intellectual would be any man or woman who is willing to think Meaning any man or woman who knows that man's life must be guided by reason By the intellect not by feelings wishes women's or mystic revelations Any man or woman who values his life And who does not want to give in to today's cult of despair cynicism and impedance and does not intend to give up the world To the dark ages and to the role of the collectivist roads All right before we go on reminder Please like the show we've got 163 live listeners right now 30 likes That should be at least 100. 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