 Hi, everyone. I'm here with Nia from the podcast log off already She's known as queer money on Twitter and she is a real life economist And she's here to answer some of our burning questions about the economy currently and the current state that we're in Nia. Welcome to the show Yeah, it's it's good to talk to you again I was recently on log off already with Cole James Cash great show everyone. So definitely check that out Okay, so I really want to pick your brain about a lot of things that are being discussed But I don't necessarily feel like I'm qualified to talk about them So we've been hearing a lot about inflation and supply chain issues. So break it down for me What exactly is the cause of? Inflation currently because my understanding is that it is because of supply chain issues So can you kind of break that down and explain why that's the case? Sure. So, yeah You know, when we think about the supply chain, what is that exactly? Well supply chain is people ultimately and the issue of the supply chain is again people Then the problem right now is that You know, we have had this historic pandemic. That's really disrupted the way we do things It's disrupted the way we work and also it's really Put a lot of people in danger So a lot of these jobs are a lot more dangerous to do and a lot of people feel like they should be compensated better And that their working conditions are not good enough for them to do their jobs so You're seeing a lot more labor of militancy a lot more workers who are willing to Quit their jobs look for a better one try and bargain for better working conditions and for better wages and As a result, you're seeing the pushback You're seeing you know Management refusing to pay for those higher wages and refusing to spend on making these jobs safer so you're seeing increasing quits and labor stoppages, you know labor strikes You know earlier you mentioned that What why is it that these supply chains are only arising now? Supply chain issues. I mean and why did it take so long? Well Part of it is that it took a while to shift for consumption to shift in a way that really started to impact our Storage of things our storage of goods But a large part of it is also that when the pandemic hit there was a historic low in labor militancy There was a historic low in labor strikes the total work stoppages in 2020 I think was the third lowest on record and that's because you know People didn't have the ability to really do that at the time the economy was crashing Now as the economy is getting better as there's you know, we had those economic relief programs that held our economy together And caused really a historic recovery if you look at the charts, I can send you some charts to show actually This has been the fastest recovery and I don't know maybe since the 80s And the depth of the recession is so deep that To say that I actually understates how how good of a recovery it was so in 2021 as a result We're having more work stoppages than we've seen in decades We can say something Yeah, I wanted to ask You know, what is it about currently? Do you think that the pandemic fueled these work stoppages because you know I've talked about on the show the worker strikes. We see the Kellogg strike in the way that they're trying to bring in scabs and they're You know permanently laying off workers and then we saw strike tober What is it about right now? Is it the pandemic that it was kind of like the final Straw that broke the camel's back. What is it about this moment in your opinion? That has led to these historic work stoppages because I've never seen anything like this Yeah, I think it is basically the pandemic plus our actual You know decent economic response or stimulus response because Workers feel like they can do this sort of thing when they have at least a little bit of room economically, you know This this comes after decades though of just stagnant wages Worsening working conditions. So it really was like the the needle that broke the camel's back and set it all off Yeah, that's really interesting because This is something that I've been trying to figure out like why now of all times And you know, I I think about it not necessarily in economic terms but socially maybe it's the case that because Workers see other workers rising up and you know opting for unionization Maybe that's it, but I think that it's kind of like the culmination of a lot of different things in the pandemic Really being like the primary one What you mentioned the recovery effort Um Do you have any insight into the recovery effort? You know because of the pandemic the 2021 stimulus package and all the reforms and uh are not reforms that all the like stimulus bills passed in 2020 in comparison like with the 2008 economic crash because I feel like people till this day haven't fully recovered And there's an article that I believe david sirota wrote about this in jack been kind of explaining how everything still kind of goes back to 2008 and how it's still hurt people till this day like what's your insight on that? Yeah, that's that's pretty much it, you know our response to the greater session was pretty horrible um the obama stimulus The it was about half the size of what was recommended and even what was recommended in my opinion would probably have been a little bit too small um I can't remember who was I think was christina roemer who's in charge of that who basically she made came up the estimate and then once She was going to present to the obama. I think larry summers Forced her to just cut it in half. Um, of course Yeah, it's always it's always going to be larry. Come on larry summers. Motherfucker Great feeling of economics But yeah, so they they literally just cut it in half and It just did not fill the hole and it was a pretty conventional, uh, kanesian stimulus as well um, the crash we faced then is pretty different from the crash we faced the pandemic because you know, economic recessions aren't all the same that was a financial crisis and It was caused by the housing market. There are a lot of dynamics here that aren't Don't exactly line up with what happened with the pandemic but the pandemic response was just much better much more effective and It's it's funny because we actually, you know the early response was it was still pretty bad Because it was you know, it was just like a giveaway to corporations Right, it's a big businesses, but it still was structured in a way that was much better And what we saw was despite This historic crash really the the biggest crash of our lifetimes The property rate fell after the stimulus and Uh, if you look at household wealth for those at the bottom it grew by historic amounts. So it was Is great even though we did badly at it Yeah, yeah, so uh, here's what I wanted to ask you because you know, a lot of this, uh The recovery effort has led to people kind of realizing that You know, they're they're getting a bad deal. The pandemic has led to that as well Um, what do you say to people like Joe Manchin who have this idiotic argument that we've heard a thousand times About how you know right now of all times is really when you don't want to authorize Newspending because that's going to make matters even worse like how do you respond to that because I think that's probably the predominant mindset I'm not sure if you'd agree with that but in dc at least like that's like the main mindset Uh, how do you respond to that and how do we shift away from this? Mindset that it just feels like we're on loop and it's the same response To every single crisis and it's the wrong response. So like what's your take on that because it's driving me nuts Yeah, I mean Joe Manchin I It's hard for me to take him in good faith. I don't think that he would explain anything Yeah, right, right but basically the issue is that they have you know, this um The mainstream view of money basically that's Uh, there's this quantity quantity theory of money. I don't know if you've ever heard that term before I have I've not so that's like the mainstream view. Um, actually so Oh, I love this got like The mainstream view is this uh, yeah quantity theory. So mv equals p p y where m is money uh v is velocity and then So you have that and then p and y that's your price level times your uh output so Their idea is that this is how the economy works and I think this is wrong but I'm gonna explain it So like inflation is reflected by changes in the price level And output is total production the total production of goods and services in our economy Uh, velocity is this idea of like How much how many transactions occur in the economy and most mainstream models hold this constant And so what you have is then the money supply Um That can change based on government spending, right? And if the government just starts to spend more money then m goes up Right And but these have to hold constant. They have to hold equal So if this v is constant and m goes up and these are equal then this has something over here has to change and since Their idea is that if you spend money, there is no increase in output. That means an increase in prices It's like a mechanical relationship and this Doesn't make any sense. It's completely ridiculous and it's it's like most economists would not want to just Deride it like that because it's the mainstream theory, but the central bank of Both the united states and of europe has admitted that this is not a functioning theory of inflation. It makes no sense um this sort of Mechanical relationship. It's just There's no way to make sense of it in real life because imagine if the government went to We're simply to print dollars and spend them Covertly on some sort of projects somewhere They don't they don't tell anybody else about it This says that At least in the long run You know Prices would go up everywhere But how would anybody for stuff? How would anybody know? And secondly like What is the long run? Is it one year? Is it five years? Is it 10 years? Like This you don't really see this relationship if you try and look at the data. It doesn't hold up And part of that is that this assumption that if you spend more money The output doesn't increase so therefore Prices have to increase That doesn't make any sense because what are you spending the money on right? If the government is spending money on let's say like a program to house homeless people or To build infrastructure or all these other things It's not creating nothing. Right. Those are that that's output That those things have value So those things add value to the economy So you don't necessarily have to have an increase in prices even in the mainstream theory in the mainstream framework I I don't really subscribe to the mainstream view anyways. I follow mmt, which is modern monetary theory and Under modern monetary theory basically We disregard the idea that demand can drive inflation that all inflation comes down to supply to the actual constraints and constraints in the economy are our real resources so If you spend money to create something you're not getting fewer resources, right? I mean this goes back to this other idea that Resources are becoming that's a quote. I think from Fred Lee that Resources are not this static thing that we just have this. We don't just have a stock of resources resources Are created by by production, you know the inputs to all things are the outputs of something else If I You know want to write a paper An essay or something and I do it by hand. I need a pencil I need the paper Those are both the outputs of another form of production so And when I when I produce a paper it also creates some other, you know Some other product that people consume. So these things are all much more circular or much There's feedback loops you know, so Yeah, and when you explain this it it makes so much sense and it clicks in a way that makes me frustrated because Why has this mentality stayed the same? I mean, I I mean I could come, you know, it's kind of a rhetorical question, but you know We know this we we know the way that the economy functions We know that when you spend money it doesn't just vanish. We know that it goes back into the economy I mean if you spend money on working people They're not going to be like rich people and hoard that money put it in overseas bank accounts It goes right back in so it's really it's frustrating to me that this mentality hasn't shifted and as an economist Who and I'm also a huge fan of mmt And I think it just it clicks it makes sense You know, what is it for you anyways in your opinion that's keeping everyone in dc including a lot of Not necessarily progressives more but more liberal minded politicians in the democratic party who ostensibly Shouldn't subscribe to these, you know ask backwards austerity minded views of the world Like what is it in your opinion that keeps them stuck on this antiquated view of the economy? Well part of it is that they've been living in this world forever, you know Right, we've been indoctrinated to have this sort of tax to spend mentality pretty much our whole lives Even if you're not an economist, you've probably been exposed to that repeatedly through the news or Uh, even you know in books you read and even on the left or people ostensibly on the left they use rhetoric that reinforces this idea And you know, I have a lot of love for Bernie Sanders, but he does this often or he talks about You know taxing certain people to pay for certain things It sounds good But if you think of it that way that's the sort of frame your framework you're working in so you reinforce that view Now for other people who aren't doing it subconsciously and you know, they just are Corrupt basically they don't want to admit that that we could pay for all these things because they don't want to Yeah, yeah, you know, I noticed that like just to to kind of demonstrate how brainwashed we are as a society Um, you know, I noticed that too. I would always use that point imagine if we didn't spend the social money on the military We could take that and put those dollars towards, you know healthcare free education when in actuality, I mean Taxes don't fund spending I think that modern monetary theory has proven that and honestly one thing that I've noticed Is that it seems as if republicans when they're in power at least They kind of govern as modern monetary theorists and that they spend money, but they don't pay for it Um So there's this double standard and this is one thing that I think really makes it a greatest Whenever it comes to, you know, a social safety net program something that benefits people It's always how are we going to pay for that? We got, you know, we've got to balance the budget when it comes to Blowing people up in the middle east and north africa Not a peeve. I mean, I don't think I've heard a single person except for bernie sand or sarcastically asking How are we going to pay for that with this latest spending bill? Um, so how do we get out of this mindset? Yeah, because it's driving me nuts and I noticed that I'm part of the problem because I keep using the same rhetoric But again, like you said, like we're almost conditioned to it So it's hard to break out of the I we could use this money for that when it doesn't work that way in actuality like literally That's not how it works. So how do we get out of this mindset? That's a good question. I think spreading modern monetary theory to people Spreading these ideas is a big part of it challenging politicians And and news media and other people When they say things like that I think that's important. It's hard to say what will really break through to people ultimately, but I think A labor movement is absolutely necessary. We're already seeing that Breeda, you know build up um And that's because the labor movement will make demands that aren't going to be based on Politicians desires and you're going to have the ability to force those demands And once people see that like we can do this sort of thing On a small scale here and there they start to get a sense of what is more is possible Yeah Yeah, yeah, that perfectly said it's for the first time. I think in a really long time I feel a little bit of hope um, which is dangerous. I know because you know, it's america But uh, you know seeing the strike till we're seeing people workers for the first time Stand up it really is Great to see I mean I've worked at really shitty retailers like wal-mart and subway and the thought of unionization Was really difficult because when I worked at wal-mart, you know We were shown an anti-union propaganda video and I was triggered immensely by that and I I spoke to my co-workers about it I'm like, did you see the same union video and they didn't know what unions were So it really felt inconceivable to me that we'd be at this place currently where starbucks employees, for example Are forming unions and you know warehouse workers in alabama get a second vote, thankfully on Unionizing their amazon warehouse So it feels like there's been a little bit of a paradigm shift and maybe if things are going to change at the mentality will shift Perhaps this is the start of it But then again, there's this cynicism inside of me that makes me think This is america. So maybe in a year things will just go back to normal. What what's your take? Do you have any hope young to offer us? What's like the practical economic stone like cold view just the practical perspective like what do you think about all of this? Yeah, I'm pretty hopeful. I think that this strikes We've been seeing which I was reading off the timeline of them earlier just to myself and On wikipedia to the page here. There's just so many of them That that gives me a lot of hope My fear is that the political situation will turn south I worry about a civil war brewing at this point with I mean an increasing Fascist movement, you know, there's no other thing to call it. So It comes down to I guess if that is held off you know long enough for a labor movement to finally start affecting people's lives in a way that they They really feel and that can cause sort of a widespread calming effects You know, hopefully we can we can avoid that civil war, but Yeah, I am a bit fearful of that and more fearful fearful of the political situation than the economic one at this point Yeah, yeah, there's there's definitely reason to be fearful if only we had a single politician that was You know wanting to jump on this labor wave and compete with fascism Maybe I just think bernie should run a third time. I'm not sure but either way like it does it's nice to hear You know here an economist confirmed that the left has kind of been right all along and it's not like it's that Like I feel like when when you break it down like when you break out the whiteboard It's it's very easy to see why their worldview is flawed and it's just a matter of waking enough people up So, yeah, this is this is all very fascinating. Nia. Thank you so much before you go Can you please tell people where we can find you how we can support your work? Uh, yeah, my twitter is at queer underscore money And I also am on the log off already show on twitch, which is just twitch.tv slash log off already And um, that's the best way to support me. I don't have a patreon anymore. Just stopped using it. So I closed it down um Yeah, also check out money on the left. I've written an article for them at least one So it's it's a very good publication Excellent. Well, thank you so much. Nia. We'll be in touch You'll be my uh one of my go-to economic advisors here on the show because this stuff goes over my head But you break it down in a way that makes me understand it Which is very impressive because I'm not a numbers person. So thank you. I really appreciate it. Well, thank you Thank you for having me