Stephanie Kelton Appears on Le Show with Harry Shearer

Stephanie appeared on Le Show with Harry Shearer on  Sunday, October 28, 2012. The archive is available through Harry’s website which you can reach by clicking the image or here.


46 responses to “Stephanie Kelton Appears on Le Show with Harry Shearer

  1. Michael O'Hara

    Excellent presentation! Thanks to Harry Shearer for bringing you to the attention of his listeners.

  2. I just spent 50 minutes listening to Harry’s interview. I have an economics background (MA from Trinity College), and I worked for many years on Wall Street, so I’m not sure I learned anything except that I could never articulate these important principles in such clear concise language. Amazing!

  3. Great interview, Stephanie. I wish every American could here it (especially before the election). Best regards.

  4. best show..wish is could be heard by more people
    how can i share it to facebook?

  5. Wonderful interview! This was such a clear presentation of economics and monetary policy and a vital rebuttal to the mass of myths and lies that pass as common sense for most Americans. How can we create a grass roots effort to counter the Peterson Foundation’s mass media effort to confuse the American people? “Like” New Economic Perspectives and Stephanie Kelton on Facebook….follow Dr. Kelton on Twitter. Let’s spread the word!

  6. Just heard you on KQED, SF. Great. I almost understand what you were saying and definitely understand the basic outline. I hope we can get this out to the brainwashed public! Thanks!

  7. valerie martin

    This was an excellent interview, presentation, class. I am inspired to learn more. Thank you.

  8. Dr. Kelton, this was great.

  9. thx, harry & dr. kelton.
    incisive. clarifying. and in IMHO “necessary.”
    belated thx to harry on yves smith appearances on the “new F bomb” — foreclosure.

  10. If all were so clear and understandable about something that appears so complicated to those of us
    “out here”.
    thank you.

  11. Excellent interview/MMT explanation at a level that non-economists should be able to understand.

    Why do I get the feeling that Pete Peterson and billionaires, in general, should be able to understand MMT, but they all seem to have an agenda? I got the impression from reading Jeff Connaughton’s book – The Payoff. Why Wall Street Always Wins, that our Congressional representatives are also bright enough to understand MMT. Is their apparent inability to do so related to the ratio of aggressive lobbyists to Congress critters, the design of our electoral college system, the inability of the majority of SCOTUS members to understand that corporations are not people, or all of the above plus human behavioral nature in a culture which accepts ambiguity in language; e.g., regulations/laws are supposedly created to be respected?

  12. Is anyone else having trouble playing this? I get to the website. I click the listen button. Nothing happens.

  13. Potomac Oracle

    Stephanie, thanks ever so much for your concise presentation of concepts debunking centuries of gold standard rubrics. Unfortunately, both Presidential candidates are mired in these now abandoned principles; Romney believing we will soon be Greece, and the President claiming we’re going broke, and both of them without a clue as to what the deficit really represents. I blame the President’s advisers, Peterson, Simpson, Bowles, Rivikin, etc. all cynically subversive and out of touch with majorities in this society.

    Prof. James Galbraith may be right that the President is guilty of “Innocent Fraud” but I suspect it is more sinister than that. Geithner’s raison d’etre is to protect the bond holders of the world, of which there may be a few million families. So he’s likely to tell the President the basics and that as President he can’t mess with the bondholders rent money from the Federal Government.

    Ergo, we get no enlightened fiscal policy initiatives from the WH, no WH pressure on the Congress which embarrasses it to acknowledge the new monetary paradigm, post 1971, and certainly nothing proactive from the Fed which nudges the Congress to, for instance, repeal debt ceiling legislation given the new monetary realities occasioned by the events of 1971-1973.

    What’s the likelihood of an MMTer’s hookup with a lame duck President to discuss the Beowulf option on Seigniorage, Randy’s ELR, and Warren’s three year FICA suspension?

  14. Great to hear you on radio. Next stop: MSNBC.

    Probably more likely if you worked your way up with a gig on Current TV. Or what about Sam Seder’s radio show Majority Report?

    Bill Black and Randy write for the Huffington Post, and I’m sure would have a whole slew of connections.

    • I agree that an interview on MSNBC would be a great step, and would like to think that (after the election) they might be interested. And someone in this or an earlier thread also suggested the Daily Show, which I also think is a great idea. It seems pretty clear to me that Stephanie and other MMT experts have developed clear and concise enough explanations to present MMT in any such interview forum, even if time is constrained.

      Has any outreach been undertaken to make this happen? If so, what were the results and are there other approaches that could be tried but haven’t been yet? If not, are there any plans to begin this kind of outreach? In either case, these kinds of strategic and tactical “outreach” questions might be a useful topic for ongoing discussion on this blog, in addition to discussing the substance of MMT.

      The issue of time constraints (e.g., of readers, listeners) also leads me to a few other suggestions:

      1. If possible, edit existing audio and video presentations, interviews, etc. into more quickly-digestible chunks, each with a title that will help people get a good sense of the specific content;

      2) include links to these multimedia clips in a prominent and well-organized section of the NEP site, so that anyone coming to the site for the first time can focus on these and digest them at their convenience.

      While I thought Stephanie’s presentation with Warren Mosler was one of the clearest and most compelling and enlightening presentations I’d ever heard on MMT, the fact is it was 2 hours long, which in and of itself might discourage a lot of people–especially newcomers–from even giving it a try. The same applies to Stephanie’s great interview with Harry Shearer, which was about 50 minutes long.

      Having shorter multimedia segments might also make it more attractive for other sites to embed or link to. As an example from my own experience…..I remember watching an interview with Steve Keen that was chopped up into short 2-5 minute chunks, and thinking “this is really good stuff.” Later on I remembered these short clips and embedded one to support a specific argument I was trying to make on my own blog (, while also providing individual links to several other interview segments I thought were also somewhat relevant. I’m not sure I would have done this if my only option was to embed or link to a video that was 30-60 minutes or even longer.

      I similarly embedded the 12 minute “no budget constraint” MMT animated video in a blog post in which I tried to introduce MMT as a source of key economic insights with relevance to one of my own areas of expertise/interest: broadband/Internet policy.

      This leads to my last point…I’d suggest that MMT advocates actively explore alliances with progressive advocates whose issue-focused missions could benefit from the freeing of government spending from destructive deficit-focused constraints, as clearly explained by MMT. While the still-widespread ignorance of MMT principles among progressives has been discussed here, it makes sense to me that we should take this beyond the critique stage and make a concerted effort to reach out to progressive advocates in a way that helps them understand the value of MMT macro policies in direct relation to the issues they care about.

      Bill Mitchell took a step in this direction in this post several months ago:

      And I tried to build on Bill’s point in my own post:

      I hope to continue this sort of thing on my blog and would love to see more references to and integration of MMT perspectives in progressive arguments made by other bloggers and advocates.

      And I’d appreciate any feedback on these suggestions, whether positive or negative.

  15. Stephanie, You did one terrific job! Everyone ought to listen!

  16. Ms. Kelton is a crazed Keynesian on steroids! I can’t understand how she doesn’t see how her currency printing press mentality is the road to poverty for people on fixed incomes and financial repression of savers and people who were responsible and did not take on excessive debt. Debasement of the currency is the height of irresponsibility! It is also the way we got into the present situation according to ABCT Austrian Business Cycle Theory. Hayek and Mises have demonstrated the folly of a policy of easy money below market interest rate policies. It succeeds in creating Boom and Bust Cycles. Ms. Kelton’s prescription was tried and is being employed by the Fed which has increased it’s balance sheet to close to $4 TRILLION when it’s money printing is done. It hasn’t worked so far and the government has increased our debt by $6 Trillion. In all fairness Harry should invite a non apologist for the status quo who is recommending putting us further into DEBT! Russ Roberts of Stanford’s Hover Institution or anyone from the Mises Institute could refute most of Ms. Kelton’s Vodoo Keynesian. If Ms. Kelton is right we could all quit our jobs and the Fed could print all the money we need and the government could spend to infinity on special interest pet projects like the D grade for infrastructure given by a Civil Engineering group whose members would benefit. Several Fed Officials have recently recommended tolerating a higher inflation rate in order to increase employment.

    “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner, as a result of a voluntary abandonment of further credit expansion,or later, as a final and total catastrophe of the currency system involved.” Ludwig von Mises

    “Why is easy monetary policy such a sin? Because in such an environment, loans are cheap and borrowers can finance every project that they dream up. This results in excesses, and also increases the severity of the recession that inevitably follows when the bubble bursts.” Anna Schwartz

    “For any revival which is merely due to artificial stimulus leaves part of the work of depressions undone and adds, to an undigested remnant of maladjustments new maladjustment of its own which has to be liquidated in turn, thus threatening business with another crisis ahead.” Joseph Schumpeter

    • Bob,

      If you want to attempt to refute MMT prescriptions you need to start by understanding what MMT is saying. Your comment demonstrates you are unable to accurately represent what MMT is saying. There is a link at the top of this page that says MMT PRIMER. That’s a good place to start.

      Probably the easiest place to start is Warren Mosler Seven Deadly Innocent Frauds.

      Read up. Soak it in. Learn it. Then come back with refutations. I think you’ll find that if you can accurately represent what MMT is saying, and then make a logical counter argument, you’ll get a proper response from one of the regulars here.

    • Religious zealotry. I wish I had a fiat nickel for every time I ran into someone pontificating about what should be instead of what is. MMT is what state money is. It describes how state money works. It is what it is. It like listening to some necked bearded, Appalachian bush crafter going on a rant about War of Northern Aggression when he discovers my salsa was canned in NYC . I understand you may not like NYC salsa, but its being trucked in , put on the shelves, and people are eating it. Its the facts. In fact, every time a sovereign goes into debt its creating fungible assets that impact buying power and saving vehicles. So I don’t care how well you shine the dross off your coins because if you want to understand how money actual works there is a difference between belief and facts. MMT descriptions are not prescriptions. I don’t think governments are going to stop producing debt. I don’t think people will cease to use it in trade, and so I have no interest in adopting a religious world view about what will be when Jesus comes. MMT is specifically trying to be apolitical, but its not apparent with this level of zealotry.

  17. shamus halkowich

    what an enlightening interview. I can’t thank you enough.

  18. Michael S. Cullen

    Listening to Ms. Kelton here in Berlin now, 9:42 AM in Berlin.
    Very good, with one exception: Ms. Kelton should help fence-sitters come down by stating that there is a difference between SPENDING and INVESTING. Building roadways and runways, in short infrastructure, is not like going to Disneyland with the kids; in fact, the kids and grandkids will, in the end, profit for years by enjoying the benefits of investing today.
    Otherwise: we really need a e-mail-able transcript of this interview, SUBITO!
    Michael S. Cullen, Berlin, Germany

    • I agree, Michael, a transcript of this would be great.

      I like your Disneyland analogy, but don’t you know that most domestic spending is going to help people on welfare buy flat screen TVs? I mean they are just sitting around swinging in a safety net that has become a hammock!

      That is the narrative we have to combat and what we have to beat back against. So, how can we create a compelling counter-narrative based on the facts of investment spending, which will undermine the “Welfare Queen” narrative that has turned most Americans into economic policy zombies?

  19. Stephanie, having listened to your interview on LeShow twice now…I’ve a couple unanswered questions. I really enjoyed your verbal clarity and ability to explain with analogy our seemingly complex world financial systems… however I did not get any information on the Federal Reserve’s role in your explanation. I listened twice. Could you please explain the role this private company that produces our currency for interest and a fee, is involved in our financial system and why it was not part of your thorough explanation on LeShow? Thanks!

  20. Dr. Kelton, while I’m not an advocate of MMT, I’ll have to admit that you’re a very effective spokesperson for its concepts.

  21. To Dr. Skelton. I heard this interview, and probably didn’t listen closely enough, but could you explain what are the drawbacks of expanding the money supply and/or government spending. It sounds too easy a fix. What’s the catch?

  22. s/b Kelton. Sorry. 🙂

  23. “It sounds too easy a fix. What’s the catch?”

    The catch is that government is not the solution; it’s the problem — along with the poor, the old, and the sick.
    They all caused the crisis and they must pay the consequences — in great suffering, lower wages, and no benefits.
    So the TBTF banks, greedy corporations, MSM, and PTB have “the room” to restore America’s greatness.

    This really isn’t about economics.

    • Ask people who are on fixed incomes, or people trying to save for a rainy day, how easy a fix it is.

      Great Suffering: Well, when I see fuel prices up 20% over last year, just after the FED announced another round of quantitative easing, I feel like I might be suffering a bit.

      Lower wages: When I was born, my father (an electrical engineer for a steel company) made about $6000/yr, a good wage in 1968. He was able to save up enough to put a 50% down payment on a $20K house, keep 2 cars, take care of me and my sister, and my mother didn’t have to work. Last year I made just a little more than 10X that, but I still have difficultly saving for a house, even though I’m single and don’t have any debt other than a few thousand in a car loan. Every month I see my checking account get a little smaller, because of higher fuel prices, food prices and electricity prices.

      No Benefits: Every year I’ve worked I’ve seen medical insurance costs go up. I have no choice but to buy insurance through my employer. I have no way to shop around for a better deal. The plan my employer uses is fairly good, but I shouldn’t have to have my health depend on my job.

      The banks, greedy (connected) corporations: They’re gonna get their money any way they can. If they sense the government would even think about printing their way out of debt they’ll pump up interest rates so fast a tornado will form in DC from the vacuum of money drying up. As for the MSM, anything that keeps butts in the chairs is good for them, so keep it in crisis mode for as long as you can.

  24. Great presentation. How can we get you to the WH to explain this to Obama and his staff?

  25. I listened to the show this afternoon (I listen to the podcast) and saved it so I can listen again. While an excellent primer for Keynesian economic theory as interpreted by modern economists, I found Ms Kelton failed to address the problems with the constant meddling with the money supply by the FED and others. There very clearly is a downside to simply printing money, and even more so our current system of debt based fiat currency. You pointed out that the government can print as much or as little money as it requires. However, this somewhat dubious statement ignores the role of the FED in the currency. The congress helped to create the FED in order to supply currency. It does so (as you pointed out) by issuing debt. That debt is covered by a bond issued by the treasury. The bond, as pointed out, must be repaid. Traditionally this has been done by issuing new debt to cover the old.

    When asked who we owe the debt to, Ms Kelton got a little fuzzy, stating that we owe it to ourselves or that it didn’t matter because it could just be printed into existence by the treasury. However, this is not the case as (as pointed out above) the FED issues currency. Who owns the FED? Well, it is owned by the regional FED offices. Who owns them? The member banks (which are all the banks in the US). So we don’t “owe it to ourselves,” we owe to the member banks.

    And what happens to all the existing money when new money is issued? Obviously it becomes worth less. The “evil speculators and businessmen” who are traditionally blamed for inflation know this so they bid up the price of finite resources like oil, copper, gold and silver. Not because they’re evil and mean, but because they need to maintain their margins and because they are dealing in an international market (and maybe a little evil). And those of us who save money watch our savings deteriorate. Instead of being told the real reason, we’re all told we need to put our money in risky adventures to see a big reward. When we all lose because the bottom drops out of the stock market (for example), we’re told that we shouldn’t have taken on risk. So we can’t win. And how are you supposed to intelligently invest with some “expert” in Washington deciding what a dollar “should” be worth at any given time? I won’t bother to get into people living on fixed incomes, but ask yourself if Social Security would be facing the dire fate it is (if no one “fixes” it) if the dollars “invested” in the system in 1950 were still as valuable today as they were then.

    And finally, Ms Kelon pointed out that Japan has debt levels 200% of GDP and they “seem to be doing fine.” But what has that level of government spending got them? They’re still in a limp-along economy, they’re still trying to do something to get out of the quagmire they’ve been in for the last 20 years, and there’s still no answer from anyone other than more debt.

    • Sigh. Eric, you’ve bought into a lot of lies. To keep it simple, forget about Fed conspiracy theories. You gotta start at the basics. The problem isn’t what you don’t know, but what you know that ain’t so.

      E.g. If Social Security would be facing the dire fate it is (if no one “fixes” it) Social Security isn’t facing a dire fate. The problem is the “fixes” and the fixers. The fixers want to fix SS like an army destroys villages in order to save them.

      E.g. And what happens to all the existing money when new money is issued? Obviously it becomes worth less.

      Utterly wrong. It could be true if a government went crazy, in a way hardly any government ever has, never the USA. It need not be true. If the new money creates jobs and real wealth, real economic growth. Utterly untrue. Probably most of the things you think are obviously true about money – aren’t.

      It’s how you spend your money that counts, not how much you spend.

    • “And what happens to all the existing money when new money is issued? Obviously it becomes worth less. ”

      When congress created incentives for workers to save dollars nobody said “the dollar is obviously going to be worth less now” – that obviously makes no sense. But you also have to accept that the private sector cannot spend less than it’s income without the public sector spending more than it’s income.

  26. I heard about this website as a regular listener of Le Show. I had never heard such interesting economic information and definitely intend to stay tuned. Thank you Stephanie for your appearance and the great ideas. I thoroughly enjoyed listening.

    Best regards,
    Disa Johnson

  27. As of Tuesday afternoon, the transcript of the Le Show discussion with Stephanie Kelton should be available on the le show page at

  28. Lonnie Wilson

    Great show.
    I’ve heard all of Mr. Shearer’s podcasts, always look forward to the latest. This one is the creme. So much to digest I’ve played it twice so far.

    I really appreciate the fact that despite the obvious homework prefacing this call, it takes rare humility to simply ask the right question and get out of the way to let the expert speak. Most podcasters would have needed to show us how much they know about the subject. As it stands now, I respect Harry’s knowledge but more importantly I respect his humanity.

  29. A different Eric G

    I just listened to the podcast and found it exciting and intriguing, and perhaps too good to be true, the way cold fusion sounded in 1989.

    Can anyone here direct me to a point-by-point rebuttal of this MMT “smackdown”: ?


  30. Steve Bongardt

    Dr. Kelton – I really appreciated your interview but have several questions. I dont know if this is the forum or not perhaps you can take one or two. I also follow Dr. Mosler. As way of background, I am at best an armchair economist, probably more a very concerned citizen. A believer in free markets, though not naive about them, my wake up call on a fundamental level was when I heard “Too big to fail”. My quest for answers brought me to the Austrian school and keeping an open mind, the Monetarists. I have read Dr Mosler’s book (7 Deadly …) and just purchased his latest one. I feel I am intelligent but there are several things I just cant seem to get my head around as I read monetary theory. Like you allude to in this interview perhaps it is just so different from the cognitive schema that I (perhaps we) have developed. My belief is that many of us on the edge of understanding, on a quest over the last few years, have many of the same questions as we try to think critically about any theory. Here goes:

    Inflation: I don’t find any good in depth explanations from Monetary Theory on the causes other than what you discuss in this interview which is purely from a supply side – capacity utilization. Is there no fear of too much of a monetary base chasing too few goods ? What would be the thresholds where you would worry? You seem to distrust the govt’s numbers on employment (rightly so I believe) so why do you trust their inflation numbers? Just putting people to work (giving them money to spend) can not be a good thing if they are not producing valuable goods (there money will also chase valuable goods) which brings me to my next issue…

    Free Markets: There does seem to be a government knows best theme in your interview – even education and infrastructure – cant/shouldn’t free markets and entrepreneurs in the long run only pick the winners and losers? In education, does more money = better?

    Interest Rates: Is it your belief that the Fed can control the entire yield curve? While short term rates can be set and inferred, if all debt is investment on the other side of the equation – at some point – wont investors demand a higher yield and cant the monetary base get to a tipping point? Interest paid/demanded by the market increases the monetary base to a point of no return? What (negative) feedback mechanism would prevent this? Is there no limit on/to the monetary base? If so what should it be and how do we know if we get there or are approaching it – what signals do we look for?

    Jobs: Should the 23 mm out of work be given any job? Digging ditches and filling them in? It sounds like you believe there is huge unused capacity right now in the United States. What evidence is there that this is true? As a consumer all I hear is nothing is made here anymore and when I buy something (other than GM) outside of the core “food and energy” – it rarely has a made in the USA sticker on it. The majority of people out of work right now dont want the very difficult hard job of building roads and bridges or have the skills for it or teaching.

    The government is not a household. I love this analogy because it really opened my eyes somewhat – but my question is regarding turning this analogy on its head – what if it were? What if I could print money (Ok increase my reserves) and spend it on anything I wanted, would it be unlimited? It also seems like it is accurate in a vacuum. We are not the only ones valuing our money right? In globalization will the US always have the ability to print its own money and not be worried about its value to those who have no utility for it as an ability to pay a tax, especially when we will soon not be the biggest economy on the planet and people can take their business elsewhere?

    Thank you for any thoughts.

    – Steve

  31. I would be very happy if Dr. Kelton could explain to me why Zimbabwe ran out of money …

    I guess quoting Greenspam, the man who caused most of the financial problems so many Americans are suffering nowadays, speaks for itself…