Great Leap Forward

Why We’re Screwed, Two: The Love Of Money

Some of you might enjoy this radio interview, a take-off from my GLF blog titled “Why We’re Screwed”. See here for my original post:

Patience, it gets better mid-way through. Took me a while to get used to the format–several interviewers all at once–but it works well.

Short take: you should be mad as hell, and you shouldn’t take it any more. Here’s the interview.

The Love of Money

British Prime Minister David Cameron and his Chancellor George Osborne are currently enforcing “savage” spending cuts that, in Cameron’s own words, “will change our whole way of life”.


What have the British people done to deserve this punishment?

Tonight’s guest, Professor L. Randall Wray, has got some very revealing answers.

If you want to know how we got in this mess – listen to this show.

If you want to know what’s going to happen next – listen to this show.

And if you want to know what we should do about it… well, you know what to do.

This is one of our very best – and most important – shows. Please: tell all your friends about it.

Presented by Peter Cox, Ali Gardiner, Dave Bartram and Ian Winn

13 Responses to “Why We’re Screwed, Two: The Love Of Money”

PZApril 2nd, 2013 at 12:22 pm

Should rent-seeking behavior really be part of GDP?

GDP is supposed to be measure of 'value added'. How are activities of wall street value adding?

olly100April 2nd, 2013 at 4:22 pm

Did Minsky write anything in detail about the "hierarchy of monies", or did he just mention it in passing? Did he agree with your description of the monetary system (hierarchical, based on tax obligations and debts, etc)?


L. Randall Wray L. Randall WrayApril 2nd, 2013 at 10:56 pm

bankers used to be personally liable for double their investment; not a bad idea. i’d greatly restrict what banks can do rather than increasing capital ratios, but then of course hold top mngmt liable for breaking laws–ramp up criminal penalties. that will do much more good than increasing capital rqmts, since anything less than 80% or so won’t change behavior much

L. Randall Wray L. Randall WrayApril 2nd, 2013 at 10:59 pm

yep. all these ideas are in his writings, and were in his classes when i took them. check his 1986/2008 book

L. Randall Wray L. Randall WrayApril 2nd, 2013 at 11:01 pm

yep, including wall st in our calculations of gdp would be a lot like counting the services of all conventional criminals in the USA as a contribution to GDP. Remember what buffet said, these are weapons of mass destruction. Wall St is a wealth destroyer–like dropping nukes on American cities.

olly100April 3rd, 2013 at 11:08 pm

Do you mean "Stabilizing An Unstable Economy"?

by the way, could you possibly respond to my previous question? It's difficult to defend your positions if I'm not entirely sure what they are!


L. Randall Wray L. Randall WrayApril 4th, 2013 at 12:08 am

olly remind me what your question was.

however, i think you should defend YOUR position, not MINE!

PZApril 7th, 2013 at 10:14 pm

Oh. I was thinking in terms that these new capital requirements would introduce new large "money sink" into the economy.

For example if banks have 50 trillion in assets (loans) and capital requirement would be raised to 30%, banks would have to raise about 16 trillion in capital to their balance sheets. Where is this money supposed to come from? In practice government would have to deficit spend 16 trillion into the economy to fill this hole.

And this is sold as a money saving measure because presumably govt would not have to bail out banks anymore? In practise all you have done is pre-fund all these bank bail-outs and then some. 16 trillion is way more than your average bank bail-out bill in a crisis.