Ep129[2/2]: Dirk Ehnts: Raising interest rates is like blowing up the garden to weed it

Welcome to episode 129 of Activist #MMT. Today's part two of my two-part conversation with Dirk Ehnts. Last week in part one, Dirk described his journey from a PhD in mainstream economics, to discovering and accepting MMT. Today, I ask questions circling around his new co-authored piece for the Gower Initiative, called Raising interest rates is like blowing up the garden to weed it. It starts with some very basic questions about how and why the central bank maintains the stability of the payment system. I then ask the specific mechanics of the central bank's raising its overnight target rate, and how it ultimately results in millions more becoming unemployed – and therefore more exploitable. I continue to struggle with these concepts, but after this conversation, I feel like the questions have become more clear. If you like what you hear, then I hope you might consider becoming a monthly patron of Activist #MMT. Patrons have exclusive access to several full-length episode, right now. A full list is here, each with a brief highlight. Patrons also get the opportunity to ask my academic guests questions, like in last week's episode with Dirk, my previous interview with John Harvey, and my recent episode with Warren Mosler. They also support the development of my large and growing collection of learn MMT resources. To become a patron, you can start by going to patreon.com/activistmmt. Every little bit helps a little bit, and it all adds up to a lot. Thanks. And now, let's get right back to my conversation with Dirk Ehnts. Enjoy. Audio chapters 5:13 - Start of academic questions 5:35 - What is the nature of a catastrophic failure of the payment system? 12:12 - Central bank versus Blockchain, a financial justice system 14:59 - Warren Mosler story about company accidentally receiving millions extra from central bank. 15:24 - Central banks and reserves, parents and food for the kids, power struggles 21:36 - Increasing interest rates- the mechanics and its effects (dis-employing people) (transmission channels of monetary policy) 29:07 - The MMT view of interest rate targeting 36:53 - I try to restate 44:44 - Germany are Greece are both currency issuers, but with different power 50:48 - The difference in power between Germany and Greece 56:23 - Goodbyes and Levy summer session 1:01:02 - Duplicate of introduction, but with no background music (for listeners with sensitive ears)