Biden Economic Adviser Tries and Fails to Explain Monetary Policy - 'Some of the Language and Concepts Are Just Confusing'
Jared Bernstein is President Joe Biden’s chairman of the U.S. Council of Economic Advisers. This is, in its own way, strangely fitting.
It’s not because Mr. Bernstein is a sterling representative of “Bidenomics” — the catchall term for an economic program the president swears is working and the American public keeps telling pollsters isn’t.
Maybe not surprisingly, the 68-year-old Bernstein was confirmed as chairman in 2023 after a long history of applying liberal economic policies in academia, in think tanks and in Democratic administrations.
That being said, he’s not exactly a far-leftist, having been a critic of modern monetary theory — the current progressive economic vogue which basically posits (in elevator pitch form) that federal deficits aren’t really a problem, since government can print all the money it wants, and inflation also isn’t a problem, since governments can subsequently tax that money out of circulation if need be.
In a 2018 post on his personal blog, Bernstein asked for an open dialogue with MMT proponents based on what he saw as some faults with the idea — including taxation being a poor mechanism for dealing with inflation, the independence of the Federal Reserve, and issues with bond sales to investors who may not be entirely pleased with a government that feels entitled to print and spend as it pleases.
Enter Stephanie Kelton, a prominent MMT proponent.
She’s a professor at Stony Brook University and senior fellow at the Schwartz Center for Economic Policy Analysis at the New School for Social Research, both in New York. She’s also behind an upcoming documentary that seeks to popularize MMT called “Finding the Money.”
The trailer is below:
If you watch the trailer, you can probably tell that if you’re a conservative — or a moderate, or even an orthodox liberal — you probably aren’t going to be in agreement with her or the talking heads she’s assembled, try as they might to convince you.
However, between Kelton’s documentary and Bernstein’s open challenge to MMT proponents to respond to his problems with the theory, we come to the viral clip from the film that proves why Mr. Bernstein is indeed a strangely fitting choice for a president whose economic policy is essentially a ship with empty sails that travels wherever the prevailing winds in the Democratic Party blow it.
In the film, Bernstein confidently asserts that “the U.S. government can’t go bankrupt, because we can print our own money.”
“It obviously begs the question: Why exactly are we borrowing in a currency that we can print ourselves?” Kelton asks, in a talking-head voiceover, asks.
Let’s leave aside Kelton’s colloquial misuse of the “begging the question” logical fallacy, because the word salad that subsequently dribbles out of Mr. Bernstein’s mouth is much funnier — and quite a bit more frightening, at the same time — than nitpicking at the ongoing debasement of the English language:
This is Jared Bernstein, the man who sets economic policy for the Biden administration. Asked why the US government borrows money if it can print its own money:
“I can’t really… I don’t get it. I don’t know what they’re talking about.”
You are doomed. pic.twitter.com/3MT7lvQFo5
— Ian Miles Cheong (@stillgray) May 4, 2024
After Kelton asks him the question on camera, this is what we get: “Well, um, the, uh, so the — I mean, again, some of this stuff gets — some of the language that the MM … some of the language and concepts are just confusing,” he said.
You’re telling me. However, to use a phrase famously applied to Massachusetts Sen. Elizabeth Warren, MMT’s most visible champion in the Senate: Nevertheless, he persisted.
“I mean, the government definitely prints money and it definitely lends that money,” Bernstein said. “Which is why, uh, uh, the government definitely prints money and it lends that money by uh — by selling bonds,” he says — then literally asks himself, aloud: “Is that what they do?”
He decides that the answer is yes. “They, um, they, yeah, they, they, um, they sell bonds. Yeah. They sell bonds, right? Since they sell bonds and people buy the bonds and lend them the money. Yeah,” he continues.
“So, a lot of times, a lot of times — at least to my ear with MMT — the language and the concepts can be kind of unnecessarily confusing, but there is no question that the government prints money and then it uses that money to um, uh, uh, uh — so, um, yeah … I guess I’m just, I don’t, I can’t really talk — I don’t, I don’t get it.
“I don’t know what they’re talking about, like, cause, it’s like, the government clearly prints money,” Bernstein said. “It does it all the time, and it clearly borrows. Otherwise we wouldn’t be having this in — this conversation. I don’t think there’s anything confusing there.”
No, nothing confusing there whatsoever. Corn Pop was a bad dude. I think he got eaten by cannibals, though. Where’s Jackie?
Now, again, you don’t have to agree with the economic ignorance of the woman who cornered Jared Bernstein to agree that Jared Bernstein appears to be even more ignorant about the basic principles of printing and spending money. (That’s assuming, of course, that the clip is a fair representation of Bernstein’s answer and not some AI manipulation or a hatchet job of malicious editing. Given the context, thought, that would be an awful a lot of malicious editing.)
And those at 1600 Pennsylvania Ave. wonder why America doesn’t trust the Biden administration on inflation, jobs or the economy.
And it’s worth noting that, as Fox Business News pointed out, Bernstein’s academic background isn’t exactly strong on economics.
“He earned a bachelor’s degree in music from the Manhattan School of Music, as well as a master of social work from Hunter College and a doctorate of social work from Columbia University,” Fox Business reported Saturday.
Why does America borrow money that it prints itself with the intention of paying it back? The answer should be simple: Because the international system of fiat currency would collapse if there wasn’t some check on the amount of currency being printed — be it an independent central bank, the value of that currency against other currencies and/or commodities, or both. Next question.
The idea that money represents value (and the more of it that’s circulating, the less it tends to be worth) is essentially an alien concept to the MMT crowd — but at least this is a feature, not a bug, in their curious economic worldview.
Here, the chairman of the U.S. Council of Economic Advisers essentially admits the same thing. He can’t say why this is, however, at least in this clip — in fact, he can’t even assay a substantive response to Kelton aside from “it’s like, the government clearly prints money” — but, at the bottom of that word salad is a very nasty bug in his view of how the world works.
In other words, this is the perfect economic adviser to our 46th president, albeit for all the wrong reasons. If Jared Bernstein didn’t exist, you get the feeling that Joe Biden might have to invent him.
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