Ep 4: Vibes-based Economy

As a regular person I have to deal with like with the government's coming after me for perhaps being a little bit ignorant about something I didn't understand taxes coming up I guess in a month but like people to pay their taxes that went with the police were harassing them or the IRS telling them you owe $600 because you made a mistake on your taxes but then they see how does the government intervene it doesn't intervene for regular people so you can see why people would be cynical and you know why if the Democrats to vote for us or better than Trump what if you like well Trump gave me you know checks during the pandemic and what are you who you giving checks do you give me them to like Venture capitalists and to like Tech Bros and their startups you know it doesn't look like they're on the side of working people

welcome to left on red where a Genex mom and gay Millennial do socialism social to use on news you can use my name is Scott Carly tease Susan Kang and we're so excited to be here with you today a lot of stuff to talk about it sooner it's been a week for capitalism is my heart take is actually that it's not been that special I feel like some things that have been going on get overblown in the news but let's let's talk about it so what's going on this week Silicon Valley Bank or svb I think is now totally gone under right I think I'm not clear exist anymore or just that depositors money continues to be protected by new levels protection from the federal government and their Deposit Insurance but does it still exist anymore

 I'm sure there's somebody out there who could talk my ear off about what the status is on that there was some so to take a step back for a minute so I can Valley Bank is this enormous still considered a Regional Bank Regional Bank that essentially had almost all the Nexus of almost all Finance for tech companies Silicon Valley in general a lot of venture capitalists and a lot of venture capitalist have links to like the crypto bubble and recently had an extremely bad time when a group of investors a lot of folks I had a lot of money in the bank since we tried to take all of their money out at once and I would call this a bank run evidently it was a group chat like we all are in group chats and my group chats definitely sort of accentuate like behaviors and attitudes and like magnify them beyond the individual and so much of capitalism is like a bunch of people

 acting heard mentalities in ways that don't reflect

 economic activity of the ground what you say that I meant fact I feel like all the finances and that'll be our next topic I got into that but if you like all of Finance is really almost has nothing to do with actual productive activity but is almost exclusively the way some people with a lot of money feel about certain things and how that translates into them giving or taking money from other people right and also their ideas that if I don't you know it gave me a particular activity like selling right now what does that mean for my investments word that means my ability to continuously accumulate and it's a behavior of a really small number of people with a lot of resources for able to make these choices with almost no consequences other than maybe a little bit of bad-mouthing that affects the lives of so many people Bank thing I think was a really big deal for me at least in terms of why did I care about this new story one I didn't think it was actually going to do that much to the overall economy it seemed kind of isolated

 like the federal government was going to step in what bothered me about it was how quickly it immediately the government was willing to do whatever it took to protect those investors those depositors in their money and how is he right now in the Supreme Court and talk about this like what the first episode how was you right now in the Supreme Court the government is saying actually we don't give a shit about student loan borrowers and we don't want to forgive any of the student debt it was like really really annoying hypocritical hypocritical about who the government doesn't does not care about right and I did notice that we that we will see now where it's a picture of Willem Dafoe saying you know I'm a bit of a venture capitalist myself inside every student loan

 Willem Dafoe sounds like a Gen X meme circulating on Twitter show me out right with myself right and so I moved to New York City and a 2008 there was a whole idea that like some banks are too big to fail and now we have our someday I meant to sail

 watch out seasons of Millennials today ya know what the size is actually what matters is those who have the capitals their interests are protected above all else has its own Department which I did and it turns out that I have the money to pay my mortgage then that's on the bank for making a bad investment with on me right and then I lose all the money I put into that apartment and then the bank will lose write the mortgage and that that's what it's like part of the process of trying to make money to make the bank is hoping that'll pay off all his interests which will be like something like I don't know 2/3 of actual in a principal that I borrowed right there making a lot of money on the fact that I don't have a bunch of cash up front to purchase my own home and like that makes sense right at home that we can all think about but for some reason multiply that by a lot and the government's like oh no we have all this money to help you out in this situation right now

 if you're the big deposit the reason given that I am willing to entertain up to a point and I'll explain to you why I disagree with it but the reason given was that okay I'll lot of the money in this bank is connected to businesses that employ people and so the government's interest in Bellingham these depositors outer protecting this money beyond the already said Federal Deposit Insurance thing which is only $250,000 was that they wanted to protect people's jobs and they didn't want a mass unemployment thing and they didn't want this to reverberate across the whole economy what was interesting to me I saw a tweet, twitter tweet that was like in a just world or in a socialist world when one or two businesses fail what would happen instead of saying we need a bail it out to those employees can still make money those employees would be protected because they'd have guaranteed housing and they'd have guaranteed Healthcare and their needs would be getting

 mat outside of whether or not the company that they're working for happened to be lucky write that if the bank that my workplace is reliant on to keep operating suddenly fail tomorrow right now I would be shut out of luck I would get fired and I will get laid off and my whole life would be good turned upside down because of some rich people playing games with our money but in a just world I would be fine I would be safe I would have maybe a universal basic income I would have guaranteed Healthcare I wouldn't need a job in order to have Healthcare I would have housing guaranteed or protector is given to me by the state I wouldn't have to worry about making enough wages for rent so that was to me another really big component of this crisis which is when it's a crisis for capitalism or just Capital rich people and their businesses it's suddenly becomes a crisis for everybody else because we have an economy that's like dependent on the rich that the rich have to keep me

 money I may have to do so in a way that's like benevolent and good for all of us or else something terrible will happen and then and only then the government steps in still somehow to protect the interests of the Rich and find somebody who sort of observing which you know I am but we do with the clear side and I had never been billed out by the government and I was watching I'd say look under Obama under Biden the Democrats are the party of the bank bailouts they've made it very clear what they care about where you know the resources should go and is not for people who are struggling right. The people in East Palestine who don't know what's going on with her health right here going to get like $1,000 or something or you know if your regular person and you find yourself being audited by the IRS because if you claim the earned income child credit or so I don't know what the exact name of that tax break is but if you're somebody is what we can with children and you you claim that on your taxes your way more like

 to get audited by the IRS get like you know if you misunderstood your taxes face additional fines right or if you get any kind of Public Assistance to more like they get audited by the IRS automatic triggers a person you could deal with like with the government's coming after me for brats being a little bit ignorant about something that didn't understand taxi is coming up so I guess in a month but life you got to pay their taxes that would win in a fight with the government is like police were harassing them with the IRS telling them you owe me $600 because you made a mistake on your taxes but then they see it doesn't intervene for regular people so you can see why people would be cynical and you know why if the Democrats a web browser better than Trump weather be like well Trump gave me you know checks during the week and what are you who you giving checks to you give me them to like the Venture capitalists and to like Tech Bros and their startups you know it doesn't look like they're on the side

 there's like a concept here that I'm not remembering or I can't figure out the phrase of but there's something to do with how the government ostensibly supposed to be buying for the people or you know it's a democracy it's voted in by the public but in Practical terms it just seems to be by in for wealthy people rich people have the most influence influence has the most power in Washington and in every single state house and they just control the government and basically it works really well for them and it doesn't work at all for us maybe maybe or maybe like corporate capture the idea that like the government is captured by corporate entities and it works not just in the sense that rich people pay a lot of money on campaigns and they by politicians but the more underlying way that it works is kind of how we referenced earlier this whole government this whole Country economy everything is Reliant

 I'm capitalism on the free flow of capital and rich people to do whatever they want so

 whenever capitalism succeeds the government succeeds whenever it fails the government fails and instead of regulating it raining it in making changes to it bringing us closer to a socialist society the government is instead dependent on capitalism because that's the way it is chosen to set things up it is set things up in a way that requires quote on quote successful capitalism to move on uninterrupted and provide the things that they think it'll provide and any Interruption to that is not just a threat to the capitalists but not a threat to the government that relies on it and I are both ecosocialist and we know that it doesn't work right because what underlined capital is assumptions is ID that we can just keep consuming keep growing no consequences and that's like golden awesome we'll talk about this more a little bit later but you know it doesn't work that way and I think Economist use a term called externalities like whether it's do you produce a bunch of like

 Jackson Loops polluted of a bunch of communities or you're making all this money and you're are you know investing boobs you accidentally led to this bank fraud which is leading to a confidence crisis across the Global Financial system right and like I read somewhere that there's like markets are shaky stocks are falling I read that a bunch of Pension funds from Sweden or actually held in Silicon Valley Bank so it's not just write like a venture capitalist or just a start of tech Bros actually like workers and Sweden whose government was trying to invest their retirements in a responsible way who bought the hype right like all this is the way to go hang out and protecting these deposits I do want Swedish workers pensions to be protected

 I told that but that's really well cuz now you're talkin about the global financial crisis and what is like Finance or credit

there's is Marxist concept that maybe I'm not explaining our understanding really well and it's called fictitious Capital shout out to I have not read Capital by Karl Marx I think I'm supposed to but it looks a little too dense and little too difficult for me to read I don't trust at all booked but I read a really great short summary or explanation of it it was called The People's guide to capitalism and try to essentially read Capital to you and much more plain or language much more understandable relatable language and there's a section on in finance and dives into what we call fictitious Capital really for me that's just kind of like all Finance are almost all find it

 and Susan Richards like you're just talking about it all of this economic activity that relates to financial instruments assets bonds all of these things that are basically money on top of money and not actually linked to any sort of production or any sort of like economic activity all of these banks that you described have all of their money like concentrated and dependent on other piles of money generating money whether that's like interest where that's loaning whether that's investment even the Swedish workers their Pension funds are relying on them investing in something else and those Investments it's not like they just say okay our pension fund has given $500 to this business and if this business is really successful in ten years they'll pay us back $600 know they're saying we're going to invest $500 in this

 and the performance of the stock doesn't actually have anything to do with the performance of the company the stock price will go up or down based on how other investors value it so if the company that's underlined the stock doesn't really do that well or does middling but all the investors think it's doing like fantastic or they're just like this stock is really hot right now the stock price will Skyrocket because demand in that speculative Market will increase I'm getting ahead of myself with Concepts but basically so much of the global economy and especially the American economy is based on nothing has Capital money on top of money Investments on assets on other Investments and we saw that with this bank run we're all of these investors all of these people attend the money wanted to take their money out of the bank and the bank just didn't have it because all of that

 money is in some way loaned out or invested to someone else that money exist on a computer but not in real life

 all right so one of the terms I I've used one of her to use is idea of financialization of capitalism the idea was that before the 1970s most Finance was used in support of real production so like widgets producing which is the factory or whatever and nowadays if you work in the finance bro and you're not really necessarily giving out loans this traditional form of economic activity but rather for like what's the artist who sang different kinds of asset-backed Securities or debt Equity swaps or other forms of sophisticated financial instruments that basically they make money off money and their ways to you know crate enormous amounts of wealth and their ways to create financial instruments for other investors to buy with the idea that they are a sure thing a good return on investment because money can't just be money right cuz that's only capitals Works money has to make more money but he has to expand and so this is like a concept that I

 Mattoon sometimes which is that back in the day your traditional Main Street Bank right they made money off of them called marginal interest rates so so y'all don't want to buy a house by the money to buy the house at a 7% interest rate that's like your classic 1980s 1990s interest rate for a bank to bake a mortgage and then somebody else deposit their money in the bank which I use for the mortgage and I paid him for percent so it's that 3% difference was. That's all the banks made that marginal difference interest rate and the thing is at only with the loosening of financial regulations I believe in the 1980s right did Banks suddenly had the ability to make so much more money so the thing is that I'm so used to saying something like oh well why don't we have a situation with workers are vulnerable to like losing their jobs I didn't even take a step back and save why can we have a situation which banks aren't like able to make so much money because Banks don't exist and political backing to exist within National bound

 countries can make regulations about like what banks can do I believe that like currently like a Traditional Bank can lend up every dollar that's a positive 10 times like evidently other Banks like International Banks to lend a single the pus out of 270 * because there's no regulation on that there there's a bunch of rules under something called like a battle agreements but they're not like things that can be easily you know regulate it right and nothing that where it's it's you find that there's all this vulnerability because Banks might bend the rules a little bit and then that's where the criminal liabilities come in until this is all the money that these banks are lending out through any number of like bizarre and sane financial terms that no one knows normal person will ever understand understand the whole thing is I don't know what the hell that means but all of these things like Capital continues to create new and new terms for fictitious

 a fake ways for them to make more money all this is connected back to what you were saying earlier Susan when you were saying there's this like desperate drive or need to grow that capitalism ultimately needs to constantly be growing otherwise it fails and that causes all of these crises capitalism has a need to constantly be concentrating wealth and generating and growing the well and that drives Banks to create new and more convoluted financial instruments and take riskier and riskier investments in order not just to keep growing but increase the pace of growth what ends up happening like we've seen with Silicon Valley in a lot of these bubbles is they invest in the investing they spend money and they try and grow and grow and then eventually there's a mistake made there's a miscalculation there's an error there's overproduction and the growth can no longer be sustained and then it comes down in an extremely damaging crash I mean play lovely one of the things that led to this

 Bank Run on Silicon Valley is the bursting of the crypto bubble if you were able to buy into the crypto bubble before it do you value your able to make a profit but you know one of the things that happened was that when things we saw last year was that people with cryptos entities they were losing the value of their Investments and you know I know that's one of the things that we saw was a market correction for this like busted bubble just like we saw with the you know the real estate market in 2007/2008 and that Bubble Burst and that led to a whole bunch of big problems and like runs on the Global Financial system one of the things that's really near and dear to me I guess is the Asian financial crisis that happened in 2097 so that was like just a couple years after you were born just making fun of calling a financial crisis keep its currency

 fix the dollar he wasn't able to do so and once it was like sorry all we cannot maintain the value of the Thai baht to the US dollar people are like in their version of a 1997 group chat saying he's got to pull your money at AJ's I want to play the money out of Asia and not because there were any actual problems in Asia but they were like it's overheated there's a problem with the currency there's you know it's not stable and then it came up with all these predictions like those Korea Japan Taiwan and somebody was any coronavirus than it is here right they just had this like a prescription for it but it really was just it was a banker on it was a confidence crisis by the International Financial class literally all speculative doesn't have almost anything to do with actual production actual economic activity but it's just some investors some very wealthy people controlling enormous sums of

 and then all of that cash either generating an instant or disappearing in the blink of an eye based on how they feel about it was the richest man in the world if you might still be but riches by what definition he bought Twitter and he's kind of like running it into the ground and almost overnight and in normal amount of his wealth quote-unquote wealth disappeared through a crash into Tesla stock through the assets that he's like losing in terms of Twitter it's not like Elon Musk spent five hundred billion dollars it's just that the speculative Capital that made Tesla so valuable or that made Tesla stock I should say so valuable went away because he was making a fool of himself and because other things were happening that made Tesla look really bad so all of this money the richest man in the world's money could soak

 we disappear just based on Vibes right but truly the Global Financial system is just like which restaurant is hot in Times Square based on what people agree and value is social it's socially constructed it's not based on like you know the best products or any sort of economic terms if you might want to think it literally is like if people believe it it's real and if people believe that the u.s. dollar is valuable than it will become valuable but there's nothing backing it up there's no gold it's just Vibes I hope and believe that fictitious Capital meaning that it's a Vibe based economy is a very good summary explanation for today I hope that if marks were alive today as he heard us say it's a Vibe based economy he would say yeah that's right that's what fictitious capital and finance me as an advisor for the working people just just want to put that out there

 kids are all right and we're not supposed to be a good vibes right there we suffer from the bad vibes and so hopefully there will be a good shift for the working people which we have to create just speaking of a Vibe shift there's a Vibe shift going on outside of the economy but in the global political scale so you may have heard this term on the news a couple of times or maybe you've heard someone smart on Twitter or in a group chat say it but I've heard people talk about the return of great power politics

 assistant professor of political science at dying inside you're not unique but rather

 let's just talk about how I'm a Genex are like when I was in college in the late 90s early 2000s they was a vibe that great power politics were over and that you know capitalism and liberal democracy had one idea that the major military powers are the rivalries are like shooting up and that they're there what determine politics like International politics that idea was that the late 90s 2000 people like Thomas Reed men who were saying that you know oh the World is Flat On The Blob they were arguing that global economic cooperation globalization was flattening all these differences between people between countries countries are no longer important important now we had these transnational like Global Citizens who would just go places and be Cosmopolitan and like you know party in Berlin working city of London you know invest in

 whatever but like there was this very Kumbaya idea that the great power politics that's what is defined a generation were no longer going away the cold war was over the boxing Freedom had one and now you know this old Power rivalries were just like a thing of the past and if I knew you'd study and for the history books I think I've heard of a book called The End Of History oh yeah that's Francis fukuyama so he was he was bigger than $90 back right but not those rides are gone now so just because we're wearing the big pants I wore 94 that I showed so your picture of you. I'm grateful to slim fit is out because it doesn't look good on my legs and I know great power politics are all the strategy games that I play and it's exciting in the imaginatory sense of the word but I feel like when people say great power politics now return to that

 who the referring to is kind of generation of spheres of power influence in the world between maybe the United States and China and Russia and Russia maybe even your up at this point to and also like emerging rivalries from like powers like Brazil India yeah it feels like what's going on isn't that all of these other countries are necessarily just becoming powerful although China certainly continues to be but it's more the United States was really extraordinary Li dominant at the end of the Cold War after the Soviet Union fell apart that it's snuffed out opportunity for other states are groups of states to be powerful but as United States is beginning to recede as we move away from some of our military engagements overseas and as the United States is dominance kind of decreases because we're in a bit of a recessionary state not in terms of our actual economy but just how we have influence abroad

 how much willingness we have to exert that influence that other countries other people are now able to become more and more powerful and exert their will on the world and now there's like Chinese models of Economic Development there's Chinese models of growth like a lot of countries in Africa prefer to get assistance and aid from China Rising the US with the EU because it doesn't come with the same kind of political strings attached and also like other countries of Latin America they have their own to Regional powers are also developing relations with China South Korea until there's new like counter hegemony's the u.s. is dominance and one of things like the first part I should we talked about I guess first and second talk about financialization of capitalism but this whole liberal Financial order was largely a kind of strong arm of the US because it was seen as beneficial to us financial institutions right and who are The Architects of the last like the world bank-imf based in the US base in Washington DC right able to sort of

 countries like Mexico South Korea you know you countries like the grease right into totally changing their financial order against the will of their people all the countries in Latin America right that suffer through you know the 90s as really great example there was an attempted there wasn't a coup in Bolivia against the Fairly popular socialist president probably United States back that coup and felt it fell apart but people of Bolivia the Socialist Party basically put their socialist leader back in charge and the United States couldn't do anything about it in Venezuela United States definitely supported that guy whose name I can't remember but that failed to didn't gain traction although thoughts we have about

 suellen socialism beside we see in Mexico leftists are in power in Mexico and its really this kind of socialist Resurgence left Resurgence in Latin America has been really exciting to see we just a Lula when it got in in Brazil a lot of that is it's not just about domestic politics also rejection assert American dominance is well within the hemisphere and the United States can't just go ahead and cool whenever it feels like it anymore there is competing influences there is other folks that are sort of asserting their power more often and the American power has infected declined a little bit but still you know the top dog for sure on anyways but like you know I think that there's a real crisis of confidence like the US hasn't been a great leader when it comes to climate European Union countries that usually are pretty much in lockstep with the US are pretty angry at the u.s.a. right now over all kinds of things and there's a lot of moral Authority that the US lacks protect

 because of its Italy take leadership when it comes to climate security concerns and sort of this perpetuation of inequality for equality within the globe yeah and I'm now almost everyone in the world do you know you go anywhere or talk to his citizen whose reasonably well-informed will probably tell you they're very intimately familiar with the way in which the United States has probably fucked over their country at least once in the past it's kind of like a story of the globe which is you probably know some way in which United States is exerted influence over you and your people in a negative manner it's not like the folks in Chile have forgotten that the United States engineered a coup right people remember that stuff now and it's kind of fueling the fire growing of anti-American seen as the domestic side of this is that there's a growing cynophobia in the u.s. or China becomes a very important scapegoat and then Russia

 what is an agent of fluke interference which on one hand we love that from other hand we just go look in the mirror sometimes we are supportive fully of the regimes of most other great Powers versus doing today that I would say I support I would say there are some elements of China that scene of the Chinese government that seem positive but let's be very clear there's an incredible amount of State repression there's a lot of capitalism in China a lot of the wealth that they've been able to generate economic growth has happened under capitalist factories abusing and exploiting workers there's a ton of horrible happening in these countries all over the world it's difficult to balance that while also recognizing the horrors of the United States and the global Empire this country has perpetuated

 how to make it if that's been we certainly I appreciate that where we as Americans we should spend a lot more time looking in the mirror than pointing fingers you know there isn't any way that we use regular Americans benefit from this dominance like the dollar has enormous purchase purchasing power and it really shouldn't merely because we divide divide for the dollar are really good people still want to invest in u.s. you know dollar-based investment vehicles and brows. Like the seminar wanted somebody was telling me that people do something like go fund me in China like regular people to invest our money in US based like real estate investment because it's seen as a sure thing so you know we still benefit and you know we set up the system that difficult to lead effects of Rich of the United States but also benefits the workers the workers and regular people in the US as well

 because at the end of the day we have a government and economy reliant on capitalism and capital and we absolutely benefit from it in many ways I think that means it's also a responsibility as American citizens of people living in the heart of the Empire to overthrow it and do what we can to make substantial changes so that the rest of the world isn't Shackled to our economic needs and also that we unite and free the Working Class Hero from exploitation so that we can benefit in the ways that the rich do and that we can spread those benefits globally that we don't hoard wealth resources we don't steal it from other countries you know we could go on and on that note I can't do it alone right we can't Liberate the working class through us and you know the rest of the World by you know posting fortunately or listen to podcast with that's fun to do

 or by lifting weights or whatever it is that we do in our spare time would rather we make changes to our Collective organizing and what what do you think the best way is to do that oh what do I played organized collectively there is this organization you may have heard of it's called the Democratic socialists of America rds-a I think you and I are both yeah that's a happy coincidence but all you have to do is Google or Bing or Yahoo search whatever you used join DSA the Democratic socialists of America check us out there are so so many people working their hearts out right now to win a better world and there are some who are doing a credible amount of organizing work and there's some folks we're just paying deuce and on the email it's right between this weekend

 Lily very busy but a little like relax a little bit and it's going to pay off it always does so we hope you consider joining and as always if you have any questions you can email us questions about us the podcast or do you say would love to answer that financialization of capitalism

 yeah yeah questions about Bitcoin we will make I don't have a Bitcoin so or crypto send us an email at the last unread and Y C at gmail.com left like the direction read like the color and we'll see you guys next episode thank you