Steve's guest is L. Randall Wray, a professor of Economics at Bard College and Senior Scholar at the Levy Economics Institute. In this 2017 interview, Wray looks at the Global Financial Crisis from both sides now. The celebrated economist tells Steve how the rise of shadow banking led to banking deregulation, opening the door for massive fraud, leading to the global financial crisis. He then explains in detail how globalism affected average Americans, suppressing their wages for 40 years and forcing them to amass unsustainable personal debt. These two threads led to the GFC.
Wray compares the federal government’s response to the banking crisis with the reaction to the real economy’s crisis, the jobs crisis, and the consumer spending crisis. Is it any wonder that Wall St recovered, but the rest of the economy did not?
He maintains that only a federal job guarantee will prevent more pain. Manufacturing jobs are not coming back to the US any time soon. He goes on to address both the myths and reality of Social Security and Medicare. And finally, he offers a simple but truthful description of the relationship & interaction between the central bank, or Federal Reserve, and the Treasury.