This past week the US Commerce Department released its early estimates for US GDP for the 1st Quarter 2021, January through March. If we are to believe the numbers, the US economy grew a respectable 6.4% during the period. But did it really? And does it represent a strong recovery underway? Or just a rebound, as the economy reopens in the services sector; and once the reopening concludes, will the economy flatten out again—as it did with last summer’s 2020 partial reopening that collapsed in late 2020?

The first thing for readers to understand is the 6.4% is not really 6.4% for the first three months of 2021. The US is one of the few countries that reports its GDP figures in an ‘Annual Rate’ (AR) percentage. Most other advanced economies do not. Annual Rate reporting takes the actual growth for the period and then multiplies it by four. In other words, a 6.4% annual rate GDP means if the economy continues to grow as it did in the first quarter 2021 then it will amount to a 6.4% for the next twelve months! That means the actual GDP growth for the first quarter was about one-fourth of 6.4%. That actual growth was 1.6% over the previous, fourth quarter of 2020.

Another obfuscation in the official numbers is that the US sometimes reports the gain for the quarter compared to the same quarter a year ago, and therefore not the previous calendar quarter. What is important is how much the economy grew in the quarter compared to the preceding quarter—and not compared to a quarter twelve months ago.

On top of all this, it’s important to understand that ‘real GDP’ (the 6.4% annual rate overestimation) is obtained by reducing what’s called ‘money GDP’ from the rate of inflation. So if the rate of inflation is underestimated, then real GDP appears higher than it actually is. And the US always underestimates inflation in order to get a higher real GDP number. It does this in many ways. For example, it doesn’t use the Consumer Price Index (CPI) to estimate the inflation. It uses another price index, called the ‘GDP Deflator’. Its number for the overall level of inflation is always much less than the CPI. There are many ways the US further underestimates inflation. Without going into boring statistical details, another way is called ‘chained pricing’. Another is to reduce prices based upon absurd assumptions that improvements in the quality of various products subtracts from their actual price increases. For example, rising prices for computers and smart phones actually show up as price declines. Apple may charge $800 for a new edition smart phone, a hike of $100-$200, but the Commerce Dept. will include it in its inflation estimate as a price decline!

The actual 1st quarter 2021 US GDP growth is therefore only 1.6%–when the ‘annual rate’ puffery is discounted; and that still ignores the manipulation of inflation in order to boost real GDP still further.

So does this 1.6% represent a robust growth? And what is causing it? And will the cause continue?

It’s important to distinguish between an economic REBOUND which is temporary and an actual economic RECOVERY that is sustained. Rebounds dissipate. Real recoveries continue to show a rise in GDP over several quarters into the future.

Last summer 2020 at this time the US economy partially reopened. Especially in the red states that ignored the shutdowns. The US economy experienced a Rebound as a result of the reopening from roughly mid-June 2020 to mid-August. That rebound then faded and in September the economy began to weaken again. That weakening continued through the last three months of 2020 as the economy almost totally stagnated. Here’s the actual quarter to quarter GDP numbers (not reflecting the ‘annual rate’ puffery):

In the first half of 2020 the US economy collapsed by an historic -10.5%. That included the decline that set in during February as the Covid virus began to hit the economy. April-May were the hardest hit months, followed by early June. By mid-June the economy was reopening (prematurely it turned out). The reopening resulted in a REBOUND from mid-June through August. That produced a 3rd Quarter GDP rise of roughly 7.4% (discounting the annual rate nonsense again). So the US economy recovered about two-thirds of its historic collapse in the first half mostly due to the reopening.

The alleged $2.2 Trillion ‘Cares Act’ fiscal stimulus passed in March contributed some to the REBOUND of the summer, but not all that much. It was mostly due to the reopening. The Cares Act, as reported by the media, amounted to $2.2T stimulus. But that was misrepresented by half! It provided only $1.3 trillion—not $2.2T. Here’s why: $500 billion was provided by the $1200 income checks households received plus the expanded unemployment benefits. Another $525 billion was provided by the PPP small business loan/grants (mostly latter) program. (An initial $350 billion was provided in March but then another emergency supplement was added to bring the total spending on PPP to $525 billion by August). So that’s just a little over $1 trillion. Another $1.1 trillion was earmarked for loans to medium and large businesses, to be distributed through the Federal Reserve US central bank. But only $175 billion was actually loaned out through the Fed’s so-called ‘Main St.’ program by year end. (The Fed sat on $455 billion and then returned it to the US Treasury in December 2020).

So the actual first stimulus, Cares Act, only provided $1.3 trillion into the US economy ($1.025T in checks, benefits, and PPP) plus $175 billion from the Fed. A good part of all that did not get into the economy, but was ‘hoarded’ by better off households and businesses and not spent or used to buy down their debt loads. Probably no more than $800 billion actually got into the economy. In short, the 3rd quarter GDP growth of 7.4% was thus mostly due to the reopening and not the inadequate fiscal stimulus called the CARES Act.

Politicians knew, by the way, that the Cares Act was not a stimulus measure. It was a ‘mitigation’ bill and they called it that. Mitigation means putting a floor under the economic collapse for 2-3 months. It doesn’t mean a spending surge that would result in a sustained economic recovery. Mitigation bills produce REBOUNDs, at best; not sustained recoveries. And that’s what the Cares Act did. It bought some time over the summer, as the economy partially reopened.

But the Cares Act spending ($1.3T minus hoarding and debt repayment) dissipated by the end of summer 2020. And only part of the economy reopened by summer’s end 2020. Consequently the US economy faltered and stagnated in the final months of 2020.

US GDP growth in the 4th quarter 2020 thus registered a mere 1.1% actual growth, which was probably zero growth due to inflation underestimation. This was followed by the 1st quarter 2021 initial GDP numbers reported last week showing a 2021 growth of only 1.6%. That too was due largely to the reopening of the US economy, and not to the emergency fiscal stimulus of another $866 billion passed at the end of December, which provided a continuation of unemployment benefits and a small $600 check to households. The December emergency measure was also a ‘mitigation’ measure, not a stimulus. It dissipated by end of February 2021, indicated clearly by a new collapse in consumer retail spending after a brief boost in January.

In short, the 1st quarter 2021 GDP growth of only 1.6% is due to the second reopening of the US economy in 2021 as the vaccines for the virus were distributed.

So here’s a summary of the actual growth of the US economy from February 2020 through March 2021:

January-June 2020: -10.5%
July-September 2020: 7.4%
October-December 2020: 1.1%
January-March 2021: 1.6%

The average historical GDP growth rate in recent decades has been around 1.8% to 2.2%. So the current 1.6% is not even average! Moreover, it will slow as the reopening of the service sectors of the economy hardest hit by the virus become more or less concluded. The question then is: will Biden’s much heralded recent ‘American Rescue Plan’ (Covid relief) fiscal spending measure of another $1.9 trillion, passed by Congress last month, be sufficient to provide spending stimulus to push the economy beyond just a REBOUND to an actual sustained RECOVERY in the second half of 2021?

That remains to be determined. But it should be noted the $1.9T reported by the media is actually only $1.8 trillion. (US Senate cut it by $100B). Moreover, according to the Congressional Budget Office, the research arm of Congress, the actual spending out of the $1.8T for this year 2021 is only $1 trillion, not $1.8T! And one must assume that a good part of that $1T will be hoarded and not spent by wealthier households as they get their $1400 checks, and that they, as well as many small businesses, will undoubtedly use their stimulus to pay down debt. Neither hoarded or debt directed money will get into the actual US economy to boost GDP in the second half of the year, 2021. In reality, it’s likely no more than $800 billion stimulus will hit the US economy in 2021. And that’s about the same amount compared to the $866 billion passed last December; and less than the Cares Act passed last March 2020!

If the Cares Act and the December emergency stimulus turned out to be mere ‘mitigation’ fiscal spending, will the current Biden ‘American Rescue Plan’ $800B result in just another mitigation measure as well?
Is the Biden stimulus of around $800 billion therefore sufficient to generate a sustained RECOVERY and not just another REBOUND after this summer and the effects of the 2021 economy reopening run their course?

Another way of looking at the course of US GDP for the remainder of the year is to break down 1st quarter US GDP by its components. Most of the 1.6% was due to a continuing surge of manufacturing. About three fourths of the growth was manufacturing. Can that sector continue to surge? And it is only about 12% of total US GDP.

Services—80% of the economy—began to recover in the 1st quarter but are still doing so only moderately. Business investment is not surging and inventories—a part of investment—actually continued to collapse in the quarter. The trade deficit was another negative contributor to US GDP. Will it turn around? Residential housing growth is plagued by shortages of homes; it won’t contribute much (and is only 4% of GDP anyway). Commercial properties (factories, hotels, parks, malls, office buildings, etc.) are busted. Don’t expect growth here either.
Government spending in the 1st quarter was not all that great a contributor to GDP, as the impact of the Biden act won’t begin to hit until summer. But again, will $800 billion be enough?

Probably not. Much more government spending will be necessary. But isn’t that coming with Biden’s ‘Infrastructure spending’ proposals (i.e. the American Jobs Act’) of reportedly another $2.2 trillion. And his recently announced additional ‘American Families Plan’ of another $1 trillion? Don’t hold your breath. Those two bills won’t be passed, if at all, until 2022. And if passed, no doubt in much lower amounts and over longer periods of time to have much effect on the US economy—and none on 2021.

To conclude: it is to be determined whether the US economy, based on recent GDP numbers and legislation, will look fundamentally different than what happened in 2020. There is a reopening of the economy underway that will certainly boost GDP some. And there’s another $800 billion in mitigation spending. But fiscal stimulus measures in 2020 of roughly that amount show their effects dissipate after a couple months. So will the reopening prove sufficient to generate something more than just another REBOUND 2.0 and a true sustained economic RECOVERY by year end 2021?

That remains to be seen. However, in a number of ways the economic trajectory looks a lot like 2020, in terms of REBOUND and not sustained RECOVERY.

And then there’s the economic ‘wild card’ of Covid. The refusal of 40% of the US population to take advantage of the vaccines indicates there will be no herd immunity attained. The virus will be with us for some time. And the risk is growing that new mutations may prove resistant to the vaccines. What happens then? Another shutdown next winter? If so, expect another fourth quarter 2021 collapse of US GDP growth, just as it did last winter 2020.

Whatever the scenarios, readers should not fall for the statistical hype in the absurd ‘annual rate’ and inflation adjusted misrepresentations of US real GDP and actual economic growth.

Dr. Jack Rasmus
May 2021

Dr. Rasmus is author of the recent book, ‘The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump’, Clarity Press, 2020. He blogs at http://jackrasmus.com. His twitter handle is @drjackrasmus. And he hosts the weekly radio show, Alternative Visions, on the Progressive Radio Network on Fridays at 2pm eastern time. Check out his website for further books, articles, video presentations, reviews, etc., at http://kyklosproductions.com.

My Alternative Visions radio show of friday, April 16, 2021 discussed the recent Union election defeat at Amazon and placed it in the historical context of the 4 decade long destruction of unions in America as a result of the policy of Neoliberalism over the period.

David Baker, who listened to the show, offered a commentary on the show’s main themes. Baker’s comment follows, along with my rejoinder to his remarks.

TO LISTEN to the Radio Show GO TO:


David Baker’s Comment

Impressive but disheartening. Disheartening because I knew so little of modern labor day history. Obviously not a mistake either by our educational institutions or mainstream media but clearly still disheartening that I was exposed to so little labor history. My other comment is that the roots of neoliberalism began with the economic defeat of this country arising out of the Indochina wars. Essentially this country could not have both guns and butter and the overheating of the economy by the war economy pushed prices out of control. That price spiral triggered a serious and successful labor movement and that movement brought on the counterattack on labor called neoliberalism. It is not a mistake that neoliberalism began with Ronald Reagan since Reagan started his political career attacking the labor movement in the film industry in Los Angeles.

Jack Rasmus’s Rejoinder to Baker

Actually, Neoliberalism began in the last two years of the Carter administration. Reagan tax policies were being formulated then by the Business Council, Business Roundtable, and Chamber of Commerce; they were then quickly launched under Reagan. Monetary policy actually began in 1980, when Carter agreed with business to replace the chair of the Fed with Volcker. Free Trade and other ‘external’ policy would have to wait until the late 1980s in Reagan’s second term; and only really implemented by Clinton thereafter in the 1990s.

But industrial and anti-union policy originated in 1979, with the Carter-Corporate imposed deal to resolve the 1979 UAW-Chrysler strike and negotiations. That’s when ‘concession bargaining’ began. Other policies to depress wages were introduced in 1980 by Reagan as well, with the deregulation of key industries legislation. Thus also passed under Carter. Tax policies to encourage offshoring of jobs were developed in 1979-80, but only implemented in 1981 and after.

So both Democrats and Republican elites were responsible for the launching of Neoliberal industrial policies that have devastated unions since 1979, and resulted in the mass offshoring of US higher paid, union manufacturing jobs, and stagnation and compression of real wages ever since 1983.

Yes, David you are right: most Americans, and union members included, have little idea of what has happened under Neoliberalism, why their benefits have eroded, why their wages have stagnated, and why their unions have almost disappeared in the private sector. In exchange for unions, decent wages, and good jobs, Neoliberalism instead has given them cheap credit (& a $12 trillion mountain of debt), multiple low pay service jobs to work more hours per week, the option to put their wives and kids to work to make up for lower wages, and cheap China made goods from Walmart, Etc. to offset the lack of wage income growth.

All that, in exchange for 40 yrs of real wage compression, less coverage & higher cost of healthcare, replacement of pensions with 401k plans, and destruction of their unions.

Destruction of unions and Neoliberal industrial policies are a big cause of the escalation of income inequality in America; the other big cause of rising income inequality has been the financialization of capitalism which has resulted in an explosion of income gains for the wealthiest 1% households and their corporations from financial markets investments. Investing in financial asset markets has meant profitability and returns are far greater than from investing in real assets that produce things requiring more jobs and wages. The shift to financial asset investing has driven wealthy incomes ever higher, while wage incomes have stagnated or fallen.

Add to that the inverting of the tax system since 1980, enabling wealthy financial asset owners of stocks, bonds, forex, derivatives, etc. to enjoy the redistribution of more than a $trillion a year, every year, for the last 20 yrs in the form of stock buybacks and dividend payouts by the corporations they own, which peaked under Trump to $1.3 trillion a year. As wages have stagnated and unions destroyed, 21st century financialized American capitalism has become a giant income redistribution machine!

The tax system + financialization + destruction of unions, wage stagnation and benefits privatization have all resulted in accelerating income and wealth inequality in America. It’s all documentable, in my 2020 book, ‘The Scourge of Neoliberalism’, and before that in my 2005 book, ‘The (Class) War At Home’. And it’s been no accident of history. It was all policies planned in the late 1970s and evolving over the last four decades, reaching an unsustainable crescendo under Trump.

What’s going on now under Biden is a last chance attempt to try to make Neoliberal policies more palatable for workers; to restore it to a more acceptable form. We shall see if the Biden wing of US capital can pull that off. I am not optimistic they will. But history and time will tell. And it won’t take long.  In just the next 18 months it will become clear, which is all the time that Biden and the Democrats have to introduce an institutionalized and more acceptable form of Neoliberalism.

But that may be a contradiction in terms: Neoliberalism cannot be made more palatable in the end. It’s longer term dynamic is it can only become more oppressive (i.e. redistribute more income to the wealthy at the expense of the many). Otherwise it cannot survive as the main policy paradigm of US Capitalism.

Thus, longer term beyond initiatives of early 2021, Biden will not be able to restore it to a more acceptable form to the general US populace. By the end of the current 2020s decade, it will more likely be replaced–by either a more oppressive form of capitalist corporatism or by a more progressive, New Deal-like set of policies. The US is therefore in the midst of an historic juncture of sorts during the current first 2 years term of the Biden administration.

2021-2022 appears will be something similar to 1933-34, when Roosevelt had the choice to double down on corporate-first policies in response to the Great Depression, or to turn to New Deal policies that benefited the rest of the country and workers. He chose the latter. Obama had a similar juncture and opportunity in 2009-10 but, unlike Roosevelt, Obama chose to double down on pro-corporate policies. We know the result of that, in terms of both economic and political: Trump.  Carter had the same choice in 1979-80, turned to placating corporate interests, and that gave us Reagan and Neoliberalism. Biden is at a similar juncture once again. We shall see which way he turns. Turn wrong and we’ll get another Reagan, or Trump, or almost certainly something even worse.

Dr. Jack Rasmus
April 25, 2021

American unions are at an historic juncture. The recent election loss at Amazon represents an historic opportunity to regenerate the union movement that was lost. The fight to unionize Amazon is not permanently lost; it may only have just begun. But for unions to prevail down the road it will take more than the strategy and tactics used at the Bessemer, Alabama facility where labor lost by a 2 to 1 margin. Why does labor keep losing union elections when polls show more than 65% of Americans want a union? (And higher among younger workers).

Having been a union organizer myself with four different unions in previous years, what follows in my most recent Alternative Visions radio show is some of my comments on why Management strategies and tactics to defeat unionization prevail most of the time, and why Unions’ strategies and tactics mostly fail. The show commentary places the recent Amazon election in historical context of what I call union labor’s ‘Great Detour’, which began in 1947, accelerated in the 1980s under Neoliberal industrial policies, and continues to this day.




Dr. Rasmus follows up last week’s analysis of the Union defeat at Amazon by placing it in historic context, from the growth of union membership in the 1930s and 1940s to the great strike wave of 1970-71 and the Great Detour and decline of unions under Neoliberal industrial parties that began with Reagan in the 1980s and continues to this day. How the 1947 Taft Hartley and 1959 Landrum Griffin Acts stopped union strikes for recognition in their tracks and how Employer-State strategy cooperation in the 1970s and beyond have rolled back union membership in the private sector from its peak of 35% (80% in basic industries like auto, steel, transport, etc.) to its barely 5% today. Rasmus explains the strategies and tactics used by employers, with aid of government, to prevent unionization in NLRB elections, such as recently occurred at Amazon. How these strategies and tactics—along with offshoring, free trade, onshoring of H1-B visas, outsourcing, contingent, gig, and other work—have together resulted in a near collapse of private sector unionization in America. Rasmus concludes with a comment on the failure of Obama administration do reform the problem of de-unionization and pass ‘card check’, as well as a review of the Biden administration’s recent PRO Act bill recently passed by the US House of Representatives but all but dead in the US Senate committee.

Watch my latest video presentation to Berkeley students and activists on the current state of the US economy, recession, and evolution of fiscal and monetary policies 2020-21. Why the US is still evolving through its Great Recession 2.0, entering a new phase, and why it still remains uncertain whether the second half 2021 will be a rebound or a sustained recovery. How today compares to 2008-10 Great Recession 1.0, and prior historical contractions in 1907-13 and 1929-30



For my initial assessment of Biden’s recently announced $2.3T Infrastructure Plan–and why it will have virtually no economic impact in 2021 and minimal even 2022-24, listen to my Alternative Visions radio show of Friday, April 2, 2021.




Today’s show focuses on Biden’s just announced Infrastructure Plan. Called a jobs plan, it will produce few jobs in 2021-22 and have virtually no impact on the near term 2021 economic recovery effort. Estimated by the Wall St. Journal at $2.3T, over 8 yrs., very little will hit the US economy in the much needed early stage of recovery in 2021. At best it will be passed no sooner that 3rd quarter 2021 and not then if filibuster in Senate is upheld. Composed of two phases, the second will not likely be passed (if at all) until 2022. Combined with the Biden prior Covid 19 Relief bill (American Rescue Plan) which projects less than $1T spending in 2021, the combined two fiscal spending bills (ARP and now American Jobs Plan, aka Infrastructure bill) will provide roughly $1 trillion stimulus to US economy in 2021, as it reopens aggressively in coming months. Dr. Rasmus discusses the outlines of Biden’s Tax plan, designed to cover part of the cost of the two stimulus bills. (see last week’s show for more details on Biden’s tax proposals).

How does Biden’s recently passed $1.8T Covid Relief Stimulus Act, just passed by Congress, compare to Franklin Roosevelt’s New Deal spending stimulus of the 1930s? For my commentary on the comparison, and related discussion, listen to my radio interview of March 31, 2021.



Listen to my 14min. interview comparing Biden’s actual (<$1T spending in 2021) to prior stimulus measures of last December and March 2020. Why no bailout of renters, homeowners back mortgages, and students’ suspended debt payments was included in the Biden fiscal measures. Why the $1.9T is really only around $800B in 2021 spending.



Now that Biden’s $1.8T fiscal stimulus bill has passed Congress, and next a $2T+ Infrastructure spending bill will be soon proposed, the question is how will the multi-trillion dollar dual fiscal package be paid for? Part will be financed no doubt by federal government borrowing (i.e. selling Treasury bonds). Another part will be paid for with new Biden initiatives in the form of tax hikes on Capital (and individuals earning more than $400k per year).

During the 2020 election year Biden provided general outlines of his tax proposals–some of which were designed to reverse Trump’s massive $4T giveaway to businesses, investors and the wealthiest households.

Recently the Biden administration has begun to clarify in more details what his forthcoming tax proposals might be. That too will soon be further detailed. What are Biden’s latest tax proposals? How do they compare to his campaign year promises to voters?

For my description of the latest version of Biden’s tax policy, listen to my Alternative Visions radio show of friday, March 25, 2021.




Dr. Rasmus provides a first look at President Biden’s Tax proposals, designed to roll back the worst of Trump’s $4T tax cuts in 2018 for businesses and investors. Rasmus describes the 40 year historical tax shift in favor of the 1% wealthiest households, their businesses and their investments—a key hallmark of Neoliberalism policy since 1981. Biden’s 3-part economic recovery program—the $1.8T recent stimulus, the $2T-$3T infrastructure bill to be announced next week, and the tax proposals to help pay for both—are described in context of a struggling US economy and a global deterioration in Europe and elsewhere of the fight against Covid 19 and another economic downturn in many economies. What’s happening in Europe and the prospects of a third wave of Covid based on new and more dangerous variants from UK, So. Africa, and Brazil. Rasmus introduces the show with commentary on the current, intensifying fight to retain even limited democracy in America—as Republicans launch voter suppression legislation in 43 states and as Democrats offer HR 1 in Congress to ensure absentee and mail in voting. America’s ‘triple crises’ of Covid, a faltering economy, and a declining democracy are not over. Is a new phase in each on the horizon?

For my latest commentary on the growing attention in mainstream media that US government deficits are about to cause escalating inflation, check out my Friday, March 19, 2020 Alternative Visions radio show:

To Listen GO TO:



Now that the Biden $1.9T (actually $1.8T) fiscal stimulus has passed, mainstream economists and media are pumping up the rhetoric it will soon lead to excess inflation and rising interest rates that will endanger the economic recovery. Rasmus debunks the notion that deficits and debt—or ‘too much money chasing too few goods’ cause inflation, as well as related ideological notions of mainstream economics. What has been the actually deficits in 2020-2021 due to the three bouts of economic fiscal stimulus during the pandemic (March, December, and now March again)? What have been the actual causes of the deficits (besides the fiscal stimulus)? What’s the likelihood of inflation in 2021 and beyond and its real causes apart from deficit spending? What are financial markets reacting now so negatively driving up long term Treasury interest rates? And what instability might that lead to?
Bond interest rates are rising fast, signalling a problem with business, households & local govts repaying record levels of debt recently accumulated. Financial crises occur not just when debt reaches excessive levels (which it has in the wake of the covid crisis in the real economy), but when businesses, households & govts can no long ‘service’ that debt (i.e. pay principal & interest) on the accumulated debt. A harbinger of financial system problems may be indicated by the current rapid rise of US bond rates and other interest rates that follow. On top of the excessive business and govt debt recently accumulated there’s the question of how will tens of millions of households now pay for their debt accumulated over the past year: more than $75B in back rent payments, $70B in back owed mortgages, $hundreds of billions in forbearance of student debt, etc. The current $1.2B Biden fiscal plan (yes, only $1.2B not $1.9B per the Congressional Budget Office) does not address the debt repayment problem.

How will households repay their record debt, when more than 1.3m a week are still filing for first time jobless benefits? When 24m are still unemployed? When it is clear business will recall workers to jobs very very slowly, when hours of work for those employed will be most part time and temp jobs, when wages will remain mostly stagnant, and when rising prices now taking off will reduce their real wages and real incomes even more?

Meanwhile, as businesses see bond and interest rates now rising rapidly, they too are taking on even further record levels of debt to take advantage of the soon disappearing low interest rates. Will Zombie companies be able to pay back the even greater debt load in progress? Business sectors like commercial real estate, travel, entertainment and big box retail, malls, etc. are candidates for default and bankruptcy as rate levels rise more rapidly.

Recently I was asked to explain by Michael Albert and ‘Revolution Z’ media how Wall St. stock markets work, what’s up with the recent Gamestop bubble, what’s financial speculation, what causes financial instability and crises–and how they are all related to, or unrelated to, the real economy. Presented in simple terms, the interview clarifies for laypersons how the current capitalist financial system functions to make investors ever richer, while the rest of the real economy experiences periodic great recessions, wages stagnate and fall, and the quality and quantity of jobs deteriorates.