2025 Levy Conference Notes (Part 2)
James Keenan
This is the second post I am making to this list about the Levy Institute's 32nd Annual Conference at Bard College in New York state's Hudson Valley. The conference was entitled Money, Finance, and Economic Strategies in Fractured Times. The first post in this series covered Sessions I and II of the conference; this one will cover the Keynote Address and Session III.
Keynote Address: U.S. Representative Ro Khanna (D, CA-17)
Following lunch attendees re-assembled for a keynote address delivered by Cong. Ro Khanna, whose district covers much of Silicon Valley in California. He was introduced by Alan Minsky, Executive Director of Progressive Democrats of America (PDA) and, not coincidentally, son of Hyman Minsky. To get an idea as to where PDA sits on the political spectrum you could look at the incumbents they endorsed in the 2024 elections. Those included Senators Bernie Sanders and Elizabeth Warren and a fair number of House members on the left side of the House Progressive Caucus. Minsky frankly acknowledged the need for struggle within the Democratic party. He characterized the "moderates" who dominate the Democratic party as being the sort of people who sixty years ago would have been "[George] Romney Republicans."
Rep. Khanna gave the sort of speech that would lead an audience member to think, "He's positioning himself to run for president in 2028." He stressed the need for both economic growth (a "21st century Marshall Plan for the U.S.") and economic security (a follow-up to FDR's Second Bill of Rights) and faulted the Democrats for failing to deliver the latter for the working and middle classes and to earn those classes' trust. He criticized "top-down approaches" -- but also called for the creation of a National Investment Bank (perhaps something like the National Infrastructure Council that Robert Hockett proposes). Khanna advocates policies that are currently outside the Democratic party's Overton window of acceptable discourse -- example: Medicare for All -- but tends to take a more incrementalist approach than, say, Franklin Roosevelt or Lyndon Johnson -- start with Medicare for All at age 55. He posed the question, "Are we [in a future Democratic administration] going to get the same constraints on Wall Street that FDR had? Frankly not." With regard to organizing millions of U.S. workers into labor unions he twice used the phrase "labor neutrality" to describe his stance --a position which (I editorialize here) is actually less pro-labor than Joe Biden's stance was.
The most interesting moment in Khanna's talk came about four questions into the Q-and-A part of the session when MMT scholar Yeva Nersisyan rose to tease out of Khanna his understanding of whether taxes fund federal spending and whether we have to worry about the national debt. Unfortunately, I failed to capture both Nersisyan's question and Khanna's response in my handwritten notes, but it was evident that Khanna's understanding of MMT was inferior to that of now retired Kentucky congressman John Yarmuth. For me, this was the must-rewatch-this-on-YouTube moment of the conference.
Session III: U.S. Policy and the Global Economy
This session was chaired by Bloomberg columnist Edward Harrison.
Giuliano T Yajima, of the Levy Institute's Macro-Modeling Team (yet another MMT!), spoke on Prospects for the U.S. Economy. Unfortunately I entered this session late and didn't take good notes, but you can see Yajima's macro analysis in this list of Levy publications.
Yan Liang, Willamette University, spoke on How China Organizes Finance Domestically and Keeps Foreign Capital at Bay. We've mentioned Ms. Liang twice recently on this list for her contribution to The Elgar Companion to Modern Money Theory ("Harnessing sovereign money for development finance and solving the debt conundrum: the case of China"), and to Levy Institute Working Paper No. 1077, A Critical Examination of the “China Collapse” Narrative. In this talk she highlighted China's extensive use of loans to industry by state-owned commercial banks, as well as the fact that foreigners hold only two percent of Chinese equities and four percent of Chinese bonds.
Ndongo Samba Sylla, International Development Economics Associates-Africa, is no stranger to this list, as we've covered his address to the Third International MMT Conference at Stony Brook University in September 2019 and provided English-language chapter summaries of his 2018 book about the CFA Franc, co-authored with Fanny Pigeaud, L’arme invisible de la Françafrique. Here Sylla spoke on "Critically Thinking about Monetary Sovereignty and Balance-of-Payments Constraints in Africa." He took issue with Thirwall's Law, which, per Wikipedia,
"... provides an alternative to the supply side models of neo-classical growth theory which are close economy models with no demand constraints. In the Thirlwall model the ultimate constraint on growth is a shortage of foreign exchange or the growth of exports to which factor supplies can adapt."
Sylla counters that in very resource-poor countries, the so-called "foreign exchange shortage" is actually a manifestation of real resource constraints and the lack of such countries' fiscal and technical control over their natural resources. See Sylla's recent Levy Working Paper, "Revisiting the Foreign Debt Problem and the “External Constraint” in the Periphery: An MMT Perspective" for a more complete discussion.
Fadhel Kabout, Denison University, spoke on "Global South Joint Industrial Policies. Per Kabout, the political-economic role imposed on the Global South during the colonial period persists today. That role entails: (i) provision of cheap raw materials; (ii) consumption of goods produced in the industrialized world; (iii) a locale to which production using outmoded technologies can be outsourced. Countries in the Global South -- particularly in Africa -- cannot industrialize by themselves. They must pursue joint industrial policies focused on renewable energy and collective self-sufficiency in food production. He shared an anecdote in which a very highly placed finance ministry official in a Western country told an important journalist off-the-record, *No one in the Global South is allowed to industrialize without our approval."
Summary
The COVID-19 pandemic disrupted the forward momentum of many organizations and their annual events. The Levy Conference was no exception. It had fewer Wall Street suits in attendance than when I attended in 2019, e.g., no presidents of regional Federal Reserve Banks; no chief economists for Citibank. The attendance was, however, bolstered by the participation of students in the Levy Summer Seminar (which I attended in 2022). It will probably take a few years of holding the event in-person to get the conference back to where it was in the last decade.
Nonetheless, everyone was quite elated to be holding the event in-person. The slightly smaller size meant that ordinary attendees had a better chance to mix and mingle with the presenters.
Jay Mills
I’d like to say - the idea of lowering Medicare to 55 is great! So long as they do a look up table to ensure enough doctors, and places will exist to receive the customers and dollars.
Best,
Jason
> On Jun 20, 2025, at 3:51 PM, James Keenan <jke...@pobox.com> wrote:
>
> Ndongo Samba Sylla