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Speaker 1: Hello, and welcome to another episode of the odd Locks Podcast.

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Speaker 1: I'm Joe Wisenthal. Unfortunately, my colleague Tracy Elloway is off today,

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Speaker 1: and I say it's unfortunate because a it's always unfortunate

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Speaker 1: when she's off, but be today we are going to

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Speaker 1: be speaking about her favorite topic, which is minting a

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Speaker 1: trillion dollar coin. Being a little facetious about that, I'm

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Speaker 1: not it is her favorite topic, but that big said.

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Speaker 1: A few weeks ago, we interviewed Rowan Gray, assistant professor

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Speaker 1: at well LAMTT Law School, and she definitely came away

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Speaker 1: from this topic. I would say more coin curious coin

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Speaker 1: pelled open to the trillion dollar coin idea than she

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Speaker 1: had been. For anyone listening today, I would definitely suggest

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Speaker 1: listening to that conversation first. And it's about this idea

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Speaker 1: that were we to get into a debt ceiling impass

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Speaker 1: that there is a statute in the law that says that,

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Speaker 1: in theory, the Treasury Secretary of the Treasury can mint

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Speaker 1: proof platinum coinage and people have argued, including Rowan, that

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Speaker 1: this would allow the government to continue financing even in

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Speaker 1: the event that it isn't allowed to take on more debt.

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Speaker 1: So again, I would encourage everyone to listen to this,

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Speaker 1: but it's a big topic and so in the m

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Speaker 1: In the meantime, the dead ceiling question has been punted

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Speaker 1: to December. They got ten Republican votes to essentially go

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Speaker 1: for about two more months, so the question isn't going

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Speaker 1: away in the meantime. Since then, we've also heard Secretary

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Speaker 1: of the Treasury Jenny Yellen go on National TV and

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Speaker 1: dismissed the coin idea again as a gimmick. Still there

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Speaker 1: is opposition to it. Nonetheless, it is still important, and

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Speaker 1: I think we're going to get to a point in

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Speaker 1: this member where I'm not predicting the colina will be minted,

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Speaker 1: but I do think we will come up against another

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Speaker 1: deadline again and the question will not go away. It

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Speaker 1: will it will again be tight of what how this

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Speaker 1: is going to get raised and how the US will

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Speaker 1: avoid a possible default. So I am very excited to

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Speaker 1: do a follow up because we have two guests today.

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Speaker 1: So we have rowing his back, Rowan Gray, Assistant Professor

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Speaker 1: Lammet Law School, the foremost legal authority or the has

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Speaker 1: written extensively on the coin and extremely excited that you know,

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Speaker 1: we have as our guest Philip Deal, who is the

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Speaker 1: thirty five head of the U. S Mint, and he

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Speaker 1: was ran the U S Mint from two thousand and

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Speaker 1: was one of the drafters essentially of the legislation that

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Speaker 1: allowed for the platinum coin. He's currently the President of

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Speaker 1: the US Money Reserve. So we don't have to spare

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Speaker 1: alculate on what the intention of the thinking of the

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Speaker 1: creators of this law were intending, because we have the

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Speaker 1: actual one of the creators here right now on odd lots.

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Speaker 1: Very excited to bring both of those guests, Rowan and Philip.

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Speaker 1: Thank you so much for joining us. Thank you for

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Speaker 1: having me my pleasure. Philip, This is a real treat because,

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Speaker 1: you know, I feel like often, you know, whether as

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Speaker 1: we're talking about some constitution or something, we are like

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Speaker 1: forced to wonder what was going on in the mind

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Speaker 1: of the person of a person who has involved in

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Speaker 1: the drafting of this thing that's become very controversial. So

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Speaker 1: it was a real treat to have you. Obviously, multiple

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Speaker 1: people may have been involved in writing this law, but

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Speaker 1: it is a real treat to have you on. But

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Speaker 1: before we do that, before we really get back into

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Speaker 1: the law itself, I want to just talk about mechanics.

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Speaker 1: For a second, Let's imagine in some world yell And

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Speaker 1: is forced to mint the coin, the trillion dollar coin. So, yeah,

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Speaker 1: what happened as the speaking as the former director of

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Speaker 1: the U S Mint, if you get the call we

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Speaker 1: have to mint the trillion dollar coin to avoid a

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Speaker 1: dead ceiling fiasco. Why do you look, Walker is through? Like,

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Speaker 1: what would happen operationally at that point, Well, almost certainly

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Speaker 1: what would happen is there'd be preparation before the order

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Speaker 1: came down, and the order would come from the Secretary

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Speaker 1: of the Treasury, and of course that will have been

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Speaker 1: discussed with the President, probably with the Chairman of the

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Speaker 1: Federal Reserve, and it'll all be set up. So before

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Speaker 1: the order came down, there would be preparation in order

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Speaker 1: to make sure that the coin was struck at the

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Speaker 1: last minute and could be transported to the Federal Reserve

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Speaker 1: and arrive on time before the dead limit was hit.

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Speaker 1: So the way that would happen is a decision would

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Speaker 1: have to be made on what the coin design would be,

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Speaker 1: because a mold will have to be produced, and then

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Speaker 1: that mold will be converted to another mold, and then

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Speaker 1: a die will that will be used to strike the

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Speaker 1: coin will be produced, and so there's a number of

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Speaker 1: steps that have to be done. Now, undoubtedly they'd want

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Speaker 1: to short circuit this process as much as possible, and

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Speaker 1: already in fact created by this coin by this legislation,

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Speaker 1: is the Platinum American Eagle, and they would take the

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Speaker 1: one ounce coin design and all they'd have to do

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Speaker 1: is replace one trillion dollars trillion spelled out, not with

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Speaker 1: all the zeros, and replace one hundred dollars on the

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Speaker 1: obverse of the coin. And that would be a very

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Speaker 1: simple and straightforward alteration in the current design of the coin.

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Speaker 1: And then those molds would be created and the dye

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Speaker 1: would be carved, and then everything would be prepared. Once

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Speaker 1: the order came down, a blank, a platinum blank, one

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Speaker 1: ounced blank would be taken off the shelf and west

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Speaker 1: point where the platinum Eagle is struck, and it would

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Speaker 1: be struck multiple times, and that coin at that point

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Speaker 1: will be minted. From West Point, it would could be

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Speaker 1: flown by a helicopter to the Federal Reserve Bank in

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Speaker 1: New York, and the moment that coin is accepted at

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Speaker 1: the Federal Reserve, it registers as a trillion dollars in

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Speaker 1: what is called senior ridge. Your your sense of the timing. Okay,

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Speaker 1: so if you established they have the blanks, the only

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Speaker 1: thing they really they don't even have to put all

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Speaker 1: the zeros on the coin and they literally just have

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Speaker 1: to write it on one thing. What is in your sense?

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Speaker 1: I think I saw you give a brief interview with

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Speaker 1: Actually you think this could all be done in the

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Speaker 1: span of a few hours. Yea, So well, assuming that

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Speaker 1: all of the preparation, the changing of the design very simple,

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Speaker 1: the molds and then the carving of the doe die

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Speaker 1: is done several days beforehand, and that might take a

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Speaker 1: few days of preparation. At that point, once the order

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Speaker 1: comes down that that blank goes into the press, it

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Speaker 1: struck and transported to the New York Federal Reserve. And yes,

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Speaker 1: that's a few hours. It's absolutely extraordinary. The the idea

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Speaker 1: that like money, you know, could be created like this,

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Speaker 1: and I think like one of the things, and you know,

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Speaker 1: talking to both of you Rowan and Philip, is things exist.

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Speaker 1: We still use them, use quarters of fair amounts. Sometimes

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Speaker 1: people will find them annoying. Sometimes people talk about things

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Speaker 1: like phasing out the penny, etcetera. It feels like in

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Speaker 1: the modern discussion about money, there's just very little talk

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Speaker 1: about you know, we talked about the FED printing money,

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Speaker 1: or we thought talked about QUI or these theoretical concepts,

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Speaker 1: But in the modern discussion of money, there is just

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Speaker 1: not a whole lot of discussion about a the role

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Speaker 1: of coinage at all, and be certainly not the operational

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Speaker 1: aspects of producing coinage. Yes, that's right, and so much

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Speaker 1: of it is just taken for granted. We're very utilitarian

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Speaker 1: in the United States. This is one thing I really

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Speaker 1: discovered when I was directed the ment. I really didn't

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Speaker 1: know that much about coinage. I was not a collector

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Speaker 1: when I was growing up or afterwards. And because we're

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Speaker 1: so utilitarian about coinage, we really just think of them

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Speaker 1: as round disk of metal and you know, and that

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Speaker 1: we exchange in commerce. Thomas Jefferson and the founders understood

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Speaker 1: that coinage is an expression of the sovereignty of a people.

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Speaker 1: So about the same time Jefferson was writing the Declaration

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Speaker 1: of Independence, he was laying the conceptual foundation for American

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Speaker 1: coinage that would come to fruition with the creation of

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Speaker 1: the United States. Men. I think it may have been

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Speaker 1: one of the first agencies that was created under the

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Speaker 1: new constitution, and then the production of a coinage and

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Speaker 1: that symbolism of the sovereignty who and what we celebrate

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Speaker 1: on the on the face of a coin you know

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Speaker 1: that has been tremendous, has been recognized as tremendous symbolic

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Speaker 1: value going back four thousand years. Can I ask a question, Philip,

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Speaker 1: you mentioned, you know, it would take a few days

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Speaker 1: to to set up the new dies and things, and

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Speaker 1: then only a few hours to strike the coin um.

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Speaker 1: But when it comes to the Platinum Statute, it seems

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Speaker 1: to me and we don't sort of spend that much

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Speaker 1: time talking about this because we usually focused on the

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Speaker 1: fact that the statute provides for almost unlimited discretion on

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Speaker 1: the denomination, but it also specifies pretty much unlimited discretion

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Speaker 1: on the design and specifications of the claim. So if

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Speaker 1: if a call came down and said, you know, we

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Speaker 1: need this out in three hours from now, is there

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Speaker 1: actually anything legally preventing using the existing hundred dollar die

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Speaker 1: as it is, and then you know, crossing it out

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Speaker 1: in sharpie pan or something. I know, it's a bit

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Speaker 1: untooth and and and doesn't really kind of have the

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Speaker 1: gravitas of of the symbolism that we might like in

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Speaker 1: a pinch. Is there anything actually that legally requires the

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Speaker 1: number on the coin to be the number that we

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Speaker 1: we kind of call it with you know, the legal purposes,

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Speaker 1: or if we really had to, is that another fiction

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Speaker 1: we could just indulge in along with you know, the

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Speaker 1: nominal value itself being something that's declared by law, by

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Speaker 1: feat that we could simply declare its its face value

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Speaker 1: even if it was a smooth, flat disc with no

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Speaker 1: inscription on it, Well, there's no precedent for that. And

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Speaker 1: on something that is this high profile, you want to

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Speaker 1: definitely ground uh, your policy and your action on the

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Speaker 1: policy on not only the law, but two hundred years,

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Speaker 1: two hundred and thirty years of precedent. And in that,

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Speaker 1: we really have two ways of evaluating the value of coin.

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Speaker 1: One is the face value, which is unrelated to any

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Speaker 1: intrinsic value of the coin. Once we say as a

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Speaker 1: government it is worth a hundred dollars, it's worth a

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Speaker 1: hundred dollars. That's the nature of fiat currency. The other

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Speaker 1: way with with bullion coins, and this is what we

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Speaker 1: do with the platinum egual bullion coin is its price

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Speaker 1: based on the spot price of platinum at the time

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Speaker 1: of sale, and those are the two primary ways in

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Speaker 1: which the widely recognized traded coins in the United States

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Speaker 1: are priced. There's also these collectible coins and commemorative coins

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Speaker 1: that had more discretion. But I have really one of

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Speaker 1: the points I've wanted to make, because so many of

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Speaker 1: the opponents of the coins and others who have sort

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Speaker 1: of brought into the mythology of the reading of that statute,

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Speaker 1: is that the coin that is authorized by this legislation

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Speaker 1: is a niche collectible that all the you know, a

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Speaker 1: small portion of the American public would have any interest in.

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Speaker 1: That simply is not true. And as a matter of fact,

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Speaker 1: this is I know this is unusual for the head

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Speaker 1: of an agency to write the legislation, but I wrote

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Speaker 1: that legislation, and I mean it didn't take rocket science.

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Speaker 1: It's very short, and I knew exactly what I wanted

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Speaker 1: and what my people wanted to do with this, and

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Speaker 1: that is to authorize a bullion coin that we could

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Speaker 1: take into the world and compete worldwide. And the reference

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Speaker 1: to proof does not negate that. But it also opened

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Speaker 1: the door for us as a byproduct of the bullion

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Speaker 1: going to produce a collectible coin. So everywhere else in

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Speaker 1: coinage law seems to be highly prescribed and there's like

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Speaker 1: very clear clear designs on the quarter and the dime

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Speaker 1: and the nickel, etcetera. And even within the amendment there

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Speaker 1: are restrictions elsewhere. And when the mint as you were

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Speaker 1: involved in, then maybe we'll get into this does something

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Speaker 1: new with coinage such as the collectible fifty State quarters endeavor.

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Speaker 1: You know, there's very strict rollout rules, etcetera. And again

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Speaker 1: all very clearly prescribed how it's going to work. And

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Speaker 1: so that I guess that is why the platinum coins

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Speaker 1: section k in this That's why it even stands out

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Speaker 1: because it's so explicit in its lack of rules, which

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Speaker 1: is unusual for coins. So can you just talk us

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Speaker 1: through why platinum and why specific there's one subsection of

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Speaker 1: the law. You made it a point in your drafting

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Speaker 1: of it to create maximum flexibility. We I was doing

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Speaker 1: a complete transform leading a complete transformation of the United States.

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Speaker 1: Meant it was a it was a race car up

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Speaker 1: on blocks in somebody's backyard when I came in in

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Speaker 1: ninety four, and I I saw the potential of the

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Speaker 1: US meant. At that point, I told the Secretary Treasury,

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Speaker 1: Lloyd Benson, who I had worked for in the Senate.

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Speaker 1: I had been his first chief of staff at Treasury.

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Speaker 1: I told him, guess I'd like to have that presidential

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Speaker 1: appointment because I think I can do something. And over

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Speaker 1: the next two years we made some major transformations of

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Speaker 1: the MINT that led me to believe that we were

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Speaker 1: prepared to compete in international markets in a way that

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Speaker 1: the US men had never done before. And part of

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Speaker 1: that was because we had already built an international distribution

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Speaker 1: network for a World Cup commemorative coin when the US

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Speaker 1: hosted the World Cup in ninety four, and then for

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Speaker 1: the n and nineties six Olympic coin programs, and those

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Speaker 1: three years had those two programs over three years had

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Speaker 1: tremendous international sales potential, and we went out and built

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Speaker 1: the most extensive international numismatic sales network ever anywhere in

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Speaker 1: the world. And we had also we had six continents covered.

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Speaker 1: I told my director of marketing, what's wrong with Antarctica, UH,

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Speaker 1: why can't we have a sales contract there? And he

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Speaker 1: went to to the National UH Atmospheric and Oceanic Commission

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Speaker 1: and actually got a distribution contract with them, and that

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Speaker 1: year's annual report had a photograph of a scientists holding

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Speaker 1: up our coins at the South Pole. So we we

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Speaker 1: were very intent on making this a very wide distribution

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Speaker 1: and we had great success with that program, and I

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Speaker 1: wanted to build on that success and but move out

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Speaker 1: of the collectible market into the bullion market, which is

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Speaker 1: a worldwide, highly competitive market with about six or seven

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Speaker 1: ments national mints that compete in that market. And the

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Speaker 1: two big markets that I had targeted were Japan in

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Speaker 1: the United States, and I felt like we could go

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Speaker 1: in and of course in the US we immediately seize

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Speaker 1: that market away from our competitors, but within six months

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Speaker 1: we had taken the about six of the Happanese market

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Speaker 1: as well, and that was really important to me, not

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Speaker 1: just for bragging rights. I'm a native Texan and that

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Speaker 1: has value, but also because I was already setting my

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Speaker 1: sights on the next program, which was the Fifty States

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Speaker 1: Quarters program, and I felt like if we demonstrated that

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Speaker 1: we were capable of competing in international markets, would be

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Speaker 1: building competence in Congress to get that enacted. And it

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Speaker 1: was ever a point where anybody said, do you stop.

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Speaker 1: You're making too many coins. You're you're earning too much

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Speaker 1: sign yourge, you're returning you're returning too much profit on

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Speaker 1: a net basis to the Treasury. You know, we're not

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Speaker 1: able to borrow as many Treasury securities because you're making

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Speaker 1: it unnecessary for us to issue. Nobody ever told me

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Speaker 1: to start to stop making profits, uh, And that was

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Speaker 1: a real bragging point for us. In fact, one of

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Speaker 1: the things says I was able to work with with

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Speaker 1: the chairman of my my sub committee to pass the

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Speaker 1: fifty State Quarters Act over Adam and opposition by Treasury

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Speaker 1: at the highest levels of Treasury. And one of the

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Speaker 1: way I sold it to him, Michael Castle, and we

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Speaker 1: sold it to other people on the hill, was that

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Speaker 1: conservatively we had projected that the fifty State Quarters program

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Speaker 1: over ten years would create two point six billion dollars

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Speaker 1: and senior ridge profit, you know, producing coins for the

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Speaker 1: purpose of provide scenerdge to the Treasury Department, over and

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Speaker 1: above what the baseline would be dates back, you know,

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Speaker 1: to that fifty State Quarters program. And so the fact

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Speaker 1: that we would do it with a trillion dollar coin

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Speaker 1: in principle is no different whatsoever. I mean sure, it

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Speaker 1: has a couple more zeros behind it, but it's the

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Speaker 1: same thing. So this is something I'm really struck by

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Speaker 1: and kind of fascinated by. Which is the sort of

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Speaker 1: I guess it would be agency entrepreneurialism. Like you had

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Speaker 1: this vision for the fifty State Quarters project, but you

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Speaker 1: also had this idea of, like to build up to that,

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Speaker 1: you needed to execute on something before that, to build

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Speaker 1: up credibility so that Mike Castle and others would want

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Speaker 1: to even like, you know, think about further coinage legislation,

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Speaker 1: put an effort into it. Can you talk a little

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Speaker 1: bit about that mentality of like building up goodwill within

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Speaker 1: Congress and the idea of, like, let's execute on something straightforward,

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Speaker 1: expanding our share in the platinum bullion market with the

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Speaker 1: idea of then gaining additional powers for the mint, and

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Speaker 1: like you're sort of like I guess, I would say,

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Speaker 1: working the inside game of expanding the discretion and power

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Speaker 1: of the Mint. So I was sworn in. I went

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Speaker 1: into the United States Men in September of of ninety three,

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Speaker 1: and my Republican predecessor, David Ryder gave me a great orientation.

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Speaker 1: We overlap for about three or four months. He gave

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Speaker 1: me a great orientation. We have remained friends over all

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Speaker 1: these years. And so I went into the MINT months

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Speaker 1: before I was even nominated, formally nominated, and then in

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Speaker 1: June I was sworn in after a Senate confirmation. I

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Speaker 1: was sworn in by Secretary Benson. So immediately one of

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Speaker 1: the first acts I took because of the analysis that

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Speaker 1: I had done with David, was we saw that the

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Speaker 1: MINT was balkanized by too many political appointees. Each the

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Speaker 1: head of each MINT was headed by a presidential appointee.

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Speaker 1: These are the regional mets you're talking about. Oh, yes,

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Speaker 1: San Francisco, Denver, kind of like the regional Feds. Yes,

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Speaker 1: that's right, San Francisco, Denver, Philadelphia, New York. And of

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Speaker 1: course those people got their job not from the Director

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Speaker 1: of the Men, not from the Secretary of the Treasury,

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Speaker 1: not even I mean they were formally nominated by the president,

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Speaker 1: but they got their jobs from the senior senator of

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Speaker 1: the president's party in each state. They certainly didn't feel

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Speaker 1: like the Director of the Men was their boss, you know.

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Speaker 1: So these are little fiefdoms. And one of the first

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Speaker 1: things I came to realize was that's a huge problem

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Speaker 1: in the management of the men, and it was the

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Speaker 1: source of multiple problems that we saw. So one of

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Speaker 1: the first things I did is I went over Treasury

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Speaker 1: and said, I want to eliminate nine political appointees. And

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Speaker 1: there are several people, of course, the Secretary I didn't

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Speaker 1: go to him first, but there were several people who

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Speaker 1: laughed at me and said, there's no way you'll be

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Speaker 1: able to get the White House to agree to this

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Speaker 1: because their prime patronage positions. People don't even need to

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Speaker 1: go to Washington and just stay stay home and do

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Speaker 1: those jobs. But the Secretary weight in. I made the

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Speaker 1: case to him that you know, if we're going to

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Speaker 1: turn this place around, this is going to be one

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Speaker 1: of the first things we do. And he agreed. In

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Speaker 1: the White House lonebole agreed not to fill those positions.

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Speaker 1: Now that's temporary, that could be changed at any moment.

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Speaker 1: I went over to Stinny Hoyer, who had had constituents

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Speaker 1: who worked at the Mint, and he said, yes, you know,

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Speaker 1: and I found a sponsor for the and we were

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Speaker 1: able to move legislation that eliminated permanently those positions. Well.

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Speaker 1: November nine, of course, is the gen Rich Revolution. And

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Speaker 1: when I go in to meet with my new Republican

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Speaker 1: chairman in the House, I walk in the door with

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Speaker 1: the credential of deep politicizing the US meant by that time,

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Speaker 1: I'm sure they were the only nine political positions that

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Speaker 1: had been administered that had been eliminated by the administration.

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Speaker 1: So I walked down the door with tremendous credibility on

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Speaker 1: the Republican side that I meant business. The reality is

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Speaker 1: is that I've been a Democrat all my life, from

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Speaker 1: being a young teenager. But I had built this rapport

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Speaker 1: and this level of trust. It was very fortunately I

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Speaker 1: had to committee subcommittee chairs who I immediately made a

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Speaker 1: connection with, and they were willing to carry a series

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Speaker 1: of reform legislation. You know, one thing that's really striking

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Speaker 1: to me, and you know, you talked about for the

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Speaker 1: for the beginning of coinage for sure, but also just

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Speaker 1: going back to Thomas Jefferson, this idea of coinage as

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Speaker 1: this sort of like expression of the state. And we

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Speaker 1: talked about Fiat money and row and you know, coming

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Speaker 1: from the M M T perspective, obviously, you know, we

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Speaker 1: talked about money as a sort of inherent state phenomenon.

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Speaker 1: You know, even though I sort of early on talked

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Speaker 1: about we don't really think about coins very much in

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Speaker 1: the modern day. Generally speaking, it is one of the

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Speaker 1: few times in which people are regularly interfacing with something

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Speaker 1: clearly created by the government. I mean, the government obviously

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Speaker 1: permeates many aspects of our lives, the regulation and laws,

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Speaker 1: but there aren't many times the day I guess the

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Speaker 1: other one of the bills or maybe postage stamps, although

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Speaker 1: those are used less and less in which were literally

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Speaker 1: interfacing and using an express creation of something that the

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Speaker 1: government made in a very straightforward way where there's no

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Speaker 1: ambiguity about who created it. How much did you it

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Speaker 1: was that something that you thought about as this idea

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Speaker 1: of like delivering a service to the public that was

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Speaker 1: clearly recognizable as something that like we want kind of

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Speaker 1: like constituent service, customer service, Like how much of that

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Speaker 1: framework did you take to the job? Oh, that was crucial,

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Speaker 1: In fact, it was. It was the first major project

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Speaker 1: that I took on United States. Meant sells these commemorative

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Speaker 1: and collectible coins to a pretty large population of collectors,

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Speaker 1: mostly in the United States. So we'd take these orders

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Speaker 1: and we'd deliver the product within six to nine months

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Speaker 1: is how long it took to deliver a product. And

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Speaker 1: of course, unless you have a monopoly on a product,

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Speaker 1: you have very committed customers. Nobody puts up with that.

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Speaker 1: So one of the things we did immediately was to

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Speaker 1: make a commitment, and we ended up making a series

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Speaker 1: of commitments to the point in which we were delivering

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Speaker 1: about of all products within one week. That was the

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00:27:27,080 --> 00:27:32,320
Speaker 1: camel's nose under the tent from me for beginning to reform.

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00:27:32,400 --> 00:27:39,040
Speaker 1: The ment was too and I made a commitment before

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Speaker 1: I had gotten endorsement from my people because I wanted

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00:27:43,359 --> 00:27:45,399
Speaker 1: to hold our feet to the fire, and I also

404
00:27:45,480 --> 00:27:49,000
Speaker 1: wanted them to know you said it, stretch objectives, and

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Speaker 1: even if you don't meet them, if you make major

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Speaker 1: progress and then renew the effort, people begin can believe you.

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Speaker 1: And I all so felt that one of the things

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Speaker 1: that's really crucial in federal government agencies they become so

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Speaker 1: insulated from their publics and from their customers or clients

410
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Speaker 1: because they have been dehumanized really for forty years, where

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Speaker 1: those Washington bureaucrats are always the enemy of the people,

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Speaker 1: and their funding is cut and oftentimes their political appointees

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Speaker 1: are hostile to the mission. So I was very much

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Speaker 1: supportive of public employees and also believed in the mission

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00:28:38,560 --> 00:28:41,960
Speaker 1: of the organization was committed to it. So in that case,

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Speaker 1: to break the old habits, I believe it was necessary

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00:28:45,320 --> 00:28:50,000
Speaker 1: to strip the installation off the organization to put people,

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Speaker 1: either figuratively or literally, face to face with their customers,

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Speaker 1: whether the customer was an external customer or an intern

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Speaker 1: a customer in which someone was supporting somebody's else activity

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Speaker 1: in the agency. So that was crucial to me. Now, Joe,

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Speaker 1: there are two pieces. You've talked about. One piece and

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Speaker 1: that is how many people produce a product that is

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Speaker 1: touched by every American. It was a unique aspect of

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Speaker 1: the United States meant. But then there's the other side

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Speaker 1: of it, and that is coins are works of art,

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00:29:33,120 --> 00:29:37,080
Speaker 1: and sometimes the art isn't very good, and sometimes the

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00:29:37,360 --> 00:29:43,320
Speaker 1: art is spectacular, and those works of art are likely

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Speaker 1: some of them are going to be in museums two

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Speaker 1: thousand years from now. So what other job can you

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00:29:50,160 --> 00:29:57,880
Speaker 1: work at that has those two counterbalanced values and where

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Speaker 1: you trace the history and the legacy back to Jefferson

433
00:30:02,320 --> 00:30:07,080
Speaker 1: and Hamilton's So all of that was crucial to me

434
00:30:07,800 --> 00:30:14,040
Speaker 1: really energizing an agency that become very demoralized. I think

435
00:30:14,040 --> 00:30:16,760
Speaker 1: I think there's also another layer there, which is that

436
00:30:17,440 --> 00:30:21,600
Speaker 1: for a long time, you know, minting coins and for example,

437
00:30:21,720 --> 00:30:26,680
Speaker 1: issuing bonds meant something very different in the monetary regime,

438
00:30:26,960 --> 00:30:32,040
Speaker 1: where bond issuance meant maybe you have a targeting international

439
00:30:32,080 --> 00:30:36,200
Speaker 1: money markets, maybe you don't have to have any pressure

440
00:30:36,360 --> 00:30:39,720
Speaker 1: on your metal reserves if you're under a gold standard.

441
00:30:40,360 --> 00:30:44,880
Speaker 1: But nowadays, of course, the coins that we issue are

442
00:30:44,920 --> 00:30:49,760
Speaker 1: not sort of tied closely to underlying market fluctuations in

443
00:30:49,800 --> 00:30:53,600
Speaker 1: the in the metal value, unless you're selling to bullion investors.

444
00:30:53,720 --> 00:30:58,160
Speaker 1: And of course the coin itself can become, you know,

445
00:30:58,520 --> 00:31:02,680
Speaker 1: with any denomination, much more something like the high high

446
00:31:02,800 --> 00:31:05,400
Speaker 1: value money that it might have been in the early Republic,

447
00:31:05,520 --> 00:31:10,280
Speaker 1: again but without any linkage to underlying metal content. But

448
00:31:10,320 --> 00:31:12,480
Speaker 1: the other part of it is that the coins are

449
00:31:12,560 --> 00:31:17,040
Speaker 1: very private, even more private than notes with barcodes. And

450
00:31:17,640 --> 00:31:19,600
Speaker 1: in this world now where there's a sort of war

451
00:31:19,720 --> 00:31:23,880
Speaker 1: on cash and there are these increasing questions about digital

452
00:31:23,920 --> 00:31:28,800
Speaker 1: privacy and digital data collection, what the mint represents is

453
00:31:28,840 --> 00:31:32,560
Speaker 1: not just small value or you know, hearkening back to

454
00:31:32,640 --> 00:31:35,160
Speaker 1: a different era where metal was more important in money,

455
00:31:35,160 --> 00:31:40,280
Speaker 1: but also a different design principle compared to central banks

456
00:31:40,280 --> 00:31:44,880
Speaker 1: with their balance sheets and their account based framework. And

457
00:31:45,320 --> 00:31:48,200
Speaker 1: your story of kind of the entrepreneurial mint getting getting

458
00:31:48,320 --> 00:31:51,320
Speaker 1: larger is one that to me, you can fit into

459
00:31:51,360 --> 00:31:54,440
Speaker 1: a larger story of institutions rising and falling. You know,

460
00:31:54,480 --> 00:31:57,080
Speaker 1: there was a period where before the Federal reserved, there

461
00:31:57,120 --> 00:32:00,000
Speaker 1: was an independent treasury that had its own set of accounts,

462
00:32:00,400 --> 00:32:04,200
Speaker 1: the Federals of coming into existence, the postal service offering

463
00:32:04,240 --> 00:32:06,360
Speaker 1: banking at one point, and they're not offering it, and

464
00:32:06,400 --> 00:32:09,120
Speaker 1: now people are talking about it coming back. But you

465
00:32:09,120 --> 00:32:12,160
Speaker 1: could imagine a moment, you know, maybe in the nineties

466
00:32:12,200 --> 00:32:16,080
Speaker 1: when you were presidently thinking about these questions of digital money,

467
00:32:16,200 --> 00:32:19,040
Speaker 1: or now today with the debates over the issuance of

468
00:32:19,040 --> 00:32:21,800
Speaker 1: a digital dollar, where the mint, you know, it comes

469
00:32:21,880 --> 00:32:24,600
Speaker 1: into a high degree of prominence and what may be

470
00:32:24,760 --> 00:32:27,840
Speaker 1: considered you a rounding era in the federal budget now

471
00:32:27,880 --> 00:32:32,000
Speaker 1: and sign yourridge becomes a much more central way that

472
00:32:32,040 --> 00:32:36,280
Speaker 1: we designed the accounting for how new money gets issued

473
00:32:36,280 --> 00:32:38,800
Speaker 1: and spent. So I just wanted to get any thoughts

474
00:32:38,800 --> 00:32:41,440
Speaker 1: about that, just that idea that kind of the mint

475
00:32:41,520 --> 00:32:44,600
Speaker 1: might be considered a very junior partner with the FED today,

476
00:32:44,760 --> 00:32:48,560
Speaker 1: but that over time, those those dynamics change and involve,

477
00:32:48,920 --> 00:32:52,400
Speaker 1: and they're not fixed right now. The kind of dynamic

478
00:32:52,440 --> 00:32:54,680
Speaker 1: we have today isn't the only one that could ever

479
00:32:54,720 --> 00:32:59,360
Speaker 1: exist again in the future. Now, that's that's very true

480
00:33:00,400 --> 00:33:02,840
Speaker 1: from my experience. When I went in the door of

481
00:33:02,880 --> 00:33:07,360
Speaker 1: the first day of the Clinton administration in January, the

482
00:33:07,560 --> 00:33:12,400
Speaker 1: very first briefing I got was on the counterfeiting of

483
00:33:12,440 --> 00:33:15,959
Speaker 1: the one dollar bill, and I won't go into the

484
00:33:16,040 --> 00:33:20,320
Speaker 1: details on it, but what was absolutely clear, So this

485
00:33:21,720 --> 00:33:24,680
Speaker 1: and the counterfeiting of the one dollar bill went back

486
00:33:24,680 --> 00:33:29,400
Speaker 1: over a decade in which the Secret Service at that

487
00:33:29,440 --> 00:33:33,680
Speaker 1: time part of the Treasury Department knew that this super

488
00:33:33,800 --> 00:33:38,280
Speaker 1: one note that was virtually indistinguishable from the real thing

489
00:33:39,520 --> 00:33:42,560
Speaker 1: was a problem. And at the end of the briefing,

490
00:33:43,760 --> 00:33:48,960
Speaker 1: I said, why hasn't this been dealt with before? And

491
00:33:49,080 --> 00:33:51,800
Speaker 1: they didn't have an answer for me, And before long

492
00:33:51,840 --> 00:33:57,240
Speaker 1: I understood nobody at the Treasury wanted to tackle that.

493
00:33:58,200 --> 00:34:02,720
Speaker 1: And currency in coinage. People go to the Treasury Department

494
00:34:03,120 --> 00:34:06,920
Speaker 1: to make big policy and they don't want to be

495
00:34:07,120 --> 00:34:14,160
Speaker 1: weighed down by little stuff like massive counterfeiting bill. And

496
00:34:14,920 --> 00:34:18,440
Speaker 1: I and It really helped me to understand that point

497
00:34:18,480 --> 00:34:21,320
Speaker 1: of view from Treasury when I went over to become

498
00:34:21,400 --> 00:34:26,040
Speaker 1: director of the MEN, because it told me something very important,

499
00:34:26,320 --> 00:34:29,759
Speaker 1: and that was in terms of my reform strategy, and

500
00:34:29,880 --> 00:34:33,600
Speaker 1: that is fly below the radar as long as you can,

501
00:34:34,640 --> 00:34:40,359
Speaker 1: because the way Treasury sees it is coinage currency all

502
00:34:40,440 --> 00:34:43,839
Speaker 1: that has trouble on it. And that was really kind

503
00:34:43,840 --> 00:34:47,760
Speaker 1: of a hangover from the Susan b Anthony disaster from

504
00:34:48,480 --> 00:34:51,719
Speaker 1: thirteen years earlier. Can you actually talk? You have a

505
00:34:51,760 --> 00:34:54,720
Speaker 1: blog and I and I've read a few of the posts.

506
00:34:55,040 --> 00:34:59,080
Speaker 1: What was the Susan b Anthony disaster? Um? And this

507
00:34:59,160 --> 00:35:02,200
Speaker 1: was something that aim well before you were the head

508
00:35:02,239 --> 00:35:04,000
Speaker 1: of the US. But when you refer to that to

509
00:35:04,080 --> 00:35:06,080
Speaker 1: there is the Susan b Anthony, I think it's a dollar.

510
00:35:06,520 --> 00:35:09,719
Speaker 1: What was the what happened with that endeavor? Well, there

511
00:35:09,719 --> 00:35:13,959
Speaker 1: are two levels in which it was a disaster. One

512
00:35:14,239 --> 00:35:19,600
Speaker 1: was as a product. It was a little bit larger

513
00:35:19,640 --> 00:35:23,319
Speaker 1: than a quarter, and it was the same color, the

514
00:35:23,360 --> 00:35:28,560
Speaker 1: same silver color as a quarter, and so people initially

515
00:35:29,719 --> 00:35:33,360
Speaker 1: confused them and it was the sort of thing and

516
00:35:33,400 --> 00:35:36,279
Speaker 1: if you reached in your pocket, you'd pull out one

517
00:35:36,320 --> 00:35:39,160
Speaker 1: of the one of the Susan B. Anthony's thinking it

518
00:35:39,280 --> 00:35:42,240
Speaker 1: was a quarter or whatever. In reality, if you carry

519
00:35:42,280 --> 00:35:45,600
Speaker 1: them around in your pocket very long, then you can

520
00:35:45,800 --> 00:35:49,279
Speaker 1: tell the difference by size, but and also by the

521
00:35:49,400 --> 00:35:52,480
Speaker 1: reading or the lack of it on the on the edge.

522
00:35:53,080 --> 00:36:00,960
Speaker 1: But it was a disaster because Americans didn't want to

523
00:36:01,120 --> 00:36:06,600
Speaker 1: carry a heavier coin. There was that resistance. Second, there

524
00:36:06,680 --> 00:36:10,120
Speaker 1: was a lot of criticism of the design of Susan

525
00:36:10,160 --> 00:36:14,440
Speaker 1: B Anthony itself. There was a claim that it wasn't

526
00:36:14,520 --> 00:36:18,680
Speaker 1: an attractive design. I mean, you know, it was petty,

527
00:36:18,719 --> 00:36:22,520
Speaker 1: but it was subject to criticism in that respect. But

528
00:36:23,080 --> 00:36:27,640
Speaker 1: at the political level, the coin was launched in ninety

529
00:36:27,760 --> 00:36:32,200
Speaker 1: nine and so there was this rumbling of dissatisfaction about it.

530
00:36:32,920 --> 00:36:37,759
Speaker 1: But in the presidential election in which Jimmy Carter was

531
00:36:37,840 --> 00:36:44,040
Speaker 1: running for re election, inflation had spiked and Ronald Reagan,

532
00:36:44,080 --> 00:36:47,480
Speaker 1: of course was running against him. Small government government can't

533
00:36:47,520 --> 00:36:51,360
Speaker 1: work because you know the big government as the enemy.

534
00:36:51,400 --> 00:36:57,200
Speaker 1: It came to be called the Carter Quarter, really emphasizing

535
00:36:57,200 --> 00:37:01,000
Speaker 1: the inflation and the confusion between when the Susan B

536
00:37:01,120 --> 00:37:05,040
Speaker 1: Anthony in the quarter, and it was a shock at

537
00:37:05,040 --> 00:37:08,399
Speaker 1: the United States meant, like you said, I didn't come

538
00:37:08,440 --> 00:37:11,759
Speaker 1: in until thirteen years later, but it was as though

539
00:37:11,880 --> 00:37:16,800
Speaker 1: it had happened yesterday there and as a matter of fact,

540
00:37:16,880 --> 00:37:20,759
Speaker 1: right after the Gingrich Revolution in January came around, the

541
00:37:20,800 --> 00:37:27,800
Speaker 1: Republican leadership proposed a new dollar coin, and my attitude was, sure,

542
00:37:27,960 --> 00:37:30,120
Speaker 1: let's talk about it, let's but let's don't make the

543
00:37:30,120 --> 00:37:36,800
Speaker 1: same mistakes, and legislation was filed completely replicating that mistake,

544
00:37:37,800 --> 00:37:42,000
Speaker 1: this whole series of mistakes, and so I ended up

545
00:37:42,440 --> 00:37:47,600
Speaker 1: doing a campaign, public campaign and testifying Congress opposing the

546
00:37:47,640 --> 00:37:52,560
Speaker 1: new dollar coin. And after we defeated that, a few

547
00:37:52,640 --> 00:37:55,520
Speaker 1: years later we came forward with the plan for the

548
00:37:55,560 --> 00:37:59,560
Speaker 1: sack of Jeweeah coin, which did not suffer those kinds

549
00:37:59,640 --> 00:38:03,520
Speaker 1: of of weaknesses because that one is actually a different uh.

550
00:38:03,600 --> 00:38:07,600
Speaker 1: That one's gold color. That's right, that's right. And it's

551
00:38:07,680 --> 00:38:12,000
Speaker 1: viewed as being a failure because ultimately it was. It

552
00:38:12,120 --> 00:38:15,919
Speaker 1: was a failure in that it didn't replace the dollar bill,

553
00:38:16,920 --> 00:38:21,160
Speaker 1: but it was an enormous success when we issued it.

554
00:38:21,960 --> 00:38:26,440
Speaker 1: The Federal Reserve doesn't like coins, and without admit director

555
00:38:26,480 --> 00:38:29,640
Speaker 1: and I left in two thousand, we launched a few

556
00:38:29,680 --> 00:38:34,520
Speaker 1: months before my term was over, and without a director

557
00:38:34,800 --> 00:38:38,680
Speaker 1: who would take on the feller reserve to ensure its

558
00:38:38,719 --> 00:38:42,920
Speaker 1: success than had died on the vine. Basically, you know,

559
00:38:43,000 --> 00:38:47,800
Speaker 1: you just talked then about the FED not liking coins

560
00:38:48,000 --> 00:38:50,759
Speaker 1: and the idea that sort of the often works best

561
00:38:50,760 --> 00:38:53,319
Speaker 1: when it's under the radar. It seems to me that

562
00:38:53,400 --> 00:38:57,160
Speaker 1: there is a bit of kind of into agency servianism.

563
00:38:57,719 --> 00:39:00,759
Speaker 1: Either way. The coin is discussed when we talk about

564
00:39:00,880 --> 00:39:03,680
Speaker 1: kind of budget gimmicks, you know, reading the Social Security

565
00:39:03,680 --> 00:39:06,560
Speaker 1: Trust Fund or something is that is the Treasury Secretary

566
00:39:06,680 --> 00:39:09,560
Speaker 1: in the eighties. That's an acceptable budget gimmick. The use

567
00:39:09,600 --> 00:39:13,240
Speaker 1: of Section thirteen three authority into downs in and nine,

568
00:39:13,360 --> 00:39:16,560
Speaker 1: all these special purpose vehicles and lending facilities the FED

569
00:39:16,640 --> 00:39:20,279
Speaker 1: does where the Treasury provides the underlying capital, so the

570
00:39:20,320 --> 00:39:23,080
Speaker 1: first losses are borne by the Treasury, but it's leveraged

571
00:39:23,080 --> 00:39:26,200
Speaker 1: by the FED. Those are acceptable accounting gimmicks because they

572
00:39:26,239 --> 00:39:29,560
Speaker 1: sound complex, They sound like the kinds of things that

573
00:39:29,640 --> 00:39:32,760
Speaker 1: you would do in a Wall Street trading firm or something.

574
00:39:33,280 --> 00:39:37,920
Speaker 1: But this gimmick it almost defends the sensibilities of the

575
00:39:38,040 --> 00:39:41,560
Speaker 1: kind of high finance, high high minded types because it's

576
00:39:42,000 --> 00:39:44,680
Speaker 1: it's sort of giving power to this lowly agency to

577
00:39:44,760 --> 00:39:47,320
Speaker 1: save the day when all of the the big boys

578
00:39:47,360 --> 00:39:49,640
Speaker 1: couldn't do it. Do you experience any of that? I

579
00:39:49,680 --> 00:39:51,719
Speaker 1: know you were actually kind of high about the Treasury

580
00:39:51,719 --> 00:39:55,400
Speaker 1: and you were in the legislature before that, But do

581
00:39:55,719 --> 00:39:57,960
Speaker 1: you experience any of that kind of chauvinism with your

582
00:39:58,040 --> 00:40:05,640
Speaker 1: agency interactions something like that? We certainly experienced it with

583
00:40:06,440 --> 00:40:12,960
Speaker 1: the Sacka Joia dollar coin. We did extensive market research

584
00:40:13,360 --> 00:40:16,080
Speaker 1: on what is it going to take for this coin

585
00:40:16,120 --> 00:40:21,520
Speaker 1: to be accepted enthusiastically by the American public. We also

586
00:40:21,760 --> 00:40:26,239
Speaker 1: did market research in depth with the banks, because the

587
00:40:26,320 --> 00:40:29,520
Speaker 1: banks are our channel to get the coin into the

588
00:40:29,560 --> 00:40:33,040
Speaker 1: hands of the public, our channel first through the Federal

589
00:40:33,120 --> 00:40:38,440
Speaker 1: Reserve and then through the banks. So we had several

590
00:40:38,719 --> 00:40:42,640
Speaker 1: meetings with banks, bankers, and the Federal Reserve was there,

591
00:40:43,360 --> 00:40:47,880
Speaker 1: and basically they laid out this catch twenty two for us,

592
00:40:47,920 --> 00:40:52,080
Speaker 1: and that was, we will order the new dollar coin

593
00:40:52,160 --> 00:40:55,479
Speaker 1: as soon as we know that the American public will

594
00:40:55,520 --> 00:40:59,640
Speaker 1: accept it. Our response was, how are we supposed to

595
00:40:59,680 --> 00:41:02,440
Speaker 1: do that if we can't get it into the hands

596
00:41:02,440 --> 00:41:05,280
Speaker 1: of And we showed them the market research that showed

597
00:41:05,880 --> 00:41:08,279
Speaker 1: that there was a really good chance that when we

598
00:41:08,400 --> 00:41:10,919
Speaker 1: launched this coin that would be big demand for it,

599
00:41:11,800 --> 00:41:16,160
Speaker 1: and the Federal Reserve just didn't weigh in despite the

600
00:41:16,200 --> 00:41:21,799
Speaker 1: ment congressional mandate to produce and circulate this coin. And

601
00:41:21,960 --> 00:41:29,080
Speaker 1: at the time, I've always been suspicious of concentrated economic power,

602
00:41:29,160 --> 00:41:34,759
Speaker 1: in particular political power to but concentrated economic power. And

603
00:41:34,800 --> 00:41:37,560
Speaker 1: I've seen over and over and over again over the

604
00:41:37,600 --> 00:41:42,040
Speaker 1: years through my career, both outside the government inside the government,

605
00:41:42,520 --> 00:41:47,520
Speaker 1: how agencies are captured by the people they regulate or

606
00:41:47,760 --> 00:41:52,240
Speaker 1: you know, the institutions they served. And what I saw

607
00:41:52,320 --> 00:41:58,720
Speaker 1: there was the Federal Reserve acting as an advocate for

608
00:41:59,120 --> 00:42:05,319
Speaker 1: the banks that they were supposed to regulate. And and

609
00:42:05,640 --> 00:42:08,200
Speaker 1: what my thought about that was a lot of people say, well,

610
00:42:08,239 --> 00:42:12,160
Speaker 1: you know, that's penny any that's opinion, you know, bun Inton.

611
00:42:12,880 --> 00:42:16,319
Speaker 1: My what my thought was, if on something that is

612
00:42:16,400 --> 00:42:20,080
Speaker 1: so small, that has so little impact on the banks,

613
00:42:20,120 --> 00:42:24,640
Speaker 1: that the FED will be their representative within the government,

614
00:42:25,280 --> 00:42:27,640
Speaker 1: what is the chance that the Fed won't do that

615
00:42:27,719 --> 00:42:30,200
Speaker 1: on the things that are really crucial to the health

616
00:42:30,239 --> 00:42:33,560
Speaker 1: of the banks. So what I in order to overcome

617
00:42:33,640 --> 00:42:39,400
Speaker 1: that problem, I went to the new lobbyists for Walmart,

618
00:42:39,719 --> 00:42:43,279
Speaker 1: who had been a distributor of our Olympic coins in

619
00:42:45,520 --> 00:42:48,680
Speaker 1: and said, I'd like to launch this coin through three

620
00:42:48,719 --> 00:42:54,640
Speaker 1: thousand locations across the country in your stores, all on

621
00:42:54,680 --> 00:43:00,319
Speaker 1: the same day, January two thousand and they said sure,

622
00:43:01,320 --> 00:43:05,080
Speaker 1: and it was a huge success. Within a matter of

623
00:43:05,640 --> 00:43:10,040
Speaker 1: hours or days, the stores exhausted their supply. So when

624
00:43:10,120 --> 00:43:13,239
Speaker 1: their customers said, oh, well, we didn't get the dollar coin,

625
00:43:13,360 --> 00:43:16,279
Speaker 1: what do they do? They call the bank? Banks don't

626
00:43:16,320 --> 00:43:19,399
Speaker 1: have them, so because they didn't order them and they

627
00:43:19,440 --> 00:43:23,120
Speaker 1: resisted it. So who do they call? Well, the FED?

628
00:43:23,680 --> 00:43:26,920
Speaker 1: And who does the FED called? The Secretary of the Treasury.

629
00:43:27,040 --> 00:43:29,640
Speaker 1: So I you know, I hear from the Secretary of Treasury,

630
00:43:29,680 --> 00:43:50,799
Speaker 1: but my job was to fade the heat. I loved it.

631
00:43:50,840 --> 00:43:53,080
Speaker 1: I mean, it's funny how many of these conversations seem

632
00:43:53,160 --> 00:43:56,399
Speaker 1: to come full circle. And of course even today there

633
00:43:56,440 --> 00:44:01,480
Speaker 1: are recurrent conversations about a company like Walmart into retail

634
00:44:01,520 --> 00:44:04,160
Speaker 1: banking and fierce opposition, and so it's interesting to hear

635
00:44:04,200 --> 00:44:06,960
Speaker 1: that in that example. But also I want to go

636
00:44:07,000 --> 00:44:09,399
Speaker 1: back to like the point also that Rohan is making

637
00:44:09,400 --> 00:44:11,600
Speaker 1: about like it's kind of like what gets called a

638
00:44:11,640 --> 00:44:14,560
Speaker 1: gimmick or not is very strange because when we heard

639
00:44:14,600 --> 00:44:18,279
Speaker 1: from Secretary Yellen recently and she called the trillion dollar

640
00:44:18,360 --> 00:44:21,640
Speaker 1: coin very dismissively a gimmick. But if Rohan has pointed out,

641
00:44:21,960 --> 00:44:24,799
Speaker 1: you know other things that are like extraordinary measures are

642
00:44:24,800 --> 00:44:28,320
Speaker 1: okay and weird things where the Treasury provides financing for

643
00:44:28,360 --> 00:44:30,839
Speaker 1: the Fed, of the Fed provides leverage, you know, those

644
00:44:30,880 --> 00:44:34,359
Speaker 1: don't get called gimmicks. It seems to me that there

645
00:44:34,480 --> 00:44:39,120
Speaker 1: is nothing less gimmicky than a coin that on some sense,

646
00:44:39,320 --> 00:44:42,359
Speaker 1: coins have existed for over three thousand years. Paying for

647
00:44:42,440 --> 00:44:45,400
Speaker 1: things with coinage is about one of the oldest traditions

648
00:44:45,600 --> 00:44:48,960
Speaker 1: there is, putting a number on a coin and saying,

649
00:44:48,960 --> 00:44:52,000
Speaker 1: as you established that that is the value of that coin.

650
00:44:52,560 --> 00:44:55,279
Speaker 1: It almost is like of all the things we talked

651
00:44:55,280 --> 00:44:58,520
Speaker 1: about in financing, there's almost to me it's a sense

652
00:44:58,560 --> 00:45:01,560
Speaker 1: of like creating a coin might be the least gimmicky

653
00:45:01,760 --> 00:45:06,239
Speaker 1: form of public fundraising there is. Yeah, well, that's exactly right.

654
00:45:06,680 --> 00:45:09,440
Speaker 1: The concept of scene ridge that we talked about earlier

655
00:45:10,000 --> 00:45:15,400
Speaker 1: is an ancient concept. It goes back thousands of years,

656
00:45:15,440 --> 00:45:19,239
Speaker 1: almost as old as coinage is itself. The concept of

657
00:45:19,320 --> 00:45:22,520
Speaker 1: senior is real simple, and that is it is the

658
00:45:22,560 --> 00:45:27,520
Speaker 1: difference between the cost of producing a coin and it's

659
00:45:27,600 --> 00:45:32,440
Speaker 1: face value, and that margin represents a form of profit.

660
00:45:32,560 --> 00:45:35,920
Speaker 1: It's not treated that way anymore, but it used to

661
00:45:35,960 --> 00:45:40,560
Speaker 1: be a way of funding the crown. So there'd be

662
00:45:40,640 --> 00:45:45,520
Speaker 1: this small difference between the gold and a coin and

663
00:45:45,640 --> 00:45:48,600
Speaker 1: the face value on the coin, and that represented a

664
00:45:48,719 --> 00:45:51,520
Speaker 1: profit that went to the king. And if you were

665
00:45:51,560 --> 00:45:56,080
Speaker 1: a mint director who produced those coins and you shaved

666
00:45:56,120 --> 00:46:00,719
Speaker 1: a little bit of metal off that and base, that's

667
00:46:00,760 --> 00:46:06,000
Speaker 1: where the concept debasing coinage or your currency comes from.

668
00:46:06,640 --> 00:46:11,319
Speaker 1: Then if you were discovered, you were beheaded. And fortunately

669
00:46:11,360 --> 00:46:15,360
Speaker 1: ment directors don't have to go through that anymore. But yes,

670
00:46:15,520 --> 00:46:18,920
Speaker 1: that's a very old concept. It seems paying for things

671
00:46:19,000 --> 00:46:21,520
Speaker 1: with coins of the state, paying for things with coins

672
00:46:21,520 --> 00:46:24,600
Speaker 1: of the state, saying that the coin is worth this

673
00:46:24,760 --> 00:46:27,120
Speaker 1: much because we say it is because we ascribed it

674
00:46:27,239 --> 00:46:30,880
Speaker 1: into the blank, seems like a very old concept. In

675
00:46:30,920 --> 00:46:36,239
Speaker 1: a way. It feels very on gimmicky. That's right, to

676
00:46:36,440 --> 00:46:39,440
Speaker 1: go back to your the whole question of about about

677
00:46:39,440 --> 00:46:42,160
Speaker 1: whether or not the trillion dollar coin is a gimmick.

678
00:46:42,880 --> 00:46:45,960
Speaker 1: As we're talking about the concept of coinage, the concept

679
00:46:46,000 --> 00:46:50,319
Speaker 1: of scene ridge, I mean, it is so deeply embedded

680
00:46:50,360 --> 00:46:54,640
Speaker 1: in human history that it's hard to call that a gimmick.

681
00:46:55,080 --> 00:47:00,280
Speaker 1: But I've said that the trillion dollar coins suffers a

682
00:47:00,360 --> 00:47:06,040
Speaker 1: branding problem, and that is it's too simple, I mean

683
00:47:06,280 --> 00:47:11,839
Speaker 1: quantitative easing. You know that sounds really sophisticated. People say, oh,

684
00:47:11,920 --> 00:47:14,960
Speaker 1: I can't conceive of that. But also what I'm discovering

685
00:47:15,120 --> 00:47:18,560
Speaker 1: is that tree and dollar coin that that also has

686
00:47:18,600 --> 00:47:22,960
Speaker 1: a brand advantage, and that is that people understand what

687
00:47:23,000 --> 00:47:26,480
Speaker 1: that is. And if we get in front of it

688
00:47:26,680 --> 00:47:32,640
Speaker 1: and explain away all the mythology and misinformation and disinformation,

689
00:47:33,320 --> 00:47:38,040
Speaker 1: then I think there's an opportunity for it to overcome

690
00:47:38,080 --> 00:47:41,960
Speaker 1: the negative aspects of the brand. Yeah, it seems to

691
00:47:42,000 --> 00:47:44,600
Speaker 1: me a lot of people say, well, we should do

692
00:47:44,680 --> 00:47:48,960
Speaker 1: this other alternative that would be functionally equivalent, but that

693
00:47:49,160 --> 00:47:52,680
Speaker 1: would would not you know, suffer the simplicity that actually

694
00:47:52,719 --> 00:47:55,840
Speaker 1: causes people to understand it. So in their view, you know,

695
00:47:56,080 --> 00:47:59,600
Speaker 1: much more complicated, giving things that that you know, involves

696
00:47:59,640 --> 00:48:02,960
Speaker 1: seven layers of jargon and all this kind of thing.

697
00:48:04,040 --> 00:48:06,960
Speaker 1: It's a feature, not a bug that they're so complicated,

698
00:48:07,000 --> 00:48:10,080
Speaker 1: because then people don't actually understand what's going on. Their

699
00:48:10,120 --> 00:48:12,960
Speaker 1: their eyes grew cross eyed. They sort of tune out

700
00:48:13,000 --> 00:48:15,879
Speaker 1: before you finish describing all the steps, and that's that's

701
00:48:15,920 --> 00:48:18,640
Speaker 1: a good thing for them, and you know, whatever your

702
00:48:18,719 --> 00:48:21,880
Speaker 1: views are about whether or not the public should be

703
00:48:21,920 --> 00:48:26,400
Speaker 1: able to understand how money works, it seems like that's

704
00:48:26,440 --> 00:48:29,000
Speaker 1: actually the real disagreement here. It's not the ones a

705
00:48:29,040 --> 00:48:31,040
Speaker 1: gimmick and one isn't a gimmick. It's that do you

706
00:48:31,080 --> 00:48:34,680
Speaker 1: want a gimmick designed to obscure or does it a

707
00:48:34,719 --> 00:48:37,640
Speaker 1: gimmick design to clarify? One sense? You know, if we're

708
00:48:37,640 --> 00:48:40,520
Speaker 1: going to call the coin of gimmick at all. And

709
00:48:40,560 --> 00:48:42,319
Speaker 1: it seems to me that we almost spend a lot

710
00:48:42,360 --> 00:48:45,440
Speaker 1: of time stepping around that that that we that everybody

711
00:48:45,480 --> 00:48:47,960
Speaker 1: wants to frame it as though one is serious and

712
00:48:48,040 --> 00:48:50,720
Speaker 1: one isn't, or one is more sort of in line

713
00:48:50,760 --> 00:48:52,919
Speaker 1: with the spirit of existing law and one isn't, when

714
00:48:52,960 --> 00:48:55,960
Speaker 1: really it just boils down to whether or not we're

715
00:48:56,000 --> 00:49:00,399
Speaker 1: trying to educate and enlighten or sort of you are

716
00:49:00,560 --> 00:49:04,279
Speaker 1: and pull the wooloiver in the proceeds. Yeah, that's a

717
00:49:04,600 --> 00:49:08,719
Speaker 1: that's an excellent point. And if and if we've discovered

718
00:49:08,760 --> 00:49:10,880
Speaker 1: anything in the last five years, and a number of

719
00:49:10,880 --> 00:49:14,640
Speaker 1: things we've discovered, one is that there is a deep

720
00:49:14,880 --> 00:49:22,120
Speaker 1: suspicion of ex so called expertise and real expertise jargon,

721
00:49:22,719 --> 00:49:28,719
Speaker 1: which is associated with certain kinds of expertise are suspect

722
00:49:28,920 --> 00:49:35,520
Speaker 1: in American culture. So quantitative easing. Yeah, you know, people say,

723
00:49:35,600 --> 00:49:38,359
Speaker 1: I don't know what that is, but I don't, you know,

724
00:49:38,560 --> 00:49:41,760
Speaker 1: I suspect what it is. Trade your dollar coin. People

725
00:49:41,800 --> 00:49:44,879
Speaker 1: get that, they understand it, and so, and really the

726
00:49:44,920 --> 00:49:50,799
Speaker 1: concept behind it is it's not that difficult. So let

727
00:49:50,840 --> 00:49:54,279
Speaker 1: me finish here with that. It's a kind of a

728
00:49:54,400 --> 00:49:57,520
Speaker 1: hypothetical or maybe it's an impossible question to answer. But

729
00:49:58,280 --> 00:50:02,040
Speaker 1: the dead ceiling has always been this sort of political

730
00:50:02,120 --> 00:50:06,440
Speaker 1: trip wire, but we've only really had extreme dead ceiling showdowns.

731
00:50:06,719 --> 00:50:08,640
Speaker 1: We talked about this with Rowan a couple of weeks

732
00:50:08,640 --> 00:50:12,480
Speaker 1: ago on the show. Really since really it's already getting

733
00:50:12,560 --> 00:50:16,719
Speaker 1: very intense under the Obama here an after the big

734
00:50:16,760 --> 00:50:21,680
Speaker 1: Republican victory, and so you know, some of these questions

735
00:50:21,719 --> 00:50:24,200
Speaker 1: about this sort of like, wow, we might really default.

736
00:50:24,239 --> 00:50:28,640
Speaker 1: We don't really know much about how past Treasury secretaries

737
00:50:29,160 --> 00:50:32,279
Speaker 1: might have dealt with this, but it is a hardball move, right, So,

738
00:50:32,440 --> 00:50:35,080
Speaker 1: like there is this norm that it's like, okay, obviously

739
00:50:35,360 --> 00:50:37,960
Speaker 1: yelling or whoever else would be Treasary secretary would like

740
00:50:38,000 --> 00:50:40,600
Speaker 1: to just raise the dead ceiling in the conventional manner

741
00:50:40,640 --> 00:50:43,640
Speaker 1: and then ideally forget about it in a few years.

742
00:50:43,640 --> 00:50:46,319
Speaker 1: But to invoke the coin and or to say, you

743
00:50:46,320 --> 00:50:49,080
Speaker 1: know what, we're not going to play games, We're not

744
00:50:49,120 --> 00:50:51,800
Speaker 1: going to let you all hold the economy hostage, whatever,

745
00:50:52,640 --> 00:50:55,560
Speaker 1: is a hardball political move, you know, it's that would

746
00:50:55,560 --> 00:50:57,480
Speaker 1: be it's outside the norm. It's not it's not the

747
00:50:57,560 --> 00:51:00,960
Speaker 1: norm of how these things typically go down. Do you

748
00:51:01,000 --> 00:51:05,520
Speaker 1: think there are like Treasury secretaries of the past who

749
00:51:05,560 --> 00:51:09,080
Speaker 1: may have had more of an appetite for the the

750
00:51:09,120 --> 00:51:13,160
Speaker 1: hardball of this option. I mean, obviously from a legal standpoint,

751
00:51:13,160 --> 00:51:17,279
Speaker 1: it's only been open since with with the amendment to

752
00:51:17,320 --> 00:51:18,839
Speaker 1: the coin in Jack that you got passed. But in

753
00:51:18,920 --> 00:51:22,000
Speaker 1: terms of like the appetite to say, you know what,

754
00:51:22,440 --> 00:51:25,360
Speaker 1: don't come to us with the negotiation, don't stall. We

755
00:51:25,440 --> 00:51:26,880
Speaker 1: have a coin that we can mint and we're not

756
00:51:26,880 --> 00:51:29,560
Speaker 1: going to talk about this. Are there is this something

757
00:51:29,600 --> 00:51:31,879
Speaker 1: that in different environments maybe there would have just been

758
00:51:31,920 --> 00:51:35,680
Speaker 1: more willingness to roll over the opposition by invoking the

759
00:51:35,760 --> 00:51:43,040
Speaker 1: Colin option earlier Alexander Hamilton's it's the only one that

760
00:51:43,120 --> 00:51:47,239
Speaker 1: comes to mind. I don't know if any secretary who

761
00:51:47,600 --> 00:51:52,160
Speaker 1: would have wanted to pursue this option unless his or

762
00:51:52,200 --> 00:51:56,000
Speaker 1: her back was to the wall, and if it comes

763
00:51:56,080 --> 00:51:59,800
Speaker 1: down to the nation to falling on its debts or

764
00:52:00,120 --> 00:52:03,200
Speaker 1: many a triion dollar coin, I think there are a

765
00:52:03,239 --> 00:52:06,080
Speaker 1: lot of Secretaries of the Treasury who would have considered it,

766
00:52:06,560 --> 00:52:10,880
Speaker 1: and if it was the only viable option, it's just

767
00:52:11,440 --> 00:52:15,919
Speaker 1: the estimate is the defaulting on the debt would eliminate

768
00:52:16,040 --> 00:52:22,759
Speaker 1: fifteen treeion dollars in wealth in this nation. Now, if

769
00:52:22,760 --> 00:52:26,880
Speaker 1: that's a choice or a treeion dollar coign easy choice,

770
00:52:27,080 --> 00:52:29,879
Speaker 1: And I think a secret treasury would do the same thing.

771
00:52:30,520 --> 00:52:33,600
Speaker 1: And I think it's an easy decision, fift trillion dollars

772
00:52:33,600 --> 00:52:36,160
Speaker 1: of wealth created or a coin that's a little gimmicky.

773
00:52:36,360 --> 00:52:38,400
Speaker 1: You would not think that that is a hard choice,

774
00:52:38,440 --> 00:52:42,080
Speaker 1: at least I wouldn't, But apparently, you know you think

775
00:52:42,120 --> 00:52:44,479
Speaker 1: that's an easy call. Well, it's not an easy call.

776
00:52:44,840 --> 00:52:47,840
Speaker 1: If there's no other option, there are There is another

777
00:52:47,880 --> 00:52:50,359
Speaker 1: option that I think is a viable option, and that

778
00:52:50,560 --> 00:52:54,640
Speaker 1: is the fourteenth Amendment. I think the fourteenth Amendment is

779
00:52:54,760 --> 00:52:59,000
Speaker 1: a clear option here. And you know, I don't think

780
00:52:59,080 --> 00:53:01,960
Speaker 1: the usually I don't think the trillion dollar coin is

781
00:53:02,000 --> 00:53:08,920
Speaker 1: a gimmick, but it is subject to criticism as a gimmick.

782
00:53:09,640 --> 00:53:12,800
Speaker 1: The Constitution of the United States and the fourteenth Amendment

783
00:53:13,280 --> 00:53:16,920
Speaker 1: is has no vulnerability to that. It has other weaknesses

784
00:53:17,000 --> 00:53:23,000
Speaker 1: and vulnerabilities, but that's not one of them. You know.

785
00:53:23,160 --> 00:53:25,920
Speaker 1: We could go on forever, and honestly, this is so

786
00:53:26,080 --> 00:53:28,480
Speaker 1: this is such a fascinating discussion to me, because even

787
00:53:28,560 --> 00:53:31,080
Speaker 1: beyond this sort of politics right now, and even beyond

788
00:53:31,320 --> 00:53:34,319
Speaker 1: the sort of legal dimension, just thinking about like the

789
00:53:34,480 --> 00:53:37,919
Speaker 1: history of money and the actual operation of how does

790
00:53:38,000 --> 00:53:41,280
Speaker 1: money get made and then how to the public essentially

791
00:53:41,280 --> 00:53:44,920
Speaker 1: to me like an under disgusted and under examined topic.

792
00:53:45,280 --> 00:53:47,440
Speaker 1: We could go on forever, but this was such a

793
00:53:47,480 --> 00:53:49,680
Speaker 1: treat Rowan, it was great to have you back and

794
00:53:49,960 --> 00:53:53,520
Speaker 1: Mint director deal so great to hear from your perspective

795
00:53:53,600 --> 00:53:56,279
Speaker 1: as having a been involved in the right of the law,

796
00:53:56,320 --> 00:53:58,919
Speaker 1: but just seeing how this all works. Thank you both

797
00:53:58,960 --> 00:54:01,839
Speaker 1: so much for coming on a lot. Thanks for having me.

798
00:54:02,520 --> 00:54:17,759
Speaker 1: Sup pleasure to thank you well. Obviously Tracy wasn't here,

799
00:54:18,000 --> 00:54:20,920
Speaker 1: so I can't banter with her as I would normally do,

800
00:54:21,480 --> 00:54:24,359
Speaker 1: but I strongly suspect, you know, I really do think

801
00:54:24,400 --> 00:54:27,400
Speaker 1: after our first Mint the coin episode, that Tracy was

802
00:54:27,440 --> 00:54:30,799
Speaker 1: getting fairly coin pilled, and I am convinced that after

803
00:54:30,920 --> 00:54:34,360
Speaker 1: this one and hearing from former MINT director Deal himself,

804
00:54:34,800 --> 00:54:36,960
Speaker 1: that she would be fully on board. Maybe that's a

805
00:54:37,000 --> 00:54:39,200
Speaker 1: little presumptuous of me to say, but I really think

806
00:54:39,200 --> 00:54:41,480
Speaker 1: she would have been sold. Like I said kind of

807
00:54:41,480 --> 00:54:43,759
Speaker 1: at the end, there are so many like aspects of

808
00:54:43,800 --> 00:54:46,960
Speaker 1: that discussion that I find like genuinely fascinating. Like, you know,

809
00:54:46,960 --> 00:54:48,839
Speaker 1: there's something I've been thinking about. It doesn't even really

810
00:54:48,840 --> 00:54:53,000
Speaker 1: relate to money per se, but the idea of agency

811
00:54:53,160 --> 00:54:58,919
Speaker 1: and sub agency entrepreneurialism and the idea of as um

812
00:54:58,920 --> 00:55:02,799
Speaker 1: Philip Deal was talked, think about, let's do this simple thing,

813
00:55:03,120 --> 00:55:07,080
Speaker 1: Let's do this straightforward thing of expanding our share in

814
00:55:07,120 --> 00:55:10,160
Speaker 1: the bullion market so that then we can get congressional

815
00:55:10,640 --> 00:55:15,280
Speaker 1: support for something more ambitious, the fifty State Quarters project.

816
00:55:15,480 --> 00:55:17,640
Speaker 1: Even like thinking about that and how like our sort

817
00:55:17,640 --> 00:55:21,880
Speaker 1: of government operates super interesting. Also really interested in this

818
00:55:21,920 --> 00:55:24,759
Speaker 1: idea that, like you know, people add Treasury might be

819
00:55:24,800 --> 00:55:28,200
Speaker 1: interested in like big ideas, like big reforms of tax policy,

820
00:55:28,239 --> 00:55:31,000
Speaker 1: but it's something sort of like simple and operational, like

821
00:55:31,280 --> 00:55:34,960
Speaker 1: how do you avoid counterfeiting the d dollar bill is

822
00:55:35,000 --> 00:55:37,839
Speaker 1: not something that people in the government maybe gets so

823
00:55:37,880 --> 00:55:41,080
Speaker 1: excited about because it's not as you know, the ideas

824
00:55:41,080 --> 00:55:44,840
Speaker 1: aren't as big anyway, so many interesting things from that discussion.

825
00:55:45,000 --> 00:55:47,239
Speaker 1: It is a real treat to hear from both of them,

826
00:55:47,280 --> 00:55:50,520
Speaker 1: so that further Ado and I there. This has been

827
00:55:50,560 --> 00:55:54,560
Speaker 1: another episode of the Odd Lots podcast. I'm Joe Wisn't

828
00:55:54,560 --> 00:55:56,920
Speaker 1: thought you could follow me on Twitter at the Stalwart.

829
00:55:57,239 --> 00:56:00,720
Speaker 1: Follow my co host on Twitter, Tracy Alloway at ac Alloway.

830
00:56:01,000 --> 00:56:04,600
Speaker 1: Follow our guests on Twitter. Rowan Gray He's at Rowan Gray.

831
00:56:05,080 --> 00:56:08,239
Speaker 1: Follow Mint director Deal Philip Deal. He's on Twitter at

832
00:56:08,320 --> 00:56:11,040
Speaker 1: Philip and Deal. Although he hasn't tweeted in a while,

833
00:56:11,080 --> 00:56:13,160
Speaker 1: I think you should get back to tweeting. Yes't tweeted,

834
00:56:13,160 --> 00:56:16,680
Speaker 1: Since he should, he should get a little more public,

835
00:56:16,719 --> 00:56:20,239
Speaker 1: in my opinion. Follow our producer Laura Carlson. She's at

836
00:56:20,360 --> 00:56:23,520
Speaker 1: Laura M. Carlson. And check out all of our podcasts

837
00:56:23,520 --> 00:56:27,600
Speaker 1: at Bloomberg under the handle at podcasts. Thanks for listening.