1
00:00:02,520 --> 00:00:11,879
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is Master's in

2
00:00:11,960 --> 00:00:17,079
Speaker 1: Business with Barry Ritholts on Bloomberg Radio.

3
00:00:17,120 --> 00:00:21,280
Speaker 2: This week on the podcast, I have another extra special guest,

4
00:00:21,800 --> 00:00:27,720
Speaker 2: Professor Stephanie Kelton teaches public policy and economics at sunny Stonybrook.

5
00:00:28,360 --> 00:00:32,520
Speaker 2: She really came to the four in the twenty tens

6
00:00:32,560 --> 00:00:36,760
Speaker 2: when she was the chief economist for the US Senate

7
00:00:36,800 --> 00:00:43,839
Speaker 2: Budget Committee, and had previously in her career revisited the

8
00:00:43,880 --> 00:00:49,640
Speaker 2: works of people like Hymen Minsky and Lord Keynes and

9
00:00:50,080 --> 00:00:56,160
Speaker 2: Warren Mosler, who's really probably the single largest influencer of

10
00:00:56,360 --> 00:01:02,000
Speaker 2: modern monetary theory, which looks at the overall economy not

11
00:01:02,160 --> 00:01:07,480
Speaker 2: from the perspective of federal deficits but the federal impact

12
00:01:07,840 --> 00:01:13,640
Speaker 2: on inflation. Really just a fascinating conversation talking about what

13
00:01:13,920 --> 00:01:19,680
Speaker 2: is and it is not heterodoxy and conventional thinking in economics,

14
00:01:19,720 --> 00:01:24,280
Speaker 2: and why the field is so hesitant to change even

15
00:01:24,319 --> 00:01:28,840
Speaker 2: when the evidence is overwhelming that what they're doing is

16
00:01:29,319 --> 00:01:33,039
Speaker 2: false or based on data that just doesn't seem to

17
00:01:33,080 --> 00:01:38,680
Speaker 2: add up. Her book, The Deficit Myth, was a surprise bestseller,

18
00:01:38,760 --> 00:01:41,200
Speaker 2: came out right in the middle of the pandemic and

19
00:01:41,440 --> 00:01:45,160
Speaker 2: did really well. She's been on all the top one

20
00:01:45,240 --> 00:01:51,480
Speaker 2: hundred lists most influential thinkers, Women in Finance, policy influencers.

21
00:01:51,200 --> 00:01:58,000
Speaker 2: She's just really a fascinating person with a perspective that

22
00:01:58,120 --> 00:02:00,600
Speaker 2: is kind of hard to argue with. A lot of

23
00:02:00,640 --> 00:02:05,920
Speaker 2: what she believes is outside of the mainstream, but it

24
00:02:06,000 --> 00:02:10,920
Speaker 2: is really stood the test of time. When the traditional

25
00:02:10,960 --> 00:02:15,280
Speaker 2: economists have said and done things, They've made forecasts, they've

26
00:02:15,320 --> 00:02:19,320
Speaker 2: made predictions about what will and won't happen, and none

27
00:02:19,360 --> 00:02:22,960
Speaker 2: of it's come true. And so when the mainstream economists

28
00:02:23,000 --> 00:02:25,639
Speaker 2: are getting it wrong, you have to look at people

29
00:02:25,639 --> 00:02:29,639
Speaker 2: who approach the field from a different perspective. She's done

30
00:02:29,639 --> 00:02:32,519
Speaker 2: a really great job. I thought the conversation was fascinating

31
00:02:33,120 --> 00:02:36,840
Speaker 2: and I think you also. With no further ado, my

32
00:02:37,000 --> 00:02:41,519
Speaker 2: conversation with Sunny Stony Brooks Professor Stephanie Calton.

33
00:02:42,000 --> 00:02:44,359
Speaker 3: Thank you for having me, Nice to be here, Nice.

34
00:02:44,120 --> 00:02:46,120
Speaker 2: To have you. I've been wanting to have you here

35
00:02:46,240 --> 00:02:50,080
Speaker 2: since the book first came out during the pandemic, and

36
00:02:50,120 --> 00:02:53,320
Speaker 2: we'll spend a lot of time talking about it, but

37
00:02:53,639 --> 00:02:55,560
Speaker 2: before we get into that, I just want to get

38
00:02:55,800 --> 00:03:00,680
Speaker 2: a handle on your background. You get a bachelor's a

39
00:03:00,680 --> 00:03:06,120
Speaker 2: BA and a BS in economics and Business at California Sacramento,

40
00:03:06,200 --> 00:03:10,840
Speaker 2: then University of Cambridge Masters in philosophy and economics, then

41
00:03:10,880 --> 00:03:14,560
Speaker 2: a PhD in economics at the New School. That sounds

42
00:03:14,600 --> 00:03:16,919
Speaker 2: like you were teeing up for a career in academia.

43
00:03:17,040 --> 00:03:18,639
Speaker 2: What was the original plan.

44
00:03:19,400 --> 00:03:20,280
Speaker 3: To be a dentist?

45
00:03:20,800 --> 00:03:23,000
Speaker 2: Really? Yeah? Why a dentist?

46
00:03:23,360 --> 00:03:26,640
Speaker 3: I think you just think, you know, what do you

47
00:03:26,720 --> 00:03:30,800
Speaker 3: do for a living where you have, you know, decent

48
00:03:30,880 --> 00:03:32,880
Speaker 3: income and you know there's going to be.

49
00:03:32,880 --> 00:03:34,760
Speaker 2: A job and high suicide race.

50
00:03:34,960 --> 00:03:36,640
Speaker 3: I didn't think about that at the time, but I

51
00:03:36,720 --> 00:03:39,360
Speaker 3: learned later. I also didn't realize that you had to

52
00:03:39,360 --> 00:03:42,440
Speaker 3: work on cadavers, and so I figured out pretty early

53
00:03:42,480 --> 00:03:44,640
Speaker 3: on that that wasn't going to be the path. And

54
00:03:44,680 --> 00:03:47,520
Speaker 3: then I, you know, I switched. I was pre law

55
00:03:47,600 --> 00:03:51,240
Speaker 3: for a while. I was an accounting major for a

56
00:03:51,280 --> 00:03:53,640
Speaker 3: good period of time. I got well into the upper

57
00:03:53,680 --> 00:03:56,400
Speaker 3: division stuff, and then I couldn't imagine myself as an

58
00:03:56,440 --> 00:03:58,040
Speaker 3: accountant and I thought, what do you do You sit

59
00:03:58,120 --> 00:04:00,720
Speaker 3: in a room all day doing tax returns or something.

60
00:04:00,760 --> 00:04:03,560
Speaker 3: It's just not you know that it seemed anti social,

61
00:04:03,600 --> 00:04:07,160
Speaker 3: and so then it became finance and a series of accidents,

62
00:04:07,200 --> 00:04:10,480
Speaker 3: you know, you have that one professor who you stumble

63
00:04:10,560 --> 00:04:14,360
Speaker 3: on and it just changes your life. And my trajectory

64
00:04:14,680 --> 00:04:17,400
Speaker 3: changed to economics by accident.

65
00:04:17,839 --> 00:04:21,000
Speaker 2: Really fascinating. So you end up teaching at the University

66
00:04:21,080 --> 00:04:25,279
Speaker 2: of Missouri Kansas City for eighteen years from nineteen ninety

67
00:04:25,320 --> 00:04:31,120
Speaker 2: nine to twenty seventeen. Tell us, I'm curious. California to Cambridge,

68
00:04:31,920 --> 00:04:35,760
Speaker 2: to the New School in New York, and then Kansas City.

69
00:04:36,080 --> 00:04:38,520
Speaker 2: Tell us about this geographic progression.

70
00:04:39,680 --> 00:04:44,160
Speaker 3: Yeah, so I was doing my undergraduate at cal State Sacramento.

71
00:04:44,320 --> 00:04:46,880
Speaker 2: Were you originally a California girl or well, we were.

72
00:04:46,800 --> 00:04:49,440
Speaker 3: Living in North Carolina. I was a senior in high school.

73
00:04:49,440 --> 00:04:51,320
Speaker 3: I was going to go to the University of North Carolina.

74
00:04:51,440 --> 00:04:53,240
Speaker 3: My dad was in the military, so we lived all

75
00:04:53,240 --> 00:04:56,479
Speaker 3: over the place. And one day he came home and

76
00:04:56,520 --> 00:04:58,560
Speaker 3: he said, you know, we're sitting at the dinner table

77
00:04:58,560 --> 00:05:01,279
Speaker 3: and he announces that he put in his retirement papers

78
00:05:01,279 --> 00:05:03,400
Speaker 3: and the family was going to go back to California.

79
00:05:03,400 --> 00:05:06,400
Speaker 3: And I could either stay on the other side of

80
00:05:06,440 --> 00:05:09,720
Speaker 3: the country by myself at seventeen, well you know, a

81
00:05:09,760 --> 00:05:11,440
Speaker 3: college kid with a car that used to break down

82
00:05:11,480 --> 00:05:13,600
Speaker 3: on me all the time, or I could follow them

83
00:05:13,600 --> 00:05:16,400
Speaker 3: to California. Of course, I missed all the application deadlines,

84
00:05:16,400 --> 00:05:22,200
Speaker 3: and so I ended up going with them and doing

85
00:05:22,320 --> 00:05:25,200
Speaker 3: most of my undergraduate work at cal State Sacramento. And

86
00:05:25,720 --> 00:05:29,520
Speaker 3: that's where I ended up taking a micro theory course

87
00:05:29,560 --> 00:05:32,120
Speaker 3: with this guy named John Henry. And you know, I

88
00:05:32,120 --> 00:05:35,120
Speaker 3: could have picked any course in the catalog, any Tuesday

89
00:05:35,160 --> 00:05:39,000
Speaker 3: Thursday section. I happened to pick that one, and he

90
00:05:39,120 --> 00:05:41,680
Speaker 3: just kept encouraging me to keep going. And by the

91
00:05:41,680 --> 00:05:43,520
Speaker 3: time I took the History of Economic Thought, I was

92
00:05:43,600 --> 00:05:46,880
Speaker 3: really hooked. And he took me out to lunch one day.

93
00:05:46,920 --> 00:05:49,280
Speaker 3: I was thinking about graduate school because he said, you know,

94
00:05:49,320 --> 00:05:51,839
Speaker 3: you ought to think about it, and so he took

95
00:05:51,839 --> 00:05:55,640
Speaker 3: me to lunch, and this guy named Randy Ray happened

96
00:05:55,640 --> 00:05:58,839
Speaker 3: to be in town. And Randy is an economist. He

97
00:05:59,600 --> 00:06:02,760
Speaker 3: did his PhD dissertation at WashU under I'm in Minsky.

98
00:06:02,880 --> 00:06:05,440
Speaker 3: So a lot of listeners will be familiar with Minski

99
00:06:05,520 --> 00:06:07,520
Speaker 3: because it's stuff like the Minski Moment and all that.

100
00:06:08,440 --> 00:06:11,240
Speaker 3: And so Randy came to lunch. I'd never met him before,

101
00:06:11,320 --> 00:06:14,080
Speaker 3: I knew who he was. But John said, to Randy,

102
00:06:14,480 --> 00:06:16,440
Speaker 3: give her some advice, tell her what she should do

103
00:06:16,720 --> 00:06:20,160
Speaker 3: about graduate school. And Randy said go to Harvard, and

104
00:06:20,240 --> 00:06:22,880
Speaker 3: John said no, no, no, no, don't listen to him.

105
00:06:23,240 --> 00:06:27,440
Speaker 3: And he was totally opposed. Why because I think he

106
00:06:27,720 --> 00:06:31,600
Speaker 3: rightly understood that if I had gone to Harvard that

107
00:06:31,680 --> 00:06:35,360
Speaker 3: I would have received a certain kind of training. And

108
00:06:35,440 --> 00:06:39,720
Speaker 3: by that point I was already you know, people will

109
00:06:39,800 --> 00:06:42,240
Speaker 3: use the word heterodox. I don't like that word, but

110
00:06:43,080 --> 00:06:46,160
Speaker 3: for lack of a better synonym at the moment, I'll

111
00:06:46,200 --> 00:06:48,679
Speaker 3: just use it. But you know, I had been reading

112
00:06:48,800 --> 00:06:51,840
Speaker 3: people like Minski and I was really into that kind

113
00:06:51,839 --> 00:06:54,440
Speaker 3: of stuff and Veblen and you know, the history of

114
00:06:54,480 --> 00:06:56,840
Speaker 3: thought really grabbed me. And I think John understood that

115
00:06:56,839 --> 00:07:00,599
Speaker 3: if I'd gone to Harvard, I would have gotten really

116
00:07:00,640 --> 00:07:03,120
Speaker 3: conventional training and I wouldn't have been exposed to some

117
00:07:03,200 --> 00:07:06,680
Speaker 3: of the really interesting thinkers and theorists. So John Henry

118
00:07:06,680 --> 00:07:09,920
Speaker 3: said go to Cambridge, not Harvard, but go to Cambridge University.

119
00:07:09,960 --> 00:07:12,640
Speaker 3: And there were people there he thought were interesting. And

120
00:07:13,040 --> 00:07:14,240
Speaker 3: that's what I ended up doing.

121
00:07:14,360 --> 00:07:19,720
Speaker 2: Huh. So Thorstin Veblin fascinating, probably the earliest theorist on

122
00:07:19,800 --> 00:07:23,640
Speaker 2: consumer spending and materialism, and kind of interesting that you

123
00:07:23,760 --> 00:07:29,320
Speaker 2: gravitated towards that and away from just being cranked out

124
00:07:29,320 --> 00:07:34,120
Speaker 2: of the factory to become another consultant. Not your path, No,

125
00:07:34,200 --> 00:07:34,720
Speaker 2: it wasn't.

126
00:07:34,760 --> 00:07:36,840
Speaker 3: And you know, when I was at Cambridge, i was there,

127
00:07:37,680 --> 00:07:40,880
Speaker 3: it was a very unusual program because you know, you

128
00:07:40,960 --> 00:07:43,960
Speaker 3: show up straight out of undergrad you do four courses.

129
00:07:44,040 --> 00:07:46,840
Speaker 3: Each course is one year long, and at the end

130
00:07:46,880 --> 00:07:50,520
Speaker 3: of the one year period you start writing a dissertation.

131
00:07:50,880 --> 00:07:54,800
Speaker 3: And then you're a PhD economist, having four courses at

132
00:07:54,840 --> 00:07:57,120
Speaker 3: the graduate level under your belt. And I thought, how

133
00:07:57,120 --> 00:07:59,400
Speaker 3: do you sell yourself as an economist? Really, it just

134
00:07:59,440 --> 00:08:02,000
Speaker 3: didn't feel right, and I wasn't sure I could compete

135
00:08:02,360 --> 00:08:05,040
Speaker 3: for a job in academia, which is four courses, and

136
00:08:05,320 --> 00:08:08,320
Speaker 3: most of the you know, kids, I'll say kids, most

137
00:08:08,320 --> 00:08:11,880
Speaker 3: of the people that I did the master's degree with,

138
00:08:12,040 --> 00:08:14,240
Speaker 3: they were flying back to the US and they were

139
00:08:14,280 --> 00:08:16,760
Speaker 3: interviewing for Wall Street jobs. And I knew that that

140
00:08:16,880 --> 00:08:20,160
Speaker 3: was not my path. And I've already gotten a fellowship

141
00:08:20,760 --> 00:08:23,360
Speaker 3: from Cambridge University through christ College to go to the

142
00:08:23,440 --> 00:08:27,920
Speaker 3: Levy Institute and spend a year working on the dissertation.

143
00:08:28,680 --> 00:08:29,840
Speaker 3: And so I went away.

144
00:08:29,960 --> 00:08:32,520
Speaker 2: So this is this is a year of four classes.

145
00:08:32,600 --> 00:08:35,400
Speaker 2: I finished a full year class. This kind of reminds

146
00:08:35,440 --> 00:08:37,320
Speaker 2: me a little bit of law school where you're taking

147
00:08:37,920 --> 00:08:43,800
Speaker 2: the four gut courses towards civil procedure, property and uh

148
00:08:44,160 --> 00:08:47,960
Speaker 2: law No klo was second year what was the contracts

149
00:08:48,520 --> 00:08:52,240
Speaker 2: And they're like killer courses and you're taking forum at once.

150
00:08:52,679 --> 00:08:55,559
Speaker 2: Then you have a full additional year to work on

151
00:08:55,679 --> 00:09:00,440
Speaker 2: your not PhD dissertation. But master's dissertation. Is that right?

152
00:09:00,880 --> 00:09:02,120
Speaker 3: No? It would it be the PhD.

153
00:09:02,320 --> 00:09:04,560
Speaker 2: Oh. So you do a year of four classes and

154
00:09:04,600 --> 00:09:05,559
Speaker 2: then the pH.

155
00:09:05,320 --> 00:09:07,520
Speaker 3: And then you write your dissertation and you have a PhD.

156
00:09:07,640 --> 00:09:09,880
Speaker 2: So I hold the who ho ho? So so you

157
00:09:09,920 --> 00:09:13,200
Speaker 2: get a PhD from Cambridge and then you go to

158
00:09:13,240 --> 00:09:15,079
Speaker 2: the New School for a PhD in economics.

159
00:09:15,120 --> 00:09:18,600
Speaker 3: So I started on the journey I took. I got

160
00:09:18,600 --> 00:09:23,040
Speaker 3: the fellowship, which was go to the Levi Institute. It's

161
00:09:23,040 --> 00:09:25,160
Speaker 3: an upstate New York. It's right there on the campus

162
00:09:25,160 --> 00:09:27,920
Speaker 3: of Bard College, kind of in the Hudson Valley. Very lovely,

163
00:09:28,200 --> 00:09:31,280
Speaker 3: it's beautiful up there. And so they gave me money

164
00:09:31,440 --> 00:09:34,040
Speaker 3: and the Levy Institute gave me, you know, office space

165
00:09:34,120 --> 00:09:36,480
Speaker 3: and housing, and they had this arrangement with Cambridge and

166
00:09:36,520 --> 00:09:38,199
Speaker 3: the idea was you go when you spend a year

167
00:09:38,240 --> 00:09:41,680
Speaker 3: there and you start writing, and then you would return

168
00:09:42,040 --> 00:09:43,559
Speaker 3: and finish up the PhD.

169
00:09:43,800 --> 00:09:45,680
Speaker 2: So Wolden Pond for economics.

170
00:09:46,280 --> 00:09:49,200
Speaker 3: Honest, it was like magic. And I get there and

171
00:09:49,320 --> 00:09:52,839
Speaker 3: Randy Ray is there. He's on a sabbatical, I think,

172
00:09:52,880 --> 00:09:55,520
Speaker 3: and he's doing research there. But I meet this guy

173
00:09:55,600 --> 00:09:59,800
Speaker 3: named Wynn Godley, and Godly is just a fascinating character

174
00:10:00,160 --> 00:10:02,600
Speaker 3: about him a little bit in the book. He really

175
00:10:02,960 --> 00:10:06,920
Speaker 3: pioneers the work around sectoral financial balances and stock flow

176
00:10:06,960 --> 00:10:09,800
Speaker 3: consistent modeling. And he's this old British guy who was,

177
00:10:10,360 --> 00:10:14,800
Speaker 3: you know, quite famous in England as a policy advisor

178
00:10:14,880 --> 00:10:17,240
Speaker 3: and an economic forecaster. He was known as one of

179
00:10:17,280 --> 00:10:21,240
Speaker 3: the Seven Wise Men. And anyway, his office was right

180
00:10:21,280 --> 00:10:23,000
Speaker 3: next to mine. We shared a wall. He would sit

181
00:10:23,040 --> 00:10:27,160
Speaker 3: in his office and play the Obo and just an

182
00:10:27,200 --> 00:10:30,480
Speaker 3: amazing person. And I learned so much from him that

183
00:10:31,080 --> 00:10:33,800
Speaker 3: I got there and I thought, there's so much more

184
00:10:33,800 --> 00:10:37,200
Speaker 3: to learn. I've done four courses, but I don't know enough.

185
00:10:37,240 --> 00:10:39,840
Speaker 3: So I started taking the train once a week, I'd

186
00:10:39,840 --> 00:10:42,480
Speaker 3: go down to New York City and I would sit

187
00:10:42,520 --> 00:10:45,520
Speaker 3: in on courses at the New School. And I mean,

188
00:10:46,120 --> 00:10:48,480
Speaker 3: I was surrounded by people I thought were ten times

189
00:10:48,760 --> 00:10:51,439
Speaker 3: brighter than I was they were more thoughtful. They were

190
00:10:51,440 --> 00:10:54,960
Speaker 3: having conversations that felt, you know, important and weighty. And

191
00:10:55,320 --> 00:10:58,480
Speaker 3: I thought, oh, there's no way, you know, I'm not ready.

192
00:10:59,200 --> 00:11:01,760
Speaker 3: I need to to stick around and do some more coursework.

193
00:11:01,800 --> 00:11:05,400
Speaker 3: And so that's what happened. I transferred. I finished up

194
00:11:05,400 --> 00:11:08,599
Speaker 3: at the New School when Godly served on my dissertation committee.

195
00:11:08,640 --> 00:11:12,839
Speaker 3: And that's that's kind of how the journey unwrapped.

196
00:11:13,120 --> 00:11:16,360
Speaker 2: Really fascinating. How do you end up in Missouri Kansas City.

197
00:11:17,240 --> 00:11:21,280
Speaker 3: So another person who had a major impact on my life.

198
00:11:21,960 --> 00:11:24,040
Speaker 3: A lot of people if they hear his name and

199
00:11:24,800 --> 00:11:27,840
Speaker 3: recognize it, they'll say, oh, Warren Mosler, the father of MMT.

200
00:11:28,600 --> 00:11:34,080
Speaker 3: So Warren was funding a small program at the New School.

201
00:11:34,200 --> 00:11:38,320
Speaker 3: He was supporting some graduate students, and he had a

202
00:11:38,320 --> 00:11:42,520
Speaker 3: faculty member there named Ednell who had students kind of

203
00:11:42,559 --> 00:11:45,280
Speaker 3: working on Warren's ideas. And I was part of that group.

204
00:11:45,960 --> 00:11:50,160
Speaker 3: And Randy Ray who was at the Levy Institute, another

205
00:11:50,440 --> 00:11:54,720
Speaker 3: economist named Matt Forstatter who was at Levy, and I

206
00:11:54,800 --> 00:11:57,920
Speaker 3: all ended up going to UMKC in the same year

207
00:11:57,960 --> 00:12:01,760
Speaker 3: because Warren, you know, provided some seed money to help

208
00:12:01,800 --> 00:12:05,320
Speaker 3: the graduate student program really kind of build itself up

209
00:12:05,360 --> 00:12:10,840
Speaker 3: there bring some economists in have a you know what

210
00:12:10,920 --> 00:12:14,920
Speaker 3: an outpost, I guess for tea and so we all

211
00:12:14,960 --> 00:12:15,520
Speaker 3: went together.

212
00:12:16,000 --> 00:12:20,640
Speaker 2: So what brought you in twenty seventeen to my alma matas,

213
00:12:20,679 --> 00:12:24,920
Speaker 2: Junie stony Brook. What led you to move over there

214
00:12:24,960 --> 00:12:26,320
Speaker 2: and what's your focus there?

215
00:12:27,360 --> 00:12:30,840
Speaker 3: Well, my husband was the associate dean at the University

216
00:12:30,840 --> 00:12:33,360
Speaker 3: of Kansas and I was the chair of the department

217
00:12:33,600 --> 00:12:37,240
Speaker 3: at the University of Missouri in Kansas City. I had

218
00:12:37,280 --> 00:12:39,440
Speaker 3: taken a bit of time away to work on the hill,

219
00:12:39,760 --> 00:12:42,760
Speaker 3: and so anyway we were, you know, the universities are

220
00:12:42,960 --> 00:12:46,760
Speaker 3: about an hour apart. We lived in Lawrence, Kansas. It's

221
00:12:46,800 --> 00:12:49,320
Speaker 3: a great little college town. We loved it, you know,

222
00:12:49,400 --> 00:12:51,600
Speaker 3: season tickets to the men's basketball games and all that

223
00:12:51,679 --> 00:12:54,400
Speaker 3: kind of stuff. It was a lot of fun. But

224
00:12:55,720 --> 00:12:58,240
Speaker 3: he had one foot in the administration and one foot

225
00:12:58,320 --> 00:13:01,160
Speaker 3: in academia. And you know, he a history professor. He

226
00:13:01,200 --> 00:13:03,000
Speaker 3: writes a lot of books, and so he kind of

227
00:13:03,040 --> 00:13:05,800
Speaker 3: put himself out there on the job market and he thought, well,

228
00:13:05,840 --> 00:13:07,880
Speaker 3: I could either go for a dean position, or I

229
00:13:07,880 --> 00:13:10,760
Speaker 3: could you know, go for some kind of endowed chair somewhere,

230
00:13:10,800 --> 00:13:15,040
Speaker 3: you know, move up. And so Stonywork had a position

231
00:13:15,120 --> 00:13:17,840
Speaker 3: for an endowed share in the History Department, and he

232
00:13:17,880 --> 00:13:20,040
Speaker 3: interviewed for it and they liked him. And then the

233
00:13:20,240 --> 00:13:23,360
Speaker 3: provost at the time was an economist. I think he

234
00:13:23,440 --> 00:13:27,240
Speaker 3: had been Jamie Galbraith's roommate at Yale, and he found

235
00:13:27,320 --> 00:13:30,840
Speaker 3: out who Paul Kelton was married to, and then I

236
00:13:30,880 --> 00:13:33,840
Speaker 3: think the conversations between the Dean and the provost started.

237
00:13:33,920 --> 00:13:36,199
Speaker 3: They said, we got to get this two for we

238
00:13:36,240 --> 00:13:39,280
Speaker 3: got to get him, and so we did. We decided

239
00:13:39,320 --> 00:13:42,200
Speaker 3: it was it was a great opportunity to you know,

240
00:13:42,320 --> 00:13:45,280
Speaker 3: go and be together and you know, build and I

241
00:13:45,280 --> 00:13:48,240
Speaker 3: could do public policy and economics and that was going

242
00:13:48,320 --> 00:13:50,200
Speaker 3: to be you know, really appealing for me because I

243
00:13:50,240 --> 00:13:52,880
Speaker 3: was just teaching economics at UMKC.

244
00:13:53,480 --> 00:13:56,400
Speaker 2: Now you just briefly alluded to your time on the hill.

245
00:13:57,760 --> 00:14:00,959
Speaker 2: You were the chief economist for the US Senate Budget

246
00:14:00,960 --> 00:14:04,640
Speaker 2: Committee during was that during the Obama administration.

247
00:14:04,320 --> 00:14:08,000
Speaker 3: For the Democrats stuff? So, yeah, there are the Republicans

248
00:14:08,000 --> 00:14:10,160
Speaker 3: have one, the Democrats have one.

249
00:14:10,240 --> 00:14:13,880
Speaker 2: Who was your who was on the other side.

250
00:14:14,400 --> 00:14:20,120
Speaker 3: Mike Enzi, Senator Mike Enzie uh huh from Wyoming.

251
00:14:19,960 --> 00:14:23,520
Speaker 2: Was the Democrat or Republican on the well.

252
00:14:23,560 --> 00:14:25,920
Speaker 3: The Republicans had the Senate. Democrats had the House at

253
00:14:25,920 --> 00:14:30,320
Speaker 3: the time, and so Bernie Sanders was the ranking member

254
00:14:30,360 --> 00:14:31,400
Speaker 3: and hired.

255
00:14:32,120 --> 00:14:35,480
Speaker 2: Wait, so you're the chief economist for the Democrat US

256
00:14:35,520 --> 00:14:38,240
Speaker 2: Senate Budget Committee, who was the chief economists for the

257
00:14:38,280 --> 00:14:43,200
Speaker 2: Republicans bill something, so not someone you interacted a lot

258
00:14:43,240 --> 00:14:45,200
Speaker 2: with you, No.

259
00:14:45,760 --> 00:14:48,000
Speaker 3: I when I got to the hill. I think it

260
00:14:48,040 --> 00:14:51,080
Speaker 3: was just the first few days after I arrived. He

261
00:14:51,160 --> 00:14:53,120
Speaker 3: reached out to me. It was a really nice guy,

262
00:14:53,200 --> 00:14:55,520
Speaker 3: and he said, you want to get together and have

263
00:14:55,600 --> 00:14:58,000
Speaker 3: coffee and I'll kind of tell you how this whole

264
00:14:58,000 --> 00:14:59,720
Speaker 3: thing works. And I said that would be sure, that'd

265
00:14:59,720 --> 00:15:01,840
Speaker 3: be really nice. So the two of us sat and

266
00:15:02,440 --> 00:15:05,320
Speaker 3: it was really interesting because you know, he's chief economist

267
00:15:05,400 --> 00:15:09,160
Speaker 3: for the senators on the Budget Committee, the Republican side,

268
00:15:09,200 --> 00:15:11,440
Speaker 3: and I'm there for the Democrats. And he said, look,

269
00:15:11,960 --> 00:15:15,120
Speaker 3: we're in charge because we have the majority. So periodically

270
00:15:15,200 --> 00:15:17,160
Speaker 3: every week, couple of weeks or whatever, we're going to

271
00:15:17,240 --> 00:15:19,360
Speaker 3: call a hearing. We get to decide what the hearing

272
00:15:19,440 --> 00:15:23,359
Speaker 3: is about, and we're going to get usually three witnesses

273
00:15:23,400 --> 00:15:25,960
Speaker 3: to testify, and you guys will get two, and we'll

274
00:15:25,960 --> 00:15:28,360
Speaker 3: try to give you as much notice as we can

275
00:15:28,440 --> 00:15:30,480
Speaker 3: to liign your witnesses up. We'll go for a week.

276
00:15:30,560 --> 00:15:32,800
Speaker 3: You won't always get that, but here's how it's going

277
00:15:32,880 --> 00:15:34,520
Speaker 3: to go. You know, we'll say where you want to

278
00:15:34,520 --> 00:15:38,440
Speaker 3: have a hearing on you know, I don't know, disability,

279
00:15:38,440 --> 00:15:42,360
Speaker 3: fraud and disability, or the budget crisis or whatever the

280
00:15:42,400 --> 00:15:45,240
Speaker 3: hell it is. And you know, maybe we'll reach out

281
00:15:45,280 --> 00:15:49,080
Speaker 3: to the people at Heritage or CATO or AI or

282
00:15:49,120 --> 00:15:50,720
Speaker 3: someplace like that, and we'll say, I need a quick

283
00:15:50,760 --> 00:15:53,000
Speaker 3: paper on X y Z, you know, leading up to

284
00:15:53,040 --> 00:15:54,920
Speaker 3: this hearing, because they want to make their points as

285
00:15:54,920 --> 00:15:56,960
Speaker 3: strongly as they can. He said, you might want to

286
00:15:57,000 --> 00:15:59,520
Speaker 3: reach out to the people at CAP or the Center

287
00:15:59,560 --> 00:16:03,000
Speaker 3: on Budget Policy Priorities or Washington Center for Equitable Growth

288
00:16:03,080 --> 00:16:05,400
Speaker 3: or EPI. You know, like you know, you're just so is.

289
00:16:05,400 --> 00:16:12,600
Speaker 2: That friendly and non adversarial because the you know, when

290
00:16:12,720 --> 00:16:16,080
Speaker 2: I was growing up, there were different parties, but there

291
00:16:16,200 --> 00:16:19,760
Speaker 2: was some bipartisan everybody seemed to be focused on what

292
00:16:19,800 --> 00:16:22,080
Speaker 2: are we going to do to make life better for everybody?

293
00:16:22,480 --> 00:16:25,200
Speaker 2: And then it just sort of devolved into this partisan

294
00:16:25,200 --> 00:16:30,800
Speaker 2: wrangling where the sort of collegial dare I say, academic

295
00:16:30,920 --> 00:16:34,600
Speaker 2: relationship across the aisle that seems to have gone away.

296
00:16:35,240 --> 00:16:37,840
Speaker 3: Yeah, I mean we had a nice report. I will

297
00:16:37,880 --> 00:16:42,800
Speaker 3: say that that most of it felt to me very performative.

298
00:16:43,320 --> 00:16:45,960
Speaker 3: You know, it was you said, making people's lives better.

299
00:16:46,000 --> 00:16:48,760
Speaker 3: I don't think I ever really had the sense that

300
00:16:48,760 --> 00:16:51,920
Speaker 3: that was what these hearings were about. A lot of

301
00:16:51,960 --> 00:16:55,080
Speaker 3: it was allowing folks to have their five minutes of

302
00:16:55,560 --> 00:16:57,160
Speaker 3: you know, I don't know.

303
00:16:57,280 --> 00:17:01,640
Speaker 2: Oh, I mean, this is long before a long before W.

304
00:17:02,520 --> 00:17:07,680
Speaker 2: George W. Bush back in the I don't know, maybe

305
00:17:07,760 --> 00:17:16,320
Speaker 2: I'm maybe I'm romanticizing. Yeah, Johnson Nixon, Ford, Carter Reagan era,

306
00:17:16,480 --> 00:17:19,760
Speaker 2: but it seemed like Tip O'Neil and Ronald Reagan. The

307
00:17:19,840 --> 00:17:21,840
Speaker 2: joke was they would argue all day and then they

308
00:17:21,880 --> 00:17:23,040
Speaker 2: go out and have a beer together.

309
00:17:23,240 --> 00:17:23,480
Speaker 1: Yeah.

310
00:17:24,080 --> 00:17:28,120
Speaker 3: Well, I think there was still some of that around

311
00:17:28,160 --> 00:17:30,919
Speaker 3: when I was there. And you know, there's certainly you know,

312
00:17:30,960 --> 00:17:35,240
Speaker 3: Bernie's Sanders for all the you know, personality and so forth,

313
00:17:35,240 --> 00:17:38,960
Speaker 3: people associate him with a really kind of cantankerous old guy.

314
00:17:39,440 --> 00:17:42,800
Speaker 3: He's just as friendly as anybody else on the committee.

315
00:17:42,840 --> 00:17:45,080
Speaker 3: Mike Enzie, the chair of the committee, was just like

316
00:17:45,119 --> 00:17:47,199
Speaker 3: you'd look at him and think that's my grandpa. You know.

317
00:17:47,320 --> 00:17:52,960
Speaker 3: He's just a mild mannered, soft spoken very easy. But

318
00:17:53,600 --> 00:17:54,879
Speaker 3: things have changed obviously.

319
00:17:56,840 --> 00:17:59,679
Speaker 2: So let's talk a little bit about the book first.

320
00:18:00,080 --> 00:18:01,680
Speaker 2: What was the inspiration to.

321
00:18:01,680 --> 00:18:06,200
Speaker 3: Write this frustration? Really? You know, I don't. I don't

322
00:18:06,280 --> 00:18:09,680
Speaker 3: enjoy writing. I don't like the process. I don't I

323
00:18:09,720 --> 00:18:11,480
Speaker 3: don't like sitting still that much.

324
00:18:12,600 --> 00:18:13,600
Speaker 2: That's really interesting.

325
00:18:13,800 --> 00:18:17,679
Speaker 3: Yeah, I could never write a book because I wanted to.

326
00:18:17,880 --> 00:18:20,119
Speaker 3: I wrote it because I felt like I had to.

327
00:18:20,400 --> 00:18:23,520
Speaker 2: I've had that experience. I've had. I've had both. I've

328
00:18:23,520 --> 00:18:26,240
Speaker 2: had the I just got to get this out because

329
00:18:26,280 --> 00:18:29,119
Speaker 2: it's burning a hole in my brain. But I've also

330
00:18:29,200 --> 00:18:32,320
Speaker 2: had the oh, let's have some fun and play with

331
00:18:32,359 --> 00:18:39,680
Speaker 2: some interesting ideas. That's a little less tedious and cathartic.

332
00:18:41,440 --> 00:18:43,720
Speaker 2: But this just had to come out. Is that was

333
00:18:43,800 --> 00:18:45,680
Speaker 2: that you had to get it out of your head

334
00:18:45,760 --> 00:18:46,920
Speaker 2: or I.

335
00:18:46,880 --> 00:18:48,399
Speaker 3: Had to get it out. It's so funny that you

336
00:18:48,560 --> 00:18:52,359
Speaker 3: use that metaphor or that kind of terminology. Because I

337
00:18:52,400 --> 00:18:55,480
Speaker 3: had a conversation with Mary Ann Williamson.

338
00:18:56,119 --> 00:18:57,520
Speaker 2: You know, why do I know that name?

339
00:18:57,600 --> 00:19:03,000
Speaker 3: Because she ran for president? Oh yeah, okay, and I

340
00:19:03,040 --> 00:19:05,879
Speaker 3: had just moved out to Stonybrook. We just moved to

341
00:19:05,920 --> 00:19:09,480
Speaker 3: Long Island, and I get this email from this person.

342
00:19:09,560 --> 00:19:12,320
Speaker 3: I've never heard of before. And she said, we have

343
00:19:12,359 --> 00:19:15,439
Speaker 3: a mutual friend. And he says that I need to

344
00:19:15,480 --> 00:19:17,639
Speaker 3: talk to you because I want to try to understand

345
00:19:17,840 --> 00:19:20,800
Speaker 3: economics better. Can I? I will come to you. You

346
00:19:20,800 --> 00:19:24,760
Speaker 3: know what would you talk to me? And I said,

347
00:19:25,080 --> 00:19:28,200
Speaker 3: I guess, so you know, sure you're gonna come to me.

348
00:19:28,400 --> 00:19:31,439
Speaker 3: So one day I'm sitting in the house sweatpants whatever,

349
00:19:31,520 --> 00:19:33,680
Speaker 3: you know, T shirt. We're in the basement my husband.

350
00:19:33,720 --> 00:19:36,080
Speaker 3: I think we're watching a football game or something, and

351
00:19:36,160 --> 00:19:38,480
Speaker 3: all of a sudden I get the notification on my phone,

352
00:19:38,640 --> 00:19:41,160
Speaker 3: you know, and it says Marian Williamson is coming at

353
00:19:41,400 --> 00:19:43,280
Speaker 3: four o'clock or whatever. And I thought, oh, was.

354
00:19:43,240 --> 00:19:46,720
Speaker 2: She running by that time with like secret service. Oh no, no,

355
00:19:46,920 --> 00:19:49,560
Speaker 2: so just a very casual drop by years.

356
00:19:49,359 --> 00:19:55,560
Speaker 3: Before, years before that. And yeah, so I see this notification.

357
00:19:55,640 --> 00:19:58,119
Speaker 3: I said, oh jesus, you know. My husband said, what

358
00:19:58,240 --> 00:20:00,359
Speaker 3: I said, somebody is coming over? He said, who's coming over?

359
00:20:00,440 --> 00:20:03,000
Speaker 3: I said, I don't know. I said, You've got somebody

360
00:20:03,000 --> 00:20:04,560
Speaker 3: coming over and you don't know who it is. So

361
00:20:04,640 --> 00:20:08,880
Speaker 3: I google and I see Larry King New York Times Bestsellers,

362
00:20:09,080 --> 00:20:11,360
Speaker 3: seven books and all the stuff. I thought, Oh Jesus,

363
00:20:11,359 --> 00:20:14,160
Speaker 3: you know, I got to change, So I changed clothes,

364
00:20:14,160 --> 00:20:15,800
Speaker 3: I went to the grocer store. I got some, you know,

365
00:20:15,880 --> 00:20:18,400
Speaker 3: things to put out and host her and so forth.

366
00:20:18,440 --> 00:20:22,280
Speaker 3: So she's she's a very sweet lady, you know. She

367
00:20:22,800 --> 00:20:25,119
Speaker 3: came to the house and I mentioned that I was

368
00:20:25,240 --> 00:20:27,760
Speaker 3: kind of toying with the idea of writing a book,

369
00:20:28,040 --> 00:20:32,119
Speaker 3: and she said, Darling, you must be pregnant with a book.

370
00:20:32,760 --> 00:20:33,320
Speaker 2: I get that.

371
00:20:33,680 --> 00:20:37,640
Speaker 3: Okay, I didn't get it at the time she said it,

372
00:20:37,720 --> 00:20:40,840
Speaker 3: but I understand it now that it's exactly what you said.

373
00:20:40,880 --> 00:20:43,880
Speaker 3: There's something that's in you that you just have to

374
00:20:44,240 --> 00:20:48,200
Speaker 3: push out. And that's the best I can.

375
00:20:48,760 --> 00:20:51,359
Speaker 2: No, that makes perfect sense. But pregnant with the book

376
00:20:51,440 --> 00:20:52,840
Speaker 2: is a great listen.

377
00:20:52,920 --> 00:20:55,640
Speaker 3: I got pregnant, Barry. It wasn't expecting.

378
00:20:57,080 --> 00:21:00,960
Speaker 2: It's funny because my last book was fit fifteen years ago,

379
00:21:01,640 --> 00:21:03,480
Speaker 2: and now I have a new one coming out and

380
00:21:04,040 --> 00:21:06,240
Speaker 2: the next one will be in twenty forty. I'm like,

381
00:21:06,560 --> 00:21:10,800
Speaker 2: I'm clockwork every fifteen years because it takes not only

382
00:21:10,840 --> 00:21:13,800
Speaker 2: does it take a lot out of you, but it's

383
00:21:14,040 --> 00:21:17,679
Speaker 2: you have to really enjoy sitting alone in front of

384
00:21:17,680 --> 00:21:23,399
Speaker 2: a screen typing, and you end up spending writing is

385
00:21:23,440 --> 00:21:26,600
Speaker 2: the easy part. It's the eddling. That's so difficult because

386
00:21:27,320 --> 00:21:30,840
Speaker 2: the first draft is, you know, the final version is

387
00:21:31,040 --> 00:21:34,360
Speaker 2: ten steps removed from the first draft, and you don't

388
00:21:34,440 --> 00:21:38,280
Speaker 2: realize how much time you spend thinking about why a

389
00:21:38,280 --> 00:21:41,199
Speaker 2: semi colon and not a comma in this parrot? Like

390
00:21:41,800 --> 00:21:46,639
Speaker 2: just dumb things. But it is a birthing process, and

391
00:21:46,720 --> 00:21:50,199
Speaker 2: it is messy and painful, to say the very least.

392
00:21:50,760 --> 00:21:54,480
Speaker 2: But that brings me to a really interesting question. The

393
00:21:54,520 --> 00:21:58,880
Speaker 2: book comes out in June twenty twenty, instant acclaim New

394
00:21:58,920 --> 00:22:03,560
Speaker 2: York Times bestseller list. How giant of a surprise was

395
00:22:03,600 --> 00:22:04,320
Speaker 2: that reaction?

396
00:22:05,320 --> 00:22:05,919
Speaker 3: Huge?

397
00:22:06,080 --> 00:22:06,399
Speaker 1: Huge?

398
00:22:06,520 --> 00:22:06,720
Speaker 2: Right?

399
00:22:06,920 --> 00:22:10,600
Speaker 3: For sure? The phone rang. My editor was on the

400
00:22:10,640 --> 00:22:14,439
Speaker 3: line and he was just tickled, tickled pink, and he said,

401
00:22:14,600 --> 00:22:18,120
Speaker 3: I want to be the first to congratulate you, and

402
00:22:17,520 --> 00:22:19,560
Speaker 3: he he knew what the list was going to look

403
00:22:19,600 --> 00:22:21,320
Speaker 3: like the next morning, and really.

404
00:22:21,320 --> 00:22:23,240
Speaker 2: Yeah, wow, So number one on the New.

405
00:22:23,240 --> 00:22:24,919
Speaker 3: York Times, No number one, but it was in the

406
00:22:24,920 --> 00:22:28,000
Speaker 3: top whatever it made the list. I think there were

407
00:22:28,000 --> 00:22:30,679
Speaker 3: fifteen and oh really thirteenth or something.

408
00:22:31,119 --> 00:22:35,800
Speaker 2: Yeah, amazing, that's amazing. So the book publishes June twenty twenty.

409
00:22:36,440 --> 00:22:40,359
Speaker 2: I'm going to assume you finished writing that before the pandemic,

410
00:22:40,440 --> 00:22:44,960
Speaker 2: before the largest government stimulus since World War Two. What

411
00:22:45,400 --> 00:22:47,480
Speaker 2: was the reaction to putting a book out in the

412
00:22:47,480 --> 00:22:48,600
Speaker 2: middle of the pandemic?

413
00:22:49,640 --> 00:22:52,439
Speaker 3: I was it was in January of twenty twenty. I

414
00:22:52,520 --> 00:22:54,120
Speaker 3: was in Australia and.

415
00:22:54,440 --> 00:22:56,080
Speaker 2: Oh, so you were out and about traveling.

416
00:22:56,200 --> 00:22:58,360
Speaker 3: You know, we didn't know it was January.

417
00:22:58,840 --> 00:23:02,879
Speaker 2: We were in flight in January twenty twenty, and like

418
00:23:03,880 --> 00:23:06,639
Speaker 2: you didn't have a clue what was coming at all.

419
00:23:07,000 --> 00:23:10,520
Speaker 3: I was there and I had the copy edited manuscript

420
00:23:10,680 --> 00:23:12,640
Speaker 3: in front of me, and I remember just going through

421
00:23:12,680 --> 00:23:17,960
Speaker 3: it one last time, and you know, two months later,

422
00:23:18,000 --> 00:23:21,520
Speaker 3: the world changed and I managed to get there was

423
00:23:21,600 --> 00:23:24,600
Speaker 3: room on the last page of the introduction or preface

424
00:23:24,680 --> 00:23:27,000
Speaker 3: or something like that, and they allowed me to add

425
00:23:27,000 --> 00:23:28,080
Speaker 3: a paragraph as.

426
00:23:27,960 --> 00:23:30,200
Speaker 2: Well as it doesn't affect the pagination the rest what

427
00:23:30,280 --> 00:23:30,920
Speaker 2: they said.

428
00:23:30,680 --> 00:23:33,959
Speaker 3: That's exactly I got. Really lucky. And so there is

429
00:23:34,200 --> 00:23:36,840
Speaker 3: some commentary in the hardback the very first, you know,

430
00:23:37,320 --> 00:23:40,239
Speaker 3: published edition of the book about the pandemic. But that

431
00:23:40,359 --> 00:23:43,359
Speaker 3: left my hands in March, and in June it was

432
00:23:43,520 --> 00:23:44,720
Speaker 3: out in stores.

433
00:23:44,960 --> 00:23:48,080
Speaker 2: So let's talk a little bit about the deficit myth.

434
00:23:48,920 --> 00:23:52,760
Speaker 2: I've heard pretty much since Ronald Reagan was elected president

435
00:23:53,160 --> 00:23:57,360
Speaker 2: in nineteen eighty. Deficits are going to crowd out private capital,

436
00:23:57,520 --> 00:24:02,560
Speaker 2: choke off innovation. It'll reduce this new company formation, It'll

437
00:24:02,600 --> 00:24:06,000
Speaker 2: make us barring cost skyrocket, will devalue the US dollar.

438
00:24:06,040 --> 00:24:08,920
Speaker 2: It's going to cause rampant inflation, and it will act

439
00:24:09,560 --> 00:24:14,120
Speaker 2: as a drag on the overall economy. None of these

440
00:24:14,160 --> 00:24:17,840
Speaker 2: things have happened. So why should we really care about deficits?

441
00:24:18,840 --> 00:24:21,879
Speaker 3: Well, so I wrote the book not to say we

442
00:24:21,880 --> 00:24:25,280
Speaker 3: shouldn't care about deficits, but to say, you know, to

443
00:24:25,359 --> 00:24:27,359
Speaker 3: address a lot of what you just said, why do

444
00:24:27,480 --> 00:24:30,720
Speaker 3: people continue to repeat these things decade after decade after decade.

445
00:24:30,760 --> 00:24:34,200
Speaker 2: I mean, it's we're talking literally my whole forty five years,

446
00:24:34,240 --> 00:24:37,360
Speaker 2: fifty five years since nineteen eighty. That's a long time,

447
00:24:37,520 --> 00:24:38,320
Speaker 2: half a century.

448
00:24:38,720 --> 00:24:41,040
Speaker 3: It's funny because you know, you got Dick Cheney saying

449
00:24:41,600 --> 00:24:45,280
Speaker 3: Reagan proved deficits don't matter, right, But everybody you know

450
00:24:45,720 --> 00:24:49,040
Speaker 3: really believes that deficits have the potential, and in some

451
00:24:49,359 --> 00:24:51,600
Speaker 3: respects not all of it is wrong. You know, there

452
00:24:51,640 --> 00:24:55,600
Speaker 3: are times where deficits can create problems, but so much

453
00:24:55,640 --> 00:24:59,560
Speaker 3: of the commentary and the way we think about and

454
00:24:59,720 --> 00:25:04,239
Speaker 3: talk about and shape policy around beliefs around, you know,

455
00:25:04,320 --> 00:25:07,240
Speaker 3: the dangers and risks of running budget deficits. I just thought,

456
00:25:07,600 --> 00:25:09,880
Speaker 3: you know, you almost need a chapter for every one

457
00:25:09,920 --> 00:25:13,560
Speaker 3: of these different myths. And it's not that deficits don't matter,

458
00:25:13,720 --> 00:25:16,960
Speaker 3: it's that they matter in ways that we aren't paying

459
00:25:16,960 --> 00:25:19,840
Speaker 3: attention to. And so the book was really to try

460
00:25:19,840 --> 00:25:23,360
Speaker 3: to get us to, you know, flip our perspective around,

461
00:25:23,760 --> 00:25:27,119
Speaker 3: to see that every deficit is good for someone, I mean, right,

462
00:25:27,200 --> 00:25:29,320
Speaker 3: you know, So a lot of what the book does

463
00:25:29,400 --> 00:25:31,680
Speaker 3: is to try to make clear why that's the case,

464
00:25:31,800 --> 00:25:35,360
Speaker 3: Why is every deficit good for someone? In purely financial terms,

465
00:25:35,480 --> 00:25:38,920
Speaker 3: government deficits are just the mirror image of a financial

466
00:25:38,960 --> 00:25:41,840
Speaker 3: surplus in the non government part of the economy. So

467
00:25:41,880 --> 00:25:45,520
Speaker 3: we should talk about deficits for whom, deficits for what. Right,

468
00:25:45,560 --> 00:25:49,560
Speaker 3: Deficits can be used to accomplish big things like you know,

469
00:25:50,960 --> 00:25:57,560
Speaker 3: repairing crumbling infrastructure, improving our healthcare education systems, and so

470
00:25:57,600 --> 00:26:00,920
Speaker 3: on and so forth, that they can also get too big,

471
00:26:01,240 --> 00:26:05,000
Speaker 3: and they can also exacerbate or cause an inflation problem.

472
00:26:05,040 --> 00:26:08,000
Speaker 3: So we don't diminish or dismiss any of those things,

473
00:26:08,040 --> 00:26:11,520
Speaker 3: but really have a very different conversation about the role

474
00:26:11,560 --> 00:26:13,240
Speaker 3: of deficits in the economy.

475
00:26:13,280 --> 00:26:15,560
Speaker 2: All right, so let's let's have that conversation. When you

476
00:26:15,600 --> 00:26:20,080
Speaker 2: say deficits can get too big. I think it was

477
00:26:20,160 --> 00:26:24,040
Speaker 2: Ryan Hunt and Rogoff's paper set one hundred percent GDP

478
00:26:24,400 --> 00:26:27,560
Speaker 2: to debt ratio is problems and tipping point right. I

479
00:26:27,560 --> 00:26:30,919
Speaker 2: mean that was that was the problem. Wasn't the Excel

480
00:26:30,960 --> 00:26:35,360
Speaker 2: spreadsheet error which changed their math. The problem is Japan

481
00:26:35,440 --> 00:26:39,520
Speaker 2: is running to fifty percent and their economy seems to

482
00:26:39,520 --> 00:26:42,600
Speaker 2: be doing just fine. Their quality of life is higher

483
00:26:42,640 --> 00:26:45,320
Speaker 2: than ours, their life expectancy is higher than ours, their

484
00:26:45,359 --> 00:26:49,240
Speaker 2: income is comparable. If Japan can run, what are we

485
00:26:49,320 --> 00:26:52,760
Speaker 2: running like one seventy five two hundred in the US? Oh,

486
00:26:52,760 --> 00:26:53,400
Speaker 2: we just I.

487
00:26:53,359 --> 00:26:56,120
Speaker 3: Mean publicly held. I think we just hit ninety nine percent.

488
00:26:56,200 --> 00:26:59,280
Speaker 2: So we're about one hundred percent. Japan is two and

489
00:26:59,320 --> 00:27:02,639
Speaker 2: a half times size. Does that suggest we have a

490
00:27:02,680 --> 00:27:05,120
Speaker 2: long ways to go before the deficit is a problem

491
00:27:05,320 --> 00:27:08,600
Speaker 2: or are there other potential issues? Well?

492
00:27:08,600 --> 00:27:13,800
Speaker 3: I just don't think the ratio is a very useful

493
00:27:13,920 --> 00:27:16,800
Speaker 3: metric in terms of, you know, thinking about when you've

494
00:27:16,840 --> 00:27:19,760
Speaker 3: quote unquote gone too far. And I think you know,

495
00:27:19,800 --> 00:27:23,119
Speaker 3: it's always interesting how Japan tends to get left out

496
00:27:23,160 --> 00:27:27,880
Speaker 3: of the conversation, right, because it really is the counterpoint

497
00:27:28,000 --> 00:27:30,440
Speaker 3: to so many of these arguments. I mean, the Japanese

498
00:27:30,480 --> 00:27:36,080
Speaker 3: government pre COVID had been running large, persistent fiscal deficits

499
00:27:36,160 --> 00:27:40,080
Speaker 3: for three decades. Three decades they had, you know, the

500
00:27:40,119 --> 00:27:43,719
Speaker 3: tenure interest rate pinned at zero more recently, but they

501
00:27:43,720 --> 00:27:46,440
Speaker 3: didn't interest rates didn't go up. They didn't suffer the

502
00:27:46,560 --> 00:27:50,160
Speaker 3: crowding out problem of rising interest rates, you know, pushing

503
00:27:50,200 --> 00:27:53,399
Speaker 3: investment down. They didn't get an inflation problem. They've been

504
00:27:53,400 --> 00:27:58,560
Speaker 3: battling deflationary pressures basically the entire time. You never have

505
00:27:58,600 --> 00:28:01,919
Speaker 3: a failed auction. You don't have a situation where you know,

506
00:28:01,960 --> 00:28:04,359
Speaker 3: bond vigilantes show up and say that's it, two hundred

507
00:28:04,359 --> 00:28:07,160
Speaker 3: and fifty percent, we're out of here. All of those

508
00:28:07,160 --> 00:28:10,040
Speaker 3: things kept not happening, and so we always pointed to Japan,

509
00:28:10,119 --> 00:28:13,399
Speaker 3: and people say, well, it's demographics. There's some reason that

510
00:28:13,480 --> 00:28:16,600
Speaker 3: Japan is an exception to the rule. But I think

511
00:28:17,840 --> 00:28:20,680
Speaker 3: the truth is that it's just we've got so much

512
00:28:20,760 --> 00:28:22,600
Speaker 3: of it wrong that that's been the reason that all

513
00:28:22,600 --> 00:28:26,240
Speaker 3: these bad things that we're supposed to happen kept not happening.

514
00:28:26,880 --> 00:28:31,080
Speaker 2: I just got an email from Washington, DC consultant Bruce

515
00:28:31,160 --> 00:28:35,000
Speaker 2: Mellman saying, please explain this chart to me showing all

516
00:28:35,080 --> 00:28:38,680
Speaker 2: these deficits, and how is the United States up here?

517
00:28:38,680 --> 00:28:41,160
Speaker 2: And how is Japan down here? And I know the

518
00:28:41,200 --> 00:28:45,640
Speaker 2: answers that Japanese central bank has interest rates said it

519
00:28:45,840 --> 00:28:49,280
Speaker 2: zero point five percent. You can finance a lot of

520
00:28:49,320 --> 00:28:53,520
Speaker 2: deficits when the FED is it was at least over

521
00:28:53,560 --> 00:28:57,480
Speaker 2: five percent for a while and now is barely below it.

522
00:28:57,880 --> 00:29:00,560
Speaker 2: When you're a tenth of that interest rate, Hey, it's

523
00:29:00,560 --> 00:29:04,120
Speaker 2: pretty easy to finance deficits. How do you look at

524
00:29:04,160 --> 00:29:08,840
Speaker 2: the relationship between a country's central bank and its ability

525
00:29:08,880 --> 00:29:10,960
Speaker 2: to manage its own debt?

526
00:29:12,440 --> 00:29:14,920
Speaker 3: Well, the central bank, So if we're talking about a

527
00:29:14,920 --> 00:29:17,440
Speaker 3: country like Japan or the US what i'll call in

528
00:29:17,520 --> 00:29:19,440
Speaker 3: what I call in the book, you know countries that

529
00:29:19,480 --> 00:29:24,000
Speaker 3: if issue their own sovereign currencies, it's not even an

530
00:29:24,120 --> 00:29:27,720
Speaker 3: issue at higher rates of interest. Right, Remember when Volka

531
00:29:28,240 --> 00:29:33,360
Speaker 3: was fedchair, Reagan was tripling the national debt, right, a

532
00:29:33,400 --> 00:29:36,720
Speaker 3: massive build up in military, you know, a couple of

533
00:29:36,800 --> 00:29:40,400
Speaker 3: huge tax cuts. Deficits were increasing, that debt was increasing

534
00:29:40,520 --> 00:29:43,400
Speaker 3: very rapidly. Interest rates were quite high, but it still

535
00:29:43,440 --> 00:29:47,480
Speaker 3: doesn't pose a financing challenge is the central bank is

536
00:29:47,640 --> 00:29:50,680
Speaker 3: just crediting bank accounts. I mean, that's how the payments

537
00:29:50,680 --> 00:29:52,240
Speaker 3: are made. And you can do that at very high

538
00:29:52,360 --> 00:29:54,440
Speaker 3: interest rates. You can do that at very low interest rates.

539
00:29:54,440 --> 00:29:58,080
Speaker 3: But when you get that combination of high interest rates

540
00:29:58,280 --> 00:30:01,880
Speaker 3: and high debt, right you've got a lot of treasuries

541
00:30:01,920 --> 00:30:03,840
Speaker 3: or a lot of jgbs, you got a high debt

542
00:30:03,880 --> 00:30:06,840
Speaker 3: to GDP ratio and high interest rates, you can very

543
00:30:07,960 --> 00:30:12,800
Speaker 3: easily get into a situation where the rate hikes themselves

544
00:30:13,200 --> 00:30:19,240
Speaker 3: are generating enough additional interest income that itself can become

545
00:30:19,400 --> 00:30:23,120
Speaker 3: a source of inflationary pressure. So I would say that's

546
00:30:23,160 --> 00:30:25,480
Speaker 3: always the relevant risk. It's not that you're going to

547
00:30:25,560 --> 00:30:26,920
Speaker 3: run out of money, it's not that you're going to

548
00:30:26,920 --> 00:30:29,000
Speaker 3: turn into grease. It's not that you're going to bankrupt

549
00:30:29,000 --> 00:30:31,520
Speaker 3: the nation or burden future generations or any of that.

550
00:30:31,600 --> 00:30:35,280
Speaker 3: It really is all about inflation as a constraint. And

551
00:30:35,720 --> 00:30:38,720
Speaker 3: you can find yourself in a situation where you have

552
00:30:38,840 --> 00:30:42,960
Speaker 3: quote too much debt, but in combination with kind of

553
00:30:43,000 --> 00:30:46,360
Speaker 3: a central bank policy that is pushing interest rates very

554
00:30:46,440 --> 00:30:48,080
Speaker 3: and then you can get into that sort of.

555
00:30:49,040 --> 00:30:52,520
Speaker 2: So we had pretty high deficits in the following the

556
00:30:52,560 --> 00:30:56,240
Speaker 2: financial crisis in the twenty tens, we had no inflation

557
00:30:56,440 --> 00:31:01,080
Speaker 2: when there was a huge and I mean huge, biggest

558
00:31:01,080 --> 00:31:05,000
Speaker 2: since the Marshall Plan since World War two, ten percent

559
00:31:05,040 --> 00:31:09,800
Speaker 2: of GDP as a fiscal stimulus that combined with the

560
00:31:09,840 --> 00:31:14,880
Speaker 2: shift to products over goods over services and snarled supply

561
00:31:15,000 --> 00:31:17,800
Speaker 2: lines and a lot of other factors, led to a

562
00:31:18,120 --> 00:31:24,320
Speaker 2: transitory inflation spike from twenty twenty peaked in June twenty

563
00:31:24,320 --> 00:31:27,280
Speaker 2: twenty two at nine percent, came back down. Now we're

564
00:31:27,280 --> 00:31:29,280
Speaker 2: in a three percent era as opposed to a one

565
00:31:29,320 --> 00:31:33,840
Speaker 2: to two percent era. But it's not the deficit that

566
00:31:34,000 --> 00:31:37,880
Speaker 2: caused that. It was the fiscal stimulus primarily as the driver.

567
00:31:38,800 --> 00:31:42,040
Speaker 2: Where do we see or is that the region me?

568
00:31:43,040 --> 00:31:45,120
Speaker 3: I thought you were setting up a different argument than

569
00:31:45,120 --> 00:31:45,960
Speaker 3: you went somewhere. I didn't know.

570
00:31:46,160 --> 00:31:48,960
Speaker 2: I'm gonna say it wasn't the deficit that was a problem.

571
00:31:48,960 --> 00:31:49,360
Speaker 1: That was.

572
00:31:50,040 --> 00:31:53,240
Speaker 2: It was the fiscal stimulus that was inflationary, and that

573
00:31:53,360 --> 00:31:58,040
Speaker 2: inflation seems to be transitory. We had following the financial crisis,

574
00:31:58,360 --> 00:32:02,680
Speaker 2: we had very modest fiscal stick and massive monetary stimulus,

575
00:32:03,000 --> 00:32:06,680
Speaker 2: and we were in mostly a deflationary environment. When we

576
00:32:06,960 --> 00:32:10,880
Speaker 2: shifted from monetary to fiscal seemed that all at once,

577
00:32:11,440 --> 00:32:15,360
Speaker 2: seemed like that's where we had our transitory inflation spike?

578
00:32:15,880 --> 00:32:17,480
Speaker 2: Or do you see it? Am I framing it in

579
00:32:17,560 --> 00:32:21,040
Speaker 2: a way that is incorrect? Tell me what you see here?

580
00:32:22,080 --> 00:32:25,080
Speaker 3: Well, so I think a couple of things I would unpack,

581
00:32:25,280 --> 00:32:28,000
Speaker 3: rewind a second and go to QE. And I don't

582
00:32:28,040 --> 00:32:30,840
Speaker 3: know if you think of that as monetary stimulus.

583
00:32:30,880 --> 00:32:34,440
Speaker 2: I don't, So you don't. You don't think quantity, So

584
00:32:34,600 --> 00:32:37,760
Speaker 2: the purchasing of bonds in order to lower interest rates

585
00:32:38,440 --> 00:32:40,560
Speaker 2: you don't think of as a monetary policy. How do

586
00:32:40,600 --> 00:32:41,040
Speaker 2: you know?

587
00:32:41,160 --> 00:32:44,080
Speaker 3: I think of it as monetary policy. To be sure,

588
00:32:44,200 --> 00:32:47,440
Speaker 3: the central Bank was trying to achieve something by doing that,

589
00:32:47,560 --> 00:32:49,800
Speaker 3: and in part what they were trying to achieve was

590
00:32:49,800 --> 00:32:54,480
Speaker 3: pushing down rates at the long end, I think from

591
00:32:54,480 --> 00:32:58,560
Speaker 3: everything I've read, the evidence suggests that it didn't do

592
00:32:58,800 --> 00:33:01,520
Speaker 3: very much at the long end. I mean, I've seen estimates,

593
00:33:01,520 --> 00:33:04,520
Speaker 3: you know, twenty basis points, So you just didn't get

594
00:33:04,520 --> 00:33:08,000
Speaker 3: a lot out of that. Now, they hoped that, you know,

595
00:33:08,040 --> 00:33:10,320
Speaker 3: people would reach for yield, you'd have a wealth effect.

596
00:33:10,480 --> 00:33:12,880
Speaker 3: Maybe there was some of that kind of stuff going on,

597
00:33:12,960 --> 00:33:17,320
Speaker 3: but in terms of stimulus, what I what I see

598
00:33:17,360 --> 00:33:20,360
Speaker 3: in retrospect, and what I thought at the moment, right

599
00:33:20,400 --> 00:33:23,840
Speaker 3: at the time, was that, you know, BERNANKI and the

600
00:33:24,080 --> 00:33:26,760
Speaker 3: FED were thinking that QE was going to be like

601
00:33:27,280 --> 00:33:31,520
Speaker 3: stomping on the gas pedal and revving up inflation, and

602
00:33:31,680 --> 00:33:34,680
Speaker 3: we'd watch the Bank of Japan try and fail at

603
00:33:34,680 --> 00:33:36,680
Speaker 3: this for at least a decade. I think you figure

604
00:33:36,680 --> 00:33:39,760
Speaker 3: out why we expected a different result here from what

605
00:33:39,880 --> 00:33:42,280
Speaker 3: they got there. But we went ahead and tried anyway,

606
00:33:42,680 --> 00:33:45,720
Speaker 3: and you know, three rounds of QE and Operation Twist

607
00:33:45,800 --> 00:33:48,840
Speaker 3: thrown in in the middle, right, and still we didn't

608
00:33:48,880 --> 00:33:51,520
Speaker 3: get to two percent over the course of a decade.

609
00:33:51,520 --> 00:33:55,640
Speaker 3: So if that's monetary stimulus, I don't know. You know,

610
00:33:55,720 --> 00:33:58,680
Speaker 3: I'm struggling to see it that way.

611
00:33:58,880 --> 00:34:02,920
Speaker 2: So let me throw something at you that is not heterodox.

612
00:34:02,960 --> 00:34:06,000
Speaker 2: And my economist friends disagree with me on this, but

613
00:34:06,040 --> 00:34:10,400
Speaker 2: I'm pretty convinced I'm right. I find the wealth effect

614
00:34:11,239 --> 00:34:15,839
Speaker 2: at the very least has been greatly exaggerated, and then

615
00:34:15,840 --> 00:34:18,600
Speaker 2: in the real world, I think it's kind of meaningless

616
00:34:18,800 --> 00:34:22,480
Speaker 2: because look when you look at who. So the wealth

617
00:34:22,520 --> 00:34:25,920
Speaker 2: effect is defined as a rising stock market leads to

618
00:34:26,040 --> 00:34:29,680
Speaker 2: greater economic activity, which I think is backwards. I think

619
00:34:29,920 --> 00:34:32,960
Speaker 2: you have good economic activity. People get hired, they get raises,

620
00:34:33,000 --> 00:34:36,120
Speaker 2: they go and spend money. That ultimately leads to a

621
00:34:36,200 --> 00:34:40,520
Speaker 2: rising stock market. And the reality is when the stock market,

622
00:34:40,920 --> 00:34:44,080
Speaker 2: aside from crashes and like eight or nine one, people

623
00:34:44,200 --> 00:34:50,880
Speaker 2: panic sold things and I don't mean just stocks, but houses, cars, collectibles, art, whatever.

624
00:34:52,040 --> 00:34:55,360
Speaker 2: When you don't have the stock market rising, that doesn't

625
00:34:55,400 --> 00:34:59,800
Speaker 2: affect eighty percent of the population. You know, the vast

626
00:35:00,000 --> 00:35:03,000
Speaker 2: majority of equities are held by the top one percent,

627
00:35:03,160 --> 00:35:05,920
Speaker 2: ten percent, twenty percent. I think top twenty percent is

628
00:35:05,920 --> 00:35:08,960
Speaker 2: something like three quarters of all equities are less than

629
00:35:08,960 --> 00:35:13,320
Speaker 2: the top quartile. So the wealth effect isn't an effect

630
00:35:13,360 --> 00:35:18,120
Speaker 2: people raising wages affects people spending. And by the way,

631
00:35:18,239 --> 00:35:20,600
Speaker 2: the wealthy, however you want to describe, it's the top

632
00:35:20,640 --> 00:35:24,680
Speaker 2: one percent ten percent. They tend to spend no matter

633
00:35:24,719 --> 00:35:27,279
Speaker 2: what the stock market's doing. You know, if they want

634
00:35:27,320 --> 00:35:29,880
Speaker 2: a new car or a vacation or a new house,

635
00:35:30,320 --> 00:35:34,359
Speaker 2: they tend to go get it regardless. So the whole

636
00:35:34,440 --> 00:35:38,640
Speaker 2: concept if the FED was engaging in QE because they

637
00:35:38,640 --> 00:35:41,920
Speaker 2: thought it would awaken the animal spirits via the wealth effect,

638
00:35:42,440 --> 00:35:44,960
Speaker 2: well are we you and I in agreement that their

639
00:35:45,600 --> 00:35:47,880
Speaker 2: fundamental premise is just completely wrong.

640
00:35:47,960 --> 00:35:48,239
Speaker 3: We are.

641
00:35:48,600 --> 00:35:48,880
Speaker 2: Yeah.

642
00:35:48,960 --> 00:35:51,400
Speaker 3: I mean, maybe there was some kind of placebo effect

643
00:35:51,520 --> 00:35:54,399
Speaker 3: associated with QE. If people thought it did a certain thing,

644
00:35:54,520 --> 00:35:57,480
Speaker 3: they behave in that way and it has real impacts

645
00:35:57,480 --> 00:35:59,680
Speaker 3: on the economy short term or something like that. But

646
00:35:59,760 --> 00:36:02,760
Speaker 3: it sure didn't appear to do what the Central Bank

647
00:36:03,160 --> 00:36:05,960
Speaker 3: anticipated and hoped it would do. And one of the

648
00:36:06,000 --> 00:36:08,120
Speaker 3: things I can remember, you know, people like Janet Yellen

649
00:36:08,200 --> 00:36:10,680
Speaker 3: and Ben Bernanki, when they would get pressed on this

650
00:36:10,880 --> 00:36:14,439
Speaker 3: what are you hoping will happen? You know, they would

651
00:36:14,440 --> 00:36:16,600
Speaker 3: bring up the wealth effect and the reach for yield

652
00:36:16,640 --> 00:36:18,680
Speaker 3: and that sort of stuff. But you know, I remember

653
00:36:18,680 --> 00:36:22,279
Speaker 3: Bernanki testifying before Congress, and Congress was really frustrated in

654
00:36:22,280 --> 00:36:25,120
Speaker 3: the wake of the financial crisis, Like, you know, unemployment

655
00:36:25,200 --> 00:36:28,320
Speaker 3: is still really high. The economy is clearly not getting

656
00:36:28,400 --> 00:36:30,440
Speaker 3: juiced by whatever it is you're doing.

657
00:36:30,440 --> 00:36:33,280
Speaker 2: Which, by the way, is a very typical post financial

658
00:36:33,360 --> 00:36:37,839
Speaker 2: crisis scenario if you look at history, that's what those

659
00:36:37,880 --> 00:36:39,040
Speaker 2: recoveries tend to look like.

660
00:36:39,160 --> 00:36:42,160
Speaker 3: Yeah, I mean, you know, you got one fiscal package,

661
00:36:42,440 --> 00:36:47,520
Speaker 3: the American Rescue Recogniact, Right, it seemed like a big

662
00:36:47,560 --> 00:36:49,520
Speaker 3: number at the time, seven hundred and eighty seven billion,

663
00:36:49,560 --> 00:36:52,760
Speaker 3: but it wasn't nearly enough given what we were up against.

664
00:36:52,840 --> 00:36:55,520
Speaker 2: And so a third was a temporary extension of unemployment,

665
00:36:55,600 --> 00:36:58,160
Speaker 2: a third was a temporary tax cut yep, and a

666
00:36:58,200 --> 00:37:02,880
Speaker 2: third was remember shovel I do two hundred billion dollars.

667
00:37:02,960 --> 00:37:07,160
Speaker 2: I mean, yeah, the first Cares Act was en x

668
00:37:07,239 --> 00:37:08,399
Speaker 2: that it's a joke.

669
00:37:08,600 --> 00:37:11,480
Speaker 3: It was. It was way too small, and as you

670
00:37:11,560 --> 00:37:14,440
Speaker 3: just said, the way that it was put together was

671
00:37:14,480 --> 00:37:16,359
Speaker 3: not going to provide a big shot in the arm

672
00:37:16,400 --> 00:37:20,640
Speaker 3: for the economy. And so here's Bernanki sitting before Congress,

673
00:37:20,760 --> 00:37:24,480
Speaker 3: and congressmen are really upset. They're saying, what is going on.

674
00:37:24,480 --> 00:37:26,560
Speaker 3: You're supposed to fix stuff. You know, it's your job.

675
00:37:26,600 --> 00:37:29,000
Speaker 3: We gave you the dual mandate. Why isn't it Why

676
00:37:29,040 --> 00:37:32,080
Speaker 3: isn't it being fixed? And Bernanki said, and I mean

677
00:37:32,120 --> 00:37:34,400
Speaker 3: I remember this, you know it's a quote. He said,

678
00:37:34,920 --> 00:37:39,080
Speaker 3: let me just say that monetary policy is not a panacea.

679
00:37:39,520 --> 00:37:41,720
Speaker 3: It's not the ideal tool.

680
00:37:42,400 --> 00:37:42,720
Speaker 2: WHOA.

681
00:37:42,840 --> 00:37:45,759
Speaker 3: When he said that, I was like, you know what,

682
00:37:46,120 --> 00:37:49,279
Speaker 3: when he's not telling you that fiscal policy is the

683
00:37:49,320 --> 00:37:52,440
Speaker 3: ideal tool, but he's telling you that fiscal policy is

684
00:37:52,440 --> 00:37:53,120
Speaker 3: the ideal tool.

685
00:37:53,440 --> 00:37:57,400
Speaker 2: Was that was he too nuanced for the geniuses in Congress.

686
00:37:57,520 --> 00:37:59,760
Speaker 3: You have to think, you have to think, I mean speak.

687
00:38:00,200 --> 00:38:02,360
Speaker 2: I'm doing your job and I don't have the tools

688
00:38:02,400 --> 00:38:05,000
Speaker 2: that you have. Yeah, so don't expect the same results.

689
00:38:05,040 --> 00:38:08,000
Speaker 3: I'm pressing the buttons at the keyboard. I'm buying mortgage

690
00:38:08,040 --> 00:38:12,400
Speaker 3: backed securities and treasuries and I'm hoping it does something.

691
00:38:12,680 --> 00:38:15,200
Speaker 3: But you all have the real firepower and you're not

692
00:38:15,320 --> 00:38:17,839
Speaker 3: using it. That's what he said. And so when COVID came,

693
00:38:18,280 --> 00:38:20,440
Speaker 3: I think we really did learn the lesson this time.

694
00:38:20,520 --> 00:38:21,800
Speaker 2: Maybe you a little too much.

695
00:38:21,640 --> 00:38:24,800
Speaker 3: And you know, but you had the collision. So, yeah,

696
00:38:24,880 --> 00:38:27,520
Speaker 3: you have an economy that is largely shut down. As

697
00:38:27,560 --> 00:38:30,600
Speaker 3: you said, You've got consumers who can't you spend money

698
00:38:30,600 --> 00:38:33,360
Speaker 3: on services because most of that part of the economy

699
00:38:33,400 --> 00:38:36,200
Speaker 3: is closed. So we all try shoving what money we

700
00:38:36,320 --> 00:38:39,319
Speaker 3: do have into the goods pipeline, and goods have to

701
00:38:39,320 --> 00:38:42,279
Speaker 3: be manufactured and shipped, and then we all remember what

702
00:38:42,360 --> 00:38:44,400
Speaker 3: that was like, you know, backups at the ports and

703
00:38:44,440 --> 00:38:47,680
Speaker 3: all the rest of it. So that collision of constrained

704
00:38:47,800 --> 00:38:53,480
Speaker 3: supply and some demand. Yes, to be sure, the stimulus

705
00:38:53,520 --> 00:38:58,560
Speaker 3: packages from CARES on through helped people right, not only

706
00:38:58,640 --> 00:39:01,799
Speaker 3: replace income, but in some cases people ended up with

707
00:39:01,880 --> 00:39:04,759
Speaker 3: more income than they had when they were working. And

708
00:39:04,840 --> 00:39:07,080
Speaker 3: so all of those things together, and then you have

709
00:39:07,120 --> 00:39:10,160
Speaker 3: to remember that the pandemic came in waves. It wasn't

710
00:39:10,200 --> 00:39:12,600
Speaker 3: just you know, one time shock. We thought we were

711
00:39:12,719 --> 00:39:14,799
Speaker 3: kind of, you know, moving beyond it, and then here

712
00:39:14,840 --> 00:39:18,120
Speaker 3: came delta, and then here came omicron, and then different

713
00:39:18,160 --> 00:39:21,600
Speaker 3: parts of the world closing at different times. So I think, Barry,

714
00:39:21,680 --> 00:39:24,719
Speaker 3: when you look at the the autopsies that people have

715
00:39:24,760 --> 00:39:27,200
Speaker 3: tried to do, say, where did all this inflation come from?

716
00:39:27,360 --> 00:39:30,600
Speaker 3: Was it really that last stimulus package? Was it the

717
00:39:30,640 --> 00:39:34,400
Speaker 3: fourteen hundred dollars checks that you know, some economists warned,

718
00:39:34,400 --> 00:39:36,680
Speaker 3: we're going to put us over the edge. People who've

719
00:39:36,680 --> 00:39:39,520
Speaker 3: gone and I think, done the really serious work here,

720
00:39:39,560 --> 00:39:42,120
Speaker 3: you know, Peter Orzag, Robin Brooks and somebody else. They

721
00:39:42,160 --> 00:39:45,800
Speaker 3: have a paper Bernanky and Blanchard, Olivia Blansharp and Burnet.

722
00:39:45,840 --> 00:39:48,080
Speaker 3: You have papers. The IMF has looked at this, different

723
00:39:48,120 --> 00:39:51,120
Speaker 3: federal Reserve banks have looked. When you cut across all

724
00:39:51,160 --> 00:39:55,280
Speaker 3: of the research that's been published, I think virtually everyone

725
00:39:55,440 --> 00:40:00,400
Speaker 3: lands in the direction of it was overwhelmingly the supply

726
00:40:00,520 --> 00:40:03,919
Speaker 3: side stuff. It wasn't the demand stamus that played a role,

727
00:40:04,160 --> 00:40:06,680
Speaker 3: but it was a modest one. And I'm writing about

728
00:40:06,680 --> 00:40:09,239
Speaker 3: this now, so I'm really steeped in, you know, going

729
00:40:09,280 --> 00:40:10,719
Speaker 3: back and revisiting.

730
00:40:10,239 --> 00:40:15,080
Speaker 2: What so when we say supply side, how much of

731
00:40:15,120 --> 00:40:18,600
Speaker 2: this were the where the we remember seeing all the

732
00:40:18,640 --> 00:40:22,719
Speaker 2: ships off of the port and Long Beach. I have

733
00:40:22,760 --> 00:40:26,520
Speaker 2: a vivid recollection of interviewing Professor Jeremy Siegel of Wharton

734
00:40:27,520 --> 00:40:29,760
Speaker 2: after I don't remember if it was the first Cares

735
00:40:29,800 --> 00:40:32,520
Speaker 2: Act or the second Cares Act. I'm pretty sure it

736
00:40:32,600 --> 00:40:35,440
Speaker 2: was before the third Cares Act. So CARES Act one

737
00:40:35,440 --> 00:40:39,880
Speaker 2: and two under Trump, one, Cares Act three under Biden.

738
00:40:41,200 --> 00:40:45,000
Speaker 2: And I recall Siegel saying, we're gonna have a massive

739
00:40:45,200 --> 00:40:49,799
Speaker 2: seventies like spike in inflation. No one's prepared for it.

740
00:40:49,880 --> 00:40:53,880
Speaker 2: The only good news is it'll be transitory. And he

741
00:40:54,160 --> 00:40:56,960
Speaker 2: like long before anyone was even using the I word,

742
00:40:57,440 --> 00:41:00,880
Speaker 2: Siegel was all over this based on the fiscal side.

743
00:41:00,880 --> 00:41:03,719
Speaker 2: Are you saying did he get lucky or was it

744
00:41:03,760 --> 00:41:06,120
Speaker 2: fiscal plus supply shocks?

745
00:41:06,160 --> 00:41:08,680
Speaker 3: Well, I'm saying it was fiscal plus. I mean, you know,

746
00:41:09,400 --> 00:41:11,439
Speaker 3: I had a piece in the New York Times in

747
00:41:11,520 --> 00:41:13,200
Speaker 3: April of twenty twenty.

748
00:41:13,320 --> 00:41:14,440
Speaker 2: I kind of remember that.

749
00:41:15,040 --> 00:41:18,000
Speaker 3: I mean, that was my sort of warning on inflation.

750
00:41:18,440 --> 00:41:20,520
Speaker 3: I submitted it. It was just ready to go in March,

751
00:41:20,560 --> 00:41:22,319
Speaker 3: but you know, they liked to hold things, and so

752
00:41:22,520 --> 00:41:26,479
Speaker 3: it was published in April. But I don't think that

753
00:41:26,480 --> 00:41:29,960
Speaker 3: that last fiscal package is what gave us that burst

754
00:41:29,960 --> 00:41:34,160
Speaker 3: of inflation. This, this is what I'm suggesting, is you

755
00:41:34,239 --> 00:41:38,239
Speaker 3: go back and you do a really careful retrospective on this,

756
00:41:38,719 --> 00:41:42,080
Speaker 3: and yeah, it played a role, But was it the

757
00:41:42,120 --> 00:41:44,400
Speaker 3: reason that we tipped over? We wouldn't have had the

758
00:41:44,400 --> 00:41:47,560
Speaker 3: inflation that we had, you know, hitting nine percent by

759
00:41:47,680 --> 00:41:51,040
Speaker 3: the summer of that year, by twenty twenty two, you know,

760
00:41:51,040 --> 00:41:54,280
Speaker 3: getting that inflation. This was a global phenomenon, right, Countries

761
00:41:54,320 --> 00:41:58,560
Speaker 3: that did massively less fiscal than we did still the

762
00:41:58,640 --> 00:42:02,880
Speaker 3: same or more in some cases more inflation. So I think,

763
00:42:03,360 --> 00:42:06,480
Speaker 3: you know, the truth is it was pandemic. It was

764
00:42:06,520 --> 00:42:10,399
Speaker 3: pandemic related, it was supply chain, and inflation went up

765
00:42:10,600 --> 00:42:14,239
Speaker 3: for reasons mostly related to the pandemic and the disruptions,

766
00:42:14,280 --> 00:42:18,440
Speaker 3: and it came down for reasons mostly related to the

767
00:42:18,520 --> 00:42:21,239
Speaker 3: working out of the kinks and the supply chains and

768
00:42:21,960 --> 00:42:24,200
Speaker 3: you know, resolving some of those issues.

769
00:42:24,280 --> 00:42:29,560
Speaker 2: So I have a vivid recollection of ed Yardini, another economist,

770
00:42:29,640 --> 00:42:34,160
Speaker 2: who wrote, when you have very rapid increases in inflation,

771
00:42:34,320 --> 00:42:36,400
Speaker 2: they tend not to be structural, and they tend to

772
00:42:36,440 --> 00:42:40,920
Speaker 2: be resolved in almost a symmetrical way. The chart looks,

773
00:42:41,120 --> 00:42:42,680
Speaker 2: you know, if you have a fast rise, you tend

774
00:42:42,719 --> 00:42:45,040
Speaker 2: to have a fast drop off. He was pretty right

775
00:42:45,080 --> 00:42:47,040
Speaker 2: about that. And when you go, and he was basing

776
00:42:47,080 --> 00:42:50,520
Speaker 2: this on when you looked at the history of previous

777
00:42:50,880 --> 00:42:53,880
Speaker 2: inflationary shocks, what you don't want is a long, slow,

778
00:42:53,960 --> 00:42:59,040
Speaker 2: gradual increase that suggests structural underpinnings. You want, Oh, we

779
00:42:59,080 --> 00:43:02,359
Speaker 2: have this temporary issue. It'll eventually be resolved. I think

780
00:43:02,400 --> 00:43:05,480
Speaker 2: the problem was that transitory took longer than everybody expected.

781
00:43:05,840 --> 00:43:09,239
Speaker 2: But that still doesn't mean it's structural. It was still transitory.

782
00:43:09,960 --> 00:43:13,480
Speaker 3: Look, you're a brave man. I know using the T

783
00:43:13,680 --> 00:43:16,000
Speaker 3: word is still the kind of thing that gets your

784
00:43:16,000 --> 00:43:18,839
Speaker 3: head lopped off in certain circles. But I think that's right.

785
00:43:19,080 --> 00:43:21,239
Speaker 3: And the part of the story that we haven't mentioned,

786
00:43:21,280 --> 00:43:24,000
Speaker 3: of course, is the war and entered the role of

787
00:43:24,200 --> 00:43:26,040
Speaker 3: energy and food. And you know, I spent the last

788
00:43:26,080 --> 00:43:29,799
Speaker 3: two days I'm working on this new book. And so

789
00:43:29,840 --> 00:43:33,440
Speaker 3: I went back and I reread every speech that Jerome

790
00:43:33,520 --> 00:43:36,920
Speaker 3: Pell has given it Jackson Hall from twenty twenty to

791
00:43:37,120 --> 00:43:41,160
Speaker 3: twenty twenty four, and you can see, you know, his

792
00:43:41,360 --> 00:43:44,600
Speaker 3: thinking in real time. And when you read them all,

793
00:43:44,800 --> 00:43:48,520
Speaker 3: you know, one after the other, you really see his thinking.

794
00:43:48,560 --> 00:43:52,640
Speaker 3: Initially with the transitory and then the war starts and

795
00:43:52,640 --> 00:43:54,040
Speaker 3: he starts emphasized.

796
00:43:53,520 --> 00:43:56,960
Speaker 2: Twenty twenty two was the war Russian invasion of UK.

797
00:43:57,400 --> 00:44:00,719
Speaker 3: Yeah, and so that becomes a much big part, and

798
00:44:00,800 --> 00:44:03,040
Speaker 3: you can hear him saying, you know, this is where

799
00:44:03,040 --> 00:44:05,440
Speaker 3: it's coming from. This is what's driving We still have

800
00:44:05,520 --> 00:44:08,240
Speaker 3: problems with supply chains. Now we have this new problem.

801
00:44:08,320 --> 00:44:11,200
Speaker 3: So it wasn't a supply side shock.

802
00:44:11,400 --> 00:44:13,080
Speaker 2: It was a multiple Yeah.

803
00:44:13,120 --> 00:44:15,680
Speaker 3: We were just getting hit left and right, shock after

804
00:44:15,760 --> 00:44:18,200
Speaker 3: shock after shock, and they fed through the system. And

805
00:44:18,239 --> 00:44:20,840
Speaker 3: then at some point when you get to energy, you know,

806
00:44:20,880 --> 00:44:23,719
Speaker 3: then all bets are off because it's transportation, it's fertilizer,

807
00:44:23,719 --> 00:44:26,120
Speaker 3: which gets food, which gets and then it's just you know,

808
00:44:26,280 --> 00:44:29,480
Speaker 3: we we sort of live that before in the seventies.

809
00:44:29,520 --> 00:44:33,880
Speaker 3: You know how quickly an energy price increase can bleed

810
00:44:33,960 --> 00:44:37,440
Speaker 3: through into you know, broader consumer good categories.

811
00:44:37,560 --> 00:44:42,560
Speaker 2: I just read an article somewhere online recently about used

812
00:44:42,600 --> 00:44:46,520
Speaker 2: car prices are still elevated, and it's directly related to

813
00:44:46,760 --> 00:44:51,480
Speaker 2: semiconductor's manufacturing. We're closed for a year or so. It

814
00:44:51,680 --> 00:44:55,520
Speaker 2: takes a long time to ramp that up. So by

815
00:44:55,600 --> 00:44:59,520
Speaker 2: twenty twenty three, when we finally get back to normal production,

816
00:45:00,440 --> 00:45:04,000
Speaker 2: you have three almost four years of new car production

817
00:45:04,200 --> 00:45:09,080
Speaker 2: down substantially worldwide. Hey, fast forward to or three years now,

818
00:45:09,120 --> 00:45:11,800
Speaker 2: you have a shortage of used cars that's still out there.

819
00:45:12,239 --> 00:45:14,359
Speaker 2: How long are we going to be dealing with the

820
00:45:14,520 --> 00:45:18,400
Speaker 2: fallout from the supply side shock of the pandemic in

821
00:45:18,480 --> 00:45:22,680
Speaker 2: twenty twenty it's half a decade later, we're still feeling

822
00:45:22,680 --> 00:45:23,359
Speaker 2: effects of that.

823
00:45:24,440 --> 00:45:26,839
Speaker 3: Yeah, I mean, we have words for things like this

824
00:45:26,960 --> 00:45:31,040
Speaker 3: when the labor market experiences a really negative shock and

825
00:45:31,040 --> 00:45:33,000
Speaker 3: then in the disrupt it doesn't sort itself out. We

826
00:45:33,040 --> 00:45:37,240
Speaker 3: talk about labor scarring and historyesis and this sort of stuff.

827
00:45:37,280 --> 00:45:40,719
Speaker 3: I don't know that there's a term to use for

828
00:45:40,880 --> 00:45:43,000
Speaker 3: stuff like this, but maybe there needs to be. And

829
00:45:43,000 --> 00:45:45,680
Speaker 3: you're right. I mean, once we finally got chips again,

830
00:45:45,680 --> 00:45:48,040
Speaker 3: they weren't the right kinds of chips, and so it

831
00:45:48,680 --> 00:45:51,680
Speaker 3: does take a very long time. An event like, this

832
00:45:51,800 --> 00:45:54,560
Speaker 3: is not something you flip the switch off and then

833
00:45:54,800 --> 00:45:56,920
Speaker 3: you know. I used to say, when the pandemic started,

834
00:45:57,200 --> 00:46:00,720
Speaker 3: you could park your car in a garage, turn the keys,

835
00:46:00,920 --> 00:46:03,440
Speaker 3: you know, turn the engine off, toss the keys in

836
00:46:03,480 --> 00:46:06,680
Speaker 3: the in the front seat of the car, and go

837
00:46:06,719 --> 00:46:08,919
Speaker 3: on vacation to Europe and come back eighteen months later

838
00:46:08,960 --> 00:46:11,120
Speaker 3: and start the car and drive and everything would be fine.

839
00:46:11,480 --> 00:46:14,080
Speaker 3: But you can't shut the economy down that way and

840
00:46:14,160 --> 00:46:16,120
Speaker 3: just turn it off and then expect to come back

841
00:46:16,120 --> 00:46:18,640
Speaker 3: a year later. You got a vaccine, let's open everything up,

842
00:46:18,920 --> 00:46:21,600
Speaker 3: turn it back on, and things work smoothly. It's just

843
00:46:21,600 --> 00:46:22,160
Speaker 3: not going to happen.

844
00:46:22,320 --> 00:46:26,319
Speaker 2: And then complicating things are following the financial crisis, at

845
00:46:26,400 --> 00:46:29,719
Speaker 2: least in the US. I can't talk globally. We underbuilt

846
00:46:29,760 --> 00:46:32,960
Speaker 2: single family homes here for pretty much a decade that

847
00:46:33,000 --> 00:46:37,280
Speaker 2: didn't lack of supply didn't help pricing for either homes,

848
00:46:37,520 --> 00:46:40,880
Speaker 2: starter homes or rentals. But I want to address a

849
00:46:41,200 --> 00:46:46,480
Speaker 2: labor which you mentioned and hysteresis and scarring that. You

850
00:46:46,520 --> 00:46:49,879
Speaker 2: have a very interesting line in the book that kind

851
00:46:49,880 --> 00:46:55,600
Speaker 2: of struck me. Unemployment is always a policy choice. Explain

852
00:46:55,640 --> 00:46:56,320
Speaker 2: what that means.

853
00:46:57,400 --> 00:47:02,920
Speaker 3: Well, it means that if you truly wanted to eradicate

854
00:47:03,480 --> 00:47:08,840
Speaker 3: I mean big thinking, right, involuntary unemployment? What is involuntary unemployment?

855
00:47:08,880 --> 00:47:11,919
Speaker 3: Anybody who wants a job, is ready, willing and able

856
00:47:11,960 --> 00:47:14,880
Speaker 3: to work, but can't find a job, you're involuntarily unemployed.

857
00:47:15,480 --> 00:47:22,160
Speaker 3: Suppose you had a policy whereby you said, the federal

858
00:47:22,160 --> 00:47:25,879
Speaker 3: government will fund a job for anybody who wants to work,

859
00:47:25,960 --> 00:47:29,640
Speaker 3: wants to contribute, can't find work anywhere else in the economy,

860
00:47:29,680 --> 00:47:33,279
Speaker 3: at some base wage maybe benefit package. You have a

861
00:47:33,320 --> 00:47:38,920
Speaker 3: federally funded, locally administered job. Right you can contribute, you

862
00:47:38,920 --> 00:47:43,640
Speaker 3: could eliminate involuntary unemployment. I'll scay quote unquote overnight. Right

863
00:47:43,760 --> 00:47:47,440
Speaker 3: once the policy is announced and you're prepared to provide

864
00:47:47,480 --> 00:47:50,239
Speaker 3: the jobs for people to have actual things for them

865
00:47:50,280 --> 00:47:54,760
Speaker 3: to do, then anybody who's still walking around without work

866
00:47:55,000 --> 00:47:58,560
Speaker 3: is voluntarily unemployed. We tend to worry about people who

867
00:47:58,560 --> 00:48:00,000
Speaker 3: are involuntarily unemployed.

868
00:48:00,800 --> 00:48:05,120
Speaker 2: So what does MMT do for us in terms of

869
00:48:05,160 --> 00:48:08,200
Speaker 2: this unemployment issue. We don't really worry about it these

870
00:48:08,280 --> 00:48:11,600
Speaker 2: days because unemployment has a four handle on it. But

871
00:48:12,160 --> 00:48:15,560
Speaker 2: for most of my adult life we've had unemployment rates

872
00:48:15,600 --> 00:48:19,480
Speaker 2: as high as five six seven percent outside of crises.

873
00:48:21,160 --> 00:48:24,040
Speaker 2: Why haven't we been more aggressive the way let's say

874
00:48:24,600 --> 00:48:30,640
Speaker 2: Germany or Japan or Switzerland act when there's an economic contraction. Really,

875
00:48:30,680 --> 00:48:36,400
Speaker 2: isn't a whole lot of people involuntarily unemployed in those countries?

876
00:48:36,840 --> 00:48:39,720
Speaker 3: Well, I mean, I think unemployment had a three handle

877
00:48:39,840 --> 00:48:43,720
Speaker 3: before the pandemic. That would have been an outstanding time

878
00:48:44,239 --> 00:48:47,800
Speaker 3: my opinion, to introduce a program like this, right, because

879
00:48:47,880 --> 00:48:50,439
Speaker 3: the take up rate would have been relatively.

880
00:48:49,880 --> 00:48:51,279
Speaker 2: Small, would have been cheap to do.

881
00:48:51,520 --> 00:48:53,520
Speaker 3: Yeah, So you put it in place then, and for

882
00:48:53,600 --> 00:48:56,799
Speaker 3: people who say sometimes people say, well there was no unemployment,

883
00:48:56,800 --> 00:48:58,680
Speaker 3: I say, great, then that's exactly the right time to

884
00:48:58,680 --> 00:49:01,839
Speaker 3: do it. Announce whatever you're willing to pay, and say

885
00:49:01,840 --> 00:49:03,480
Speaker 3: that you're willing to hire people. And if no one

886
00:49:03,520 --> 00:49:07,080
Speaker 3: shows up, that's just fine. Right, But now the policy,

887
00:49:07,160 --> 00:49:09,440
Speaker 3: you've stood up the policy and the program is there

888
00:49:09,680 --> 00:49:12,960
Speaker 3: so that when an event like COVID happens, you don't

889
00:49:13,040 --> 00:49:17,160
Speaker 3: have to throw twenty thirty million people into the ranks

890
00:49:17,160 --> 00:49:21,279
Speaker 3: of the unemployed. You can transition people from the job

891
00:49:21,320 --> 00:49:25,239
Speaker 3: that they're about to lose into some new job and

892
00:49:25,280 --> 00:49:28,719
Speaker 3: would truncate the downturn. It would replace income or a

893
00:49:28,800 --> 00:49:32,520
Speaker 3: portion of income, probably not replacing full income for most

894
00:49:32,560 --> 00:49:35,200
Speaker 3: people who lose jobs, But it would be a very

895
00:49:35,360 --> 00:49:40,040
Speaker 3: powerful automatic stabilizer. Those people could transition into paid work.

896
00:49:40,320 --> 00:49:43,279
Speaker 3: They'd have a job record, and future employer could call

897
00:49:43,320 --> 00:49:45,800
Speaker 3: and say, what kind of work is you know buried?

898
00:49:45,840 --> 00:49:47,600
Speaker 3: Does he get there on time? Does he picked fights

899
00:49:47,600 --> 00:49:49,920
Speaker 3: with his coworker? Is you a pretty good guy? And

900
00:49:49,960 --> 00:49:53,480
Speaker 3: then as the income is supported and the economy begins

901
00:49:53,560 --> 00:49:57,399
Speaker 3: to recover, those people can transition back into private sector job.

902
00:49:57,480 --> 00:50:00,799
Speaker 3: So it works like a very powerful buffer stock, like

903
00:50:00,880 --> 00:50:04,320
Speaker 3: a cushion for the economy through the business cycle.

904
00:50:04,640 --> 00:50:07,879
Speaker 2: Sounds a lot like what Claudia Sam form of FED

905
00:50:07,960 --> 00:50:11,319
Speaker 2: researcher and creator of the Sam rule, has talked about

906
00:50:11,360 --> 00:50:14,920
Speaker 2: putting automatic stabilizers in place so that it's not a

907
00:50:14,960 --> 00:50:19,520
Speaker 2: partisan hot potato. When there's a big downturn, there's a

908
00:50:19,560 --> 00:50:25,239
Speaker 2: way to cush in the blow and reduce the unemployment rate.

909
00:50:25,880 --> 00:50:29,839
Speaker 2: So we're talking about modern monetary theory, we're talking about spending.

910
00:50:30,360 --> 00:50:33,680
Speaker 2: What we haven't really talked about is taxes. What are

911
00:50:33,680 --> 00:50:39,040
Speaker 2: the role of taxes in deficits and modern monetary theory?

912
00:50:40,000 --> 00:50:43,280
Speaker 3: Well, taxes are for subtraction. That's how I think of it.

913
00:50:43,360 --> 00:50:46,839
Speaker 3: I don't think at the federal level. I don't think

914
00:50:46,880 --> 00:50:53,480
Speaker 3: of taxes for revenue's sake. Really, Yeah, I know it sounds.

915
00:50:54,000 --> 00:50:57,200
Speaker 2: Well, it sounds Trumpian because some people have argued that

916
00:50:57,280 --> 00:51:00,520
Speaker 2: he wants to move to a tariff system, which is

917
00:51:00,560 --> 00:51:04,920
Speaker 2: effectively like a European vat tax only at the border

918
00:51:04,960 --> 00:51:08,799
Speaker 2: instead of a consumption. I don't know if it's a

919
00:51:08,880 --> 00:51:13,560
Speaker 2: negotiating stance, so what have you? But less focus on

920
00:51:13,640 --> 00:51:17,160
Speaker 2: federal taxes, more focus on other revenue sources.

921
00:51:16,800 --> 00:51:19,840
Speaker 3: Right, But he's still thinking of tariffs as a revenue source,

922
00:51:19,920 --> 00:51:22,400
Speaker 3: so he just wants to change the allocation where the

923
00:51:22,400 --> 00:51:25,719
Speaker 3: revenue comes from. I don't think he's thinking that. You

924
00:51:25,760 --> 00:51:29,799
Speaker 3: know that taxes or tariffs don't generate revenue that the

925
00:51:29,840 --> 00:51:32,800
Speaker 3: federal government in a sense needs to pay the bills.

926
00:51:33,200 --> 00:51:36,799
Speaker 3: So what I'm saying is for the federal government, I

927
00:51:36,840 --> 00:51:39,439
Speaker 3: don't think of taxes or the role of taxes as

928
00:51:39,560 --> 00:51:42,839
Speaker 3: generating revenue that the government needs in order to pay

929
00:51:42,840 --> 00:51:46,920
Speaker 3: the bills. So what do taxes do. Well, they subtract

930
00:51:47,040 --> 00:51:49,120
Speaker 3: money from the rest of us. So every dollar that's

931
00:51:49,200 --> 00:51:51,040
Speaker 3: taxed away from you is a dollar you don't have

932
00:51:51,120 --> 00:51:53,880
Speaker 3: and you can't use to chase after goods and services.

933
00:51:53,880 --> 00:51:58,439
Speaker 3: In the economy. So one important function of taxes is

934
00:51:58,480 --> 00:52:03,000
Speaker 3: to reduce purchasing power in the non government part of

935
00:52:03,000 --> 00:52:07,000
Speaker 3: the economy, right, so consumers, businesses have less to spend.

936
00:52:07,440 --> 00:52:10,759
Speaker 3: That makes room for the government's own spending so that

937
00:52:10,840 --> 00:52:14,719
Speaker 3: it can spend money into the economy without creating inflationary pressure. So,

938
00:52:14,840 --> 00:52:19,000
Speaker 3: right now, the federal government this last fiscal year spent

939
00:52:19,400 --> 00:52:22,840
Speaker 3: let me just use rough numbers, let's call it seven trillion, right,

940
00:52:22,920 --> 00:52:27,960
Speaker 3: and collects five point two trillion in taxes and other revenue,

941
00:52:28,560 --> 00:52:31,200
Speaker 3: mostly from taxes, So get a one point eight trillion

942
00:52:31,239 --> 00:52:34,839
Speaker 3: dollar fiscal deficit. So what does that mean. It means

943
00:52:34,880 --> 00:52:37,640
Speaker 3: that they've made a deposit of one point eight trillion.

944
00:52:37,840 --> 00:52:41,759
Speaker 3: That's a financial contribution that goes into the broader economy,

945
00:52:42,320 --> 00:52:44,480
Speaker 3: and we can then talk about, you know, where it

946
00:52:44,520 --> 00:52:47,759
Speaker 3: goes and what good it's doing in the economy. But

947
00:52:48,280 --> 00:52:52,120
Speaker 3: taxes are important because they pull money out and our

948
00:52:52,200 --> 00:52:56,040
Speaker 3: one potential way to regulate inflationary pressure. Obviously, they can

949
00:52:56,080 --> 00:52:58,600
Speaker 3: be used it make changes to the tax code if

950
00:52:58,640 --> 00:53:01,240
Speaker 3: you care about the distribution of come in wealth and

951
00:53:01,320 --> 00:53:03,600
Speaker 3: you want to make some kind of change because you

952
00:53:03,640 --> 00:53:06,799
Speaker 3: think things have gotten too concentrated, or you can use

953
00:53:06,800 --> 00:53:10,839
Speaker 3: it for incentivizing and disincentivizing behaviors, but the big one

954
00:53:10,880 --> 00:53:13,920
Speaker 3: is regulating inflationary pressure.

955
00:53:14,080 --> 00:53:17,600
Speaker 2: So let's talk about the opposite of MMT. Right after

956
00:53:17,640 --> 00:53:20,800
Speaker 2: the financial crisis, when a lot of economies around the

957
00:53:20,800 --> 00:53:26,000
Speaker 2: world were precariously balanced at the knife edge, you had

958
00:53:26,239 --> 00:53:33,279
Speaker 2: the Austerians come out and very puritanical belief that deficits

959
00:53:33,840 --> 00:53:39,000
Speaker 2: excess fiscal spending, really any good time is problematic, and

960
00:53:39,040 --> 00:53:41,600
Speaker 2: we must all pay for our sins. And so we

961
00:53:41,680 --> 00:53:43,839
Speaker 2: saw that in the UK, we saw it to some

962
00:53:43,920 --> 00:53:47,400
Speaker 2: degree in Greece other parts of Europe. How do you

963
00:53:47,440 --> 00:53:52,520
Speaker 2: look at these folks that are pushing on austerity argument

964
00:53:53,200 --> 00:53:55,040
Speaker 2: into a weak economy.

965
00:53:56,080 --> 00:54:01,120
Speaker 3: I mean it's economically illiterate, okay, I mean it certainly

966
00:54:01,160 --> 00:54:05,560
Speaker 3: didn't work out well to say nothing, we'll hold Brexit aside.

967
00:54:06,160 --> 00:54:10,960
Speaker 2: The UK's recovery was pretty weak, Europe generally was pretty weak.

968
00:54:11,080 --> 00:54:14,920
Speaker 2: Of all places, Greece seems to be doing really well today.

969
00:54:15,800 --> 00:54:18,600
Speaker 2: Germany is in and out of recession, like wherever you

970
00:54:18,640 --> 00:54:24,560
Speaker 2: look around, France and Poland and just Spain is doing okay.

971
00:54:24,680 --> 00:54:29,200
Speaker 2: But all these countries have been having ongoing economic contractions.

972
00:54:30,040 --> 00:54:32,799
Speaker 2: Do they need to raise their deficit. Do they need

973
00:54:32,840 --> 00:54:36,600
Speaker 2: to do a little more fiscal spending? What's the economic

974
00:54:36,719 --> 00:54:38,680
Speaker 2: malaise source in Europe?

975
00:54:39,640 --> 00:54:43,439
Speaker 3: Well, I mean it's just what Cain's told us in

976
00:54:43,560 --> 00:54:46,279
Speaker 3: nineteen thirty six. It's a lack of effective demand. I

977
00:54:46,280 --> 00:54:49,040
Speaker 3: don't think it's necessarily the case that it's got to

978
00:54:49,080 --> 00:54:53,040
Speaker 3: be government fiscal deficit. But somebody's got to spend more.

979
00:54:53,600 --> 00:54:55,359
Speaker 3: So how do you do that? I mean, there are

980
00:54:55,360 --> 00:54:58,400
Speaker 3: two ways to generate this thing we call economic growth.

981
00:54:58,440 --> 00:55:01,239
Speaker 3: Somebody's some part of the economy has to spend more

982
00:55:01,239 --> 00:55:04,359
Speaker 3: than its income, and if the private sector does it,

983
00:55:04,640 --> 00:55:06,520
Speaker 3: that can work for a period of time. But that

984
00:55:06,640 --> 00:55:08,640
Speaker 3: generally involves leverage.

985
00:55:08,400 --> 00:55:10,879
Speaker 2: Right, a little bit of credit, borrowing whatever.

986
00:55:10,640 --> 00:55:13,920
Speaker 3: Yeah, barring, and that can be fine. But as the

987
00:55:13,960 --> 00:55:16,880
Speaker 3: engine of growth, what we've seen is that when you

988
00:55:16,960 --> 00:55:22,320
Speaker 3: rely disproportionately or sometimes entirely on private sector to generate

989
00:55:22,400 --> 00:55:25,480
Speaker 3: that growth, it ends very badly. That's basically what happened.

990
00:55:25,560 --> 00:55:28,520
Speaker 3: You know, when Bill Clinton was president and you had

991
00:55:28,760 --> 00:55:31,960
Speaker 3: the budget, federal budget in surplus for four years in

992
00:55:31,960 --> 00:55:34,040
Speaker 3: a row, ninety eight through two thousand and one. The

993
00:55:34,080 --> 00:55:36,440
Speaker 3: government's budget was in surplus, and a lot of folks

994
00:55:36,440 --> 00:55:38,280
Speaker 3: looked at that and said, oh my god, we finally

995
00:55:38,280 --> 00:55:41,080
Speaker 3: did it. You know, let's celebrate the miracle of the

996
00:55:41,120 --> 00:55:44,680
Speaker 3: federal surpluses. Isn't this a great thing? And there were

997
00:55:44,719 --> 00:55:48,440
Speaker 3: people like I mentioned earlier when Godly who were writing

998
00:55:48,440 --> 00:55:50,480
Speaker 3: about this in real time and saying, man, this is

999
00:55:50,520 --> 00:55:54,759
Speaker 3: going to end badly because those government surpluses that everybody

1000
00:55:54,800 --> 00:55:58,440
Speaker 3: is celebrating are being built on the backs of private

1001
00:55:58,719 --> 00:56:01,640
Speaker 3: sector indebtedness. That it was the private sector that was

1002
00:56:01,680 --> 00:56:06,160
Speaker 3: spending more than its income, running deficits year after year.

1003
00:56:06,239 --> 00:56:08,719
Speaker 3: Wind said, it can go on for a while, but

1004
00:56:08,800 --> 00:56:11,600
Speaker 3: it can't go on forever, and when it ends, it's

1005
00:56:11,640 --> 00:56:13,600
Speaker 3: going to be really bad. Of course, we had a

1006
00:56:13,640 --> 00:56:16,960
Speaker 3: recession in two thousand and one and then the surpluses disappeared,

1007
00:56:17,000 --> 00:56:20,280
Speaker 3: government's budget moved back into deficits. So, yeah, these countries

1008
00:56:20,320 --> 00:56:23,960
Speaker 3: have to figure out some way to generate the demand.

1009
00:56:24,480 --> 00:56:27,520
Speaker 3: And it doesn't have to be from government, but it

1010
00:56:27,640 --> 00:56:34,600
Speaker 3: tends to be the more sustainable way to sort of

1011
00:56:34,680 --> 00:56:38,920
Speaker 3: create enough demand to keep an economy operating in close

1012
00:56:38,960 --> 00:56:40,240
Speaker 3: proximity to full employment.

1013
00:56:40,400 --> 00:56:45,480
Speaker 2: So, following those four consecutive years of surplus, we had

1014
00:56:45,520 --> 00:56:49,359
Speaker 2: the dot com implosion and then the recession, and then

1015
00:56:49,440 --> 00:56:51,920
Speaker 2: towards the very the last month or two of the recession,

1016
00:56:51,960 --> 00:56:55,640
Speaker 2: we had September eleventh, and then eventually we ended up

1017
00:56:55,680 --> 00:56:59,200
Speaker 2: with not just the creation of homeland security and a

1018
00:56:59,200 --> 00:57:03,520
Speaker 2: whole bunch of increase in wartime and defense spending, but

1019
00:57:03,560 --> 00:57:07,600
Speaker 2: you also had a pretty substantial tax cut under President Bush.

1020
00:57:08,280 --> 00:57:13,760
Speaker 2: Did that giant tax cut and all that extra deficit spending,

1021
00:57:14,280 --> 00:57:21,040
Speaker 2: did that then shift that private sector deficit over to

1022
00:57:21,120 --> 00:57:23,320
Speaker 2: the government, and did things end up a little better

1023
00:57:23,360 --> 00:57:28,120
Speaker 2: balanced because the economy wasn't terrible, it was just over

1024
00:57:28,240 --> 00:57:32,040
Speaker 2: leveraged as we had headed into the financial crisis exactly.

1025
00:57:32,440 --> 00:57:37,440
Speaker 3: Yeah. I mean when consumers pull back right, because the

1026
00:57:38,080 --> 00:57:41,760
Speaker 3: government surpluses are like they work like a hoover. They're

1027
00:57:41,840 --> 00:57:46,320
Speaker 3: just vacuuming up net financial assets. They're sucking dollars off

1028
00:57:46,320 --> 00:57:48,720
Speaker 3: of the balance sheets of the private sector. That's what happens.

1029
00:57:48,720 --> 00:57:51,320
Speaker 3: And at some point the private sector christ uncle, and

1030
00:57:51,400 --> 00:57:54,480
Speaker 3: they want to spend less and save more. That alone

1031
00:57:54,640 --> 00:57:57,320
Speaker 3: will tend to move the government's budget back into deficit.

1032
00:57:57,480 --> 00:58:00,520
Speaker 3: So much of the you know, year to year movement

1033
00:58:00,760 --> 00:58:03,720
Speaker 3: in the fiscal balance is driven not by what Congress

1034
00:58:03,800 --> 00:58:07,720
Speaker 3: is doing, but by what the private sector wants to

1035
00:58:07,720 --> 00:58:09,840
Speaker 3: do do they want to save more they're trying to

1036
00:58:09,880 --> 00:58:13,160
Speaker 3: save more or are they okay spending more and saving less.

1037
00:58:13,360 --> 00:58:17,280
Speaker 3: Government's budget is endogenous in that way, will automatically move around.

1038
00:58:17,520 --> 00:58:20,800
Speaker 3: As the economy started to slow down, George W. Bush,

1039
00:58:20,840 --> 00:58:24,200
Speaker 3: Republicans realized, oh, we should have a policy response. The

1040
00:58:24,200 --> 00:58:26,720
Speaker 3: economy is slowing. So you got the tax cuts in

1041
00:58:26,720 --> 00:58:28,440
Speaker 3: two thousand and one, and then you got another one

1042
00:58:28,440 --> 00:58:31,320
Speaker 3: in two thousand and three. Right move. I mean, the

1043
00:58:31,400 --> 00:58:35,120
Speaker 3: right impulse was to relax fiscal policies. So I give

1044
00:58:35,120 --> 00:58:37,200
Speaker 3: them credit. Maybe I wouldn't have structured the tax cuts

1045
00:58:37,240 --> 00:58:39,200
Speaker 3: the way that they did, and you got a big

1046
00:58:39,240 --> 00:58:41,840
Speaker 3: expansion of medicare as well r D.

1047
00:58:42,160 --> 00:58:47,120
Speaker 2: Right, that was really substantial. So last question on the book.

1048
00:58:49,320 --> 00:58:54,680
Speaker 2: You're right that Obama was essentially a fiscal conservative when

1049
00:58:54,680 --> 00:58:57,560
Speaker 2: it came to policy. I don't think the average person

1050
00:58:57,640 --> 00:59:01,600
Speaker 2: thinks of Barack Obama as a fiscal conservative or certainly

1051
00:59:01,640 --> 00:59:03,280
Speaker 2: a fiscal policy conservative.

1052
00:59:03,800 --> 00:59:09,280
Speaker 3: Explained, Well, like we were talking earlier about that fiscal package.

1053
00:59:09,320 --> 00:59:11,880
Speaker 3: You know that's seven hundred and eighty seven billion dollars.

1054
00:59:11,960 --> 00:59:15,360
Speaker 3: When he was coming in to office, the first time,

1055
00:59:15,400 --> 00:59:18,000
Speaker 3: the wheels were coming off, they were off the economy,

1056
00:59:18,080 --> 00:59:21,560
Speaker 3: and he had people around him. You know, Christina Romer

1057
00:59:22,080 --> 00:59:25,760
Speaker 3: was an economic policy advisor, you see, Berkeley professor. She

1058
00:59:25,840 --> 00:59:28,400
Speaker 3: went on to become chair of the Council of Economic Advisors.

1059
00:59:28,840 --> 00:59:32,520
Speaker 3: But she told Barack Obama, this is your holy moment.

1060
00:59:32,920 --> 00:59:35,120
Speaker 3: She was trying to say, this is not going to

1061
00:59:35,120 --> 00:59:38,440
Speaker 3: be your garden variety recession. You can't do some little,

1062
00:59:38,720 --> 00:59:41,760
Speaker 3: you know, tinkering and some modest fiscal package, and all

1063
00:59:41,840 --> 00:59:43,480
Speaker 3: of this is going to be in the rear view mirror.

1064
00:59:43,680 --> 00:59:47,080
Speaker 3: This is this is big, right, and she could see

1065
00:59:47,080 --> 00:59:49,600
Speaker 3: that this had the potential to be the worst economic

1066
00:59:49,720 --> 00:59:54,120
Speaker 3: downturn since the Great Depression. And her memo was to

1067
00:59:54,280 --> 00:59:57,680
Speaker 3: encourage Barack Obama to go really big on fiscal Now,

1068
00:59:57,680 --> 01:00:00,720
Speaker 3: a lot of people have written about this, and and

1069
01:00:00,760 --> 01:00:03,200
Speaker 3: there were others in Barack Obama's.

1070
01:00:02,720 --> 01:00:05,440
Speaker 2: Circle, the guys Larry Sommer.

1071
01:00:05,960 --> 01:00:09,240
Speaker 3: Yeah, Larry Summer's David Axelrod, I think I put in

1072
01:00:09,280 --> 01:00:12,800
Speaker 3: my book famously said you cannot be talking about anything

1073
01:00:13,080 --> 01:00:16,520
Speaker 3: that has the tea in it, not trillion trillion meaning trillion.

1074
01:00:16,600 --> 01:00:19,400
Speaker 3: You're going to give people sticker shock, he said. And

1075
01:00:19,480 --> 01:00:22,400
Speaker 3: so you know, they the I think the men basically

1076
01:00:22,440 --> 01:00:25,800
Speaker 3: said don't listen to Christina Romert, you got to go

1077
01:00:25,920 --> 01:00:28,680
Speaker 3: for something more modest. And then what he did was

1078
01:00:28,720 --> 01:00:31,640
Speaker 3: try to negotiate with Republicans to try to bring some

1079
01:00:31,720 --> 01:00:34,400
Speaker 3: of them on board. Didn't get any but ended up

1080
01:00:34,760 --> 01:00:36,800
Speaker 3: changing the package so that you had about a third

1081
01:00:36,800 --> 01:00:38,920
Speaker 3: of it in the form of tax cuts, hoping to

1082
01:00:38,960 --> 01:00:41,600
Speaker 3: sweeten the deal and pull some Republicans in. Didn't work.

1083
01:00:42,160 --> 01:00:42,440
Speaker 2: Uh.

1084
01:00:42,480 --> 01:00:45,760
Speaker 3: And then when it became clear that the fiscal uh,

1085
01:00:46,040 --> 01:00:49,840
Speaker 3: that the fiscal response was too small, and voices came back,

1086
01:00:49,840 --> 01:00:51,720
Speaker 3: and you have people like Paul Krugman and all kinds

1087
01:00:51,760 --> 01:00:53,640
Speaker 3: of people saying, you know, Congress, you got to get

1088
01:00:53,680 --> 01:00:56,760
Speaker 3: back in there, you got to do another package. By

1089
01:00:56,800 --> 01:01:00,000
Speaker 3: that point, you know, Barack Obama and the economists around

1090
01:01:00,080 --> 01:01:05,000
Speaker 3: him had pivoted to austerity. They were talking about, you know,

1091
01:01:05,040 --> 01:01:07,000
Speaker 3: what can we do with a commission to try to

1092
01:01:07,000 --> 01:01:09,600
Speaker 3: get the deficit down by four trillion dollars at least,

1093
01:01:09,640 --> 01:01:11,600
Speaker 3: and all this sort of stuff. And we're looking over

1094
01:01:11,640 --> 01:01:14,520
Speaker 3: at what's happening to Greece and Spain and some of

1095
01:01:14,520 --> 01:01:16,720
Speaker 3: the periphery countries that how can we.

1096
01:01:16,680 --> 01:01:19,560
Speaker 2: Make those same mistakes? Yeah? Right, it seems sort of

1097
01:01:20,000 --> 01:01:23,720
Speaker 2: I have a vivid recollection of having a dinner with

1098
01:01:23,800 --> 01:01:26,600
Speaker 2: about eight ten people, and Paul was one of the

1099
01:01:26,600 --> 01:01:31,480
Speaker 2: people at the dinner around this time, and I remember

1100
01:01:31,640 --> 01:01:35,560
Speaker 2: sort of floating the idea, Hey, you know, this is

1101
01:01:35,600 --> 01:01:39,240
Speaker 2: the first time I've seen in my lifetime that the

1102
01:01:39,280 --> 01:01:42,800
Speaker 2: party that doesn't hold the White House is actively trying

1103
01:01:42,800 --> 01:01:47,800
Speaker 2: to sabotage the economy to regain the Like we you

1104
01:01:47,880 --> 01:01:52,480
Speaker 2: mentioned economic literacy. I said, you can't come out of

1105
01:01:52,520 --> 01:01:56,640
Speaker 2: a financial crisis and say no fiscal stimulus, and that's

1106
01:01:56,680 --> 01:02:00,560
Speaker 2: effectively what Congress said, And it kind of got hooopooed

1107
01:02:00,680 --> 01:02:06,640
Speaker 2: back in twenty eleven and twelve ten years later, people like, oh, okay,

1108
01:02:06,680 --> 01:02:13,440
Speaker 2: maybe this, you know, there was some purposeful economic literacy

1109
01:02:13,960 --> 01:02:19,720
Speaker 2: that conveniently made the economy less attractive for a president

1110
01:02:19,800 --> 01:02:20,680
Speaker 2: running for reelection.

1111
01:02:20,880 --> 01:02:23,120
Speaker 3: Yeah, so we ran the opposite experiment. It's just too

1112
01:02:23,120 --> 01:02:25,760
Speaker 3: bad that it had to run against the backdrop of

1113
01:02:25,920 --> 01:02:30,000
Speaker 3: globally constrained supply chains, because we don't still have an

1114
01:02:30,080 --> 01:02:33,520
Speaker 3: opportunity to just road test what if we really just

1115
01:02:33,640 --> 01:02:37,520
Speaker 3: engaged the fiscal lever and instead of relying so much

1116
01:02:37,520 --> 01:02:39,600
Speaker 3: on monetary policy, which is what we did for the

1117
01:02:39,600 --> 01:02:43,200
Speaker 3: previous three decades. It's just the central banks will take

1118
01:02:43,240 --> 01:02:46,760
Speaker 3: the economic steering wheel and fiscal can mostly worry about

1119
01:02:46,760 --> 01:02:48,480
Speaker 3: just trying to balance the budget or something.

1120
01:02:48,600 --> 01:02:52,960
Speaker 2: Well, certainly, since eight oh nine, to let's call it

1121
01:02:53,000 --> 01:02:58,240
Speaker 2: twenty seventeen, the Tax Cuts and Job Act pure monetary policy,

1122
01:02:58,560 --> 01:03:01,960
Speaker 2: almost no fiscal policy, see, and we saw the result.

1123
01:03:02,080 --> 01:03:06,720
Speaker 2: It was a subpar weak job creation, little wage gains,

1124
01:03:07,400 --> 01:03:11,040
Speaker 2: poor sentiment, poor consumer spending. As soon as the fiscal

1125
01:03:11,080 --> 01:03:15,600
Speaker 2: spigots opened up, things seem to begin to By twenty seventeen,

1126
01:03:15,720 --> 01:03:20,160
Speaker 2: things seventeen things had already sort of gotten better. But

1127
01:03:21,040 --> 01:03:23,240
Speaker 2: you know, that was a trillion and change, so I

1128
01:03:23,360 --> 01:03:25,400
Speaker 2: only had a positive effect on GDP.

1129
01:03:26,000 --> 01:03:28,680
Speaker 3: Monetary policy works by trying to get people to spend

1130
01:03:28,760 --> 01:03:32,040
Speaker 3: more out of the same income, and fiscal policy works

1131
01:03:32,040 --> 01:03:33,960
Speaker 3: by trying to get people to spend more out of

1132
01:03:34,000 --> 01:03:37,400
Speaker 3: more income. So this shouldn't be a huge surprise, which

1133
01:03:37,400 --> 01:03:40,400
Speaker 3: one tends to be. The more you know, have, the

1134
01:03:40,440 --> 01:03:42,160
Speaker 3: more potent response.

1135
01:03:42,200 --> 01:03:44,720
Speaker 2: Especially when you're coming off a decade or two of

1136
01:03:44,760 --> 01:03:47,640
Speaker 2: low interest rates. It's one thing when your mortgage goes

1137
01:03:47,680 --> 01:03:51,080
Speaker 2: from eight percent to four percent. Hey, we could refinance,

1138
01:03:51,120 --> 01:03:52,920
Speaker 2: and we have a little extra cash in our budget.

1139
01:03:53,920 --> 01:03:56,720
Speaker 2: But you can't do that from three percent to two percent.

1140
01:03:56,800 --> 01:04:00,280
Speaker 2: It's just there's no juice left in the limit. Let's

1141
01:04:00,280 --> 01:04:03,520
Speaker 2: talk a little bit about what we've been seeing over

1142
01:04:03,560 --> 01:04:06,480
Speaker 2: the past couple of decades and what it means for

1143
01:04:06,560 --> 01:04:11,600
Speaker 2: public policy today. I have to start by talking about

1144
01:04:11,760 --> 01:04:15,080
Speaker 2: how few recessions we've seen over the past twenty years.

1145
01:04:15,600 --> 01:04:19,320
Speaker 2: We had the financial crisis, that the recession began in

1146
01:04:19,360 --> 01:04:23,040
Speaker 2: I think October seventh or December seven, something like that,

1147
01:04:23,720 --> 01:04:28,840
Speaker 2: and then we ever so briefly had a pandemic recession.

1148
01:04:29,720 --> 01:04:33,040
Speaker 2: That's pretty much it. It seems we're having fewer recessions

1149
01:04:34,040 --> 01:04:36,480
Speaker 2: and we're responding to them quicker than we used to.

1150
01:04:36,800 --> 01:04:41,920
Speaker 2: How do you see the depth and frequency of recessions

1151
01:04:41,960 --> 01:04:42,520
Speaker 2: these days?

1152
01:04:43,960 --> 01:04:48,200
Speaker 3: Yeah, it's a good question. I definitely agree we've had

1153
01:04:48,280 --> 01:04:53,560
Speaker 3: longer stretches between them when they've happened. With the exception

1154
01:04:53,680 --> 01:04:57,720
Speaker 3: of I guess the global financial crisis, they have been

1155
01:04:58,200 --> 01:05:01,280
Speaker 3: somewhat weaker. That was obviously a big When COVID has

1156
01:05:01,080 --> 01:05:05,960
Speaker 3: it is its own unique thing. I don't know, Barry.

1157
01:05:06,000 --> 01:05:10,360
Speaker 3: I mean sometimes I feel like Larry Summers had it right,

1158
01:05:10,720 --> 01:05:14,360
Speaker 3: you know, years ago when he said we only know

1159
01:05:14,400 --> 01:05:17,480
Speaker 3: one way to grow the economy and that's through bubbles

1160
01:05:18,120 --> 01:05:21,760
Speaker 3: that we get a good run up in. You know,

1161
01:05:21,800 --> 01:05:25,120
Speaker 3: whether it's the SNL period or the dot com era

1162
01:05:25,400 --> 01:05:29,120
Speaker 3: or the housing bubble. You know, something comes along and

1163
01:05:29,200 --> 01:05:33,800
Speaker 3: provides a nice tailwind, and we get a what looks

1164
01:05:33,840 --> 01:05:37,560
Speaker 3: like a long, robust expansion, except it's sort of sowing

1165
01:05:37,600 --> 01:05:39,960
Speaker 3: the seeds of its own destruction. And then we end

1166
01:05:40,040 --> 01:05:42,960
Speaker 3: up with a recession. But we've gotten very good at

1167
01:05:43,280 --> 01:05:47,000
Speaker 3: clean up on Aisle four. You know, we respond, and

1168
01:05:47,040 --> 01:05:48,800
Speaker 3: then we set the table and we do it again.

1169
01:05:49,120 --> 01:05:52,240
Speaker 2: I'm always happy to push back on anything Larry Summers says,

1170
01:05:53,640 --> 01:05:57,480
Speaker 2: because he is so frequently wrong and yet so widely

1171
01:05:58,560 --> 01:06:03,120
Speaker 2: louded and regarded. Hey, the twenty tens a gradual, slow

1172
01:06:03,200 --> 01:06:09,680
Speaker 2: recovery from the financial crisis, despite the lack of fiscal stimulus,

1173
01:06:10,120 --> 01:06:19,440
Speaker 2: and despite the FEDS zup policy that wildly stimulated asset prices.

1174
01:06:19,600 --> 01:06:22,600
Speaker 2: We didn't have a bubble the pandemic. We still don't

1175
01:06:22,600 --> 01:06:26,440
Speaker 2: have a bubble. If you want to say maybe crypto

1176
01:06:26,600 --> 01:06:29,680
Speaker 2: is a bubble or AIS a bubble, I guess you

1177
01:06:29,800 --> 01:06:35,400
Speaker 2: can make that case. But so far there's the difference

1178
01:06:35,440 --> 01:06:40,800
Speaker 2: between a broad society wide bubble like the led to

1179
01:06:40,800 --> 01:06:44,320
Speaker 2: the financial crisis where you had really the bubble was

1180
01:06:44,360 --> 01:06:47,960
Speaker 2: in mortgages. We no longer care about your ability to

1181
01:06:48,000 --> 01:06:50,280
Speaker 2: service the debt. We just want to It's all about

1182
01:06:50,280 --> 01:06:54,320
Speaker 2: our ability to sell the debt to a securitizer that

1183
01:06:54,440 --> 01:06:57,160
Speaker 2: was clearly a bubble. It's kind of hard to say

1184
01:06:57,200 --> 01:07:01,560
Speaker 2: we're in the midst of a big bubble of me today.

1185
01:07:01,840 --> 01:07:05,840
Speaker 2: It's always obvious in hindsight. Are we in a bubble today?

1186
01:07:06,240 --> 01:07:09,880
Speaker 2: Can we say that this has been a pretty robust

1187
01:07:10,000 --> 01:07:12,560
Speaker 2: fifteen year run with no bubbles?

1188
01:07:14,720 --> 01:07:18,160
Speaker 3: Look, I don't I don't know. I think that things

1189
01:07:18,200 --> 01:07:23,040
Speaker 3: have felt awfully bubbly to me for at least a

1190
01:07:23,040 --> 01:07:27,120
Speaker 3: few years. I mean, you can it was the spackfa

1191
01:07:27,520 --> 01:07:28,520
Speaker 3: the spack craze.

1192
01:07:28,560 --> 01:07:30,400
Speaker 2: Oh god, that's a decade ag, I.

1193
01:07:30,360 --> 01:07:32,920
Speaker 3: Know, but it you know, these things come and then

1194
01:07:32,960 --> 01:07:35,640
Speaker 3: they transition, and then it's the next thing. It's you know,

1195
01:07:35,680 --> 01:07:38,680
Speaker 3: we did the memes stock thing. Now we have AI

1196
01:07:38,880 --> 01:07:44,880
Speaker 3: at Crypto and it feels tenuous. Let us I.

1197
01:07:44,800 --> 01:07:51,680
Speaker 2: Try and draw a distinction between these giant, bubblicious, impacting

1198
01:07:51,760 --> 01:07:55,080
Speaker 2: society things that you know, feels like it's just taken

1199
01:07:55,160 --> 01:07:57,720
Speaker 2: over everything that dot COM's felt like it just took

1200
01:07:57,760 --> 01:08:01,400
Speaker 2: over everything in the late nine these and people forget

1201
01:08:01,480 --> 01:08:05,120
Speaker 2: the Greenspan speech was ninety six, the irrational exuberance speech.

1202
01:08:05,120 --> 01:08:08,280
Speaker 2: You still had another for almost five years of growth.

1203
01:08:09,400 --> 01:08:12,320
Speaker 3: Well that was Kine's point, right, The market can stay

1204
01:08:12,320 --> 01:08:15,360
Speaker 3: irrational longer than you can stay solvent, which is what

1205
01:08:15,480 --> 01:08:17,880
Speaker 3: makes it so tough to find the entry point to

1206
01:08:17,920 --> 01:08:19,599
Speaker 3: come in and say yeah, we're here.

1207
01:08:19,960 --> 01:08:23,839
Speaker 2: You know, you know Canes had. I still don't understand

1208
01:08:23,880 --> 01:08:28,599
Speaker 2: why so many people fight against what have been such

1209
01:08:28,680 --> 01:08:34,200
Speaker 2: self evident observations by Canes. Of course, when you have

1210
01:08:34,240 --> 01:08:39,040
Speaker 2: a contraction, it's the government that should spends, but no

1211
01:08:39,080 --> 01:08:41,439
Speaker 2: one wants to do the flip side of that, which

1212
01:08:41,479 --> 01:08:44,040
Speaker 2: is when you have a robust economy, that's where the

1213
01:08:44,080 --> 01:08:47,280
Speaker 2: government should be. That's where you can think about a deficit,

1214
01:08:47,840 --> 01:08:52,520
Speaker 2: not in a contraction. Why do so many economists ignore

1215
01:08:53,280 --> 01:08:57,080
Speaker 2: the brilliant insights that Lord Kaines had a century ago.

1216
01:08:58,360 --> 01:09:01,720
Speaker 3: Well, well, I think we got you know, stripped of

1217
01:09:01,880 --> 01:09:06,599
Speaker 3: most of the really interesting stuff. When Hicks and Hanson

1218
01:09:06,880 --> 01:09:11,280
Speaker 3: gave us the sort of islm interpretation of John Maynard Kaynes.

1219
01:09:11,280 --> 01:09:14,479
Speaker 3: It took out a lot of the really interesting you know,

1220
01:09:14,920 --> 01:09:19,160
Speaker 3: the role of expectations and psychological impulses and all of

1221
01:09:19,160 --> 01:09:21,080
Speaker 3: that sort of stuff, and it became this kind of

1222
01:09:21,080 --> 01:09:24,479
Speaker 3: static you know. LM curve go up, I curve go down.

1223
01:09:25,160 --> 01:09:28,200
Speaker 3: We pretend we can analyze the economy as having two

1224
01:09:28,439 --> 01:09:31,280
Speaker 3: separate and distinct spears of spheres, a monetary and a

1225
01:09:31,400 --> 01:09:34,240
Speaker 3: real side of the economy. And I just don't think

1226
01:09:34,320 --> 01:09:37,120
Speaker 3: people go back and read the original text, and so

1227
01:09:37,800 --> 01:09:40,680
Speaker 3: the rich stuff too often gets left out.

1228
01:09:41,280 --> 01:09:46,520
Speaker 2: Meaning explain the rich stuff from Canes the animal spirits.

1229
01:09:47,000 --> 01:09:49,680
Speaker 3: Well, people use the phrase animal spirits, but they use

1230
01:09:49,720 --> 01:09:56,160
Speaker 3: it loosely to just mean that when people start feeling good, optimistic,

1231
01:09:56,320 --> 01:09:58,599
Speaker 3: that it means they're willing to take on some more risk,

1232
01:09:58,720 --> 01:10:01,160
Speaker 3: make more investment. They sort of turn it into that.

1233
01:10:01,280 --> 01:10:04,080
Speaker 3: Where I would say Chapter seventeen is the most important

1234
01:10:04,160 --> 01:10:06,719
Speaker 3: chapter in the general theory, it's also the hardest one

1235
01:10:07,320 --> 01:10:12,200
Speaker 3: for most people to understand. That's where Caines deals with

1236
01:10:12,320 --> 01:10:15,280
Speaker 3: things like the own rates of interest in liquidity preference theory,

1237
01:10:15,320 --> 01:10:20,080
Speaker 3: and that's what I'm talking about that's very hard to

1238
01:10:20,280 --> 01:10:24,040
Speaker 3: tease out and to bring forward in the ISLM framework.

1239
01:10:24,040 --> 01:10:26,920
Speaker 3: It's kind that you can argue that it's embedded in

1240
01:10:26,960 --> 01:10:30,599
Speaker 3: the LM curve it's there somewhere, but nobody sort of

1241
01:10:30,600 --> 01:10:36,160
Speaker 3: manipulates the standard Canesian model in ways that really reflect

1242
01:10:36,240 --> 01:10:39,320
Speaker 3: that deep concern of Kynes's in terms of the role

1243
01:10:39,360 --> 01:10:41,960
Speaker 3: of long term expectations and liquidity preference and that sort

1244
01:10:41,960 --> 01:10:42,400
Speaker 3: of stuff.

1245
01:10:42,680 --> 01:10:47,160
Speaker 2: So we're recording this towards the first quarter of twenty

1246
01:10:47,240 --> 01:10:54,400
Speaker 2: twenty five. We're in full DOGE administration mode, the Department

1247
01:10:54,439 --> 01:10:58,200
Speaker 2: of Government Efficiency. How do you look at all these

1248
01:10:58,240 --> 01:11:02,479
Speaker 2: federal layoffs, all these people in DC that we don't

1249
01:11:02,520 --> 01:11:05,280
Speaker 2: know if these job losses are going to stick with

1250
01:11:05,320 --> 01:11:08,559
Speaker 2: the courts are going to say, But hypothetically we lose

1251
01:11:08,640 --> 01:11:12,559
Speaker 2: ten or twenty percent of the federal government three million workers.

1252
01:11:13,000 --> 01:11:16,400
Speaker 2: What does that do to the economy, Well, it throws.

1253
01:11:16,200 --> 01:11:18,880
Speaker 3: A lot of people out of work, and then through

1254
01:11:18,880 --> 01:11:21,920
Speaker 3: a multiplier effect. Now we go back to Keynes, it's

1255
01:11:21,960 --> 01:11:24,360
Speaker 3: not just the person who loses their job and now

1256
01:11:24,400 --> 01:11:28,400
Speaker 3: has no income or has income replaced on unemployment at

1257
01:11:28,400 --> 01:11:30,800
Speaker 3: a lower rate or whatever. It's the jobs that are

1258
01:11:30,840 --> 01:11:34,479
Speaker 3: tied to those jobs. And so when millions of people

1259
01:11:34,800 --> 01:11:37,320
Speaker 3: are hundreds of thousands of people in this case, I

1260
01:11:37,320 --> 01:11:41,120
Speaker 3: guess start losing their jobs, it means less spending, which

1261
01:11:41,120 --> 01:11:43,400
Speaker 3: means less income for someone else, which means they go

1262
01:11:43,520 --> 01:11:46,320
Speaker 3: on to spend less. I think it was You'll probably

1263
01:11:46,360 --> 01:11:48,479
Speaker 3: know very better than I will. I think it was

1264
01:11:49,240 --> 01:11:52,000
Speaker 3: Torsten's lock. I think who put out a note for

1265
01:11:52,080 --> 01:11:54,240
Speaker 3: clients just maybe a week or so ago that said

1266
01:11:54,560 --> 01:11:57,439
Speaker 3: basically three x whatever. You know, if you think that

1267
01:11:57,600 --> 01:11:59,439
Speaker 3: one hundred thousand people are going to lose their jobs,

1268
01:11:59,479 --> 01:12:01,840
Speaker 3: it's more like three. It's three to one. Right, You're

1269
01:12:01,840 --> 01:12:02,200
Speaker 3: not just.

1270
01:12:02,080 --> 01:12:04,439
Speaker 2: Looking canes and multiplier.

1271
01:12:03,880 --> 01:12:07,479
Speaker 3: Effective to the macro effects. So I don't know this

1272
01:12:07,560 --> 01:12:11,040
Speaker 3: haphazard thing. Do you respond to any email or this

1273
01:12:11,200 --> 01:12:15,320
Speaker 3: is no way to go about looking for smart ways

1274
01:12:15,439 --> 01:12:19,559
Speaker 3: to trim you know, and find efficiencies in government.

1275
01:12:19,840 --> 01:12:24,880
Speaker 2: So from a modern monetary theory perspective, what are the

1276
01:12:24,960 --> 01:12:28,280
Speaker 2: smart ways to approach public policy? Do you think about

1277
01:12:28,720 --> 01:12:30,240
Speaker 2: deficits to think about spending?

1278
01:12:31,720 --> 01:12:34,080
Speaker 3: Well, the big thing that frustrated me when I served

1279
01:12:34,120 --> 01:12:36,720
Speaker 3: on the Budget Committee was the fact that no one

1280
01:12:36,920 --> 01:12:40,120
Speaker 3: and I mean not a staffer, not a senator, not

1281
01:12:40,439 --> 01:12:43,519
Speaker 3: anyone on either side of the aisle ever gave the

1282
01:12:43,560 --> 01:12:48,240
Speaker 3: briefest moment of concern care attention to inflation.

1283
01:12:48,800 --> 01:12:52,320
Speaker 2: You're seeing there that is genuinely shocking.

1284
01:12:52,160 --> 01:12:58,360
Speaker 3: Absolutely shocking, frustrating, maddening. You got people writing bills, you know,

1285
01:12:58,439 --> 01:13:01,360
Speaker 3: a trillion dollar infrastructre your bill of Medicare for all,

1286
01:13:01,400 --> 01:13:04,320
Speaker 3: bill of this bill of budget or whatever. And the

1287
01:13:04,400 --> 01:13:08,000
Speaker 3: mentality is if you can just stitch up the numbers

1288
01:13:08,360 --> 01:13:11,280
Speaker 3: such that the amount of money you want to spend

1289
01:13:11,640 --> 01:13:15,639
Speaker 3: is offset by you know, savings elsewhere in the budget

1290
01:13:15,720 --> 01:13:18,639
Speaker 3: or new revenue, then you've done your job, because now

1291
01:13:18,640 --> 01:13:22,200
Speaker 3: you have deficit neutral legislation and you're good to go

1292
01:13:22,280 --> 01:13:24,920
Speaker 3: and you can go vote and you've been fiscally responsible.

1293
01:13:25,400 --> 01:13:28,599
Speaker 3: And Kelton is sitting in the room going, oh my god,

1294
01:13:28,680 --> 01:13:32,960
Speaker 3: you guys. You know, you're talking about spending let's say,

1295
01:13:32,960 --> 01:13:35,960
Speaker 3: trillions of dollars into the economy, and let's suppose it

1296
01:13:36,040 --> 01:13:39,759
Speaker 3: was some big, ambitious, green new deal infrastructure whatever program,

1297
01:13:39,840 --> 01:13:44,799
Speaker 3: trillions of dollars, and your plan is to completely offset

1298
01:13:44,800 --> 01:13:47,400
Speaker 3: that spending with new revenue. But you're only going to

1299
01:13:47,400 --> 01:13:50,200
Speaker 3: get the new revenue from a handful of people at

1300
01:13:50,240 --> 01:13:53,639
Speaker 3: the very top of the income distribution of corporate tax increase,

1301
01:13:53,720 --> 01:13:56,240
Speaker 3: the wealth tax, or financial trans out, whatever it is.

1302
01:13:56,280 --> 01:13:59,640
Speaker 3: You know, they throw all this stuff around, you're potentially

1303
01:13:59,640 --> 01:14:04,000
Speaker 3: open us up to a huge inflation problem because You're

1304
01:14:04,040 --> 01:14:06,559
Speaker 3: going to broadly spend trillions into the hands of people

1305
01:14:06,560 --> 01:14:11,160
Speaker 3: in the economy while only removing by taxing money from

1306
01:14:11,160 --> 01:14:14,760
Speaker 3: people at the very top of the income distribution. And

1307
01:14:14,800 --> 01:14:18,400
Speaker 3: I look at that and say, this is not fiscally responsible.

1308
01:14:18,800 --> 01:14:21,120
Speaker 3: If you're doing this in a fiscally responsible way with

1309
01:14:21,160 --> 01:14:25,200
Speaker 3: an MMT lens, you're not asking how do I ensure

1310
01:14:25,200 --> 01:14:28,000
Speaker 3: that my spending is deficit neutral? You're asking how do

1311
01:14:28,080 --> 01:14:31,880
Speaker 3: I ensure that my spending will be inflation neutral? And

1312
01:14:31,920 --> 01:14:37,040
Speaker 3: that's an entirely different problem for an agency, Congressional budget office,

1313
01:14:37,200 --> 01:14:40,519
Speaker 3: for omb for other people who are thinking about and

1314
01:14:40,560 --> 01:14:43,400
Speaker 3: writing federal legislation. You have to approach this in a

1315
01:14:43,439 --> 01:14:44,479
Speaker 3: completely different way.

1316
01:14:44,600 --> 01:14:46,519
Speaker 2: So I'm going to assume you're not a big fan

1317
01:14:46,560 --> 01:14:49,880
Speaker 2: of the Elizabeth Warren wealth tax sort of thing, or

1318
01:14:50,400 --> 01:14:54,840
Speaker 2: even some of what Bernie Sanders has proposed with another

1319
01:14:55,040 --> 01:14:59,680
Speaker 2: tax bracket for the wealthiest people. I don't think that's

1320
01:14:59,720 --> 01:15:04,680
Speaker 2: how people generally perceive MMT. Am I mischaracterizing this or

1321
01:15:04,720 --> 01:15:05,400
Speaker 2: is that accurate?

1322
01:15:05,840 --> 01:15:08,479
Speaker 3: I mean you're accurate. We talked earlier about what is

1323
01:15:08,520 --> 01:15:10,719
Speaker 3: the purpose of the tax, and I said, the big

1324
01:15:10,760 --> 01:15:14,280
Speaker 3: one is it removes It removes income from somebody, and

1325
01:15:14,320 --> 01:15:16,839
Speaker 3: why would you want to do that. Well, one reason

1326
01:15:16,920 --> 01:15:18,960
Speaker 3: is to make sure that they don't have those dollars

1327
01:15:19,000 --> 01:15:21,559
Speaker 3: and they can't spend them, because it helps you regulate

1328
01:15:21,600 --> 01:15:24,559
Speaker 3: inflationary pressure. But I also said you could make changes

1329
01:15:24,600 --> 01:15:27,479
Speaker 3: to the tax code if you have, you know, deep

1330
01:15:27,560 --> 01:15:31,320
Speaker 3: concerns about concentrations of wealth and income. If you think

1331
01:15:31,320 --> 01:15:34,160
Speaker 3: things have gotten to extreme, there are things you can do.

1332
01:15:34,240 --> 01:15:36,800
Speaker 3: You can close loopholes, you can think about new ways

1333
01:15:36,800 --> 01:15:38,519
Speaker 3: to raise revenue, can look at the estate tax, you

1334
01:15:38,520 --> 01:15:41,679
Speaker 3: can look at and that's a legitimate thing to do

1335
01:15:42,000 --> 01:15:46,280
Speaker 3: or to think about through an MMT lens, independent of

1336
01:15:46,600 --> 01:15:49,160
Speaker 3: how much revenue will it raise. And that's how Senator

1337
01:15:49,160 --> 01:15:52,759
Speaker 3: Warren's Senator Sanders. They tend to think of these as

1338
01:15:53,280 --> 01:15:56,160
Speaker 3: I need to get money to pay for X, Y

1339
01:15:56,200 --> 01:15:59,200
Speaker 3: and Z. Rich people have a lot of money. Therefore,

1340
01:15:59,479 --> 01:16:02,639
Speaker 3: let's tax rich people so that we can be fiscally

1341
01:16:02,680 --> 01:16:05,040
Speaker 3: responsible and pay for our spending. And I just think

1342
01:16:05,080 --> 01:16:08,360
Speaker 3: from an MMT perspective, that is not the way to

1343
01:16:08,360 --> 01:16:09,000
Speaker 3: go about it.

1344
01:16:09,040 --> 01:16:13,920
Speaker 2: The Willie Sutton theory of taxation. So I doubt that

1345
01:16:14,000 --> 01:16:18,240
Speaker 2: you're going to get this phone call. But hypothetically this

1346
01:16:18,320 --> 01:16:22,400
Speaker 2: administration reaches out to Professor Calton and says, hey, we're

1347
01:16:22,400 --> 01:16:26,280
Speaker 2: really thinking about extending the twenty seventeen tax cuts and

1348
01:16:26,400 --> 01:16:29,639
Speaker 2: job ACKed. We could do it for ten years, because

1349
01:16:29,680 --> 01:16:31,360
Speaker 2: that's what the rule is. We could do it for

1350
01:16:31,439 --> 01:16:34,200
Speaker 2: five years and not worry about the offset at someone

1351
01:16:34,240 --> 01:16:39,880
Speaker 2: else's problem. What do you tell them about the TCJA,

1352
01:16:40,040 --> 01:16:43,559
Speaker 2: which some people accused of being very and a lot

1353
01:16:43,560 --> 01:16:48,160
Speaker 2: of the data supports it was very heavy towards the top.

1354
01:16:48,680 --> 01:16:52,799
Speaker 2: Pick a number ten percent, five percent, two percent of earners.

1355
01:16:53,439 --> 01:16:56,439
Speaker 3: I mean the number that gets quoted a lot is

1356
01:16:56,640 --> 01:16:59,880
Speaker 3: that eighty three percent of the benefits went to people

1357
01:17:00,080 --> 01:17:02,640
Speaker 3: the top one percent of the income distribution that's on

1358
01:17:02,680 --> 01:17:03,400
Speaker 3: the personal tax.

1359
01:17:03,640 --> 01:17:06,880
Speaker 2: Have you seen the prices of portions and ferraris, they've

1360
01:17:06,920 --> 01:17:09,880
Speaker 2: gone through the room. These people need some help.

1361
01:17:11,320 --> 01:17:14,479
Speaker 3: So look, I mean, on the I always think of

1362
01:17:14,560 --> 01:17:17,880
Speaker 3: inflation kind of that's my first stop on the train ride.

1363
01:17:18,040 --> 01:17:21,160
Speaker 3: So I heard a lot of people saying, if these

1364
01:17:21,160 --> 01:17:25,080
Speaker 3: tax cuts are extended, it's going to exacerbate the inflation problem,

1365
01:17:25,080 --> 01:17:27,360
Speaker 3: and I said, no, it's not. I mean, come on right,

1366
01:17:27,400 --> 01:17:29,800
Speaker 3: we're just talking about a continuation of what's been in

1367
01:17:29,800 --> 01:17:34,320
Speaker 3: place already for the better part of that new stimulus

1368
01:17:34,320 --> 01:17:37,439
Speaker 3: of any kind, so that I set that aside.

1369
01:17:37,520 --> 01:17:42,240
Speaker 2: So if this is, if JA is renewed, non inflationary,

1370
01:17:43,000 --> 01:17:47,280
Speaker 2: but there's still some inflation out in the economy, and.

1371
01:17:47,200 --> 01:17:50,960
Speaker 3: They're talking not just about an extension, but you know,

1372
01:17:51,040 --> 01:17:53,479
Speaker 3: they might have to fiddle with the numbers because they've

1373
01:17:53,479 --> 01:17:56,599
Speaker 3: only given themselves I'm saying, only only given themselves four

1374
01:17:56,640 --> 01:17:59,479
Speaker 3: and a half trillion in headroom on the tax side.

1375
01:17:59,600 --> 01:18:02,400
Speaker 3: So if the president wants things in there like no

1376
01:18:02,520 --> 01:18:05,840
Speaker 3: tax on social Security, no tax on overtime, no tax

1377
01:18:05,880 --> 01:18:08,840
Speaker 3: on tips, well you're not going to fit that in

1378
01:18:08,880 --> 01:18:10,640
Speaker 3: that four and a half trillion. So now what are

1379
01:18:10,640 --> 01:18:12,000
Speaker 3: they going to do. They're going to go and take

1380
01:18:12,040 --> 01:18:15,519
Speaker 3: a look at some of the corporate stuff, some of

1381
01:18:15,560 --> 01:18:18,200
Speaker 3: the personal stuff. Maybe they go for an extension of

1382
01:18:18,240 --> 01:18:20,559
Speaker 3: three or five years so that they can create a

1383
01:18:20,560 --> 01:18:23,639
Speaker 3: little bit of headroom to add some of these other things.

1384
01:18:23,840 --> 01:18:27,960
Speaker 3: There's inflation potential in that. Now you hear talk of

1385
01:18:28,000 --> 01:18:31,559
Speaker 3: a doze dividend and five thousand dollars checks. I mean,

1386
01:18:31,600 --> 01:18:34,720
Speaker 3: we're getting into some serious money here.

1387
01:18:35,120 --> 01:18:39,920
Speaker 2: If the fourteen hundred dollars Cares Act one was inflationary,

1388
01:18:40,520 --> 01:18:42,880
Speaker 2: what does that mean for what would a five thousand

1389
01:18:42,920 --> 01:18:44,519
Speaker 2: dollars check do for PEDA.

1390
01:18:44,640 --> 01:18:49,719
Speaker 3: Okay, so let's remember the first Cares Act was March

1391
01:18:49,760 --> 01:18:54,400
Speaker 3: of twenty twenty and that package included twelve hundred dollars checks.

1392
01:18:54,479 --> 01:18:56,720
Speaker 3: That was President Trump. And then at the end of

1393
01:18:56,760 --> 01:18:59,080
Speaker 3: the year, in December of twenty twenty, you got the

1394
01:18:59,240 --> 01:19:03,280
Speaker 3: nine hundred bills billion dollar package that included a six

1395
01:19:03,439 --> 01:19:06,759
Speaker 3: hundred dollars check. That was President Trump was after the election,

1396
01:19:06,840 --> 01:19:09,240
Speaker 3: but he's still president. He didn't want to send a

1397
01:19:09,280 --> 01:19:11,720
Speaker 3: six hundred dollars check. He was really mad about that.

1398
01:19:11,800 --> 01:19:14,599
Speaker 3: He said he wanted at least two thousand, four thousand.

1399
01:19:15,479 --> 01:19:17,240
Speaker 2: Yeah, that's a big number.

1400
01:19:17,439 --> 01:19:19,040
Speaker 3: It's a big number. And he said it ought to

1401
01:19:19,040 --> 01:19:21,679
Speaker 3: be two thousand. He's in fact, he said six hundred

1402
01:19:21,720 --> 01:19:24,120
Speaker 3: is like an insult, and is said, I want two

1403
01:19:24,160 --> 01:19:27,559
Speaker 3: thousand per the individual and four thousand per family. But

1404
01:19:27,600 --> 01:19:29,360
Speaker 3: he couldn't get it, so he had to settle for

1405
01:19:29,400 --> 01:19:31,960
Speaker 3: the six hundred dollars check. And then it was Biden

1406
01:19:32,040 --> 01:19:35,160
Speaker 3: three months later in March of twenty twenty one, who

1407
01:19:35,240 --> 01:19:37,599
Speaker 3: came in with the fourteen hundred, which when you added

1408
01:19:37,600 --> 01:19:40,400
Speaker 3: to the six hundred two thousand, which is what Trump

1409
01:19:40,479 --> 01:19:44,160
Speaker 3: wanted all along. Ironically, it's a lot of the Republicans

1410
01:19:44,280 --> 01:19:47,639
Speaker 3: who are the loudest at complaining about that fourteen hundred

1411
01:19:47,640 --> 01:19:50,960
Speaker 3: dollars check being the thing that tipped us into you know,

1412
01:19:51,160 --> 01:19:53,040
Speaker 3: the great inflation.

1413
01:19:53,000 --> 01:19:56,880
Speaker 2: Of the It's never one thing, it's always a multiplicity

1414
01:19:56,920 --> 01:19:58,680
Speaker 2: of different Yeah.

1415
01:19:58,439 --> 01:20:01,680
Speaker 3: So all of those things definitely put a lot of

1416
01:20:01,720 --> 01:20:06,160
Speaker 3: money into people's hands, and it definitely helped support consumer spending,

1417
01:20:06,200 --> 01:20:10,840
Speaker 3: and I mean it modestly increased inflationary pressure. So now

1418
01:20:11,040 --> 01:20:14,599
Speaker 3: I think they're talking about you know, a five thousand

1419
01:20:14,680 --> 01:20:17,840
Speaker 3: dollars check going to households what seventy seventy six or

1420
01:20:17,920 --> 01:20:19,320
Speaker 3: so million households.

1421
01:20:19,439 --> 01:20:19,799
Speaker 2: Wow.

1422
01:20:20,640 --> 01:20:23,400
Speaker 3: Yeah, but they're saying, no, don't worry, because that money

1423
01:20:23,479 --> 01:20:25,960
Speaker 3: was going to be spent by government anyway. And we're

1424
01:20:25,960 --> 01:20:28,519
Speaker 3: finding all these efficiencies and so we're just gonna let

1425
01:20:28,600 --> 01:20:31,000
Speaker 3: you spend the money instead of letting the federal government

1426
01:20:31,000 --> 01:20:32,559
Speaker 3: spend money. Problem is the math.

1427
01:20:32,400 --> 01:20:37,280
Speaker 2: Doesn't work well, you know math who really believes numbers

1428
01:20:37,320 --> 01:20:39,840
Speaker 2: should add up anyway? All right, before we get to

1429
01:20:39,880 --> 01:20:44,040
Speaker 2: our favorite question, I just have a curveball to throw

1430
01:20:44,120 --> 01:20:47,960
Speaker 2: at you. When I was an undergraduate at sunny Stony Brook,

1431
01:20:50,000 --> 01:20:52,960
Speaker 2: the head of the math department was a guy named

1432
01:20:53,040 --> 01:20:58,240
Speaker 2: Jim Simons who eventually set up Renaissance Technologies. You've been there,

1433
01:20:58,720 --> 01:21:01,479
Speaker 2: Did you ever get a chance to to meet Professor Simons?

1434
01:21:03,600 --> 01:21:05,920
Speaker 3: I did not meet him, but I had a couple

1435
01:21:05,920 --> 01:21:09,040
Speaker 3: of encounters with him. One in particular, it was kind

1436
01:21:09,040 --> 01:21:12,200
Speaker 3: of funny. I was right in the middle of the

1437
01:21:12,200 --> 01:21:14,960
Speaker 3: pandemic twenty twenty. I don't remember what month it was,

1438
01:21:15,000 --> 01:21:17,840
Speaker 3: but it must have been reasonably nice out because I

1439
01:21:17,920 --> 01:21:20,320
Speaker 3: was sitting in the house drinking coffee one morning and

1440
01:21:20,320 --> 01:21:23,720
Speaker 3: I happened to look over my shoulder into our backyard

1441
01:21:23,840 --> 01:21:25,640
Speaker 3: and I see we live on the north shore of

1442
01:21:25,680 --> 01:21:29,120
Speaker 3: Long Island, and I see these two kayakers pulling this

1443
01:21:29,400 --> 01:21:32,800
Speaker 3: little dinghy boat up to our dock, and there are

1444
01:21:32,800 --> 01:21:34,800
Speaker 3: two older people in the boat. And I said to

1445
01:21:34,800 --> 01:21:37,880
Speaker 3: my husband, go find out what is going on. Who's

1446
01:21:37,920 --> 01:21:41,000
Speaker 3: getting towed up to the dock. And so he leaves.

1447
01:21:41,040 --> 01:21:44,040
Speaker 3: He goes outside, and I see the couple climb out

1448
01:21:44,040 --> 01:21:45,640
Speaker 3: of this little boat and they tie it up to

1449
01:21:45,680 --> 01:21:48,519
Speaker 3: the dock and they go walking up and my husband's

1450
01:21:48,520 --> 01:21:50,320
Speaker 3: gone for a while and he finally comes back and

1451
01:21:50,320 --> 01:21:52,920
Speaker 3: he says to me, you'll never guess who that was.

1452
01:21:53,400 --> 01:21:55,200
Speaker 3: And I don't know what made me say it, except

1453
01:21:55,200 --> 01:21:57,080
Speaker 3: I knew he lived in the area. I said, Jim

1454
01:21:57,120 --> 01:22:00,080
Speaker 3: Simon's and he said, how did you know that? I

1455
01:22:00,120 --> 01:22:00,439
Speaker 3: don't know.

1456
01:22:00,520 --> 01:22:02,360
Speaker 2: I just un believe.

1457
01:22:02,439 --> 01:22:05,519
Speaker 3: Yeah, there he was. You know, I pictured a yacht,

1458
01:22:05,560 --> 01:22:08,520
Speaker 3: but no, it was a tiny little outboard.

1459
01:22:09,479 --> 01:22:11,800
Speaker 2: I'm sure there's a yacht or two flowing somewhere in

1460
01:22:11,800 --> 01:22:14,559
Speaker 2: the Mediterranean or down in the Caribbean. All right, let's

1461
01:22:14,600 --> 01:22:18,000
Speaker 2: jump to our favorite questions while we still have you,

1462
01:22:18,240 --> 01:22:21,920
Speaker 2: starting with what have you been doing to stay entertained?

1463
01:22:22,040 --> 01:22:25,560
Speaker 2: What are you watching or listening to these days? Yeah?

1464
01:22:25,640 --> 01:22:28,800
Speaker 3: I feel like it was a long dry spell where

1465
01:22:28,840 --> 01:22:31,320
Speaker 3: we couldn't agree on anything. You're talking about streaming like

1466
01:22:31,360 --> 01:22:35,080
Speaker 3: Coflix or whatever. We could not agree. My husband will

1467
01:22:35,080 --> 01:22:37,160
Speaker 3: start something, I watch half of it, I hate it.

1468
01:22:37,200 --> 01:22:40,479
Speaker 3: We stopped. So we went back and rewatched Miss Masel

1469
01:22:40,680 --> 01:22:42,280
Speaker 3: because he loved that at the same time.

1470
01:22:42,479 --> 01:22:45,240
Speaker 2: Yeah, and then although it did kind of go off

1471
01:22:45,280 --> 01:22:47,840
Speaker 2: the rails in the last couple of seasons.

1472
01:22:47,360 --> 01:22:50,320
Speaker 3: Well we enjoyed that was okay. We both loved that.

1473
01:22:50,640 --> 01:22:54,479
Speaker 3: And then two nights ago we started streaming nineteen twenty three,

1474
01:22:54,760 --> 01:22:58,640
Speaker 3: the second season. Oh really, I love I watched that.

1475
01:22:58,640 --> 01:22:59,920
Speaker 2: That's part of the Yellowstone.

1476
01:23:00,280 --> 01:23:02,800
Speaker 3: Yeah, I was on an airplane and I'd never heard

1477
01:23:02,800 --> 01:23:05,320
Speaker 3: of the thing. And years ago I watched I think

1478
01:23:05,320 --> 01:23:08,040
Speaker 3: they had five episodes available and I just ate them up,

1479
01:23:08,400 --> 01:23:10,160
Speaker 3: and then I came home and said, you got you

1480
01:23:10,200 --> 01:23:11,840
Speaker 3: got to watch this with me. I'll start it all

1481
01:23:11,880 --> 01:23:14,040
Speaker 3: over with you. And so a couple days ago, I

1482
01:23:14,080 --> 01:23:15,360
Speaker 3: think season two came out.

1483
01:23:15,439 --> 01:23:17,679
Speaker 2: So huh, I'm gonna I'm gonna definitely have to check

1484
01:23:17,720 --> 01:23:22,320
Speaker 2: that out. Tell us about the mentors who affected your career,

1485
01:23:22,320 --> 01:23:25,120
Speaker 2: who helped shape the economists you are today.

1486
01:23:25,880 --> 01:23:30,200
Speaker 3: Well, I mentioned John Henry early on. That's an undergrad mentor,

1487
01:23:30,520 --> 01:23:34,679
Speaker 3: and then graduate kind of my masters, that's Randy Ray

1488
01:23:34,800 --> 01:23:40,640
Speaker 3: I also mentioned, and then when Godly came after, and

1489
01:23:40,680 --> 01:23:44,599
Speaker 3: then Warren Mosler. I know, those are the four men

1490
01:23:44,720 --> 01:23:48,800
Speaker 3: who I think, more than anyone else, shaped not just

1491
01:23:48,960 --> 01:23:51,400
Speaker 3: my professional life, but in a lot of ways just

1492
01:23:52,040 --> 01:23:52,639
Speaker 3: my life.

1493
01:23:53,120 --> 01:23:56,559
Speaker 2: Huh, really really interesting. Let's talk about books. What are

1494
01:23:56,600 --> 01:23:58,679
Speaker 2: some of your favorites? What are you reading right now?

1495
01:23:59,640 --> 01:24:02,679
Speaker 2: Although I know when you're wrapping up a book, there's

1496
01:24:02,680 --> 01:24:05,320
Speaker 2: no time to read other books other than research.

1497
01:24:05,040 --> 01:24:09,280
Speaker 3: It's exactly right. I go back and I consult books now,

1498
01:24:09,439 --> 01:24:12,120
Speaker 3: mostly for the purpose of working on this book. But

1499
01:24:12,400 --> 01:24:16,240
Speaker 3: I'm an old school you know, like I think people

1500
01:24:16,280 --> 01:24:19,519
Speaker 3: should read Veblin. I think they should read The Theory

1501
01:24:19,520 --> 01:24:21,559
Speaker 3: of Business Enterprise. I think they should read the Theory

1502
01:24:21,560 --> 01:24:24,080
Speaker 3: of the Leisure Class. I think people should read Minski.

1503
01:24:24,200 --> 01:24:28,439
Speaker 3: I think, you know, Stabilizing an unstable Economy is really

1504
01:24:28,640 --> 01:24:31,800
Speaker 3: hard to plow through. But Can It Happen Again is

1505
01:24:31,840 --> 01:24:35,559
Speaker 3: a wonderful little book. People should read anything by John

1506
01:24:35,640 --> 01:24:42,600
Speaker 3: Kenneth Galbraith. Right now, I'm reading Galbray's son, James Galbraith

1507
01:24:42,920 --> 01:24:46,080
Speaker 3: and his co author Jing Chen have a new book

1508
01:24:46,360 --> 01:24:49,720
Speaker 3: just came out last month called Entropy Economics, So I

1509
01:24:49,800 --> 01:24:50,400
Speaker 3: just started that.

1510
01:24:50,760 --> 01:24:50,920
Speaker 1: Huh.

1511
01:24:51,360 --> 01:24:54,240
Speaker 2: You know, that's the worst part about writing a book

1512
01:24:54,360 --> 01:24:56,679
Speaker 2: is you just have to put all your reading that's

1513
01:24:56,720 --> 01:24:59,360
Speaker 2: not related off to a side. It's no fun. Our

1514
01:24:59,400 --> 01:25:02,840
Speaker 2: final two questions, what sort of advice would you give

1515
01:25:02,840 --> 01:25:05,720
Speaker 2: to a recent college grad interest in the career and

1516
01:25:05,800 --> 01:25:08,800
Speaker 2: either economics or academia.

1517
01:25:09,520 --> 01:25:12,679
Speaker 3: I think anybody who wants to study economics should try

1518
01:25:12,720 --> 01:25:16,360
Speaker 3: to find a program where they can get exposed to

1519
01:25:16,840 --> 01:25:21,519
Speaker 3: a broad array of you know, diversity of views, a

1520
01:25:21,560 --> 01:25:25,439
Speaker 3: pluralist program if you like something where you know, every

1521
01:25:25,479 --> 01:25:28,599
Speaker 3: class you walk into isn't going to be some version

1522
01:25:28,640 --> 01:25:32,120
Speaker 3: of itself general equilibrium theory and that sort of thing.

1523
01:25:32,160 --> 01:25:35,320
Speaker 3: Try to find places where to as much as you

1524
01:25:35,400 --> 01:25:37,760
Speaker 3: can you get what might have won one day been

1525
01:25:37,840 --> 01:25:41,240
Speaker 3: called political economy. You know, where you can actually read

1526
01:25:41,439 --> 01:25:46,879
Speaker 3: interesting thinkers and do more than just i'll say sterile

1527
01:25:47,840 --> 01:25:50,280
Speaker 3: agent based modeling and all that. You want the real

1528
01:25:50,320 --> 01:25:52,760
Speaker 3: world in there. You want finance and banking. You know,

1529
01:25:52,920 --> 01:25:57,360
Speaker 3: these people who came out of economic and finance programs

1530
01:25:57,439 --> 01:26:00,240
Speaker 3: ahead of the GFC. A lot of people said, I

1531
01:26:00,240 --> 01:26:03,000
Speaker 3: couldn't make sense of what was happening because we never

1532
01:26:03,080 --> 01:26:06,080
Speaker 3: had any room in our models for finance or banks

1533
01:26:06,160 --> 01:26:08,559
Speaker 3: or credit. We didn't talk about any of those things.

1534
01:26:08,920 --> 01:26:12,360
Speaker 2: Huh, really interesting. And our final question, what do you

1535
01:26:12,400 --> 01:26:17,360
Speaker 2: know about the world of failing the blank? Public policy, economics,

1536
01:26:17,400 --> 01:26:21,200
Speaker 2: deficit spending today? You wish you knew twenty five or

1537
01:26:21,200 --> 01:26:23,320
Speaker 2: so years ago when you were first getting started.

1538
01:26:23,720 --> 01:26:26,760
Speaker 3: So that conversation I had when I was an undergraduate

1539
01:26:27,040 --> 01:26:30,120
Speaker 3: about where to go to graduate school, and I can

1540
01:26:30,200 --> 01:26:34,479
Speaker 3: remember Randy Ray saying, if you go to Harvard, you

1541
01:26:34,520 --> 01:26:38,559
Speaker 3: won't suffer the slings and arrows that you'll suffer if

1542
01:26:38,600 --> 01:26:41,840
Speaker 3: you go to a program like Notre Dame at the time,

1543
01:26:42,160 --> 01:26:44,479
Speaker 3: or the New School or something like that. I'll never

1544
01:26:44,520 --> 01:26:47,799
Speaker 3: forget him saying you can avoid the slings and arrows.

1545
01:26:48,280 --> 01:26:52,080
Speaker 3: That was thirty years ago, and I think I didn't

1546
01:26:52,080 --> 01:26:54,920
Speaker 3: take the advice. I went to Cambridge, England, and then

1547
01:26:54,920 --> 01:26:57,200
Speaker 3: I went to the News School, and I have definitely

1548
01:26:57,240 --> 01:27:00,479
Speaker 3: suffered the slings and arrows over many years. I think

1549
01:27:01,040 --> 01:27:06,439
Speaker 3: I wish I had known or understood better just how

1550
01:27:07,200 --> 01:27:11,439
Speaker 3: petty and aggrieve a lot of academics can be.

1551
01:27:11,840 --> 01:27:15,439
Speaker 2: What's the old joke, Why is academic politics so vicious

1552
01:27:15,439 --> 01:27:19,000
Speaker 2: because the right there is so little at stake. Yeah,

1553
01:27:19,240 --> 01:27:20,680
Speaker 2: it's really true.

1554
01:27:20,479 --> 01:27:23,360
Speaker 3: Yeah it is. I didn't understand at the time, but

1555
01:27:24,320 --> 01:27:25,559
Speaker 3: I live to learn right.

1556
01:27:25,680 --> 01:27:29,559
Speaker 2: But you know, the academic lifestyle is really not a

1557
01:27:29,600 --> 01:27:33,520
Speaker 2: bad lifestyle. You get to work with bright young students.

1558
01:27:33,840 --> 01:27:37,919
Speaker 2: It's usually college towns or lovely parts of the country.

1559
01:27:40,280 --> 01:27:43,240
Speaker 2: It sounds like you enjoy being a professor and your

1560
01:27:43,360 --> 01:27:45,280
Speaker 2: husband enjoys being a dean.

1561
01:27:46,560 --> 01:27:49,240
Speaker 3: Well, he's a professor, sob.

1562
01:27:48,520 --> 01:27:50,000
Speaker 2: Is he still teaching or is he head of the

1563
01:27:50,040 --> 01:27:51,000
Speaker 2: department or both?

1564
01:27:51,160 --> 01:27:54,880
Speaker 3: He's he's a professor. He's got an endowed chair in

1565
01:27:54,920 --> 01:27:58,000
Speaker 3: the history department, but as of a month or so ago,

1566
01:27:58,120 --> 01:28:00,599
Speaker 3: he is once again back in the day office. He's

1567
01:28:00,600 --> 01:28:04,040
Speaker 3: an associate dean now, so he's doing both well.

1568
01:28:04,240 --> 01:28:07,840
Speaker 2: Stephanie, thank you for being so generous with your time.

1569
01:28:08,439 --> 01:28:12,160
Speaker 2: We have been speaking with Stephanie Kelton. She is professor

1570
01:28:12,240 --> 01:28:17,120
Speaker 2: of economics and public Policy at Stonybrook University and author

1571
01:28:17,320 --> 01:28:21,080
Speaker 2: of the best selling book The Deficit Myth. If you

1572
01:28:21,280 --> 01:28:24,920
Speaker 2: enjoy these conversations, well, check out any of the five

1573
01:28:25,000 --> 01:28:28,479
Speaker 2: hundred and fifty or so we've done over the past

1574
01:28:28,520 --> 01:28:34,080
Speaker 2: ten plus years. You can find those at iTunes, Spotify, YouTube, Bloomberg,

1575
01:28:34,479 --> 01:28:37,840
Speaker 2: wherever you find your favorite podcasts, And be sure and

1576
01:28:37,920 --> 01:28:41,559
Speaker 2: check out my new book, How Not to Invest The

1577
01:28:41,600 --> 01:28:46,240
Speaker 2: Bad Ideas, numbers, and behaviors that Destroy Wealth, coming out

1578
01:28:46,680 --> 01:28:50,519
Speaker 2: March eighteenth of this year. I would be remiss if

1579
01:28:50,560 --> 01:28:52,439
Speaker 2: I did not thank the crack team that helps me

1580
01:28:52,520 --> 01:28:56,280
Speaker 2: put these conversations together each week. My audio engineer is

1581
01:28:56,360 --> 01:29:00,640
Speaker 2: Andrew Gavin. Anna Luke is my producer, Sean Russo is

1582
01:29:00,680 --> 01:29:04,640
Speaker 2: my head of research. Sage Bauman is the head of podcasts.

1583
01:29:04,640 --> 01:29:08,600
Speaker 2: Here at Bloomberg, I'm Barry Retorts. You've been listening to

1584
01:29:08,720 --> 01:29:14,919
Speaker 2: Masters in Business on Bloomberg Radio,