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Speaker 1: Hello, Odd Lots listeners, It's Joe Wisenthal. I want to

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Speaker 1: let you know about something cool that's coming up. On Wednesday, July,

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Speaker 1: Odd Lots of holding our first ever live stream event.

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Speaker 1: Tracy and I will be interviewing Carson Block, founder of

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Speaker 1: Muddy Waters Research. We're gonna be talking to Carson live

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Speaker 1: on Bloomberg dot Com, the Terminal, Twitter, et cetera. It's

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Speaker 1: gonna be eight p m. Eastern Time on Wednesday, July Team,

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Speaker 1: so be sure to follow at podcast to catch the

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Speaker 1: live stream of the event. So check it out. Thanks, Hello,

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Speaker 1: and welcome to another episode of The Odd Lots Podcast.

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Speaker 1: I'm Joe Wisenthal and I'm Tracey all Away. So, Tracy,

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Speaker 1: we're still in the middle of a crisis. Yes, we

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Speaker 1: are three months on still crisis mode. You know, like

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Speaker 1: one of the things we've been doing throughout this whole

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Speaker 1: crisis is we've been making sure that listeners know the

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Speaker 1: date that we were recording this. And I feel like

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Speaker 1: it's especially important because a this as you mentioned, it's

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Speaker 1: been going on a long time. We you're in Hong Kong,

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Speaker 1: and Hong Kong you just had one of its worst

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Speaker 1: days of new cases ever and you guys were like

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Speaker 1: the the exemplars that everyone are, one of the best,

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Speaker 1: that we're all supposed to aspire to. And it's not

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Speaker 1: even over there. Yeah, it's pretty worrying. Uh, one of

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Speaker 1: its worst days on record, as you just mentioned, and

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Speaker 1: also Tokyo had a really bad day for infections as well.

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Speaker 1: So the concern is that even in countries that have

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Speaker 1: done reasonably well in containing the virus so far, there

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Speaker 1: is a risk for a big resurgence. Right so that

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Speaker 1: the date is at least in the US time, it's

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Speaker 1: morning where you are, but it's July nine, and yes,

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Speaker 1: several months after this began, we are still in the

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Speaker 1: thick of it. You're in Hong Kong, I'm in Texas,

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Speaker 1: where everyone is, where cases are very bad. This crisis

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Speaker 1: is a long way from over, and it doesn't seem

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Speaker 1: like there's any obvious path out as of as this

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Speaker 1: work moment. That's an accurate, if depressing description. Yes, And

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Speaker 1: the thing you know, obviously we've talked about this a lot.

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Speaker 1: It's it's a multi crisis crisis because there's the health crisis,

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Speaker 1: there's the political credibility crisis because even if leaders want

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Speaker 1: to do something or have a you know, plan to

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Speaker 1: fight the virus itself. There's a question of whether they

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Speaker 1: can actually uh sort of get the country behind it.

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Speaker 1: And then of course there's the straight up economic crisis,

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Speaker 1: mass unemployment, a major slowdown in activity, and yeah, and

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Speaker 1: of course all three of those different crises seem to

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Speaker 1: feed off each other and make each one worse. Uh,

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Speaker 1: you get this really bad feedback loop, i'd argue, is

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Speaker 1: the economy worsens, people get more upset with their politicians

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Speaker 1: and aeticians arguably get more distracted when it comes to

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Speaker 1: dealing with the health crisis, and then people get more upset.

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Speaker 1: It's a very bad cycle. It's a real like stress test,

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Speaker 1: I feel like on the entire system all at once.

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Speaker 1: We had a conversation a while back with Adam Two's

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Speaker 1: it's sort of like the everything crisis, and I think

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Speaker 1: right as you said, like maybe there was some appetite

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Speaker 1: in the US for a barely hard lockdown policies early on,

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Speaker 1: but you know, come to summer, it's really hard. So um, yeah,

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Speaker 1: it's a it's a bad situation. Okay, So we've set

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Speaker 1: the scene, which is pretty dire. What are we talking

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Speaker 1: about today? So if you're listening to the podcast we're

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Speaker 1: actually this is that you can view this on YouTube.

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Speaker 1: We are going to be talking today with Zach Carter.

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Speaker 1: He is a senior reporter at The Huffington's Post, but

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Speaker 1: right now he's also a best selling author of a

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Speaker 1: new book, The Price of Peace, Money, Democracy, and the

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Speaker 1: Life of John Maynard Keynes. And I feel like, um,

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Speaker 1: you know, a you know, in the economic crisis that

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Speaker 1: we're experiencing, I think a lot of people are talking

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Speaker 1: about Keynesian economics, arguably even more than the Great Financial Crisis.

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Speaker 1: We're seeing the sort of greater willingness on policymakers to

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Speaker 1: just spend, like a pure recognition that that has to

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Speaker 1: be part of the playbook. Much more aggressive fiscal policy. Um.

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Speaker 1: But it's even more. And I think one of the

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Speaker 1: things and we're going to talk about with Zach is

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Speaker 1: that Canes was dedicated his life to a lot more

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Speaker 1: than just spending when the economy is bad, which is

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Speaker 1: how many people think of Keynesianism. But it's actually many

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Speaker 1: more lessons and implications of his work than just what

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Speaker 1: people know him for. Um. I think the fact that

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Speaker 1: we are in this everything crisis sort of makes this

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Speaker 1: a very timely conversation. Yeah. I think this ties in

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Speaker 1: with a theme that we've been touching on, which is

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Speaker 1: there is a purpose to economics, which is supposed to

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Speaker 1: be to make everyone better off, and it feels like

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Speaker 1: that sometimes gets a little bit lost, especially in times

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Speaker 1: like now. All right, So without further Ado, Zack, thank

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Speaker 1: you very much for joining us. Thanks so much for

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Speaker 1: having me. Guys, I'm really excited to be talking to you. So, like,

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Speaker 1: you know, why is it so hard to read like

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Speaker 1: the general Theory? Like I've tried reading in a bunch

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Speaker 1: of times. Yeah, I have my chapters like the one

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Speaker 1: about like the beauty contest is pretty interesting, like talked

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Speaker 1: about the stock market, and some of it I really get,

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Speaker 1: and then other times I read it like, man, I

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Speaker 1: really really tough, Like what's the deal with that? Yeah,

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Speaker 1: you know, if you want to get through the general theory, uh,

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Speaker 1: And I feel like this is a pretty high folutint audience,

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Speaker 1: so we can we can just go straight to the

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Speaker 1: general theory. Uh, you know, you can get you can

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Speaker 1: get a lot out of that book if you just

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Speaker 1: read chapters twelve and twenty four, and those are the

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Speaker 1: most readable chapters. They're they're those that seem to make

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Speaker 1: the most intuitive sense about the world that we live

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Speaker 1: in today. You know, I think there are two things

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Speaker 1: going on with the general theory, but it's in its unreadability.

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Speaker 1: One is that Kin's is actively still trying to work

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Speaker 1: out his ideas about what's going on as he is

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Speaker 1: as he is writing, and he is in a sense

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Speaker 1: uncomfortable with the sort of radical implications of the ideas

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Speaker 1: that he's developing, because by the time he gets to

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Speaker 1: chapter twenty four, he says, uh, you know, I think

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Speaker 1: we'll have to have some sort of semi comprehensive socialization

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Speaker 1: of investment. And by investment he means he means, you know,

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Speaker 1: corporate investment, you know, spending on equipment, research and development,

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Speaker 1: things like that, in order to prevent the type of

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Speaker 1: thing that we're we're experiencing right now. This is the

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Speaker 1: Great Depression, which in Britain has been going on for

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Speaker 1: seventeen years. So he's, uh, you know, someone who comes

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Speaker 1: from this very you know, traditional liberal Enlightenment tradition, and

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Speaker 1: that is not a place that he is like super

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Speaker 1: eager to go to, but he does want to preserve

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Speaker 1: all of those liberal values about freedom of conscious, freedom

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Speaker 1: of choice, all of these things that that individual liberty,

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Speaker 1: that that we associate with liberalism. But he's he's getting

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Speaker 1: the point where he just doesn't think those things can

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Speaker 1: be saved without massive government activity, and he's not totally

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Speaker 1: comfortable with that. The other thing, though, is that you know,

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Speaker 1: when Cain's knew what he wanted to say, he was

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Speaker 1: very clear. He was a very accomplished financial journalist, and

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Speaker 1: I think one of the reasons why we still remember

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Speaker 1: who he is is because he had this incredible ability

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Speaker 1: to connect with the public over the course of his lifetime.

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Speaker 1: So for most the twenties and the thirties, he's easily

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Speaker 1: the most popular sort of financial press person in the world,

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Speaker 1: not just in Britain or the United States, but all

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Speaker 1: over the world. People people read his his columns and

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Speaker 1: his magazine articles, and they they understand the way the

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Speaker 1: economy works through what Kin's is saying. He has almost

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Speaker 1: no influence throughout this period on actual government policy. So

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Speaker 1: he's a guy who's capable of communicating when he wants to.

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Speaker 1: But I honestly think that when he got to the

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Speaker 1: general theory, he said, you know, we are like I'm trying.

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Speaker 1: I've had this great success communicating with the public, I

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Speaker 1: have not been able to persuade the policymakers. What if

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Speaker 1: I make this really hard to understand so that a

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Speaker 1: bunch of economists will read it, Like if I make

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Speaker 1: this really hard to understand, economists will spend forever diving

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Speaker 1: into it and trying to decipher you know, liquidity preference

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Speaker 1: and all these things. He'd been making the sort of

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Speaker 1: basic policy arguments for about about seven years before the

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Speaker 1: General theory came out. He was talking about the multiplier,

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Speaker 1: he was he was talking about deficit spending, he was

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Speaker 1: talking about public works, all all of these things that

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Speaker 1: we associate with Kynesianism today that long predated the general theory.

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Speaker 1: I think he just tried to sort of mystify it

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Speaker 1: so that economists would spend a lot of time digging

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Speaker 1: through it. And and as a result, it became this

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Speaker 1: big work of economic theory that only the great brilliant

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Speaker 1: economists could understand. And then the great brilliant economists could

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Speaker 1: take it to policymakers, into into legislatures and too you know,

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Speaker 1: two presidents and say, well, uh, only we can really

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Speaker 1: understand this incredible work of impenetrable genius. Um you know

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Speaker 1: you you must listen to us now, and and that

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Speaker 1: empowered a whole generation of of you know what we

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Speaker 1: now call Kanzie and economists to to to push for

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Speaker 1: deficit spending. Essentially, I think there's a lot more to

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Speaker 1: Kaanes than deficit spending, but that I think that's how

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Speaker 1: he ends up becoming so influential in in the late

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Speaker 1: thirties and in Zach. Maybe just to stop and back

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Speaker 1: up for a second, can you walk us through how

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Speaker 1: radical Keynes's ideas were actually considered in the nine thirties,

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Speaker 1: because I think nowadays everyone just assumes Keynesianism is kind

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Speaker 1: of the economic orthodoxy, but obviously it wasn't always considered

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Speaker 1: that well, and it's it's been the orthodoxy that's fall

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Speaker 1: in a favorite. I think I think now it's it's

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Speaker 1: it's back in vogue today. When we think about the

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Speaker 1: gold standard, which was the dominant mode not only of

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Speaker 1: economic exchange, but of of sort of international economic cooperation,

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Speaker 1: it was the global geopolitical order. Today we think about

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Speaker 1: the gold standard as as sort of an instrument of conservatism.

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Speaker 1: People who like the gold standard are are typically associated

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Speaker 1: with the hard right they're associated with the very right

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Speaker 1: wing of Republican Party or or anti internationalist movements, things

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Speaker 1: like that. That wasn't the case in the early twentieth century.

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Speaker 1: The people who were committed to the gold Standard. There

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Speaker 1: were right wingers who were who were part of it,

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Speaker 1: but there was this belief that liberal internationalism, that that

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Speaker 1: free exchanged between different peoples in different countries would help

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Speaker 1: bring the world to a sort of peaceful place. And

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Speaker 1: Kines was saying, I like those ideals, but this doesn't

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Speaker 1: actually work, and we're not getting more peaceful, we're becoming

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Speaker 1: more warlike, and and this is leading us to domestic

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Speaker 1: misery and international conflict. And what he's doing when he

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Speaker 1: says that is blowing up not just sort of a

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Speaker 1: conservative paradigm, but the paradigm that dominates conservatives, liberals, and centrists.

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Speaker 1: It's it's it's sort of be like coming to the

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Speaker 1: United States today and saying rule of law is a

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Speaker 1: bad idea, the Constitution is stupid. Don't do that anymore.

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Speaker 1: I've got a better idea. It's very very radical, and

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Speaker 1: in the sense that it's a deep departure from what

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Speaker 1: what the understood way of doing things and the international

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Speaker 1: order is there's an almost sort of like quasi religious

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Speaker 1: moral significance to this order. You know, the gold standard

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Speaker 1: isn't just about growth and and balance, trade and prosperity.

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Speaker 1: It's it's it's about respecting different countries. It's about uh,

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Speaker 1: you know, sort of sort of loving your neighbor in

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Speaker 1: this in this really this way that people really do

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Speaker 1: take seriously at the time, even though I think of retrospect,

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Speaker 1: it seems kind of silly. And and so kanes Is

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Speaker 1: is saying, we have to throw all that out. If

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Speaker 1: we care about these values, we have to totally change.

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Speaker 1: He's not totally comfortable with the policy implications of of

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Speaker 1: changing that, and he changes his mind over the course

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Speaker 1: of the nineteen twenties and the nineteen thirties many times.

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Speaker 1: But by the time you get to nineteen forties. In

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Speaker 1: the United States, he's famous for being the deficit spending guy.

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Speaker 1: But in the UK his biggest policy achievement is being

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Speaker 1: the financial architect for the National Health Service. So he

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Speaker 1: follows this logic through and comes to the conclusion that

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Speaker 1: they have to socialize not just health insurance, but actually

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Speaker 1: the the entire medical system in the UK, and he

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Speaker 1: he helps push that through politically. So the implications of

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Speaker 1: this are are much more radical, I think than what

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Speaker 1: than what we've come to understand him as in the

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Speaker 1: United States, where he's the sort of deficit therapist who says,

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Speaker 1: spend money when things go off the cliff. He was

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Speaker 1: talking about realizing UH and and UH fostering a more

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Speaker 1: harmonious democratic society in good times and in bad I

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Speaker 1: want to get to that uh soon, like the gap

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Speaker 1: between what we call kanesie and economics and cane Zone ideas.

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Speaker 1: But before we do so, we set this up. Obviously,

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Speaker 1: it feels to me like your book is very timely

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Speaker 1: given this massive international crisis, which you probably weren't anticipating

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Speaker 1: when you decide to write it. But why did you

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Speaker 1: like what prompted you as a journalist to say, like,

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Speaker 1: I want to write a Keynes biography because there are

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Speaker 1: Canes biographies. We've interviewed uh Lord Skidelski at least once

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Speaker 1: on the podcast, who is probably the most famous Canes biographer.

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Speaker 1: But from your perspective, what was it that in your

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Speaker 1: views like there needs to be another Canes book, and

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Speaker 1: I want to do it because it's gonna be a

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Speaker 1: tough two thousand eight changed the way people looked at

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Speaker 1: cane Zinism in in a kind of foundational way. Cans

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Speaker 1: was already sort of if you look at the like

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Speaker 1: academic literature, and the stuff was already sort of coming

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Speaker 1: back into vogue over the course of the Bush administration,

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Speaker 1: but it had been really really deep in the legitimacy

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Speaker 1: ditch before that, so it's just barely coming back into

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Speaker 1: respectability among among academ economists. And two thousand eight makes

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Speaker 1: a lot of the criticisms of Kanzianism seemed very silly.

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Speaker 1: And for me, I was working as a banking reporter

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Speaker 1: at a trade publication called SNL Financial, which is now

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Speaker 1: part of SMP Global, and you know, doing just analyzing

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Speaker 1: banking data and and looking at credit quality and you know,

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Speaker 1: delinquent loans and all the rest. And I really love

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Speaker 1: that job. But it became very clear that in two

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Speaker 1: thousand and eight, all the people that I talked to

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Speaker 1: went from saying markets are rational, um, they reach equilibrium

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Speaker 1: and we've got to obey the verdict of the rational

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Speaker 1: market to saying we have to bail at the financial sector.

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Speaker 1: And that was clearly people weren't stupid like people are

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Speaker 1: talking to knew they were changing their tune, right, they

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Speaker 1: weren't just like hypocrites, but it was very clear that

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Speaker 1: there was an intellectual shift that was happening. And I said, okay, well,

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Speaker 1: let me read this Kane's guy. I've only ei leaned

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Speaker 1: him from my eCOM one of one classes. But when

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Speaker 1: I went back and read him, and I tried to read,

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Speaker 1: to be perfectly honest, I tried to read the General

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Speaker 1: Theory first, and I found it sort of like it

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Speaker 1: was as pleasant as as like eating a pretzel covered

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Speaker 1: in Thorn's right, it's just not great. I'm glad I'm

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Speaker 1: not the only one. I was like a little nervous.

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Speaker 1: I'm just glad that No, it's it's terrible. It's terrible.

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Speaker 1: I mean, Kane's most of the time is a beautiful writer.

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Speaker 1: His friends are people like Virginia Wolf and Litton Straitchy

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Speaker 1: and Ian Forster, and he is capable of doing beautiful

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Speaker 1: things with language about economic policy. But the General Theory

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Speaker 1: is just not That's not not his his most lyrical work.

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Speaker 1: So I went back and read The Economic Consequences of

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Speaker 1: the Piece, which is the book that he writes at

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Speaker 1: the end of the negotiations over the Treaty of Versailles.

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Speaker 1: He is the top representative from the British Treasury at

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Speaker 1: at the talks about how to establish both an economic

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Speaker 1: and political order at the end of World War One,

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Speaker 1: and he is furious about about what his own government

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Speaker 1: has done and about the ultimate agreements, and he says, look,

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Speaker 1: the economic terms that we have committed ourselves to and

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Speaker 1: this treaty are going to march the entire continent towards

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Speaker 1: dictatorship and war. And I think it's just, you know,

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Speaker 1: there are people who have have quibbled with some of

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Speaker 1: his figures here and there over the years, but I

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Speaker 1: just think it's very difficult to argue with that basic premise.

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Speaker 1: He was talking about something that came to pass, and

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Speaker 1: and for reasons that are very closely connected to why

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Speaker 1: they came to pass. The reparations that were assigned to

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Speaker 1: Germany were essentially unpayable. They destroyed the German economy and

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Speaker 1: UH and that economic wreckage sort of created the breeding

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Speaker 1: ground for fascism. And when I read that, it became

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Speaker 1: clear to me that Haynes wasn't just talking about money

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Speaker 1: and numbers economic consequences. The piece is not about deficit spending.

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Speaker 1: Kanes hasn't even thought of that yet. He's just talking

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Speaker 1: about international cooperation and figuring out a way to link

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Speaker 1: economic policy with global harmony. He's still committed to the

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Speaker 1: gold standard in nineteen nineteen when he writes this book.

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Speaker 1: But it seemed to me like it was a work

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Speaker 1: of political theory, like the works that I had studied

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Speaker 1: when I was an undergraduate. I studied philosophy, so you know,

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Speaker 1: Hobb's lap were so enlightenment philosophy stuff, and and he

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Speaker 1: just seemed like one of those guys to me, And

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Speaker 1: so I started reading, and I kept reading. And when

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Speaker 1: you read Skidelski and other accounts, these are very good biographies.

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Speaker 1: I don't want to denigrate them at all. But they're

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Speaker 1: written from the perspective of of looking at Kines as

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Speaker 1: an economist and how he came to develop his economic ideas.

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Speaker 1: They're very, very useful for that purpose. But if you

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Speaker 1: think of Kines as a social theorist, and if you

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Speaker 1: think of him as a statesman, there's a lot going

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Speaker 1: on in the economic theory that is happening for these

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Speaker 1: these moral political hole reasons that I think are really

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Speaker 1: the things that are driving him. I think in a

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Speaker 1: lot of ways, Canes comes up with a solution that

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Speaker 1: he comes to believe is morally or politically necessary, and

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Speaker 1: then sort of reverse engineers it to be economically acceptable

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Speaker 1: to people. In economics, he has a really great essay

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Speaker 1: on Isaac Newton. A lot of people don't know is

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Speaker 1: what was an important economist in the British Empire in

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Speaker 1: the in the eighteenth century. Um in charge of the

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Speaker 1: British meant all sorts of monetary policy stuff he's doing,

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Speaker 1: But he talks about Newton and says, you know, Newton's

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Speaker 1: great genius was this this ability to have a flash

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Speaker 1: of creative insight, and then he would dress up the

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Speaker 1: creative insight with mathematics after the fact. And I think

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Speaker 1: Canes was doing the same thing in economics, um and

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Speaker 1: and that makes him, you know, sort of more of

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Speaker 1: an artist than an economist that as we would think

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Speaker 1: of the economist today. It's really interesting how you mentioned

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Speaker 1: it sort of took the two thousand and eight financial

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Speaker 1: crisis to bring Keynesianism back in vogue, and then, of

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Speaker 1: course it kind of took the Great Depression to make

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Speaker 1: people take Kane seriously. In the first place. But just

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Speaker 1: to back up for a second, can you talk to

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Speaker 1: us more about his social vision, like what is it

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Speaker 1: that he is trying to reverse engineer here? So with Kansa,

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Speaker 1: you have always have to be careful because he changes

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Speaker 1: over time. He's not monolithic, but he does have this

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Speaker 1: very consistent vision of beauty and the good life um

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Speaker 1: that he gets from from being an undergraduate at Cambridge

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Speaker 1: and being a member of the Bloomsberry set. So friends

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Speaker 1: with Virginia Wolf, the great writer, Litton Straighty, the great writer,

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Speaker 1: Ian forrest Or the Great writer, a lot of painters

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Speaker 1: who are not as well known today, but people like

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Speaker 1: Duncan Grant and and Vanessa Bell who was Virginia Wolf's sister,

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Speaker 1: who in their day were considered very great artists. You know,

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Speaker 1: Vanessa Bell would go and hang out with Pablo Picasso

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Speaker 1: in in Montparnas all the time that that was they

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Speaker 1: were part of this big international cultural milieu. And Kines

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Speaker 1: himself ended up marrying a ballerina named Lydia Lapakovo who's

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Speaker 1: from St. Petersburg, who's basically the most famous ballerina in Britain.

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Speaker 1: This is at time when ballet is sort of like

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Speaker 1: a combination between like football and and like Netflix. It's

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Speaker 1: it's easily like the most popular and powerful cultural thing

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Speaker 1: that's happening in Europe at the time. So he's very

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Speaker 1: deeply involved with this cultural life and he thinks that

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Speaker 1: this this this vibrant thing where you can, you know,

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Speaker 1: you can hang out with Stravinsky and you can and

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Speaker 1: you can you know, make out with ballerinas and and

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Speaker 1: drink champagne with Virginia Wolf while having your hair cut

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Speaker 1: by you know, somebody who's just got back from seeing

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Speaker 1: Gertrude Stein. He thinks this is really the life, and

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Speaker 1: it's hard to you know, it's hard to disagree with

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Speaker 1: the guy. I mean, that sounds like a pretty good

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Speaker 1: way to live, and he wants to preserve that. And

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Speaker 1: when he starts out as a as an economic thinker,

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Speaker 1: he's really just trying to preserve that for his his

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Speaker 1: sort of upper middle class, quasi elite milieu. But as

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Speaker 1: he continues to develop his his thinking, he says, you know,

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Speaker 1: if we don't open this space up to other people,

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Speaker 1: the rabble are going to revolt and they are going

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Speaker 1: to overthrow us, and we are not going to be

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Speaker 1: able to have these parties anymore, and that is going

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Speaker 1: to be terrible. So in in order to preserve this

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Speaker 1: sort of lifestyle, we've we've got to democratize it. And

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Speaker 1: he starts thinking about ways to essentially alleviate the very

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Speaker 1: high inequality of the late Gilded Age that he's living

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Speaker 1: in um in order to preserve the sort of high

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Speaker 1: cultural achievements of that of that era, thinking that, you know,

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Speaker 1: it's better to democratize these things than have them be

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Speaker 1: smashed by what he's particularly worried about as the marks

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Speaker 1: of authoritarianism, which he thinks is brutal and violent and terrible,

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Speaker 1: but but also just kind of ghost just just there's

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Speaker 1: bad art from the fascists. So if you want to

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Speaker 1: have a beautiful world, you're going to need to democratize it.

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Speaker 1: And as he continues to develop his thought, he believes

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Speaker 1: that the sort of possibilities for democratizing this or wider

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Speaker 1: and wider, so he ultimately ends up concluding that economic scarcity,

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Speaker 1: which at least when I was studying economics as a

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Speaker 1: as an undergraduate, I was told you first thing, first

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Speaker 1: day and ecoon one on one is economics is the

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Speaker 1: study of you know, scarce resources and and infinite wants.

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Speaker 1: Kanser says, that's not that that's not the subject of economics.

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Speaker 1: The subject of economics is uncertainty and human decision making

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Speaker 1: in the face of uncertainty. Scarcity is not the thing

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Speaker 1: that we have to worry about. We can give all

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Speaker 1: this stuff to everybody. That's very, very radical, I think

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Speaker 1: rethinking of what economics is, and I don't think it's

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Speaker 1: ever really been integrated into the policy agenda of people

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Speaker 1: who call themselves Kinesians in in sort of government politics,

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Speaker 1: like I don't think Paul Krugman, for instance, talks about

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Speaker 1: uncertainty very often. He talks about deficits and you know,

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Speaker 1: debt to GDP ratios and things like that. You don't

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Speaker 1: see these guys talking about uncertainty. One of the great

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Speaker 1: contributions I think that Lord's goodels ty May, I think

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Speaker 1: was trying to recenter uncertainty as the key to Dick

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Speaker 1: ckenzie and thought all the way back in the nineteen

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Speaker 1: eighties you said he was scared of fascism. I'm just

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Speaker 1: wondering was it fascism or was it communism? Because I

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Speaker 1: think people forget in the nineteen twenties and nineteen thirties,

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Speaker 1: how absolutely terrified most of the world was about rising

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Speaker 1: waves of socialists and communism in the East. It's it's

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Speaker 1: both early on. But he has a very interesting quote

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Speaker 1: in he goes to uh to this big international conference

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Speaker 1: at Genoa in Italy, which is designed to renegotiate the

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Speaker 1: terms from the Treaty of Versailles from nineteen nineteen, and

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Speaker 1: he's he's writing all of these dispatches back that are

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Speaker 1: being published all over the world. He's he's syndicated. It's

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Speaker 1: very famous guy. And he basically says that there are

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Speaker 1: people who think the big challenge of the world today

428
00:23:45,359 --> 00:23:48,760
Speaker 1: is between the sort of bourgeois liberal states of the

429
00:23:48,840 --> 00:23:52,680
Speaker 1: nineteenth century and and the socialist stuff that's happening in

430
00:23:52,880 --> 00:23:55,320
Speaker 1: in Soviet Russia, which is has you know, there's very

431
00:23:55,359 --> 00:23:59,400
Speaker 1: recent Russian Revolution stuff. He said, I disagree. I think

432
00:23:59,440 --> 00:24:03,240
Speaker 1: the real allunges between this this thing called militarism and

433
00:24:03,280 --> 00:24:07,480
Speaker 1: I'm paraphrasing here and liberalism, and that militarism believes in

434
00:24:07,520 --> 00:24:10,600
Speaker 1: the imposition of a culture, in the imposition of of

435
00:24:10,680 --> 00:24:14,119
Speaker 1: sort of social hierarchies against people, and liberalism is is

436
00:24:14,160 --> 00:24:18,080
Speaker 1: about free ideas and free individuals and socialism is sort

437
00:24:18,119 --> 00:24:21,520
Speaker 1: of this this you know, kind of weird variant of

438
00:24:21,640 --> 00:24:25,399
Speaker 1: liberalism that he's he's not totally comfortable with yet, but

439
00:24:25,480 --> 00:24:28,760
Speaker 1: he doesn't see it as being a totally alien thing

440
00:24:28,920 --> 00:24:32,080
Speaker 1: the way he sees that the hard right that's rising

441
00:24:32,359 --> 00:24:34,280
Speaker 1: in Europe at the time. And I think we forget

442
00:24:34,320 --> 00:24:37,360
Speaker 1: when we talk about Canes often and the rise of fascism.

443
00:24:37,440 --> 00:24:40,240
Speaker 1: There's like Canes in nineteen nineteen, and then there's there's

444
00:24:40,320 --> 00:24:42,400
Speaker 1: Hitler in nineteen thirty two. But there's the beer Hall

445
00:24:42,440 --> 00:24:48,200
Speaker 1: Putch in nine, there's Mussolini in nineteen. There are there's

446
00:24:48,240 --> 00:24:52,600
Speaker 1: just all of these very intensive outbreaks of far right

447
00:24:52,720 --> 00:24:56,720
Speaker 1: political violence that are happening across Europe very quickly after

448
00:24:56,880 --> 00:25:00,320
Speaker 1: the end of the First World War, and that's that's

449
00:25:00,359 --> 00:25:03,000
Speaker 1: what's really animating him. He doesn't He eventually goes to

450
00:25:03,119 --> 00:25:05,840
Speaker 1: Soviet Russia in nine and comes back and says, this

451
00:25:06,000 --> 00:25:09,600
Speaker 1: is a disaster. Don't do this. These people don't believe

452
00:25:09,640 --> 00:25:12,840
Speaker 1: in the good life. They're totally acetic, like they refuse

453
00:25:12,960 --> 00:25:17,600
Speaker 1: to enjoy anything. It's it's he's against the sort of

454
00:25:17,760 --> 00:25:21,280
Speaker 1: political oppression that he sees that the sort of paranoia

455
00:25:21,400 --> 00:25:24,119
Speaker 1: that he sees the in the government breeding, but he

456
00:25:24,280 --> 00:25:26,719
Speaker 1: also just thinks that it's sort of like a colorless,

457
00:25:26,840 --> 00:25:31,359
Speaker 1: lifeless existence, that it's it's made people, um, joyless and

458
00:25:31,480 --> 00:25:34,920
Speaker 1: in this really sort of spiritual way. So he's a

459
00:25:34,960 --> 00:25:38,480
Speaker 1: critic of communism, but it there's a reason why a

460
00:25:38,560 --> 00:25:41,040
Speaker 1: lot of his critics who arise after World War Two

461
00:25:41,119 --> 00:25:44,320
Speaker 1: are are on the right and and not on the left. Um.

462
00:25:45,080 --> 00:25:50,720
Speaker 1: He he sees the coming of right wing militaristic authoritarianism

463
00:25:51,040 --> 00:25:55,200
Speaker 1: as the great threat facing society, and he also says, well, yeah,

464
00:25:55,200 --> 00:25:57,919
Speaker 1: we shouldn't do Soviet Russia too. At the same time, um,

465
00:25:58,359 --> 00:26:00,960
Speaker 1: he's he's often saying we need of find ways to

466
00:26:01,080 --> 00:26:03,919
Speaker 1: move left what we'd call left today on economic policy

467
00:26:04,080 --> 00:26:06,080
Speaker 1: in his time, it's not clear what whether what he's

468
00:26:06,080 --> 00:26:08,600
Speaker 1: doing is left right or center to be be very clear,

469
00:26:09,240 --> 00:26:12,120
Speaker 1: but he's often saying we need to do left wing

470
00:26:12,200 --> 00:26:15,560
Speaker 1: economic policies to prevent this this sort of right wing

471
00:26:15,640 --> 00:26:20,679
Speaker 1: dictatorship politics from taking over. So how did that change?

472
00:26:21,000 --> 00:26:25,040
Speaker 1: So here you have this sort of social theorist philosopher,

473
00:26:25,200 --> 00:26:27,960
Speaker 1: even perhaps as you characterize him, something of an artist,

474
00:26:28,359 --> 00:26:32,520
Speaker 1: who then sort of built a economic vision to sort

475
00:26:32,560 --> 00:26:36,360
Speaker 1: of buttress that those ideals and those ideals, as you said,

476
00:26:36,440 --> 00:26:38,960
Speaker 1: you know, about spreading his vision of the good life

477
00:26:39,040 --> 00:26:43,760
Speaker 1: to more people maintaining that lifestyle. How did we get

478
00:26:43,880 --> 00:26:48,920
Speaker 1: this thing called Kanzian economics, which is, oh, the you know,

479
00:26:48,960 --> 00:26:51,840
Speaker 1: the unemployment is here, so we have to set interest

480
00:26:51,960 --> 00:26:55,200
Speaker 1: rates here, and we have to spend this much. How

481
00:26:55,280 --> 00:26:58,400
Speaker 1: did that become a thing where it got so seemingly

482
00:26:58,600 --> 00:27:01,520
Speaker 1: divorced from the philosophy. Well, I think this gets back

483
00:27:01,600 --> 00:27:03,720
Speaker 1: to your first question, Joe, when you were talking about

484
00:27:03,760 --> 00:27:06,080
Speaker 1: why is the general theory so hard to read? And

485
00:27:07,240 --> 00:27:12,320
Speaker 1: we have remembered Kanes because the economics profession took him

486
00:27:12,400 --> 00:27:16,600
Speaker 1: up as sort of this important, idle icon that they

487
00:27:16,600 --> 00:27:19,520
Speaker 1: could hold up and say, look, the great Kine said

488
00:27:19,600 --> 00:27:21,880
Speaker 1: we must do it this way, therefore it is legitimate.

489
00:27:21,920 --> 00:27:24,600
Speaker 1: He's like a historical figure who had great prestige, who

490
00:27:24,720 --> 00:27:28,320
Speaker 1: was well respected around the world, and in invoking his name,

491
00:27:28,440 --> 00:27:32,800
Speaker 1: had this sort of legitimizing power over policies that people

492
00:27:33,520 --> 00:27:36,800
Speaker 1: would invoke and the policies that people wanted to pursue.

493
00:27:36,800 --> 00:27:39,159
Speaker 1: In the United States, which became the sort of global

494
00:27:39,240 --> 00:27:42,760
Speaker 1: economic hedgeman at after World War Two, which and that's

495
00:27:42,800 --> 00:27:46,959
Speaker 1: important because the UK was the global economic hegemon before

496
00:27:47,560 --> 00:27:49,920
Speaker 1: the US took over. And so because Kines is the

497
00:27:49,960 --> 00:27:54,560
Speaker 1: most prominent economic figure from that, Americans are very very

498
00:27:54,640 --> 00:27:57,040
Speaker 1: eager to take somebody from sort of the last old

499
00:27:57,160 --> 00:28:00,040
Speaker 1: order and say, look, this guy, this guy is a

500
00:28:00,160 --> 00:28:02,320
Speaker 1: serious you knew what he was doing. We can refer

501
00:28:02,440 --> 00:28:05,600
Speaker 1: to him for for our policymaking. But in the United States,

502
00:28:06,320 --> 00:28:10,159
Speaker 1: the economics profession doesn't really want to abandon its basic assumptions.

503
00:28:10,720 --> 00:28:12,960
Speaker 1: It likes the Kanesie and policies because they can see

504
00:28:13,040 --> 00:28:15,440
Speaker 1: that they work. I mean, they watched the you know,

505
00:28:15,520 --> 00:28:17,840
Speaker 1: the New Deal and the great in World War two

506
00:28:17,880 --> 00:28:20,200
Speaker 1: and saw the war spending. But they don't really want

507
00:28:20,280 --> 00:28:23,480
Speaker 1: to shift the focus of economics away from rational actors

508
00:28:23,840 --> 00:28:27,240
Speaker 1: in general equilibrium theory, and and so they start saying, well,

509
00:28:27,440 --> 00:28:30,920
Speaker 1: you know, I think the most the most popular version

510
00:28:30,960 --> 00:28:33,560
Speaker 1: of this is Paul Samuelson, who's probably a lot of

511
00:28:33,880 --> 00:28:36,160
Speaker 1: viewers here, you know, like me. You know you've read

512
00:28:36,160 --> 00:28:38,680
Speaker 1: the Samuelson textbook. Is your econ one on one book, right?

513
00:28:38,720 --> 00:28:41,000
Speaker 1: I mean this is this is how Kanzie and ideas

514
00:28:41,120 --> 00:28:44,560
Speaker 1: really get out into the main streams is through these textbooks.

515
00:28:44,960 --> 00:28:49,320
Speaker 1: And Samuelson basically says, look, things get kind of wacky.

516
00:28:49,360 --> 00:28:52,040
Speaker 1: If we're not at full employment, markets are rational. You know,

517
00:28:52,120 --> 00:28:54,520
Speaker 1: you've got supply and demand and they hit their equilibrium.

518
00:28:54,920 --> 00:28:57,680
Speaker 1: That happens unless we're not at full employment. And if

519
00:28:57,680 --> 00:28:59,920
Speaker 1: we get into full if we get out of full employment,

520
00:29:00,000 --> 00:29:01,920
Speaker 1: things going to this topsy turvy world. So we just

521
00:29:02,080 --> 00:29:04,040
Speaker 1: have to figure out a way to make sure that

522
00:29:04,120 --> 00:29:07,200
Speaker 1: we have full employment and will do fiscal policies. And

523
00:29:07,320 --> 00:29:12,080
Speaker 1: he doesn't really investigate what that means for the nature

524
00:29:12,160 --> 00:29:14,200
Speaker 1: of the broader theory. You know, why is it that

525
00:29:14,320 --> 00:29:17,400
Speaker 1: things would not be at equilibrium if people are rational

526
00:29:17,480 --> 00:29:20,560
Speaker 1: actors and things generally do reach equilibrium, why do you

527
00:29:21,080 --> 00:29:24,680
Speaker 1: they start talking about external shocks and and things like

528
00:29:24,800 --> 00:29:27,960
Speaker 1: this that that have no Really they're sort of ad

529
00:29:28,040 --> 00:29:30,920
Speaker 1: hoc additions to the theory, but they don't require you

530
00:29:31,080 --> 00:29:34,640
Speaker 1: to break from these other other things about economics, which look,

531
00:29:34,960 --> 00:29:37,800
Speaker 1: they're useful there, it's not you know, people talk about

532
00:29:37,880 --> 00:29:40,280
Speaker 1: these things because they're intuitive. They make sense. And when

533
00:29:40,280 --> 00:29:43,560
Speaker 1: you're talking particularly about like a small business and or

534
00:29:43,600 --> 00:29:46,280
Speaker 1: a household and and supply and demand and how monetary

535
00:29:46,320 --> 00:29:49,000
Speaker 1: flows work there, they make a lot of sense. They

536
00:29:49,080 --> 00:29:52,000
Speaker 1: don't tend to work I think on on a large

537
00:29:52,200 --> 00:29:56,280
Speaker 1: social scale, but they just sort of keep keep handwaving that.

538
00:29:56,440 --> 00:30:00,240
Speaker 1: And in the United States, this this principle is really

539
00:30:00,320 --> 00:30:02,520
Speaker 1: useful because it just says, look, the government can spend

540
00:30:02,560 --> 00:30:04,520
Speaker 1: on anything and it will be good for the economy.

541
00:30:04,960 --> 00:30:08,160
Speaker 1: So whatever it is that you're democratic or republican government

542
00:30:08,200 --> 00:30:10,400
Speaker 1: wants to spend on, whether it's the war in Vietnam

543
00:30:10,920 --> 00:30:14,520
Speaker 1: or the invention of medicare under under Lyndon B. Johnson

544
00:30:14,600 --> 00:30:17,320
Speaker 1: in the nineteen sixties, these projects are all good for

545
00:30:17,400 --> 00:30:19,880
Speaker 1: the economy because they will increase demand and they will

546
00:30:20,120 --> 00:30:23,479
Speaker 1: they will get the economy back to equilibrium. And Keynes

547
00:30:23,560 --> 00:30:25,880
Speaker 1: wasn't in favor of spending as such, he wasn't in

548
00:30:26,000 --> 00:30:28,720
Speaker 1: favor of deficits as such. He had a social vision

549
00:30:28,760 --> 00:30:30,959
Speaker 1: and it mattered very deeply to him what you actually

550
00:30:31,040 --> 00:30:33,880
Speaker 1: spent the money on and why. But if you turn

551
00:30:34,000 --> 00:30:36,400
Speaker 1: him into this sort of sterile economist who only thinks

552
00:30:36,440 --> 00:30:39,520
Speaker 1: about money and numbers, who is only a scientist who

553
00:30:39,560 --> 00:30:41,560
Speaker 1: you know, pushes up his glasses on his nose and

554
00:30:42,000 --> 00:30:45,280
Speaker 1: and just tells you how the equations balance, then you

555
00:30:45,400 --> 00:30:49,840
Speaker 1: can use that guy to to justify different moral considerations,

556
00:30:49,920 --> 00:30:53,400
Speaker 1: and he's not this sort of partisan or or philosophical

557
00:30:53,720 --> 00:30:57,800
Speaker 1: or or or a moralist figure who who would have

558
00:30:57,920 --> 00:31:00,960
Speaker 1: an agenda right, and he's dead, so we can't defend himself.

559
00:31:02,280 --> 00:31:03,840
Speaker 1: And this is what happens over the course of the

560
00:31:03,880 --> 00:31:07,400
Speaker 1: fifties and especially the nineteen sixties. And then of course

561
00:31:07,440 --> 00:31:09,760
Speaker 1: you have this inflation crisis in the nineteen seventies and

562
00:31:09,840 --> 00:31:13,280
Speaker 1: people say, well, Kennism is responsible for for inflation, so

563
00:31:13,560 --> 00:31:16,120
Speaker 1: it doesn't count anymore. Um, But you have about twenty

564
00:31:16,200 --> 00:31:20,520
Speaker 1: years where people are just trying to justify the political

565
00:31:20,640 --> 00:31:24,680
Speaker 1: agenda that they have for you know, good and bad reasons,

566
00:31:24,760 --> 00:31:27,120
Speaker 1: for conservative and liberal reasons. And Kanes is the guy

567
00:31:27,240 --> 00:31:30,280
Speaker 1: who can be invoked. Nixon invokes him, lb J and

568
00:31:30,400 --> 00:31:33,680
Speaker 1: gall Braith invoke him. Uh, there are very different types

569
00:31:33,760 --> 00:31:36,120
Speaker 1: of presidents in the United States who are saying this

570
00:31:36,280 --> 00:31:38,160
Speaker 1: is our guy, and this is this is why we

571
00:31:38,280 --> 00:31:40,480
Speaker 1: are doing what we are doing. Just to dig into

572
00:31:40,560 --> 00:31:42,320
Speaker 1: that a bit more, I'm curious, who do you think

573
00:31:43,080 --> 00:31:48,680
Speaker 1: misused Kane's the most in that con It's it's really hard,

574
00:31:48,920 --> 00:31:52,120
Speaker 1: it's really hard to say, you know. I think lb

575
00:31:52,240 --> 00:31:55,080
Speaker 1: J is a very is a really fascinating person to

576
00:31:55,240 --> 00:31:57,640
Speaker 1: me because I think his social programs that he's doing

577
00:31:57,680 --> 00:32:01,040
Speaker 1: in the United States are exactly the types of programs

578
00:32:01,440 --> 00:32:05,600
Speaker 1: that Cain's thought were were necessary. So, you know, LBJ

579
00:32:05,920 --> 00:32:08,400
Speaker 1: creates food stamps, a lot of the New Deal programs

580
00:32:08,440 --> 00:32:10,920
Speaker 1: that we like like in the United States, like social Security,

581
00:32:11,480 --> 00:32:14,960
Speaker 1: they become the thing that we understand that to be

582
00:32:15,000 --> 00:32:18,320
Speaker 1: because LBJ expands them so much, and he creates Medicare.

583
00:32:19,360 --> 00:32:21,560
Speaker 1: There's just a lot of this social safety net kind

584
00:32:21,600 --> 00:32:23,480
Speaker 1: of work that seems very canzy, and to me, this

585
00:32:23,640 --> 00:32:27,960
Speaker 1: protecting society from the swings of the market. You know,

586
00:32:28,200 --> 00:32:29,920
Speaker 1: when things go up or things go down, you've still

587
00:32:29,960 --> 00:32:31,600
Speaker 1: got this stuff and you're not going to be a

588
00:32:31,680 --> 00:32:35,040
Speaker 1: sort of thrown to the wolves. But lb J is

589
00:32:35,480 --> 00:32:39,720
Speaker 1: also doing the Vietnam War, and Caines wanted to do

590
00:32:40,320 --> 00:32:43,640
Speaker 1: all of that stuff so that people wouldn't go to war.

591
00:32:44,120 --> 00:32:46,880
Speaker 1: He thought he thought you could use economic policy to

592
00:32:47,040 --> 00:32:52,120
Speaker 1: both create social justice and prevent international conflict. And so

593
00:32:52,480 --> 00:32:57,200
Speaker 1: there's just this deep contradiction within that administration from from

594
00:32:57,280 --> 00:33:00,320
Speaker 1: a canzie in perspective, where they're doing all the things

595
00:33:00,360 --> 00:33:03,920
Speaker 1: that Caines would approve of, but they're simultaneously using his

596
00:33:04,080 --> 00:33:06,640
Speaker 1: ideas to spend an enormous amount of money on this

597
00:33:06,720 --> 00:33:08,640
Speaker 1: conflict in Vietnam, which kills you know, at least a

598
00:33:08,640 --> 00:33:11,960
Speaker 1: million people in Vietnam. It's it's it's fifty tho Americans,

599
00:33:12,040 --> 00:33:15,600
Speaker 1: but it's it's a complete catastrophe for for people living

600
00:33:15,640 --> 00:33:20,800
Speaker 1: in Vietnam. And I think he he would have been extremely,

601
00:33:21,160 --> 00:33:24,960
Speaker 1: extremely uncomfortable with that. I think would furious frankly, and

602
00:33:25,400 --> 00:33:28,160
Speaker 1: you get to Nixon, and Nixon basically does you know,

603
00:33:28,480 --> 00:33:31,840
Speaker 1: the same thing, but with a more explicit focus. He

604
00:33:31,960 --> 00:33:33,800
Speaker 1: invokes the name of Caines, you know, a couple of

605
00:33:33,920 --> 00:33:37,800
Speaker 1: times saying I'm going to do deficits. Uh, I just

606
00:33:37,920 --> 00:33:42,120
Speaker 1: think that war stuff. He was so scarred by World

607
00:33:42,160 --> 00:33:44,920
Speaker 1: War One, you know, he he came of age thinking

608
00:33:45,040 --> 00:33:47,560
Speaker 1: that everything was fine. He didn't even have to become

609
00:33:47,560 --> 00:33:49,560
Speaker 1: a famous economist, didn't have to become a famous writer.

610
00:33:49,680 --> 00:33:52,360
Speaker 1: He could just sort of frolic in the lawns of

611
00:33:52,520 --> 00:33:56,720
Speaker 1: Cambridge and talk about you know, philosophy and Plato with

612
00:33:56,880 --> 00:33:59,840
Speaker 1: these with these other smart people, and everything would be

613
00:34:00,320 --> 00:34:03,120
Speaker 1: because because they were all working their way towards progress

614
00:34:03,160 --> 00:34:05,239
Speaker 1: and beauty, and war was going to be a thing

615
00:34:05,280 --> 00:34:08,120
Speaker 1: of the past, because all these great ideas were making

616
00:34:08,239 --> 00:34:12,240
Speaker 1: society more and more harmonious. And then the war comes along.

617
00:34:12,360 --> 00:34:15,239
Speaker 1: It just shatters that vision entirely. And so he's just

618
00:34:15,320 --> 00:34:18,200
Speaker 1: spending his entire life trying to prevent another war. He

619
00:34:18,280 --> 00:34:21,920
Speaker 1: just thinks that this he's he's deeply, deeply shaken by this,

620
00:34:22,080 --> 00:34:24,799
Speaker 1: and so the idea that his theories would be used

621
00:34:25,120 --> 00:34:28,400
Speaker 1: to create massive international war machines, I think would have

622
00:34:28,480 --> 00:34:46,520
Speaker 1: absolutely horrified him. M Let's bring it forward a little

623
00:34:46,560 --> 00:34:50,360
Speaker 1: bit to the present, because, as you mentioned, you know,

624
00:34:51,239 --> 00:34:55,399
Speaker 1: basically since the last financial crisis, Hainzian ideas have been

625
00:34:55,560 --> 00:34:58,200
Speaker 1: on the rise of somewhat. He's been invoked a lot lately.

626
00:34:58,280 --> 00:35:00,799
Speaker 1: And I you know, there's there was lot of reluctance

627
00:35:00,880 --> 00:35:04,480
Speaker 1: to spend money during two thousand and eight two thousand nine.

628
00:35:04,840 --> 00:35:08,319
Speaker 1: Now everybody is spending money, even even the Germans, who

629
00:35:08,360 --> 00:35:10,799
Speaker 1: are like famous for like not spending money, even they're

630
00:35:10,920 --> 00:35:13,160
Speaker 1: spending money. Like let's talk about like some of the

631
00:35:13,239 --> 00:35:15,960
Speaker 1: other things. So obviously, okay, spending money. It seems like

632
00:35:16,040 --> 00:35:18,000
Speaker 1: that's necessary. We need to do a lot more of it.

633
00:35:18,560 --> 00:35:20,960
Speaker 1: There's not a whole lot of disagreement. It's kind of impressive.

634
00:35:21,000 --> 00:35:23,520
Speaker 1: No one even really talks about like deficits that much.

635
00:35:23,600 --> 00:35:26,400
Speaker 1: With the national debt like nowhere nearer where in two

636
00:35:26,440 --> 00:35:29,640
Speaker 1: thousand and eight, two thousand nine. But a we have

637
00:35:29,800 --> 00:35:33,960
Speaker 1: a problem of we haven't been able to end the

638
00:35:34,080 --> 00:35:37,200
Speaker 1: virus crisis, especially in the US where there's a serious

639
00:35:37,239 --> 00:35:41,120
Speaker 1: political legitimacy problem. It's really it's been really hard to

640
00:35:41,239 --> 00:35:44,400
Speaker 1: marshal the resources to get it done, to suppress it

641
00:35:44,480 --> 00:35:47,360
Speaker 1: to an acceptable degree. And then even if we do,

642
00:35:48,560 --> 00:35:50,640
Speaker 1: are you know, we just came off of like almost

643
00:35:50,680 --> 00:35:54,600
Speaker 1: a decade of underemployment from the latter is such a

644
00:35:54,640 --> 00:35:57,600
Speaker 1: slow recovery. I don't think anyone wants to know, you know,

645
00:35:57,920 --> 00:36:00,680
Speaker 1: to wait until twenty thirty until we have the unemployment

646
00:36:00,800 --> 00:36:03,960
Speaker 1: rate below five percent again. So like, beyond just the

647
00:36:04,160 --> 00:36:09,200
Speaker 1: acute need to spend money, what can the next set

648
00:36:09,239 --> 00:36:13,359
Speaker 1: of leaders, whoever it is here elsewhere, But what are

649
00:36:13,440 --> 00:36:16,520
Speaker 1: the ideas that they should draw from from pains so

650
00:36:16,640 --> 00:36:20,480
Speaker 1: that we don't have this like ongoing political legitimacy crisis

651
00:36:20,680 --> 00:36:24,759
Speaker 1: and we don't have another ten years of underemployment, you know,

652
00:36:24,840 --> 00:36:27,480
Speaker 1: with the caveat that it's always a very dangerous thing

653
00:36:27,600 --> 00:36:31,800
Speaker 1: to your view of like what you know, you know,

654
00:36:31,920 --> 00:36:35,840
Speaker 1: I think, um, you know, I think your point about

655
00:36:35,960 --> 00:36:39,960
Speaker 1: about the the public health crisis is. It's very simple,

656
00:36:40,000 --> 00:36:42,800
Speaker 1: but it's really important. You know, Canes didn't want to

657
00:36:42,840 --> 00:36:45,520
Speaker 1: be remembered as a deficit theory therapist. He wanted to

658
00:36:45,560 --> 00:36:47,840
Speaker 1: be remembered as a guy who addressed the great problems

659
00:36:47,920 --> 00:36:50,279
Speaker 1: of his day. And the great problems of his day

660
00:36:50,320 --> 00:36:52,719
Speaker 1: were war in depression. The great problem of our day

661
00:36:52,920 --> 00:36:56,719
Speaker 1: is this pandemic. So you have to address the pandemic.

662
00:36:56,800 --> 00:36:59,080
Speaker 1: You have to figure out how to cope with that

663
00:36:59,440 --> 00:37:03,240
Speaker 1: and how to credibility with the public, in particular about

664
00:37:03,280 --> 00:37:05,160
Speaker 1: how how to how you're going to deal with that.

665
00:37:05,280 --> 00:37:08,880
Speaker 1: You know, a lot of Kinzie infurial and economics is

666
00:37:08,960 --> 00:37:13,480
Speaker 1: not about equations balancing just so, but about uncertainty and

667
00:37:13,920 --> 00:37:18,480
Speaker 1: building a confidence among not only investors but the public

668
00:37:18,880 --> 00:37:21,360
Speaker 1: that tomorrow could be better than today. Because if you

669
00:37:21,480 --> 00:37:23,920
Speaker 1: don't believe that tomorrow can be better today than today,

670
00:37:24,200 --> 00:37:26,080
Speaker 1: you're going to keep hoarding your money. You're not going

671
00:37:26,120 --> 00:37:28,719
Speaker 1: to go out and spend, and investors are not going

672
00:37:28,760 --> 00:37:30,399
Speaker 1: to go out and invest. You're gonna keep your money

673
00:37:30,440 --> 00:37:32,600
Speaker 1: under the mattress. Right, I've spent a little bit more

674
00:37:32,640 --> 00:37:35,600
Speaker 1: money in the pandemic because I've had some pretty decent

675
00:37:35,680 --> 00:37:39,120
Speaker 1: books sales. But you know, I'm still not like, you know,

676
00:37:39,520 --> 00:37:43,640
Speaker 1: I didn't buy a house, right, Like you'd be crazy

677
00:37:43,680 --> 00:37:45,560
Speaker 1: to right, people are that's the weird thing. How does

678
00:37:45,600 --> 00:37:49,160
Speaker 1: it actually doing really well? So it's it's weird. It

679
00:37:49,200 --> 00:37:52,160
Speaker 1: makes no sense to me. But yeah, I keep waiting

680
00:37:52,200 --> 00:37:53,880
Speaker 1: for New York rents to go down and so I

681
00:37:53,960 --> 00:38:00,319
Speaker 1: can move, but it doesn't happen. So the the thing

682
00:38:00,440 --> 00:38:02,320
Speaker 1: there is is to find a way to make the

683
00:38:02,400 --> 00:38:04,320
Speaker 1: public believe in what you're doing. And I think for

684
00:38:04,400 --> 00:38:07,040
Speaker 1: the US this is not so much of a problem

685
00:38:07,120 --> 00:38:09,200
Speaker 1: of dollars and cents is as it is a problem

686
00:38:09,280 --> 00:38:13,319
Speaker 1: of just straightforward leadership. Like nobody believes the Trump administration right,

687
00:38:13,760 --> 00:38:15,439
Speaker 1: and I don't know if anyone is going to believe

688
00:38:15,480 --> 00:38:18,279
Speaker 1: them until they change that. There's there's sort of this um.

689
00:38:19,280 --> 00:38:21,160
Speaker 1: The closest parallel I can think of this is the

690
00:38:21,239 --> 00:38:26,880
Speaker 1: ECB in in sort of fourteen austerity crisis in in

691
00:38:27,360 --> 00:38:30,880
Speaker 1: UH in Europe. E c V just kept saying crazy

692
00:38:31,000 --> 00:38:34,040
Speaker 1: things for for years and years, and people were like,

693
00:38:35,080 --> 00:38:38,279
Speaker 1: there was just no reason to believe that anything they

694
00:38:38,320 --> 00:38:40,320
Speaker 1: were going to do is actually going to solve the problem.

695
00:38:40,640 --> 00:38:43,759
Speaker 1: And then all of a sudden, drug he says, no, what,

696
00:38:44,120 --> 00:38:46,799
Speaker 1: We're just going to provide unlimited support. We're just gonna

697
00:38:46,880 --> 00:38:51,480
Speaker 1: do it, And there's this huge shift in investor sort

698
00:38:51,520 --> 00:38:54,680
Speaker 1: of confidence, in in in the the general sort of

699
00:38:54,920 --> 00:38:58,040
Speaker 1: belief about how the world works. That's just with a decree,

700
00:38:58,280 --> 00:39:01,320
Speaker 1: but he backs it up with actual trual policies. I

701
00:39:01,360 --> 00:39:03,560
Speaker 1: don't know if Trump is capable of making a decree

702
00:39:03,640 --> 00:39:05,680
Speaker 1: like that, because I don't think people believe him the

703
00:39:05,719 --> 00:39:08,640
Speaker 1: way they believe other public officials. They don't trust him.

704
00:39:08,920 --> 00:39:11,600
Speaker 1: But somehowever or other, the government's got to be able

705
00:39:11,640 --> 00:39:14,640
Speaker 1: to convince the public that they can actually control the

706
00:39:14,719 --> 00:39:16,920
Speaker 1: pandemic to such an extent that when they say, you know,

707
00:39:17,360 --> 00:39:18,959
Speaker 1: if these kids are going back to school, it's actually

708
00:39:19,000 --> 00:39:20,399
Speaker 1: pretty safe. If you want to go to the beach,

709
00:39:20,440 --> 00:39:22,040
Speaker 1: it's actually pretty safe. But if you want to go

710
00:39:22,120 --> 00:39:24,239
Speaker 1: to a bar, maybe it's not. You know, there have

711
00:39:24,400 --> 00:39:27,320
Speaker 1: to be ways to figure out what we can do

712
00:39:28,080 --> 00:39:30,840
Speaker 1: in such a way that people aren't just you know,

713
00:39:30,960 --> 00:39:33,759
Speaker 1: hiding in their apartments all the time, becoming miserable and

714
00:39:33,920 --> 00:39:36,680
Speaker 1: angry and getting ready to protest. Right, Not that I

715
00:39:36,719 --> 00:39:38,520
Speaker 1: have a problem with the protests live been happening, but

716
00:39:38,680 --> 00:39:40,719
Speaker 1: I think it's pretty obvious that a lot of the

717
00:39:40,880 --> 00:39:43,040
Speaker 1: energy that's being expressed in the streets is pent up

718
00:39:43,400 --> 00:39:47,040
Speaker 1: pandemic anger. So you have to deal with the crisis first,

719
00:39:47,080 --> 00:39:49,000
Speaker 1: the actual public health crisis. You have to you have

720
00:39:49,160 --> 00:39:52,120
Speaker 1: to care about the optics and and and so the

721
00:39:52,160 --> 00:39:54,960
Speaker 1: communication with the public and why they would why they

722
00:39:55,080 --> 00:39:57,080
Speaker 1: believe in you. But you then also have to convince

723
00:39:57,120 --> 00:40:00,320
Speaker 1: the public that the government actually works for them. You know,

724
00:40:00,480 --> 00:40:05,480
Speaker 1: the United States has had thirty five years of accelerating inequality,

725
00:40:06,080 --> 00:40:09,200
Speaker 1: and as a result of that, I think it's pretty

726
00:40:09,239 --> 00:40:12,040
Speaker 1: clear that they're different people who were living in different

727
00:40:12,239 --> 00:40:15,640
Speaker 1: political worlds, different societies really, and the pandemic is really

728
00:40:15,800 --> 00:40:18,400
Speaker 1: underscoring this. There are people like me who get to,

729
00:40:18,600 --> 00:40:20,840
Speaker 1: you know, hide out. And I'm in my in laws

730
00:40:20,920 --> 00:40:24,040
Speaker 1: house in northern Virginia. Here, I'm hiding out here, talking

731
00:40:24,120 --> 00:40:27,919
Speaker 1: to you guys and and collecting royalties for a book.

732
00:40:28,239 --> 00:40:29,680
Speaker 1: You know, I don't get to do all the fun

733
00:40:29,760 --> 00:40:31,440
Speaker 1: things I used to do. But this is not like

734
00:40:31,760 --> 00:40:33,640
Speaker 1: mass suffering for me. I take my dog down to

735
00:40:33,680 --> 00:40:35,800
Speaker 1: the creek. It's okay. There are other people who have to,

736
00:40:35,920 --> 00:40:39,000
Speaker 1: like go to work every day and risk death in

737
00:40:39,200 --> 00:40:42,840
Speaker 1: order to serve the rest of the country. And that

738
00:40:43,080 --> 00:40:46,600
Speaker 1: is just an accelerated, intensified version of the way that

739
00:40:46,680 --> 00:40:50,920
Speaker 1: the country has been sort of bifurcating for for decades now.

740
00:40:51,400 --> 00:40:52,719
Speaker 1: And if we're going to be part of the same

741
00:40:52,760 --> 00:40:54,799
Speaker 1: political project, I think Kines would look at that and say,

742
00:40:54,880 --> 00:40:58,400
Speaker 1: you know, forget about even social justice. Those guys are

743
00:40:58,440 --> 00:41:00,480
Speaker 1: not going to hang together. These who are going to

744
00:41:00,560 --> 00:41:02,439
Speaker 1: be at war with each other if you don't find

745
00:41:02,480 --> 00:41:03,960
Speaker 1: a way to make them feel like they're part of

746
00:41:04,000 --> 00:41:06,440
Speaker 1: the same project. And economically, you've got to just bring

747
00:41:06,520 --> 00:41:09,560
Speaker 1: them closer, closer together so they're living in the same world.

748
00:41:10,280 --> 00:41:12,439
Speaker 1: And and so you know, he would he would talk

749
00:41:12,520 --> 00:41:15,360
Speaker 1: about inequality, not so much as a not even not

750
00:41:15,440 --> 00:41:17,520
Speaker 1: even for you know, he came up with reasons to say,

751
00:41:17,800 --> 00:41:21,040
Speaker 1: here's here's why, you know, giving poor people money is

752
00:41:21,080 --> 00:41:23,279
Speaker 1: more effective than giving rich people money, so that you know,

753
00:41:23,360 --> 00:41:25,400
Speaker 1: you get more growth out of it. But you know,

754
00:41:25,480 --> 00:41:27,480
Speaker 1: his real motivation for this was that he was afraid

755
00:41:27,520 --> 00:41:30,279
Speaker 1: society would fall apart and to send into chaos. And

756
00:41:30,840 --> 00:41:33,960
Speaker 1: I think I think addressing inequality would be something that

757
00:41:34,040 --> 00:41:36,680
Speaker 1: he would have very very high on his list. But

758
00:41:36,760 --> 00:41:38,560
Speaker 1: I think he would also be looking at the breakdown

759
00:41:38,600 --> 00:41:41,360
Speaker 1: of these international systems. The relationship between the US and

760
00:41:41,520 --> 00:41:45,200
Speaker 1: China is just awful right now, the relationship between the

761
00:41:45,320 --> 00:41:48,600
Speaker 1: countries of Europe is awful right now. And he would

762
00:41:48,640 --> 00:41:51,960
Speaker 1: come up with some brilliant sort of grand plan that

763
00:41:52,000 --> 00:41:55,040
Speaker 1: would probably be politically impossible, where he would try to

764
00:41:55,080 --> 00:41:59,600
Speaker 1: alleviate inequality in the United States, fix the trade relationship

765
00:41:59,680 --> 00:42:02,680
Speaker 1: with I know, and cure the pandemic all at once.

766
00:42:03,080 --> 00:42:05,160
Speaker 1: And you know, I don't pretend to have his his

767
00:42:05,840 --> 00:42:08,000
Speaker 1: like creative genius, but he would try to find some

768
00:42:08,280 --> 00:42:11,239
Speaker 1: magic formula that would attack all three of these things,

769
00:42:11,320 --> 00:42:14,040
Speaker 1: and then he would pitch it everybody across the world,

770
00:42:14,640 --> 00:42:18,120
Speaker 1: and then he would watch in dismay as everybody refused

771
00:42:18,160 --> 00:42:22,080
Speaker 1: to do it, and the world then descended into chaos again.

772
00:42:22,400 --> 00:42:24,239
Speaker 1: Just on that note, what do you see is the

773
00:42:24,320 --> 00:42:27,759
Speaker 1: major weakness of Kynesianism, Because as I listened to you

774
00:42:27,880 --> 00:42:30,359
Speaker 1: talk and to me, it seems like if you want

775
00:42:30,400 --> 00:42:33,480
Speaker 1: the government to be a stabilizing force not just on

776
00:42:33,560 --> 00:42:36,880
Speaker 1: the economy but on society at large, then that government

777
00:42:37,000 --> 00:42:40,480
Speaker 1: needs to be capable in various ways and aligned with

778
00:42:40,600 --> 00:42:43,880
Speaker 1: a certain form of society. So to me, that seems

779
00:42:43,880 --> 00:42:45,960
Speaker 1: like a flaw on the plan but I'd love to

780
00:42:46,040 --> 00:42:47,719
Speaker 1: get your thoughts on what you see is the big

781
00:42:47,800 --> 00:42:52,520
Speaker 1: problem here. No, I think that's exactly right. Canes believed

782
00:42:53,000 --> 00:42:56,000
Speaker 1: he's very much this philosophical rationalist. He believes that there

783
00:42:56,040 --> 00:42:59,200
Speaker 1: are real eternal truths that are out there sort of

784
00:42:59,320 --> 00:43:02,319
Speaker 1: in the ether, that we can you know, divine through

785
00:43:02,600 --> 00:43:05,480
Speaker 1: through pure reason, and once we see them, we will

786
00:43:05,600 --> 00:43:07,000
Speaker 1: we will, you know, a light will go off and

787
00:43:07,040 --> 00:43:09,800
Speaker 1: we will recognize that. And that by arguing with people

788
00:43:09,880 --> 00:43:13,920
Speaker 1: and presenting good, good arguments to them, people will come

789
00:43:13,960 --> 00:43:16,000
Speaker 1: around and they will agree to these things. And he

790
00:43:16,200 --> 00:43:19,640
Speaker 1: is he is he is reacting very sharply against Marxism,

791
00:43:20,239 --> 00:43:24,719
Speaker 1: against particularly the like very hard materialist versions of Marxism

792
00:43:24,800 --> 00:43:27,480
Speaker 1: presented by Lenin that are very very popular in Europe

793
00:43:27,520 --> 00:43:31,080
Speaker 1: in the twenties and thirties, um, where the argument is

794
00:43:31,120 --> 00:43:33,719
Speaker 1: that people don't listen arguments at all. Everything is determined

795
00:43:33,760 --> 00:43:36,080
Speaker 1: by the economic structure of society and so it's a

796
00:43:36,160 --> 00:43:38,160
Speaker 1: it's a it's a fool's air, and do you even

797
00:43:38,239 --> 00:43:41,600
Speaker 1: engage in philosophical debate And he thinks that's just totally outrageous.

798
00:43:41,960 --> 00:43:44,480
Speaker 1: But I do think that while I mean, I think

799
00:43:44,600 --> 00:43:47,040
Speaker 1: it's very clear that people can be persuaded. I think

800
00:43:47,239 --> 00:43:51,040
Speaker 1: Knes's belief that people are persuaded it just based on

801
00:43:51,239 --> 00:43:58,360
Speaker 1: the the eternal truths of arguments is uh, it's politically naive.

802
00:43:58,520 --> 00:44:02,000
Speaker 1: You know, people find different things persuasive. People do listen

803
00:44:02,000 --> 00:44:04,440
Speaker 1: to arguments, but the reasons they find them persuasive and

804
00:44:04,520 --> 00:44:07,920
Speaker 1: non persuasive are often dependent on all sorts of other factors.

805
00:44:07,960 --> 00:44:11,520
Speaker 1: They don't have to necessarily be you know, the forces

806
00:44:11,600 --> 00:44:14,000
Speaker 1: of production or whatever that that you would see from

807
00:44:14,239 --> 00:44:16,719
Speaker 1: from you know, certain sort of crude Marxists from the

808
00:44:16,840 --> 00:44:19,239
Speaker 1: twenties and thirties. But it's it's hard to it's hard

809
00:44:19,280 --> 00:44:20,920
Speaker 1: for me to believe that, you know, you could talk

810
00:44:20,960 --> 00:44:23,640
Speaker 1: to somebody from the Mortgage Bankers Association and tell them

811
00:44:23,680 --> 00:44:26,120
Speaker 1: that we can really save the economy if we just

812
00:44:26,320 --> 00:44:29,680
Speaker 1: right off. You know, second leans, there's a reason why

813
00:44:29,760 --> 00:44:32,160
Speaker 1: people don't find that persuasive, and they don't They don't

814
00:44:32,160 --> 00:44:33,840
Speaker 1: even have to be acting in bad faith to not

815
00:44:33,960 --> 00:44:36,880
Speaker 1: find it persuasive. It but there's that there are factors

816
00:44:36,960 --> 00:44:39,320
Speaker 1: in their lives that have made them think in certain

817
00:44:39,400 --> 00:44:41,839
Speaker 1: channels that make that difficult. You know, when I used

818
00:44:41,880 --> 00:44:44,560
Speaker 1: to work at S and L Financial Um, we had

819
00:44:44,600 --> 00:44:48,160
Speaker 1: CNBC on in the office all day. He starts thinking

820
00:44:48,480 --> 00:44:52,520
Speaker 1: about the world through that media that's being pumped into

821
00:44:52,600 --> 00:44:55,960
Speaker 1: your the horizons of what is possible, start to start

822
00:44:56,040 --> 00:44:57,839
Speaker 1: to feel that way. It's not because you're stupid, it's

823
00:44:57,880 --> 00:45:01,120
Speaker 1: not because you're your venal or corrupt or something. It's

824
00:45:01,200 --> 00:45:03,120
Speaker 1: just this is the way you become accustomed to thinking

825
00:45:03,160 --> 00:45:05,400
Speaker 1: about things. And when I came to huf Post, suddenly

826
00:45:05,440 --> 00:45:07,560
Speaker 1: we had an MSNBC pumping into my head all the

827
00:45:07,680 --> 00:45:09,960
Speaker 1: time in the office. It's a totally different set of

828
00:45:09,960 --> 00:45:13,040
Speaker 1: assumptions that just sort of start undergirding your thinking. And

829
00:45:13,120 --> 00:45:15,080
Speaker 1: you have you have to be careful in all these situations,

830
00:45:15,200 --> 00:45:17,880
Speaker 1: right to try to maintain your independence. But but people

831
00:45:18,080 --> 00:45:21,680
Speaker 1: are stamped by the sort of social forces around them.

832
00:45:21,760 --> 00:45:25,160
Speaker 1: And for Canes, I just think he was too. He

833
00:45:25,320 --> 00:45:28,960
Speaker 1: had this very majestic and and kind of childlike belief

834
00:45:29,640 --> 00:45:33,440
Speaker 1: in people's ability to be persuaded that that sort of

835
00:45:33,520 --> 00:45:36,920
Speaker 1: took them to be these these sort of rational atoms

836
00:45:36,960 --> 00:45:40,480
Speaker 1: that had nothing, no social forces at play on them,

837
00:45:40,600 --> 00:45:42,520
Speaker 1: and and that's just that's just not the way people are.

838
00:45:43,880 --> 00:45:46,560
Speaker 1: You know. I love your point about the sort of

839
00:45:46,880 --> 00:45:49,680
Speaker 1: the state that we're in is sort of this accelerated

840
00:45:50,080 --> 00:45:54,120
Speaker 1: version of the pre pandemic state, particularly with respect to inequality.

841
00:45:54,560 --> 00:45:57,439
Speaker 1: And there are people whose jobs require them to work

842
00:45:57,520 --> 00:46:00,480
Speaker 1: often at very little pay and expose themselves to potential

843
00:46:00,840 --> 00:46:03,200
Speaker 1: health risks and death every day. And then there are

844
00:46:03,239 --> 00:46:05,319
Speaker 1: people like the three of us who get to talk

845
00:46:05,400 --> 00:46:10,520
Speaker 1: about canes professionally and safely. And it's but it's also

846
00:46:10,600 --> 00:46:12,279
Speaker 1: you see it in the market too, And you see

847
00:46:12,360 --> 00:46:15,919
Speaker 1: like this acceleration where tech stocks which were already doing

848
00:46:16,120 --> 00:46:20,520
Speaker 1: very well pre crisis have absolutely soared, interest rates which

849
00:46:20,560 --> 00:46:23,600
Speaker 1: were already headed down, headed out further. Like every trend

850
00:46:23,719 --> 00:46:28,080
Speaker 1: it feels like going into this crisis has actually been accelerated.

851
00:46:28,080 --> 00:46:30,239
Speaker 1: It hasn't been a reversal at all in some sense.

852
00:46:30,640 --> 00:46:33,440
Speaker 1: But I'm just curious, Like you know, you said, Kine

853
00:46:33,560 --> 00:46:37,640
Speaker 1: sort of lived in fear of chaos and society falling apart.

854
00:46:37,719 --> 00:46:40,440
Speaker 1: I've always sort of been paranoided at myself even before that,

855
00:46:40,719 --> 00:46:43,719
Speaker 1: So I feel sympathetic, Like do you think we're sort

856
00:46:43,760 --> 00:46:47,759
Speaker 1: of like this is a big moment, like just you know,

857
00:46:47,960 --> 00:46:50,440
Speaker 1: obviously it's a big moment in terms of a crisis,

858
00:46:50,480 --> 00:46:55,200
Speaker 1: but in terms of like these trends potentially hitting their

859
00:46:55,239 --> 00:46:59,799
Speaker 1: breaking point or their possible limits if we don't take

860
00:46:59,840 --> 00:47:01,960
Speaker 1: a different approach, or can we put it back in

861
00:47:02,040 --> 00:47:04,680
Speaker 1: the bottle and just sort of go back to December,

862
00:47:06,280 --> 00:47:08,680
Speaker 1: you know. I think the sort of nice response the

863
00:47:08,760 --> 00:47:12,080
Speaker 1: two thousand eight crisis was the Occupy Wall Street movement,

864
00:47:12,120 --> 00:47:14,600
Speaker 1: where you had all these hippies hanging out in Zukkati

865
00:47:14,680 --> 00:47:17,799
Speaker 1: Park and they're pretty much harmless, right, They're just they're

866
00:47:17,840 --> 00:47:21,000
Speaker 1: just walking around talking about love and trust and and

867
00:47:21,160 --> 00:47:25,120
Speaker 1: having really unproductive sort of strategy sessions, but like but

868
00:47:25,280 --> 00:47:28,040
Speaker 1: meeting well and like talking about a better world. They

869
00:47:28,400 --> 00:47:32,120
Speaker 1: succeeded in I think, reframing the sort of narrative about

870
00:47:32,160 --> 00:47:34,160
Speaker 1: what was wrong in two thousand and eleven. It's stopped.

871
00:47:34,160 --> 00:47:36,640
Speaker 1: It was stopping about if you if you were watching

872
00:47:36,719 --> 00:47:39,359
Speaker 1: mainstream cable news of the time, it went from being

873
00:47:39,680 --> 00:47:41,960
Speaker 1: everything from me about the deficit to being about inequality.

874
00:47:42,640 --> 00:47:45,080
Speaker 1: Very very clear shift in the narrative. But but then

875
00:47:45,120 --> 00:47:47,719
Speaker 1: it was over. I think the really nasty response to

876
00:47:47,920 --> 00:47:52,200
Speaker 1: twenty eight is the Trump candidacy and the way that

877
00:47:52,280 --> 00:47:57,680
Speaker 1: Trump demagogues against immigrants and scapegoats people who are vulnerable.

878
00:47:58,360 --> 00:48:02,480
Speaker 1: I think that's that's another way of expressing and channeling

879
00:48:02,520 --> 00:48:05,440
Speaker 1: the anger that happened as a result of that of

880
00:48:05,560 --> 00:48:08,719
Speaker 1: that crisis, we are. We were at a point, I think,

881
00:48:08,800 --> 00:48:10,920
Speaker 1: before the pandemic, where it looked like we might just

882
00:48:11,040 --> 00:48:14,560
Speaker 1: sort of glide past the Trump administration into something might

883
00:48:14,760 --> 00:48:16,759
Speaker 1: might miss the you know, a lot of people have

884
00:48:16,880 --> 00:48:19,280
Speaker 1: suffered in the last four years from you know, Hurricane

885
00:48:19,320 --> 00:48:22,000
Speaker 1: Maria all the rest. But but we would have missed

886
00:48:22,040 --> 00:48:25,560
Speaker 1: these these massive, massive calamities that I think people who

887
00:48:25,600 --> 00:48:29,200
Speaker 1: were very worried about the Trump administration had been talking about.

888
00:48:29,560 --> 00:48:32,279
Speaker 1: UM And we've now not missed those, And I think

889
00:48:32,320 --> 00:48:35,920
Speaker 1: the question is what what comes next. We've watched on

890
00:48:36,080 --> 00:48:40,880
Speaker 1: the right, people armed with you know, these massive, crazy

891
00:48:40,920 --> 00:48:44,879
Speaker 1: looking guns just sort of storming the Michigan State Legislature.

892
00:48:45,560 --> 00:48:49,000
Speaker 1: On the left, we've had uprisings in every American city

893
00:48:49,560 --> 00:48:52,960
Speaker 1: for the last month. Basically, I think they're they're they're

894
00:48:53,000 --> 00:48:54,840
Speaker 1: dying down a little bit now because the pandemic is

895
00:48:54,840 --> 00:48:59,480
Speaker 1: getting so bad. But you know, that's that's a combustible situation.

896
00:49:00,040 --> 00:49:03,560
Speaker 1: UM and this in this situation, economically, it does not improve, right,

897
00:49:04,040 --> 00:49:06,160
Speaker 1: things are gonna get worse. We haven't even seen this

898
00:49:06,600 --> 00:49:09,920
Speaker 1: as a financial crisis. It's possible that all of this

899
00:49:10,040 --> 00:49:13,560
Speaker 1: stuff that's happening in the real economy transfers to the

900
00:49:13,640 --> 00:49:16,160
Speaker 1: monetary economy, and we have a banking crisis that that

901
00:49:16,320 --> 00:49:18,839
Speaker 1: compounds all of this. It's possible, it just gets much

902
00:49:18,880 --> 00:49:22,600
Speaker 1: worse without that. The uncertainty that's hanging over people's lives,

903
00:49:22,719 --> 00:49:26,239
Speaker 1: I think is extremely damaging. People don't know when they're

904
00:49:26,320 --> 00:49:28,000
Speaker 1: going to be able to go back to work, they

905
00:49:28,040 --> 00:49:29,440
Speaker 1: don't know when they're gonna be able to have fun.

906
00:49:29,840 --> 00:49:31,560
Speaker 1: No one knows if they're going to be able to watch,

907
00:49:31,680 --> 00:49:34,719
Speaker 1: you know, basketball in the fall. I mean, these very

908
00:49:34,840 --> 00:49:38,960
Speaker 1: simple things about people's lives, simple and and then emotionally compelling,

909
00:49:39,360 --> 00:49:41,440
Speaker 1: are are up in the air. And that just creates

910
00:49:41,520 --> 00:49:44,759
Speaker 1: a great deal of anxiety. So I find it very

911
00:49:44,800 --> 00:49:46,279
Speaker 1: hard to believe that we're not at some sort of

912
00:49:46,360 --> 00:49:51,239
Speaker 1: inflection point. I cannot believe that the global economic order

913
00:49:51,719 --> 00:49:56,279
Speaker 1: that we are going to see in is going to be,

914
00:49:56,840 --> 00:49:59,000
Speaker 1: you know, some sort of moderately tweaked version of the

915
00:49:59,000 --> 00:50:02,120
Speaker 1: global economic order in nineteen I think something is going

916
00:50:02,239 --> 00:50:05,400
Speaker 1: to have to change because the system is just breaking.

917
00:50:05,520 --> 00:50:09,280
Speaker 1: It's it's not working right. We were already having stresses,

918
00:50:09,480 --> 00:50:13,520
Speaker 1: particularly for globalization, before this happened, But but right now

919
00:50:13,680 --> 00:50:16,719
Speaker 1: I mean all sorts of trade, you know, supply chains

920
00:50:16,760 --> 00:50:19,760
Speaker 1: are breaking down and trade relationships are just following apart

921
00:50:19,840 --> 00:50:22,239
Speaker 1: because of the pandemic, and it's it's really hard to

922
00:50:22,280 --> 00:50:25,120
Speaker 1: see how you rebuild in a globalized way without either

923
00:50:25,600 --> 00:50:29,400
Speaker 1: massive international coordination, which would require a total rethink of

924
00:50:29,640 --> 00:50:32,480
Speaker 1: the way that we're doing things now, or or sort

925
00:50:32,520 --> 00:50:36,520
Speaker 1: of a sort of retreat into economic nationalism where people

926
00:50:36,560 --> 00:50:38,319
Speaker 1: just where countries just try to do things on their

927
00:50:38,320 --> 00:50:40,520
Speaker 1: own so they don't have to be dependent on these

928
00:50:40,560 --> 00:50:44,799
Speaker 1: international uh you know, legal issues. Either way, things are

929
00:50:44,800 --> 00:50:47,440
Speaker 1: going to change very radically, and and and there will

930
00:50:47,440 --> 00:50:50,560
Speaker 1: be a lot more social unrest before before it's over.

931
00:50:52,800 --> 00:50:55,960
Speaker 1: Zach Carter, thank you so much for joining us. I've

932
00:50:56,000 --> 00:50:59,239
Speaker 1: started your book. I haven't finished it, but I'm really

933
00:50:59,280 --> 00:51:03,200
Speaker 1: looking forward to finishing it now. And that was fantastic

934
00:51:03,280 --> 00:51:07,360
Speaker 1: and it really does feel very timely. Uh you know,

935
00:51:07,440 --> 00:51:09,800
Speaker 1: I know, I'm sure multi year. What year did you started?

936
00:51:10,400 --> 00:51:14,600
Speaker 1: I sold the proposal in uh, March of seen, but

937
00:51:14,640 --> 00:51:16,160
Speaker 1: I've been working on it for a year, so I

938
00:51:16,880 --> 00:51:21,120
Speaker 1: really started taking it seriously in March, so right around

939
00:51:21,760 --> 00:51:24,320
Speaker 1: basically when the Trump president Trump campaign seemed to be

940
00:51:24,400 --> 00:51:27,160
Speaker 1: taking off. I was like I just can't keep covering

941
00:51:27,239 --> 00:51:29,959
Speaker 1: American politics day to day all the time without something

942
00:51:30,040 --> 00:51:32,680
Speaker 1: else because I'll go nuts. Because I was covering the

943
00:51:32,719 --> 00:51:35,799
Speaker 1: twenty sixteen campaign, it just it was an unpleasant thing

944
00:51:35,880 --> 00:51:39,040
Speaker 1: to cover. It just was not fun. So I sold

945
00:51:39,280 --> 00:51:41,759
Speaker 1: the book is like a a way to you know,

946
00:51:42,040 --> 00:51:44,319
Speaker 1: retreat into a different part of the world that still

947
00:51:44,360 --> 00:51:47,560
Speaker 1: felt intellectually serious enough to actually allow you to like

948
00:51:48,239 --> 00:51:51,360
Speaker 1: emotionally engaged, so that you could retreat from what was

949
00:51:51,440 --> 00:51:54,600
Speaker 1: going on. Tracy, this is a good reason for us

950
00:51:54,640 --> 00:51:56,320
Speaker 1: to write our books. I was going to say, I

951
00:51:56,360 --> 00:51:58,800
Speaker 1: wish I was this productive because when I want to

952
00:51:58,880 --> 00:52:02,040
Speaker 1: retreat from the world, I watch like old movies and

953
00:52:02,160 --> 00:52:04,759
Speaker 1: eat junk food. But I very much admire that you

954
00:52:04,800 --> 00:52:07,879
Speaker 1: went off and wrote a book about Kanes, and yes, Joe,

955
00:52:08,000 --> 00:52:10,520
Speaker 1: we should write it old movies and jug food, have

956
00:52:10,640 --> 00:52:12,720
Speaker 1: a have A have A Place that I did plenty

957
00:52:12,760 --> 00:52:15,040
Speaker 1: of that in twenty six too. But but you know,

958
00:52:15,840 --> 00:52:17,759
Speaker 1: you could only distract yourself for so long. You have

959
00:52:17,840 --> 00:52:20,600
Speaker 1: to find something to like invest yourself in, and that

960
00:52:20,840 --> 00:52:23,000
Speaker 1: that's really the way to escape. And for me it

961
00:52:23,120 --> 00:52:28,399
Speaker 1: was British monetary policy in the nineties. Well, Tracy, let's

962
00:52:28,400 --> 00:52:30,400
Speaker 1: get on our book. Let's let's start working on it,

963
00:52:30,640 --> 00:52:46,480
Speaker 1: all right, Zach Carter, thanks for joining us. Thanks guys, No,

964
00:52:46,680 --> 00:52:49,440
Speaker 1: I thought that was great. And Tracy and the um.

965
00:52:49,680 --> 00:52:53,120
Speaker 1: You know what Zach talked about at the end, specifically,

966
00:52:53,760 --> 00:52:57,200
Speaker 1: it's sort of like the difficulty of really even imagining

967
00:52:57,360 --> 00:53:00,319
Speaker 1: just going back to like some version of twenty nine team,

968
00:53:00,760 --> 00:53:03,239
Speaker 1: you know, just beyond the economics in the life, like,

969
00:53:03,320 --> 00:53:06,759
Speaker 1: you know, just from an investors standpoint, that's a huge question. Yeah,

970
00:53:06,800 --> 00:53:09,480
Speaker 1: I agree. I'm actually really surprised that we managed to

971
00:53:09,560 --> 00:53:14,040
Speaker 1: go through that entire podcast without mentioning MMT once. For you,

972
00:53:14,520 --> 00:53:16,279
Speaker 1: I was waiting for you to. I never bring it

973
00:53:16,360 --> 00:53:20,880
Speaker 1: up anymore. It's always someone else. It's always you. You know,

974
00:53:21,040 --> 00:53:25,359
Speaker 1: I don't it's not okay. But really, I mean, there

975
00:53:25,560 --> 00:53:29,360
Speaker 1: is that well you either call it a criticism or

976
00:53:29,360 --> 00:53:31,440
Speaker 1: a compliment, I guess, but there is that line of

977
00:53:31,520 --> 00:53:35,040
Speaker 1: thought that MMT is just another version of Kynesianism. Yeah,

978
00:53:35,280 --> 00:53:36,960
Speaker 1: we could have asked him. I'm in a like a

979
00:53:37,080 --> 00:53:39,480
Speaker 1: chat room where we talk about MMT. Is accident too,

980
00:53:39,560 --> 00:53:42,040
Speaker 1: so I'm in a chat room where we exclusively talk

981
00:53:42,120 --> 00:53:46,640
Speaker 1: about MMT. But it was a really fascinating conversation and

982
00:53:47,520 --> 00:53:51,640
Speaker 1: I don't know like it. It's sort of it sort

983
00:53:51,680 --> 00:53:54,280
Speaker 1: of makes me think that the problem isn't necessarily economic,

984
00:53:54,680 --> 00:53:57,600
Speaker 1: it's political, which is what I've said about MMT over

985
00:53:57,800 --> 00:53:59,880
Speaker 1: and over. So you're the one who keeps this is

986
00:53:59,920 --> 00:54:02,799
Speaker 1: like three or four times now in a row where

987
00:54:02,840 --> 00:54:04,800
Speaker 1: I don't say anything about it, and it's always you

988
00:54:04,880 --> 00:54:07,239
Speaker 1: bring here. Okay, Okay, I'm not going to say m

989
00:54:07,320 --> 00:54:10,479
Speaker 1: m T anymore. I'm just gonna say listening to Zach

990
00:54:10,680 --> 00:54:12,960
Speaker 1: it really makes me think that again, the problem is

991
00:54:12,960 --> 00:54:17,640
Speaker 1: about politics and not necessarily economics. It's these different visions

992
00:54:17,719 --> 00:54:20,320
Speaker 1: of the world, and no one can actually agree on

993
00:54:20,480 --> 00:54:23,120
Speaker 1: where we're supposed to be going and get aligned on

994
00:54:23,239 --> 00:54:28,759
Speaker 1: them agree. And I really do think that, like, even if,

995
00:54:28,840 --> 00:54:31,439
Speaker 1: like you know, you're purely just an investor, and even

996
00:54:31,480 --> 00:54:33,880
Speaker 1: if like you just want to like make money, I

997
00:54:33,920 --> 00:54:37,160
Speaker 1: think that point is so crucial that you can't avoid politics.

998
00:54:37,239 --> 00:54:40,160
Speaker 1: And I think that people think of like politics and like, well,

999
00:54:40,200 --> 00:54:42,680
Speaker 1: maybe Joe Biden is gonna win and raise the tax

1000
00:54:42,800 --> 00:54:46,879
Speaker 1: rate by what's that gonna mean? Or maybe he's gonna,

1001
00:54:47,120 --> 00:54:49,600
Speaker 1: you know, put a higher tax on prescription drugs, what

1002
00:54:49,640 --> 00:54:52,399
Speaker 1: does that mean? Whatever? But I think that right now

1003
00:54:52,640 --> 00:54:56,520
Speaker 1: like there's a deeper question politically, and it's in the

1004
00:54:56,680 --> 00:54:59,360
Speaker 1: US but also around the world, but also like specifically

1005
00:54:59,400 --> 00:55:02,320
Speaker 1: the US, as will this force us to go in

1006
00:55:02,560 --> 00:55:05,719
Speaker 1: some different trajectory? And I almost feel like if you're

1007
00:55:05,760 --> 00:55:07,719
Speaker 1: of an investor, it's like and you want to figure

1008
00:55:07,719 --> 00:55:09,640
Speaker 1: out what's gonna hapen with inflation or what's gonna happen

1009
00:55:09,640 --> 00:55:12,880
Speaker 1: with wages? You know, we're like everyone's you know, they

1010
00:55:12,920 --> 00:55:15,240
Speaker 1: look at like the FED balance sheet or they deficits

1011
00:55:15,320 --> 00:55:18,080
Speaker 1: or whatever. But I do feel like these fundamental questions,

1012
00:55:18,719 --> 00:55:21,759
Speaker 1: like what kind of like world will political leaders try

1013
00:55:21,840 --> 00:55:25,359
Speaker 1: to rebuild when the virus is gone? He is going

1014
00:55:25,440 --> 00:55:27,319
Speaker 1: to just be this huge thing, and there's so much

1015
00:55:27,400 --> 00:55:30,640
Speaker 1: uncertainty and the question of like ken we will we

1016
00:55:30,760 --> 00:55:33,600
Speaker 1: they will they try to just get back to twenty

1017
00:55:33,760 --> 00:55:39,080
Speaker 1: nine light is a huge unknown question absolutely. All right,

1018
00:55:39,200 --> 00:55:43,240
Speaker 1: Well on that big question, shall we leave it there? Okay?

1019
00:55:43,360 --> 00:55:46,120
Speaker 1: This has been another episode of the All Thoughts Podcast.

1020
00:55:46,239 --> 00:55:49,200
Speaker 1: I'm Tracy Alloway. You can follow me on Twitter at

1021
00:55:49,239 --> 00:55:52,239
Speaker 1: Tracy Alloway, and I'm Joe Wisenthal. You can follow me

1022
00:55:52,480 --> 00:55:55,520
Speaker 1: on Twitter at the Stalwart and you should follow our

1023
00:55:55,600 --> 00:56:00,760
Speaker 1: guests on Twitter. Zach Carter his handle is Zack D. Carter,

1024
00:56:01,080 --> 00:56:03,600
Speaker 1: and of course check out his new book, the best

1025
00:56:03,680 --> 00:56:07,080
Speaker 1: seller The Price of Peace, Money, Democracy, and The Life

1026
00:56:07,120 --> 00:56:09,839
Speaker 1: from John Maynard Kines. And be sure to follow our

1027
00:56:09,880 --> 00:56:13,799
Speaker 1: producer on Twitter, Laura Carlton at Laura M. Carlton, Call

1028
00:56:13,840 --> 00:56:17,400
Speaker 1: of the Bloomberg had a podcast, Francisca Leady at Francisca Today,

1029
00:56:17,920 --> 00:56:20,960
Speaker 1: and check out all of our podcasts under the handle

1030
00:56:21,280 --> 00:56:23,000
Speaker 1: at podcast. Thanks for listening