WEBVTT - Single Best Idea with Tom Keene: Douglas Irwin & Gautam Mukunda

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Single best idea, What did we invent over twenty years ago?

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<v Speaker 2>What we tried to event working off of all sorts

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<v Speaker 2>of good analogs. You wouldn't believe the number of people

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<v Speaker 2>that influenced this was the quality of the conversation. And

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<v Speaker 2>it doesn't mean just get a lot of fancy muckety

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<v Speaker 2>MUCKs and have them on twenty four to seven. It

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<v Speaker 2>means a set of people. Lori Calvicina was fabulous today

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<v Speaker 2>on a small stock effect and the courage to be

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<v Speaker 2>in the markets, said some really good fixed income people.

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<v Speaker 2>The other day, Ian Lincoln would be moo capital markets

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<v Speaker 2>and on and on. But when it's something in macroeconomics

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<v Speaker 2>or international economics, you have to go to the source.

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<v Speaker 2>The source in America is at Dartmouth College. Douglas Irwin

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<v Speaker 2>thirty years ago, as incredibly young at the time, wrote

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<v Speaker 2>a book called Against the Tide, which was absolutely definitive

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<v Speaker 2>about the history of free trade. And I went right

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<v Speaker 2>to him on the first question, President Trump's fixation on

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<v Speaker 2>a gilded age, his fixation on William McKinley.

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<v Speaker 3>Well, I'd say the myth that the US economy grew

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<v Speaker 3>in the late nineteenth century when we became an industrial

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<v Speaker 3>power because of the tariff There's a classic case of

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<v Speaker 3>correlation not being causation. So there are a lot of

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<v Speaker 3>reasons why the US became an industrial power. After the

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<v Speaker 3>Civil War up until World War One, we had massive immigration,

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<v Speaker 3>not many people in come administration and mentioned that we

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<v Speaker 3>were the recipient of major capital inflows from Britain and

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<v Speaker 3>other countries. We were adopting technology from then the technological

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<v Speaker 3>leader of Britain. We are pretty much open to the

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<v Speaker 3>world except in trade. So we did have high tariffs,

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<v Speaker 3>but they did promote manufacturing a bit. But if you

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<v Speaker 3>look where the productivity growth was, it was in the

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<v Speaker 3>service sector. It was railroads and then later electrification and telecommunications.

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<v Speaker 3>It wasn't just manufacturing and becoming rich because of the

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<v Speaker 3>tariff walls.

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<v Speaker 2>I will editorialize here with Doug Irwin of Dartmouth that

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<v Speaker 2>the set of reasons there of McKinley, and before McKinley,

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<v Speaker 2>in the time of Blaine and grew, I call him

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<v Speaker 2>President Grover Cleveland Alexander. President Grover Cleveland Alexander was a

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<v Speaker 2>picture named after Groover Cleveland. It's a side story But

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<v Speaker 2>the answer here is the capital inflow from the United

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<v Speaker 2>Kingdom was extraordinary. Alan Nevins nails this, the great historian

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<v Speaker 2>of Grover Cleveland. The gift that America got not even

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<v Speaker 2>post Civil War, but eighteen after the Panic of eighteen

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<v Speaker 2>seventy two, eighteen eighty onwards. The wall of money that

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<v Speaker 2>came into America from the United Kingdom, to me is

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<v Speaker 2>the great catalyst to our technological progress in the productivity

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<v Speaker 2>that Professor Irwin talks about over the arch of Megdan

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<v Speaker 2>de size long century, as he would call it. Another

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<v Speaker 2>expert that we talked to today was god A Macunda

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<v Speaker 2>of Yale University. What a spirited discussion here. He was

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<v Speaker 2>just flat out heated Macunda of Yale on tariffs.

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<v Speaker 1>If they don't realize it now, they will soon. The

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<v Speaker 1>United States government has been uniquely stable for a couple

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<v Speaker 1>of centuries, just basically longer than any other country in

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<v Speaker 1>the world, and American business has been the extraordinary beneficiary

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<v Speaker 1>of that. If that goes away, it will have consequences

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<v Speaker 1>in ways that we cannot predict, but that are gargantuan.

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<v Speaker 1>I'll just say as a general rule, it's when the

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<v Speaker 1>things that you so deeply believe about the world that

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<v Speaker 1>you don't even think about them turn out not to

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<v Speaker 1>be true, that you have the biggest impact. And here

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<v Speaker 1>is one where the basic underlying principle of everything in

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<v Speaker 1>global economics and everything in global foreign policy has been

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<v Speaker 1>the US government kind of knows what it's doing. That

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<v Speaker 1>assumption is breaking while we speak.

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<v Speaker 2>Got a mccunda. I'm sure we'll speak to him here

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<v Speaker 2>in the coming weeks. Is well. I really can't say

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<v Speaker 2>enough about the effort this weekend on this story. We

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<v Speaker 2>go into midnight tonight, I feel like Cinderellic and midnight

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<v Speaker 2>things are going to change with the tariff. Alex Steele

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<v Speaker 2>was actually brilliant when we were off Mike today about

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<v Speaker 2>really can we get to midnight. Maybe something will happen

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<v Speaker 2>today to adjust the tariff story for tomorrow. On your

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<v Speaker 2>commute across the nation, Apple Carplate, Android Auto in Philadelphia,

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<v Speaker 2>Sirius XM Channel one twenty one. In Kansas City. I

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<v Speaker 2>don't know what they do in Kansas City. Can you

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<v Speaker 2>tell I'm rooting for the Eagles? I think I think so.

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<v Speaker 2>But what we know is on YouTube, you subscribe to

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<v Speaker 2>This is single best I do

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<v Speaker 3>Seven