WEBVTT - Paul Krugman on Challenging Zombie Ideas 0:00:02.279 --> 0:00:06.840 This is Master's in Business with Barry Ridholts on Boomberg Radio. 0:00:07.480 --> 0:00:10.240 This week on the podcast, I have an extra special guest. 0:00:10.760 --> 0:00:14.400 His name is Paul Krugman, and you probably know him 0:00:14.440 --> 0:00:17.560 from his ubiquitous New York Times columns. UH. If you 0:00:17.560 --> 0:00:20.439 don't know him from that, you must know him from 0:00:20.440 --> 0:00:24.800 from television, from all of his books, including his textbooks. 0:00:24.840 --> 0:00:27.000 He was the two thousand and eight winner of the 0:00:27.040 --> 0:00:32.800 Nobel Prize as well as just too many honorifics to list. 0:00:33.640 --> 0:00:40.320 If you are remotely interested in any of the following economics, UH, 0:00:40.360 --> 0:00:46.560 income inequality, climate change, the history of economic development and thought, 0:00:47.159 --> 0:00:54.320 how public policy affects the population, UM, healthcare law, climate change, 0:00:54.320 --> 0:00:56.800 will go down, go down the list. We just walk 0:00:56.880 --> 0:01:02.760 out on everything and it's just been absolutely fascinating conversation. So, 0:01:02.840 --> 0:01:07.520 with no further ado, my m IB interview with Paul Krugman. 0:01:09.959 --> 0:01:14.520 This is Master's in Business with Barry Ridholtz on Boomberg Radio. 0:01:15.480 --> 0:01:19.240 My extra special guest today is Paul Krugman. He is 0:01:19.360 --> 0:01:22.360 the winner of the two thousand and eight Nobel Memorial 0:01:22.400 --> 0:01:26.200 Prize for his contributions UH to new trade theory and 0:01:26.240 --> 0:01:30.319 new economic geography. He is a Distinguished Professor at the 0:01:30.480 --> 0:01:33.840 Quney Graduate Center of the City of New York. He 0:01:33.959 --> 0:01:36.440 spent much of his career teaching at M I T 0:01:36.720 --> 0:01:40.240 and Princeton, where he focused on economics. He has either 0:01:40.440 --> 0:01:44.639 authored or edited twenty seven books, published over two hundred 0:01:44.680 --> 0:01:50.680 scholarly articles. Most recently, his book Arguing with Zombies, Economics, Politics, 0:01:51.000 --> 0:01:53.400 and a Fight for a Better Future just came out. 0:01:54.000 --> 0:01:58.000 He is the second most cited author on the College 0:01:58.000 --> 0:02:02.080 syllabi for economics, and is perhaps best known as a 0:02:02.200 --> 0:02:06.560 columnist for The New York Times. Paul Krugman, Welcome back 0:02:06.600 --> 0:02:09.560 to Bloomberg. Hi there, it's good to see you again. 0:02:09.880 --> 0:02:13.080 Let's jump right into this. So I recall you telling 0:02:13.080 --> 0:02:16.520 a story that you were a science fiction geek as 0:02:16.520 --> 0:02:21.280 a kid. How did Isaac Asimov's Foundation trilogy lead you 0:02:21.560 --> 0:02:26.320 to economics? Isaac Asimov wrote this, you know these books, 0:02:26.680 --> 0:02:32.720 uh thereabouts, which are you know? It's the Galactic Empire 0:02:32.760 --> 0:02:36.160 and people use blasters and have spaceships. But actually the 0:02:36.200 --> 0:02:39.200 science fiction e part is the least of it. It's 0:02:39.240 --> 0:02:42.560 social science fiction. The core of the story is there's 0:02:42.600 --> 0:02:46.640 this group of mathematical social scientists, the Psychohistorians, who have 0:02:46.720 --> 0:02:50.359 figured out that galactic civilization is falling and have discovered 0:02:50.400 --> 0:02:52.680 that if they intervene in just the right way, they 0:02:52.680 --> 0:02:56.120 can limit the period of barbarism. So it's basically social 0:02:56.120 --> 0:02:58.679 scientists save the universe. I want to be one of 0:02:58.720 --> 0:03:01.880 those guys. Economics was as close as I could get. 0:03:02.440 --> 0:03:05.959 That's pretty amusing. People may not know that you are 0:03:06.080 --> 0:03:10.520 an economics textbook author. You and your wife wrote what 0:03:10.720 --> 0:03:15.560 is today the second most popular economics textbook in colleges today. 0:03:15.600 --> 0:03:18.320 Who who's the lead? Is that? Mank You? Ah? Yeah, 0:03:18.360 --> 0:03:22.080 I'm afraid it's Greg mank You. So whatever led you 0:03:22.160 --> 0:03:25.359 to write a textbook that sounds like a lot of work? Actually? Yeah? 0:03:25.440 --> 0:03:27.680 So the first thing about it is that nobody writes 0:03:27.720 --> 0:03:31.000 one of the those principles books except out of ignorance 0:03:31.000 --> 0:03:33.280 of how much work it's going to involve. The actual 0:03:33.720 --> 0:03:37.600 the labor that's involved in producing, especially the first edition, 0:03:37.600 --> 0:03:41.440 but even the revisions is enormous. Partly it's a it's 0:03:41.440 --> 0:03:43.960 a reasonably honest way to make a living. Since it 0:03:44.040 --> 0:03:47.400 is my book, teaching is not well, it's supplemental. So 0:03:47.560 --> 0:03:49.440 since my wife is my co author, our in house 0:03:49.520 --> 0:03:52.040 name for the book is Economics for one k um. 0:03:52.640 --> 0:03:56.640 But it was also we thought that we could have 0:03:56.680 --> 0:03:59.920 a different kind of textbook that people. Most students come 0:04:00.080 --> 0:04:03.200 thinking economicis is this totally dry subject, and you know, 0:04:03.240 --> 0:04:05.440 some of it is, I've got to admit that, but 0:04:05.600 --> 0:04:07.880 there's stories. So we thought we could try to write 0:04:07.880 --> 0:04:11.040 a textbook which was as much as possible story driven. 0:04:11.120 --> 0:04:13.920 It was about real world things, and then we say, 0:04:13.960 --> 0:04:16.080 here's how economics helps me makes sense of these things. 0:04:16.080 --> 0:04:18.320 And so we wrote a textbook that was different and 0:04:18.600 --> 0:04:20.599 a lot of people like it. And you were you 0:04:20.600 --> 0:04:23.960 were still doing the revisions on the textbook while you 0:04:24.040 --> 0:04:28.359 were in Stockholm for the not that that edition, that 0:04:28.400 --> 0:04:32.360 was second edition, and the financial crisis broke as we 0:04:32.360 --> 0:04:36.040 were going through pages, so we already were in galleys 0:04:36.160 --> 0:04:38.760 and suddenly nothing in the money in Banking chapter was 0:04:38.800 --> 0:04:43.120 true anymore, and so we were frantically working to revise 0:04:43.600 --> 0:04:47.280 that that chapter in pages. So every replacement passage had 0:04:47.320 --> 0:04:50.719 to exactly physically fill the space of the stuff it replaced. 0:04:50.760 --> 0:04:52.880 So yeah, we uh, I had a lot of stuff 0:04:52.920 --> 0:04:55.760 I had to do in Stockholm. Robin spent a large 0:04:55.760 --> 0:04:58.520 part of the time on the floor of our hotel room, 0:04:58.600 --> 0:05:01.520 crawling from one set of paper as to another doing 0:05:01.520 --> 0:05:05.640 the revisions that was insane. You had written, or maybe 0:05:05.720 --> 0:05:09.280 I read it in an interview about a decade ago 0:05:10.160 --> 0:05:14.279 that at the top of the dot com bubble you said, Gee, 0:05:14.360 --> 0:05:16.760 the stock market doesn't make any more sense. I'm going 0:05:16.800 --> 0:05:19.880 to pull out of equities. It was a was that true? 0:05:19.960 --> 0:05:22.400 Would be? How did you that was true? Then we 0:05:22.440 --> 0:05:25.920 have in fact gotten back in some Still, I think 0:05:26.960 --> 0:05:31.080 probably our portfolio is less equity heavy than than probably 0:05:31.120 --> 0:05:33.760 the the average. But well, twenty years ago you were 0:05:33.800 --> 0:05:38.080 what early fifties, lates forties. I was, No, twenty years ago, 0:05:38.240 --> 0:05:41.840 I was late forties, late forties, So you should have 0:05:41.880 --> 0:05:47.160 equities then and now less equities. Yeah, yeah, So I 0:05:47.240 --> 0:05:49.440 mean I don't claim to be a great investor. In fact, 0:05:50.480 --> 0:05:53.680 Robbin's got the better head for detail, which is important. 0:05:53.720 --> 0:05:57.000 So we uh uh, we own a lot of you know, 0:05:57.200 --> 0:06:01.320 selective real estate, not not things where we think we 0:06:01.360 --> 0:06:04.200 know something. Okay, Well, real estate goes up over time 0:06:04.240 --> 0:06:06.919 as well. So eight if when you say you've partially 0:06:06.920 --> 0:06:10.040 gotten back in, does that mean your some stocks, some bond, 0:06:10.120 --> 0:06:13.600 some real estate. So you have a diverse portfolio that 0:06:13.839 --> 0:06:16.240 makes a whole lot of sense. There's another issue I 0:06:16.240 --> 0:06:21.520 have to ask you about, which is that of media bias. Um. 0:06:21.720 --> 0:06:24.840 Lots of people these days have accused the media of 0:06:24.880 --> 0:06:28.240 being fake news or biased or whatever. You take a 0:06:28.520 --> 0:06:34.479 decidedly different perspective on bias. Tell us a little bit 0:06:34.520 --> 0:06:38.479 about that. Yeah, the biggest so by and large, the 0:06:38.520 --> 0:06:42.080 media get facts right. Uh. They formal me. I mean 0:06:42.080 --> 0:06:44.080 that's not obviously true of you know, Breitbart or something 0:06:44.120 --> 0:06:46.080 like that, but they But the New York Times gets 0:06:46.080 --> 0:06:50.520 its facts right. The what it doesn't do very well 0:06:51.080 --> 0:06:54.000 is it it doesn't know how to handle things where 0:06:54.440 --> 0:06:57.680 there really aren't two sized to a debate when when 0:06:57.720 --> 0:07:01.800 there's a One of the very first columns I wrote 0:07:01.839 --> 0:07:04.640 back during the two thousand election said that if if 0:07:04.760 --> 0:07:08.000 Bush had had said that the Earth was flat, the 0:07:08.360 --> 0:07:12.160 headline would probably read views differ on shape of the planet. Right. 0:07:12.240 --> 0:07:15.560 The media are really terrible. And that's very hard to 0:07:16.000 --> 0:07:18.400 That's a real problem when you have a not just 0:07:18.480 --> 0:07:22.640 a highly polarized political environment, but an asymmetrically polarized political 0:07:22.720 --> 0:07:27.200 environment where one side of the debate is peddling zombie 0:07:27.280 --> 0:07:32.040 lies uh and the other is is not uh. And 0:07:32.120 --> 0:07:35.200 it's so it's very there's a real failure I think 0:07:35.280 --> 0:07:39.080 to inform. There's a unwillingness to I mean, when I 0:07:39.120 --> 0:07:42.200 started out, I was literally forbidden to use the word 0:07:42.280 --> 0:07:45.320 lie in my columns, and that's no longer true. But 0:07:45.400 --> 0:07:49.360 even so, there's a tremendous bias towards even handedness, even 0:07:49.400 --> 0:07:51.600 when the hands are not remotely even so you get 0:07:51.600 --> 0:07:55.840 this false equivalence where both sides are trade equally. The 0:07:55.840 --> 0:07:58.320 The other thing that you have referenced as a form 0:07:58.400 --> 0:08:01.520 of bias that i'm a has been amused by is 0:08:01.560 --> 0:08:05.600 the concept of quote very serious people. That's right, what 0:08:05.600 --> 0:08:08.360 what are the very serious people? So very serious people? 0:08:08.480 --> 0:08:10.960 The phrase actually a lot of it comes from the 0:08:10.960 --> 0:08:13.360 build up to the Iraq War, when all the serious 0:08:13.360 --> 0:08:15.520 people thought it made that this was a good idea, 0:08:15.840 --> 0:08:19.280 which it wasn't obviously, um, but very serious people are 0:08:19.280 --> 0:08:23.320 people who buy into what is a conventional wisdom of 0:08:23.400 --> 0:08:28.680 the time, something that important people say and everybody thinks 0:08:28.680 --> 0:08:30.920 it's serious because all of the other serious people are 0:08:31.040 --> 0:08:34.760 saying it, and they will nod their head and so 0:08:35.000 --> 0:08:38.040 like you know, the US debt levels are major threats, 0:08:38.080 --> 0:08:42.240 even though it's not really true or the um we 0:08:42.280 --> 0:08:47.120 have a real problem of a skills gap in the workforce. 0:08:47.320 --> 0:08:50.400 And so these are things that so I stole it. 0:08:50.600 --> 0:08:52.400 I think I stole it from the blogger at us. 0:08:52.440 --> 0:08:55.600 But it really works, these things that And that's, by 0:08:55.600 --> 0:08:58.320 the way, where the media drops it's even handled this 0:08:58.440 --> 0:09:01.160 on this So a lot of reporting on debt it 0:09:01.240 --> 0:09:04.959 was uncritically Bowls and Simpson are great national heroes. Uh 0:09:05.200 --> 0:09:08.400 so it's yeah, I remember that, but the but the whole. 0:09:08.600 --> 0:09:11.000 So it's funny that the one place where the news 0:09:11.040 --> 0:09:14.440 media really dropped the false equivalence and started saying one 0:09:14.440 --> 0:09:17.920 side is right is in fact where that side happens 0:09:17.920 --> 0:09:21.839 to be wrong. But they're very impressed by titles and 0:09:21.880 --> 0:09:26.959 by positions and by some academic credentials. And if you're 0:09:27.000 --> 0:09:29.439 the head of a think tank, they think you're actually 0:09:29.559 --> 0:09:33.240 thinking when really you're not thinking. Well they yeah, they 0:09:33.240 --> 0:09:36.280 are impressed by think tanks, which is really a bad 0:09:36.320 --> 0:09:38.760 idea because uh, there a think tanks, and then there 0:09:38.760 --> 0:09:40.280 are think tanks, and a lot of the thing tanks 0:09:40.320 --> 0:09:44.920 don't actually think. Uh they're very impressed by uh, rich people, 0:09:44.960 --> 0:09:48.280 powerful people. So if you're you know, if Jamie Diamond 0:09:48.320 --> 0:09:51.640 says we have a skills gap, that must be serious, 0:09:51.679 --> 0:09:54.720 whereas Jamie Diamond is no doubt a great business person, 0:09:54.760 --> 0:10:00.160 but he doesn't know anything about macroeconomics, so it's a 0:10:00.200 --> 0:10:04.199 really it is a real problem the U on many issues, 0:10:04.679 --> 0:10:07.320 going to important people is absolutely the worst place to 0:10:07.360 --> 0:10:09.840 get information because there are people who have a stake 0:10:09.880 --> 0:10:12.600 in a particular point of view and or or they're 0:10:12.600 --> 0:10:15.319 too busy to actually think hard. So it is a 0:10:15.720 --> 0:10:18.000 you know, that's those are the places. Now it's gotten better, 0:10:18.040 --> 0:10:22.840 I have to say, the The Times um now has 0:10:23.520 --> 0:10:26.840 several people writing who actually do understand some economics, don't 0:10:26.920 --> 0:10:30.200 uncritically accept stuff. We've got a hold section the Upshot, 0:10:30.240 --> 0:10:33.200 which tends to be analytical pieces from multiple disciplines. So 0:10:33.559 --> 0:10:37.440 it's better than it was, but still, uh so, those 0:10:37.440 --> 0:10:40.839 are the biases. It's not liberal bias, it's not even 0:10:40.920 --> 0:10:44.480 actually conservative bios So there does very serious people tend 0:10:44.480 --> 0:10:47.040 to be somewhat right of center, but it's it's mostly 0:10:47.080 --> 0:10:51.080 it's it's seriousness and even handedness on things which are 0:10:51.120 --> 0:10:53.160 in fact not serious and in fact where you shouldn't 0:10:53.160 --> 0:10:56.680 be treating equally both sides equally. Let's talk a little 0:10:56.679 --> 0:10:59.320 bit about free trade, which is what you won your 0:10:59.520 --> 0:11:03.439 Nobel for free trade has been the cornerstone of US 0:11:03.520 --> 0:11:08.840 economic policy. Why has it gotten such a bad reputation 0:11:09.360 --> 0:11:13.319 amongst some economists and a lot of people in this administration. 0:11:13.559 --> 0:11:17.080 Economists love free trade for some good reasons and some 0:11:17.240 --> 0:11:20.040 not so good reasons. We love free trade because, in fact, 0:11:20.080 --> 0:11:23.120 there's a lot to be said for it. It's particularly 0:11:23.160 --> 0:11:26.920 important really for smaller, poorer countries. Try and think about 0:11:26.960 --> 0:11:29.600 what would happen to Bangladesh without the ability to export 0:11:29.720 --> 0:11:33.600 clothing would probably literally be starting to death. So trade 0:11:34.040 --> 0:11:36.640 open markets doesn't have to be precisely free trade, but 0:11:36.679 --> 0:11:39.120 open markets are really important for a lot of the world. 0:11:39.280 --> 0:11:41.760 It's always been the case that if you did it right, 0:11:42.240 --> 0:11:49.320 you understood that while free trade generally makes all countries richer, uh, 0:11:49.360 --> 0:11:53.760 it doesn't make everybody within the country's richer. Has effects, 0:11:53.760 --> 0:11:57.199 possibly strong effects on the distribution of income. Now, we 0:11:57.280 --> 0:11:58.959 tried to quantify that a little bit, and then no 0:11:59.120 --> 0:12:02.839 question that it's it's a growing world. Trade has been 0:12:03.080 --> 0:12:07.160 some a source nowhere near the dominant source, but a 0:12:07.240 --> 0:12:10.800 source of rising inequality within the US. Um What we 0:12:10.920 --> 0:12:13.600 really missed and which has been where a lot of 0:12:13.600 --> 0:12:18.760 the academic research has gotten We missed how concentrated the 0:12:18.840 --> 0:12:21.960 negative effects are. Right, So you take a look and 0:12:22.000 --> 0:12:24.120 you say, look, okay, we're importing a lot of stuff 0:12:24.120 --> 0:12:26.880 from China we didn't used to import. One of the 0:12:26.920 --> 0:12:29.640 things is furniture, So we're importing lots of furniture from China. 0:12:30.240 --> 0:12:34.120 Clothing boys. I like furniture as a particular example, because 0:12:34.559 --> 0:12:37.400 if you ask, all right, how many jobs were displaced 0:12:37.480 --> 0:12:42.160 by Chinese imports of Chinese furniture answers, Maybe it might 0:12:42.240 --> 0:12:45.240 is more, probably more than the duh, maybe even two 0:12:45.320 --> 0:12:48.120 hundred thousand, But you know, the other jobs were created 0:12:48.440 --> 0:12:51.920 lower price to consumers. How big a deal is that? Well, 0:12:52.240 --> 0:12:55.640 if you happen to be in Hickory, North Carolina, which 0:12:55.760 --> 0:12:59.040 is a city that is built entirely around the furniture industry, 0:12:59.320 --> 0:13:03.080 all of a sudden, for that community, it's a devastating impassion. 0:13:03.320 --> 0:13:05.800 So we missed the extent to which the U. S 0:13:05.840 --> 0:13:09.040 economy is gigantic, and it's churning all the time. A 0:13:09.080 --> 0:13:11.600 million and a half people are fired every month. So 0:13:11.679 --> 0:13:14.080 you say, how much difference Canada's trade make? Well, the 0:13:14.120 --> 0:13:17.080 trouble is that the impacts of trade have tended to 0:13:17.120 --> 0:13:20.680 fall quite heavily on specific communities, and I may Apa, 0:13:20.760 --> 0:13:24.360 I didn't see that, and it really took a very 0:13:24.400 --> 0:13:30.040 good paper, you know, published in in in twenty I think, 0:13:30.720 --> 0:13:34.240 on the China shock um that, among other things, written 0:13:34.240 --> 0:13:37.199 by one of my students, uh and to to point 0:13:37.240 --> 0:13:40.120 out how much we were missing that effect. So lots 0:13:40.160 --> 0:13:44.640 of um countries have an industrial policy. Shouldn't there be 0:13:44.880 --> 0:13:48.400 some sort of Hey, if you're in West Virginia coal country, 0:13:48.480 --> 0:13:52.280 or in North Carolina furniture country, or in the broad 0:13:52.360 --> 0:13:56.760 loom and fabric areas that are specifics to certain states. 0:13:57.280 --> 0:14:00.760 When it's apparent that a region is getting estimated because 0:14:00.760 --> 0:14:06.520 the global trade advantages where essentially global labor arbitrage and 0:14:06.520 --> 0:14:10.640 and some of the improved technologies that become specific to 0:14:11.240 --> 0:14:15.040 elsewhere in the world, why don't we do a retrain, 0:14:15.200 --> 0:14:19.040 re educate, give people new skills so they can compete 0:14:19.320 --> 0:14:22.360 even if it's no longer in coal or furniture. Well, 0:14:22.400 --> 0:14:26.920 we try, and actually we've had trade adjustment assistance at 0:14:27.000 --> 0:14:30.440 various points in our history. It's never been tremendously successful. 0:14:30.440 --> 0:14:32.040 And by the way, trade is not unique. You know, 0:14:32.080 --> 0:14:34.880 technology does it? Does it? If you actually want to 0:14:34.880 --> 0:14:37.840 ask what happened to West Virginia. International trade, it turns out, 0:14:37.920 --> 0:14:40.840 is not an important thing for West Virginia. It's changes 0:14:40.880 --> 0:14:44.080 in the technology wracking, fracking, and even before fracking, it 0:14:44.160 --> 0:14:46.760 was mountain top removal. So all of a sudden, instead 0:14:46.760 --> 0:14:49.880 of employing thousands of workers to mind coal, you just 0:14:49.880 --> 0:14:53.760 blow the tops off mountains and use some So um, 0:14:53.880 --> 0:14:56.520 now you can't have a policy too, or it's it's 0:14:56.520 --> 0:14:58.480 hard to have a policy to deal with every shock. 0:14:58.760 --> 0:15:01.320 What you really wanted to straw long safety net so 0:15:01.360 --> 0:15:04.200 that at least some basics are supplies, so at least 0:15:04.200 --> 0:15:06.920 people are the resources, among other things, the resources to 0:15:07.840 --> 0:15:15.400 move or seek different jobs. Whatever. The little secretive American 0:15:15.440 --> 0:15:17.600 policy is that we actually have a lot of that. 0:15:18.760 --> 0:15:23.680 We actually have because the major social programs Social Security, Medicare, 0:15:23.800 --> 0:15:28.280 Medicaid are paid for at the federal level, mostly because 0:15:28.400 --> 0:15:32.520 the tax system is uh, at least the federal tax 0:15:32.520 --> 0:15:35.920 system is fairly progressive, we actually end up providing a 0:15:35.960 --> 0:15:40.440 lot of de facto aid to distressed regions. And you 0:15:40.480 --> 0:15:43.800 take Kentucky, it's receiving net aid from the federal government 0:15:43.840 --> 0:15:47.200 to the tune of about GDP. So you know, we 0:15:47.280 --> 0:15:49.640 don't we actually do do a lot. Now that doesn't 0:15:49.840 --> 0:15:52.000 it's not clear that we have anything that can We 0:15:52.040 --> 0:15:54.800 can replace a fair bit of the income that's lost. 0:15:54.840 --> 0:15:57.800 We can't replace the dignity, and but it's not clear 0:15:57.840 --> 0:16:00.320 that anyone knows how to do that. Another thing that's 0:16:00.360 --> 0:16:03.600 kind of interesting that you've written, quote international trade and 0:16:03.640 --> 0:16:07.480 trade policy aren't nearly as important as people think they are. 0:16:07.840 --> 0:16:10.480 People love to go on about international trade because a 0:16:10.840 --> 0:16:13.360 variety of reasons, but among other things, it sounds important. 0:16:13.360 --> 0:16:16.520 It's international, it's global. Uh. My parents wants gave me 0:16:16.560 --> 0:16:19.120 a sweatshirt that said global Schmobile on it. I said 0:16:19.120 --> 0:16:20.800 what and they said, every time you go off to 0:16:20.840 --> 0:16:22.560 a conference, we ask you what it's about, you say 0:16:22.560 --> 0:16:25.960 global schmobile. You know, people love to talk global and 0:16:26.120 --> 0:16:30.560 u which means that we exaggerate, you know, compare we 0:16:30.560 --> 0:16:32.480 we spent about the same share of our income on 0:16:32.560 --> 0:16:37.440 imports and on healthcare as a nation. Uh. Trade, even 0:16:37.520 --> 0:16:40.360 after even with the Trump tariffs, trade is sort of 0:16:40.400 --> 0:16:44.000 only it's mostly actually pretty clean. Healthcare is a howling mess. 0:16:44.400 --> 0:16:46.880 So health care policy is much much more important than 0:16:46.920 --> 0:16:49.560 trade policy. And but that's not reflected. And the way 0:16:49.560 --> 0:16:52.280 we talk about the world so so let's talk about 0:16:52.400 --> 0:16:55.640 changes to some of the trade policy we had. I 0:16:55.680 --> 0:16:59.280 recall Ross Perow talking about the great sucking sound that 0:16:59.440 --> 0:17:02.560 NAFTA is going to create, pulling all those jobs south 0:17:02.680 --> 0:17:07.120 of the border. Trump effectively ran on that. And now 0:17:07.200 --> 0:17:10.639 we've tossed the side NAFTA with U s m c A. 0:17:11.000 --> 0:17:13.040 We're all so much better now, aren't we. Right? So 0:17:13.080 --> 0:17:15.080 I have people I know have been calling the U 0:17:15.080 --> 0:17:18.040 s m c A the village people who agree. Uh. Um, 0:17:18.240 --> 0:17:21.120 And it's a U s m c A is basically 0:17:21.200 --> 0:17:23.840 NAFTA with Trump's name stuck on it. Um. Is it 0:17:23.920 --> 0:17:27.600 not all that different than what it's of. It is 0:17:27.680 --> 0:17:29.920 just the same thing as before, and there's a few 0:17:29.920 --> 0:17:33.520 other things. The one place where there's some significant differences 0:17:33.520 --> 0:17:37.199 it actually gives a little bit more protection clout to 0:17:37.440 --> 0:17:40.280 labor unions, which is why Democrats voted for it in 0:17:40.320 --> 0:17:43.200 the US. In the US really uh in Mexico to 0:17:43.400 --> 0:17:46.119 but it's it was kind of a pro labor union 0:17:46.400 --> 0:17:48.800 change in policy. Not big deal, but enough so that 0:17:49.680 --> 0:17:51.800 Richard Trumka of the A F L c I O said, 0:17:51.960 --> 0:17:54.880 you know, vote for this, and and the Democratic Caucus 0:17:55.000 --> 0:17:58.560 voted it through um because there was something in it 0:17:58.600 --> 0:18:01.720 for organized labor, which I'm sure was not. I'm not 0:18:01.760 --> 0:18:04.600 sure whether that was, you know, over Trump kicking and screaming, 0:18:04.680 --> 0:18:06.359 or whether he just didn't even know that he'd done that. 0:18:06.400 --> 0:18:10.080 But anyway, that's quite the policy wonk, right, so I 0:18:10.080 --> 0:18:13.720 think that he knows unlike everybody else in Kansas cities 0:18:13.720 --> 0:18:18.919 in Kansas. But the post super Bowl congratulations that was 0:18:18.920 --> 0:18:22.840 pretty so A few people pointed out, um that it's 0:18:22.880 --> 0:18:26.439 actually in Missouri. Yeah, well, kind of people in Missouri 0:18:26.600 --> 0:18:30.040 kind of noticed that. Let's talk a little bit about 0:18:30.119 --> 0:18:33.920 your book, which I found quite intriguing, filled with all 0:18:34.040 --> 0:18:38.400 sorts of fascinating topics. Let's begin with a great financial crisis. 0:18:38.800 --> 0:18:43.119 You had some very prescient columns in O. Five and 0:18:43.320 --> 0:18:47.000 oh seven, running out of bubbles, that hissing sound coming 0:18:47.000 --> 0:18:51.000 out of real estate and innovating our way to financial crisis, 0:18:51.560 --> 0:18:55.160 all of these pre date two thousand and eight. What 0:18:55.200 --> 0:18:57.920 were you looking at that gave you such a clear 0:18:58.000 --> 0:19:01.639 view of the financial crisis? That was it was just 0:19:01.760 --> 0:19:06.640 clear that on the normal metrics, things like the prices 0:19:06.680 --> 0:19:11.280 to rents, uh, the housing had gone way out of sight. 0:19:11.320 --> 0:19:14.040 And he just said, is there there are a good 0:19:14.080 --> 0:19:17.919 reason for this, and then you if you were there 0:19:17.920 --> 0:19:21.040 were the kind of a tell's tale informal signs, you know, 0:19:21.080 --> 0:19:24.280 if if um the dot com bubble, I thought I 0:19:24.800 --> 0:19:26.920 had an inkling that things were gonna be bad when 0:19:26.920 --> 0:19:28.639 I realized that and when you when when you went 0:19:28.680 --> 0:19:32.199 into a bar, they tended to have CNBC on in 0:19:32.240 --> 0:19:35.080 the bar instead of sports. And then I have a 0:19:35.240 --> 0:19:39.560 very vivid recollection of that era where where stocks became 0:19:39.600 --> 0:19:41.840 the national pastime, right and then so if you go 0:19:41.880 --> 0:19:43.960 back to around two thousand five, it was shows like 0:19:44.000 --> 0:19:46.280 Flipped This House, so it was the same kind of 0:19:46.320 --> 0:19:48.960 feel to it. So it just looked way out of whack. 0:19:49.000 --> 0:19:51.960 And I had an inkling, but only a partial inkling, 0:19:52.400 --> 0:19:55.159 that the financial sector was out of control, that that 0:19:55.240 --> 0:19:57.520 we didn't know what we were doing, that things had 0:19:57.520 --> 0:20:00.600 gotten complicated. Was only when the crisis was in full 0:20:00.680 --> 0:20:04.000 swing that it became clear that we were in much 0:20:04.000 --> 0:20:06.880 worse shape than I'd realized, that that more than half 0:20:06.920 --> 0:20:09.680 of the banking sector was was things that weren't called 0:20:09.760 --> 0:20:12.200 banks and therefore weren't regulated like banks. And then so 0:20:12.320 --> 0:20:15.399 shadow banking was was a huge vulnerability. But that was 0:20:15.440 --> 0:20:17.600 one of the few times when it's it really seemed 0:20:17.640 --> 0:20:20.200 obvious that something was majorly out of whack and that 0:20:20.320 --> 0:20:22.960 something bad was gonna happen. So let's fast forward a 0:20:22.960 --> 0:20:26.480 couple of years. During the second Bush term, you had 0:20:26.520 --> 0:20:31.359 been staunchly opposed to privatizing Social Security, and you wrote, quote, 0:20:31.359 --> 0:20:34.240 an amazing thing happened for the first time since I 0:20:34.280 --> 0:20:37.480 became a New York Times columnist in two thousand, my 0:20:37.800 --> 0:20:41.320 side of a policy debate. Actually one, how is that 0:20:41.400 --> 0:20:43.959 possible that you know, for ten years you're not winning 0:20:44.119 --> 0:20:49.160 any debates despite making pretty good arguments. Well if if 0:20:49.200 --> 0:20:52.000 good arguments one, and the world would be a very 0:20:52.000 --> 0:20:54.480 different place from the way it is. And uh, look, 0:20:54.520 --> 0:20:57.119 I I started writing during the two thousand election, and 0:20:57.560 --> 0:20:59.879 the Times, yes, because you have been publishing it's slate 0:21:00.040 --> 0:21:02.160 for a good couple of years. Yeah, unfortunate as well. 0:21:02.280 --> 0:21:06.520 So but for right for the Times, I've only got 0:21:06.560 --> 0:21:08.879 really political during the two thousand election because it was 0:21:08.920 --> 0:21:11.560 obvious to me that then candidate George W. Bush was 0:21:11.640 --> 0:21:14.879 lying through his teeth about his policies. Um. But the 0:21:16.480 --> 0:21:20.560 uh so it was our period of Republican ascendency, and 0:21:20.600 --> 0:21:25.400 the Republican Party uh already then, although not as much now. 0:21:26.400 --> 0:21:29.280 Was dominated by zombie ideas, by beliefs and the magical 0:21:29.320 --> 0:21:31.720 power of tax cuts and so on. So I was 0:21:31.760 --> 0:21:34.240 on the losing side of most of the political stuff, 0:21:34.400 --> 0:21:37.439 and it was you tell me, you don't believe the 0:21:37.520 --> 0:21:40.240 laugh of curve is a real Oh. I believe that 0:21:40.280 --> 0:21:42.760 there is a laugh of curve, and there is a 0:21:42.880 --> 0:21:46.760 some tax rate beyond which you actually lose revenue. But 0:21:46.840 --> 0:21:49.000 I suspect that that tax rate is on the order 0:21:49.040 --> 0:21:52.680 of or, and I suspect I actually estimated the laugh 0:21:52.720 --> 0:21:54.920 of curve is not relevant for the U. S. Economy. 0:21:55.400 --> 0:22:00.200 And yeah, So between the fact that you have a 0:22:00.320 --> 0:22:04.000 very powerful right wing which has is committed to things 0:22:04.000 --> 0:22:06.520 that are not true, and the fact that the very 0:22:06.520 --> 0:22:09.120 serious people tend to go for things that are serious 0:22:09.520 --> 0:22:12.120 but not actually serious. So let's talk about a very 0:22:12.160 --> 0:22:15.919 serious person that you seem to have a constant um 0:22:16.080 --> 0:22:20.200 ongoing argument with, Paul Ryan. You you have a section 0:22:20.400 --> 0:22:25.119 called fiscal phonies. You specifically point out, Paul Ryan, I 0:22:25.280 --> 0:22:27.920 have a problem with the group I call the UH 0:22:28.040 --> 0:22:32.040 deficit chicken hawks. They're chicken hawks, They're they're big deficit 0:22:32.080 --> 0:22:34.159 hawks as long as they're out of power. Once they 0:22:34.160 --> 0:22:37.080 get into power, suddenly the deficit doesn't matter. What's your 0:22:37.080 --> 0:22:39.600 beef with Paul Ryan? Well, I wasn't really with him. 0:22:40.400 --> 0:22:44.800 I mean fact, I'm not a uh you know me personally, 0:22:44.880 --> 0:22:48.600 I'm not I'm not a person that's particularly into grudges, 0:22:48.760 --> 0:22:52.119 personal feuds whatever. I don't uh, But Paul Ryan was 0:22:52.160 --> 0:22:55.240 as symboled both of where the Republican Party has gone, 0:22:55.280 --> 0:22:57.800 but also of what's wrong with with me? Your coverage, 0:22:57.960 --> 0:23:03.159 I mean, the the the media equivalence required that there 0:23:03.320 --> 0:23:07.000 be serious, honest conservatives, the people who are really earnest 0:23:07.040 --> 0:23:10.200 had interesting ideas. So there was a role that someone 0:23:10.240 --> 0:23:12.400 had to feel except there actually is nobody like that. 0:23:12.840 --> 0:23:16.719 So they promoted Paul Ryan into that role because he 0:23:17.080 --> 0:23:19.840