WEBVTT - Bloomberg Businessweek Weekend - January 16th, 2026 0:00:00.320 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.640 --> 0:00:13.000 This is Bloomberg business Week Daily reporting from the magazine 0:00:13.000 --> 0:00:17.599 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.640 --> 0:00:22.520 and trends shaping today's complex economy. Plus global business finance 0:00:22.560 --> 0:00:25.880 and tech news as it happens. The Bloomberg Business Week 0:00:25.960 --> 0:00:31.320 Daily Podcast with Carol Masser and Tim Stenebek on Bloomberg Radio. 0:00:32.000 --> 0:00:34.840 Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast 0:00:35.280 --> 0:00:38.680 twenty twenty six. Definitely often running. It's about one week 0:00:38.720 --> 0:00:40.600 since we found out that one of the pillars of 0:00:40.720 --> 0:00:45.000 US economic governance was again under attack after fedchair J 0:00:45.159 --> 0:00:47.519 Powell announced that the Central Bank was served with a 0:00:47.560 --> 0:00:51.559 grand jury subpoena from the Department of Justice. It's not 0:00:51.640 --> 0:00:53.479 the only time the US Central Bank was caught in 0:00:53.520 --> 0:00:56.600 the crosshairs of a president or investors for that matter. 0:00:56.960 --> 0:00:58.920 And on that and what we can learn from our 0:00:58.920 --> 0:01:02.080 financial past. Returned to the New York Times best selling 0:01:02.120 --> 0:01:04.960 author of Too Big to Fail in nineteen twenty nine, 0:01:05.200 --> 0:01:08.560 Inside the greatest crash in Wall Street History and how 0:01:08.560 --> 0:01:11.920 it shattered a nation, Andrew Ross Sorkin will join us. 0:01:12.240 --> 0:01:14.360 All that to come. We begin, though with the real 0:01:14.360 --> 0:01:16.800 world impact of tariffs. Nearly a year after they were 0:01:16.800 --> 0:01:19.160 imposed by the Trump administration. 0:01:18.760 --> 0:01:21.680 The Supreme Court did not rule on challenges to President 0:01:21.720 --> 0:01:25.080 Donald Trump's AJIPA tariffs this past week for a second time, 0:01:25.480 --> 0:01:28.080 leaving the world to wait until at least this coming week, 0:01:28.319 --> 0:01:31.800 possibly to learn the fate of his signature economic policy. 0:01:32.040 --> 0:01:32.360 Again. 0:01:32.760 --> 0:01:36.759 Possibly it could be even longer before we get some 0:01:36.840 --> 0:01:38.640 kind of ruling from the Supreme Court on this. 0:01:38.959 --> 0:01:41.920 Someone paying really close attention apart from us to that 0:01:42.040 --> 0:01:45.640 decision is Rick Woldenberg. Rick is CEO of Learning Resources 0:01:45.640 --> 0:01:48.800 in Hand to Mind. They're two educational toy businesses based 0:01:48.840 --> 0:01:52.000 near Chicago. Rick, back in April of last year, sued 0:01:52.000 --> 0:01:55.320 the Trump administration to invalidate the tariffs as exceeding the 0:01:55.360 --> 0:01:59.160 president's authority. Rick joined us alongside Bloomberg New Supreme Court 0:01:59.160 --> 0:02:00.640 reporter Greg store Well. 0:02:00.680 --> 0:02:03.520 Taris have had a dramatic effect on our business. The 0:02:04.280 --> 0:02:08.720 imposition of these taxes on our company, with no advanced 0:02:08.720 --> 0:02:12.720 warning and with seemingly no limit through our supply chain 0:02:13.240 --> 0:02:17.320 administration completely out the window. We had to rebuild our 0:02:17.320 --> 0:02:22.040 supply chain on the fly. It was a significant disruption 0:02:22.120 --> 0:02:26.240 in how we manufactured our product. And so we had 0:02:26.240 --> 0:02:30.560 an enormous diversion of labor in our office, maybe up 0:02:30.600 --> 0:02:35.160 to thirty percent of our man hours were shifted towards surviving. 0:02:35.280 --> 0:02:40.120 That change also obviously created a huge cost, well in 0:02:40.200 --> 0:02:43.079 excess of ten million dollars in twenty twenty five, up 0:02:43.080 --> 0:02:47.000 from zero in the prior year, and so it affected 0:02:47.000 --> 0:02:50.240 our cash flow. It affected our costs. We had to 0:02:50.400 --> 0:02:55.040 raise our prices, and it's an economic depressant, a massive 0:02:55.160 --> 0:02:59.680 tax like that. It's like wearing ankle weights in a sprint. 0:03:00.080 --> 0:03:03.760 You slow down. And so we're a little smaller as 0:03:03.760 --> 0:03:07.000 a result of this huge tax. 0:03:08.080 --> 0:03:10.000 So, Greg Store, I want to bring you in. This 0:03:10.080 --> 0:03:14.560 is a great story as you do so well, and 0:03:14.840 --> 0:03:17.200 it's I feel like a Bloomberg does it like reminds 0:03:17.280 --> 0:03:19.960 us that there are big stories. There are headlines, but 0:03:20.000 --> 0:03:22.560 there are people and companies being impacted, and in this 0:03:22.600 --> 0:03:24.960 case a lot of small and mid sized companies. I 0:03:25.000 --> 0:03:27.720 think it's safe to say that Rick's story not unique. 0:03:29.320 --> 0:03:31.680 It's not unique, and in fact, it is the smaller 0:03:31.720 --> 0:03:35.960 companies that have launched this challenge. There are two different 0:03:35.960 --> 0:03:38.280 cases there before the Supreme Court, and the other ones 0:03:38.320 --> 0:03:42.520 also small businesses, actually smaller than Rix the bigger companies. 0:03:42.560 --> 0:03:46.640 While they have subsequently filed some lawsuits to try to 0:03:46.680 --> 0:03:49.680 get refunds in case the Supreme Court strikes down the tariffs, 0:03:49.920 --> 0:03:52.840 they didn't want to be out front in challenging these. 0:03:53.160 --> 0:03:56.600 So, Rick, why did you choose to speak out? Why 0:03:56.600 --> 0:03:59.080 are you speaking publicly about this? Why did you file 0:03:59.200 --> 0:04:02.640 this lawsuit? Doesn't Yes, they're certainly upside, but there's also 0:04:02.720 --> 0:04:04.400 a lot for you to lose. Like we've seen the 0:04:04.400 --> 0:04:07.800 way that this administration has been punitive in some cases. 0:04:08.560 --> 0:04:10.520 Well, I think that the things that I was afraid 0:04:10.560 --> 0:04:15.839 of losing were the relationship I have with our customers, 0:04:15.960 --> 0:04:21.320 the dependents that our employees and their families have on 0:04:21.360 --> 0:04:26.840 our company. Ours is a family business. I'm third generation, 0:04:27.000 --> 0:04:30.120 my kids are fourth generation. You have a very strong 0:04:30.240 --> 0:04:34.560 sense of how the health of your business affects the 0:04:34.600 --> 0:04:37.599 community that you live in. And so we just couldn't 0:04:37.640 --> 0:04:42.080 walk away from those folks. And I'm I'm very American 0:04:42.120 --> 0:04:44.840 in my outlook. I want to take control of what's 0:04:44.880 --> 0:04:47.360 happening to us, and I wasn't going to let a 0:04:47.400 --> 0:04:50.560 politician ruin what we've built up over one hundred years. 0:04:51.040 --> 0:04:54.159 We're also mission driven business, there's lots of families like 0:04:54.240 --> 0:04:57.760 yours who use our products and depend on them to 0:04:57.839 --> 0:05:01.760 help educate their children. That means a whole lot to us. 0:05:03.800 --> 0:05:06.320 So we felt like we had a lot of reasons 0:05:06.320 --> 0:05:09.360 to stand up, and I was more concerned about not 0:05:09.520 --> 0:05:11.480 doing something than doing something. 0:05:11.920 --> 0:05:14.719 You know, the President Rick and Detroit said quote to 0:05:14.760 --> 0:05:17.560 be anti tariff is to be pro Chinese, and the 0:05:17.600 --> 0:05:21.839 tariff challengers at the Supreme Court are China centric, and 0:05:21.839 --> 0:05:23.760 he alluded to the idea of people who are challenging 0:05:23.760 --> 0:05:26.240 tariffs as anti American. How do you respond to that? 0:05:26.640 --> 0:05:27.960 You know. One of the things I've done in this 0:05:28.040 --> 0:05:30.880 lawsuit is I've tried not to go tit for tat 0:05:30.960 --> 0:05:35.800 and to point fingers in saying that mister Trump points 0:05:35.839 --> 0:05:38.760 fingers at me. But I'm not sure that I make 0:05:38.839 --> 0:05:43.320 my point more strongly by engaging in finger pointing back. 0:05:43.360 --> 0:05:46.560 I would just simply say that mister Trump has no 0:05:46.680 --> 0:05:50.360 legal right to have impoosed this tax on us. It's 0:05:50.440 --> 0:05:54.080 hurt our business, and we've asked the court to adjudicate 0:05:54.160 --> 0:05:58.240 that he has has no right to do this, and 0:05:58.320 --> 0:06:01.560 no American wants to or feels exposed to the risk 0:06:02.080 --> 0:06:05.760 of paying attacks that's not legal. There are means for 0:06:05.839 --> 0:06:08.440 him to put taxes on us. He has to go 0:06:08.520 --> 0:06:12.800 through the House. That's what James Madison wants and that's 0:06:12.839 --> 0:06:15.400 what we need to do, so he can't do it. 0:06:16.160 --> 0:06:18.440 He has no idea if we're China centric or not. 0:06:18.560 --> 0:06:22.400 I would tell you we're child centric and we're trying 0:06:22.400 --> 0:06:24.600 to help children get a great start in life. That's 0:06:24.680 --> 0:06:25.480 our orientation. 0:06:25.760 --> 0:06:28.440 Yeah, what a story, A stark story. And Greg, you know, 0:06:28.480 --> 0:06:31.760 I look at your story on this and you you know, 0:06:31.839 --> 0:06:34.599 you say, and you remind us that the president has 0:06:34.640 --> 0:06:37.120 wielded tariffs to try to get Canada and Mexico to 0:06:37.200 --> 0:06:40.720 crack down on illegal immigration, Brazil to stop to drop 0:06:40.760 --> 0:06:44.640 the prosecution of ex President Bolsonaro, and India to stop 0:06:44.680 --> 0:06:48.279 buying Russian oil. He has used this tool a lot 0:06:48.800 --> 0:06:52.080 in this administration in his first year. Come Onian on 0:06:52.120 --> 0:06:55.960 the conversation, and you know you brought Rick to us. 0:06:56.120 --> 0:06:58.320 I'd love for you to ask Rick a question as well. 0:06:59.160 --> 0:06:59.440 Well. 0:06:59.560 --> 0:06:59.800 Carol. 0:07:00.000 --> 0:07:03.640 One thing you're putting out there is that the terriffs 0:07:03.680 --> 0:07:06.440 that he has imposed under the laws that's at issue 0:07:06.480 --> 0:07:08.839 at the Supreme Court known as IEPA. There are other 0:07:08.920 --> 0:07:11.360 teriff authorities that he's used that are not before the 0:07:11.400 --> 0:07:13.920 Supreme Court. And so actually my question for Rick is, 0:07:14.320 --> 0:07:16.880 you know, the President has said that even if he 0:07:16.960 --> 0:07:19.560 loses the Supreme Court case, he's going to turn to 0:07:19.600 --> 0:07:22.320 these other authorities and try to replicate the tariffs. And 0:07:22.360 --> 0:07:25.320 I'm actually really interested in terms of your business. Are 0:07:25.400 --> 0:07:27.840 how concerned are you that even if you win at 0:07:27.840 --> 0:07:30.280 the Supreme Court, you're just going to see a whole 0:07:30.280 --> 0:07:33.080 different variety of teriffts, maybe ones that force you to 0:07:33.120 --> 0:07:35.840 kind of shift your business plans again and shift where 0:07:35.880 --> 0:07:37.680 you're manufacturing some of your products. 0:07:38.040 --> 0:07:41.280 Of course, that's the risk, and mister Trump has a 0:07:41.400 --> 0:07:45.600 track record of changing the rules on a very rapid cadence, 0:07:45.640 --> 0:07:48.520 which makes it hard for us to run our business. 0:07:48.840 --> 0:07:51.480 It's a little difficult to respond to like what he 0:07:51.560 --> 0:07:54.080 might do or what he might not do. All the 0:07:54.120 --> 0:07:57.080 other provisions in the law that give him the rights 0:07:57.080 --> 0:08:00.000 in post tariffs come with a lot of strings attached, 0:08:00.600 --> 0:08:05.200 so it requires a lot of fact finding hearings. It's 0:08:05.240 --> 0:08:08.640 a slow process. He can't do it by fiat, he 0:08:08.680 --> 0:08:12.480 can't do it by true social tweet. So I think 0:08:12.520 --> 0:08:16.320 it's better to wait and see what he actually does. 0:08:16.600 --> 0:08:19.720 I'm not aware of a legal mechanism where mister Trump 0:08:19.760 --> 0:08:22.960 can be a taxing body. He's not allowed to do that. 0:08:23.040 --> 0:08:26.440 The Constitution is quite clear on that. So as much 0:08:26.480 --> 0:08:30.200 as he wants to do it without going through Congress, 0:08:30.840 --> 0:08:35.160 he can't. The law says he cannot. And so I 0:08:35.160 --> 0:08:40.360 don't want to overreact to threats made on TV. I 0:08:40.400 --> 0:08:44.520 think the Constitution provides the answer to that. Ultimately, at 0:08:44.559 --> 0:08:46.280 the end of the day, it's going to be a 0:08:46.280 --> 0:08:50.800 lot harder for him to build a tariff structure going 0:08:50.840 --> 0:08:54.120 around Congress. The law doesn't provide for it. And so 0:08:54.320 --> 0:08:56.800 we'll see what he does, and when he does it 0:08:57.559 --> 0:08:59.600 will figure out how to respond. 0:09:00.080 --> 0:09:05.000 Rick. The story that Greg wrote back in November talks 0:09:05.040 --> 0:09:06.840 a little bit about in the beginning of this kind 0:09:06.880 --> 0:09:08.960 of game of whack a mole, moving production from one 0:09:08.960 --> 0:09:10.840 country to another, only to find the tariffs have been 0:09:10.840 --> 0:09:13.880 imposed in this country. Also that was China to India 0:09:13.920 --> 0:09:17.520 and the like. At the end of the day, the 0:09:17.559 --> 0:09:20.559 president wants teriffs because he wants this stuff made in 0:09:20.600 --> 0:09:24.319 the US. So is there a way that you foresee 0:09:24.360 --> 0:09:27.480 in the future you could ever just make all the 0:09:27.520 --> 0:09:29.760 products or a good portion of the products that are 0:09:29.760 --> 0:09:32.240 made overseas right now, you could make them in the US. 0:09:32.960 --> 0:09:35.880 Certainly, no, And I've answered the questions many times. The 0:09:35.920 --> 0:09:38.720 answer is still no. And there's no evidence in the 0:09:38.760 --> 0:09:43.800 marketplace that anyone really disagrees with me. I think, unfortunately 0:09:43.880 --> 0:09:46.880 the way this is being dealt with is that our 0:09:46.960 --> 0:09:52.840 industry and companies like ours are considered a sacrificeable rounding error. 0:09:53.160 --> 0:09:55.520 They don't really have any idea what we do or 0:09:55.559 --> 0:09:58.319 how we do it. They want cars made here, they 0:09:58.320 --> 0:10:00.920 want cell phones made here, they want chips made here, 0:10:01.200 --> 0:10:04.080 and so they've come up with one own rule. That's 0:10:04.120 --> 0:10:06.679 what their intent is. I want to bring back pharmaceuticals, 0:10:07.240 --> 0:10:09.480 and like, if something bad happens to us, it's not 0:10:09.960 --> 0:10:13.679 believe their problem. We don't move the needle economically, and 0:10:13.720 --> 0:10:16.439 so they don't care. And I don't think they care 0:10:16.440 --> 0:10:18.480 about our employees. And I don't think they care about 0:10:18.480 --> 0:10:22.360 your families who use our products. We're rounding error. And 0:10:22.600 --> 0:10:25.400 I just can't look at the people who work here, 0:10:25.520 --> 0:10:27.600 the people who use our products and say, I think 0:10:27.600 --> 0:10:28.560 you're a rounding error. 0:10:28.800 --> 0:10:30.160 I don't, yeah, And I. 0:10:30.120 --> 0:10:33.319 Think that we create great jobs. Greg has been through 0:10:33.360 --> 0:10:35.920 our facilities. He can tell you that, like We're a 0:10:35.960 --> 0:10:40.520 massive consumer and user of technology of technology. I think 0:10:40.559 --> 0:10:42.800 that our business season, the way we run our business 0:10:42.880 --> 0:10:47.440 is an exemplar to other companies. We are what you 0:10:47.559 --> 0:10:50.560 want here, we just don't make a high tech product. 0:10:51.200 --> 0:10:55.200 Yeah, you know, Greg should apologize. 0:10:56.240 --> 0:10:56.520 Greg. 0:10:56.840 --> 0:10:59.120 I think Rick makes a really good point. We talk 0:10:59.200 --> 0:11:01.600 so much about small and mid sized businesses being the 0:11:01.600 --> 0:11:06.120 backbone of the US economy and putting American workers to work, 0:11:06.280 --> 0:11:08.000 and he is certainly an example of that. 0:11:08.400 --> 0:11:08.720 Greg. 0:11:08.800 --> 0:11:12.280 We're now focusing on next week. Third times, maybe the 0:11:12.400 --> 0:11:14.920 charm in terms of whether we get the Supreme Court 0:11:14.920 --> 0:11:17.719 to rule. What should we be watching out for and 0:11:17.800 --> 0:11:18.720 are we likely to get it? 0:11:18.720 --> 0:11:21.319 And just quickly, well, we don't know even though that 0:11:21.360 --> 0:11:24.080 we're having opinions at all next Kay, we'll probably find 0:11:24.120 --> 0:11:27.360 that out on Friday. If we don't get the tariff 0:11:27.400 --> 0:11:30.040 opinion next week, the Court's not goes on a four 0:11:30.040 --> 0:11:32.800 week recess. They're not scheduled to take the bench again 0:11:32.920 --> 0:11:35.960 until February the twentieth, and normally that's how they release 0:11:36.040 --> 0:11:38.280 their opinions. So if we don't get it next week, 0:11:38.520 --> 0:11:40.240 we could be in for our fairly long week. 0:11:40.400 --> 0:11:43.000 Are you surprised it's taking so long, just ten more seconds. 0:11:43.440 --> 0:11:45.840 You know, I'm not sure I've been saying. I still 0:11:45.840 --> 0:11:48.440 stand with this. I'm not surprised either way. Court has 0:11:48.520 --> 0:11:51.120 tried to expedite it. But this is a big case. 0:11:51.160 --> 0:11:52.240 It's going to take a while, all. 0:11:52.240 --> 0:11:55.160 Right, so appreciate it. Great story as always, Greg Store, 0:11:55.280 --> 0:11:58.480 Bloomberg News Supreme Court reporter and Rick Woldenberg. He is 0:11:58.600 --> 0:12:02.720 CEO of Learning Resources and hand to Mind, a favorite 0:12:02.840 --> 0:12:05.720 of Tim's kids. It turns out. 0:12:08.760 --> 0:12:12.760 You're listening to the Bloomberg Business Weekdaily podcast. Catch us 0:12:12.840 --> 0:12:16.280 live weekday afternoons from two to five pm Eastern. Listen 0:12:16.320 --> 0:12:19.880 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:12:20.000 --> 0:12:22.400 or watch us live on YouTube. 0:12:22.880 --> 0:12:25.600 There's no chance that you're gonna have that kind of problem, 0:12:25.880 --> 0:12:29.040 but there are chances to have a problem somewhere, somehow, 0:12:29.240 --> 0:12:33.040 you know. The biggest unknown is geopolitics. 0:12:33.240 --> 0:12:35.680 JP Morgan Chase CEO Jamie Diamond this past week with 0:12:35.760 --> 0:12:38.520 Bloomberg host and Carlisle co founder and co chair David 0:12:38.559 --> 0:12:42.240 Rubinstein at the US Chamber of Commerce in Washington. 0:12:41.840 --> 0:12:42.079 D C. 0:12:42.480 --> 0:12:45.560 JP Morgan, by the way, featured very prominently in a 0:12:45.600 --> 0:12:47.920 new book out on the nineteen twenty nine market crash, 0:12:48.000 --> 0:12:50.360 and this feels like kind of the right conversation to 0:12:50.400 --> 0:12:53.120 be having at this moment in time when certain investing 0:12:53.200 --> 0:12:58.240 narratives dominate US financial markets, AI, private credit, transparency concerns, 0:12:58.280 --> 0:13:02.599 crypto prediction markets, and more questions about whether these narratives 0:13:02.679 --> 0:13:05.160 are the right ones that lead to longer term gains 0:13:05.160 --> 0:13:07.839 and prosperity for investors and for the country. There's a 0:13:07.880 --> 0:13:08.800 lot of questions out. 0:13:08.640 --> 0:13:11.600 There, yeah, stuff about exuberance as well. Could it lead 0:13:11.640 --> 0:13:13.480 to a crisis or to a crash? It does lead 0:13:13.520 --> 0:13:15.600 us to nineteen twenty nine, a book that takes us 0:13:15.640 --> 0:13:18.440 inside the greatest crash in Wall Street history and how 0:13:18.440 --> 0:13:21.079 it shattered a nation. The book by New York Times 0:13:21.080 --> 0:13:23.920 bestselling author of Too Big to Fail, who also happens 0:13:23.960 --> 0:13:26.280 to be an award winning journalist for The New York Times. 0:13:26.400 --> 0:13:28.680 He's the founder and editor at large of Deal Book. 0:13:28.679 --> 0:13:32.200 He's co anchor of Squawk Box on CNBC. Andrew Ross 0:13:32.200 --> 0:13:34.000 Sorkin joins us now, welcome. 0:13:33.679 --> 0:13:34.480 Thanks for having me, guys. 0:13:34.600 --> 0:13:36.560 Yeah, thanks for joining me here. You know, it's funny. 0:13:36.679 --> 0:13:39.280 Jamie Diamond was asked about just now by David Rubin 0:13:39.280 --> 0:13:42.679 Sigin about the financial crisis and about whether or not 0:13:43.040 --> 0:13:46.240 we could have another big financial crisis. Our question for 0:13:46.320 --> 0:13:48.880 you is, in this day and age, could we have 0:13:48.920 --> 0:13:52.800 another nineteen twenty nine like stock market crash? Or is 0:13:52.840 --> 0:13:56.199 the structure just completely different? Are the protections now in place? 0:13:56.240 --> 0:13:57.160 Could it happen again? 0:13:57.480 --> 0:14:00.640 So yes and no, I can explain I know, and 0:14:00.679 --> 0:14:02.600 then if you'd like, I can get you there if 0:14:02.640 --> 0:14:05.200 you want to get if you want to go there. Look, 0:14:05.640 --> 0:14:09.040 the good news is the world is very different today 0:14:09.200 --> 0:14:11.559 from a technology perspective. One of the reasons that nineteen 0:14:11.559 --> 0:14:14.439 twenty nine ever even happened was literally the stock exchange 0:14:14.800 --> 0:14:17.720 was oftentimes off, meaning the numbers that you saw on 0:14:17.760 --> 0:14:21.160 the big board were three four five hours behind the 0:14:21.240 --> 0:14:24.640 actual the actual numbers, and as a result, people were 0:14:24.680 --> 0:14:27.520 just selling indiscriminately because they just thought the whole thing 0:14:27.560 --> 0:14:30.040 didn't even work. I mean, one of the reasons youo'y 0:14:30.120 --> 0:14:32.760 see the famous pictures of people down the New York 0:14:32.720 --> 0:14:35.520 Stock Exchange, and actually the reason they're there, the reason 0:14:35.560 --> 0:14:37.520 they're all in the street, is these are people who 0:14:37.560 --> 0:14:39.360 come from all over New York and the rest of 0:14:39.360 --> 0:14:41.760 the country to try to find out, like, what's happened 0:14:41.800 --> 0:14:44.840 to their money, so that piece of it you take 0:14:44.840 --> 0:14:46.680 off the table because you can get the numbers right 0:14:46.760 --> 0:14:50.360 here and off of your terminal and everything else. There's 0:14:50.360 --> 0:14:55.120 an SEC Insider trading is not legal. It was legal then, 0:14:55.160 --> 0:14:58.080 so all the manipulation that was taking place, there was 0:14:58.120 --> 0:15:02.320 no FDIC, so you had bank runs that took place 0:15:02.400 --> 0:15:06.080 in the aftermath of this crisis. You know, we could 0:15:06.080 --> 0:15:09.800 talk about Glass Stiegel and what that either representator didn't 0:15:09.840 --> 0:15:11.480 or whether you think it's come back or not. But 0:15:11.560 --> 0:15:14.760 here's a bigger one. Capital requirements for banks there were 0:15:14.800 --> 0:15:18.800 none zero back then. So there's a lot of reasons 0:15:19.280 --> 0:15:23.680 you'd like to believe that we can't have another crisis 0:15:24.000 --> 0:15:26.080 of the magnitude we did. And by the way, it's 0:15:26.080 --> 0:15:29.120 also worth noting the crash in nineteen twenty nine wasn't 0:15:29.160 --> 0:15:31.800 preordained that when that happened that we had to have 0:15:31.800 --> 0:15:35.520 a great depression. That was really the first domino of 0:15:35.560 --> 0:15:38.240 a series of dominoes, and then a series of frankly 0:15:38.320 --> 0:15:41.520 terrible policy choices, the Federal Reserve basically doing nothing, the 0:15:41.560 --> 0:15:45.800 implementation of tariffs. We can discuss what that means today. 0:15:45.840 --> 0:15:47.560 You know, there was a gold standard, so there was 0:15:47.560 --> 0:15:49.240 a question about how much money you could throw into 0:15:49.240 --> 0:15:53.640 the system, austerity, all of that that worked against things 0:15:53.640 --> 0:15:56.320 that led to twenty five percent unemployment didn't have to happen, 0:15:56.800 --> 0:15:57.400 if you will. 0:15:57.440 --> 0:15:58.680 I have to say that was one of the things 0:15:58.680 --> 0:16:00.080 in reading your book that I was like, wait, I 0:16:00.080 --> 0:16:01.720 think there was just an assumption that it was the 0:16:01.760 --> 0:16:03.480 market crash that caused the Great Depression. 0:16:03.520 --> 0:16:05.880 Oh yeah, everybody thinks using like there's one bad day 0:16:06.160 --> 0:16:07.840 and then somehow there's a great depression. 0:16:08.080 --> 0:16:09.960 But there's so much in between. 0:16:10.320 --> 0:16:12.720 You know, listen, so many people on your book tours 0:16:12.720 --> 0:16:14.960 like everybody's like this nineteen twenty nine happen again. And 0:16:15.000 --> 0:16:17.120 I do wonder, is there a better, smarter question that 0:16:17.160 --> 0:16:19.920 we should be asking you, having done all this research 0:16:20.240 --> 0:16:22.880 and taken us back there making us feel like we 0:16:22.880 --> 0:16:25.360 were in the room when it happened, You know that 0:16:25.360 --> 0:16:26.040 we should. 0:16:25.760 --> 0:16:28.000 Be asking you, well, look, it didn't happen, and. 0:16:28.040 --> 0:16:29.280 Then can nineteen twenty nine. 0:16:29.720 --> 0:16:31.880 I'll tell you, I'll give you actually how you could 0:16:31.880 --> 0:16:35.120 get to nineteen thirty two today, and that that sort 0:16:35.120 --> 0:16:39.800 of maybe speaks to this. So one of the lessons 0:16:39.840 --> 0:16:42.160 that came out of nineteen twenty nine, it was actually 0:16:42.200 --> 0:16:44.280 the lesson that Ben Bernanke learned when he was doing 0:16:44.280 --> 0:16:47.600 his Great His thesis on the Great Depression at Princeton 0:16:48.080 --> 0:16:50.800 is when there's a crash or a crisis or a panic, 0:16:51.560 --> 0:16:54.360 the playbook is to throw money at the problem. Maybe 0:16:54.360 --> 0:16:57.080 politically unpopular, but that is the lesson. And he did 0:16:57.160 --> 0:16:58.520 it in two thousand and eight, and by the way, 0:16:58.520 --> 0:17:01.560 we did it again during the pandemic. And I think 0:17:01.600 --> 0:17:03.720 we now think that there is a playbook. And by 0:17:03.720 --> 0:17:06.520 the way, there's also therefore a put on the market 0:17:06.560 --> 0:17:09.560 because we now we have the playbook. The one thing 0:17:09.640 --> 0:17:13.480 that's different this time is if you genuinely believe every 0:17:13.480 --> 0:17:16.040 financial crisis to some degree is a function of debt. 0:17:16.080 --> 0:17:18.879 Too much debt in the system. So far we're all 0:17:18.920 --> 0:17:22.440 talking about corporate debt. Really back then, there was in 0:17:22.520 --> 0:17:25.560 nineteen twenty nine there was a budget surplus in America. 0:17:25.720 --> 0:17:28.399 Now we have thirty eight trillion dollars. The question is, 0:17:28.840 --> 0:17:31.760 let's say we have a crash and the government says, 0:17:31.800 --> 0:17:34.560 you know, we're gonna write check for five trillion dollars. 0:17:34.320 --> 0:17:37.200 That's the put. And whether you believe that there is 0:17:37.240 --> 0:17:40.200 some kind of invisible line that turns into a red 0:17:40.240 --> 0:17:42.679 line for the bond market where they say, you know what, 0:17:42.680 --> 0:17:45.760 we like you guys in America. We'll happy to lend 0:17:45.800 --> 0:17:47.760 you money at three or four times the rate that 0:17:47.800 --> 0:17:49.480 we do today. And that's the interest that you're going 0:17:49.520 --> 0:17:51.200 to pay. And then all of a sudden you actually 0:17:51.200 --> 0:17:54.520 do get into some kind of austerity spiral and then 0:17:54.560 --> 0:17:56.720 you're living at a twenty five percent unemployment rate in 0:17:57.000 --> 0:17:59.880 the country. That's I mean, when you really started trying 0:17:59.880 --> 0:18:01.680 to get through the permutations, how do you get there 0:18:02.520 --> 0:18:03.760 in this day and age. 0:18:03.840 --> 0:18:04.560 That's one way. 0:18:04.840 --> 0:18:07.960 One other thing that's interesting today is the technology, as 0:18:07.960 --> 0:18:09.919 bad as it was then, in some. 0:18:09.800 --> 0:18:11.960 Cases, could even be too good today. 0:18:12.200 --> 0:18:14.280 And I think we learned that with the Silicon Valley 0:18:14.280 --> 0:18:18.359 Bank of Failure, where someone goes on Twitter and says, 0:18:18.520 --> 0:18:21.440 I'm pulling my account now that information's accurate. Everybody does 0:18:21.440 --> 0:18:24.080 it over the weekend on their Everybody does it. I 0:18:24.200 --> 0:18:27.439 used to think, oh, this device is so great because 0:18:27.480 --> 0:18:29.040 if there was a bad piece of information, it could 0:18:29.040 --> 0:18:31.600 be corrected very quickly. But if there's an accurate piece 0:18:31.600 --> 0:18:33.720 of information that's not good. 0:18:33.840 --> 0:18:35.480 Right, people act on it quickly. 0:18:35.560 --> 0:18:37.800 Well, So let's talk more about the technology today and 0:18:38.080 --> 0:18:41.280 sort of parallels and the idea of maybe irrational exuberance 0:18:41.320 --> 0:18:45.560 and signs of irrational exuberance right now. In reading the book. 0:18:45.600 --> 0:18:47.159 In the nineteen twenties, there were certainly a lot of that, 0:18:47.200 --> 0:18:49.080 but it seemed like it was, you know, more on 0:18:49.119 --> 0:18:52.840 credit and people buying on margin. Nowadays there's the idea 0:18:52.840 --> 0:18:56.280 of crypto Some of that has been kind of pulled back, 0:18:56.320 --> 0:18:58.680 and in just a couple of months actually since you 0:18:58.680 --> 0:19:00.520 published the book, we've seen some there is. 0:19:00.480 --> 0:19:02.439 A lot of debt in the crypto market, I mean 0:19:02.560 --> 0:19:03.800 shocking amount of leverage. 0:19:03.880 --> 0:19:06.320 So there's there's that side of things. There's prediction markets 0:19:06.320 --> 0:19:08.240 and sort of the money that's going into those, the 0:19:08.320 --> 0:19:12.720 excitement around those. The private credit and concerns about private 0:19:12.720 --> 0:19:15.320 credit that we've seen in the last couple of months, 0:19:15.800 --> 0:19:17.080 any signs of anything there. 0:19:17.280 --> 0:19:20.240 Look, the private credit business has always concerned me because 0:19:20.240 --> 0:19:22.400 of the transparency of it, or frankly, lack of transparence. 0:19:22.400 --> 0:19:23.320 I think if you were to talk to J. 0:19:23.480 --> 0:19:26.440 Powell, he would tell you that, you know, even the 0:19:26.480 --> 0:19:30.200 Federal Reserve doesn't have a full grasp of how inter 0:19:30.560 --> 0:19:32.960 linked all of the debt and credit is in the 0:19:33.000 --> 0:19:36.359 private credit market. Having said that, depending on what numbers 0:19:36.359 --> 0:19:38.560 you're looking at. You could argue, it's only two trillion dollars, 0:19:38.600 --> 0:19:40.320 two trillion dollars a lot of money, but it's not. 0:19:40.840 --> 0:19:43.920 It's not the entire market, its stem So I don't 0:19:43.920 --> 0:19:46.560 know if it's I don't know if it's systemic. By 0:19:46.560 --> 0:19:50.080 the way, I might worry more today about short term treasuries. 0:19:50.200 --> 0:19:53.040 I mean, by the way we the United States have 0:19:53.040 --> 0:19:55.520 been trying to sell short term treasuries like crazy because 0:19:55.560 --> 0:19:57.800 we think that we can get a cheaper rate that way. 0:19:58.160 --> 0:20:01.360 That's also a much more complicated place to be if 0:20:01.400 --> 0:20:03.959 in fact you actually have to pay it back more quickly. 0:20:04.600 --> 0:20:06.400 One of the questions we were kicking around when we're 0:20:06.440 --> 0:20:09.720