Speaker 1: Hello, and welcome to Stephanomics, the podcast that brings the
Speaker 1: global economy to you. Now. I should start with a
Speaker 1: warning for anyone listening with a fragile disposition who has
Speaker 1: more than thirty million dollars in the bank. You might
Speaker 1: find some of the content of this episode of upsetting,
Speaker 1: because we're talking about taking some of your money away.
Speaker 1: Three men in America now own as much as the
Speaker 1: lower fifty percent of the population and the richest one percent.
Speaker 1: That's you, with your thirty million odd own around forty
Speaker 1: of the nation's wealth. At least two prominent contenders for
Speaker 1: the U S presidency, and quite a lot of economists
Speaker 1: think that needs to change. I'm going to talk later
Speaker 1: to two of our europe based economists about the experience
Speaker 1: of wealth taxes here, and I'll also be talking to
Speaker 1: Bloombergs Jiano Randall in Frankfort about the thirtieth anniversary of
Speaker 1: the fall of the Berlin War. But first his o
Speaker 1: U S economy reporter Cat Dmitrieva with the low down
Speaker 1: on wealth taxes and the US presidential race. Today, we
Speaker 1: say to Wall Street and the billionaire class, you ain't
Speaker 1: gonna get it all anymore. That's Bernie Sanders. Yes, that
Speaker 1: is a two cent tax on fortune's over fifty million dollars.
Speaker 1: Your first fifty million, don't worry, you're in the clear.
Speaker 1: But for your fifty million and first dollar, you gotta
Speaker 1: pitch in two cents and two cents for every dollar
Speaker 1: after that. Just and that's Elizabeth Warren. Their voices are
Speaker 1: becoming more and more familiar as campaigns heat up for
Speaker 1: presidential election. Both have big plans to reshape US tax policy.
Speaker 1: Their goal narrow the gap between the haves and have nots.
Speaker 1: America is now the least equal developed nation, largely because
Speaker 1: of outsize gains among the rich. For the majority of Americans,
Speaker 1: their wealth has actually declined in the past decade. That's
Speaker 1: despite a record stock market, the longest economic expansion in history,
Speaker 1: and the lowest unemployment in fifty years. Inequality also played
Speaker 1: a role in the election. Donald Trump won in part
Speaker 1: by promising jobs and an improved life for those left behind.
Speaker 1: Where you're born, where you went to school, if you
Speaker 1: went to school, how rich your parents are. These all
Speaker 1: dictate where you'll end up in America. So how do
Speaker 1: you solve an issue that's so complicated and runs so
Speaker 1: deep Sanders and Warren think they have the answer. Make
Speaker 1: the rich pay more. For Warren and Sanders, a wealth
Speaker 1: tax is a way to even things out, to redistribute
Speaker 1: economic gains. More broadly, we have something that's just fundamentally
Speaker 1: wrong with an economy that isn't performing well for broad
Speaker 1: majorities of the population. Stephanie Kelton is an economics professor
Speaker 1: at Stony Brook University and she advises the Sanders campaign.
Speaker 1: You know, this is an economy that on the surface
Speaker 1: might look pretty healthy in terms of the headline unemployment
Speaker 1: numbers or GDP growth, but underneath the surface there is
Speaker 1: a lot that isn't working, which growth has stagnated this
Speaker 1: year despite a tight labor market. Those without a college
Speaker 1: degree make less than half with someone with a master's
Speaker 1: degree makes. If they go to school, they're likely to
Speaker 1: get saddled with huge amounts of debt. Meanwhile, health care
Speaker 1: is becoming more and more expensive. For people making the
Speaker 1: media income and working multiple jobs, life can feel impossible.
Speaker 1: The outcome can be tragic. More people, especially white, middle
Speaker 1: aged men, are committing suicide or dying of drug overdoses.
Speaker 1: So why is taxing the solution? Gabrielle Zokman, the economists
Speaker 1: who advise Standers and Warren, explains, you know, look, taxation
Speaker 1: is one of the key determinant of the long run
Speaker 1: concentration of wealth. That's one of the big lessons from history.
Speaker 1: You know when when when the tax system was much
Speaker 1: more progressive, that also when inequally was lower. And uh,
Speaker 1: if you care about reducing the concentration of wealth, then
Speaker 1: the most direct and powerful tool would be a progressive
Speaker 1: wealth dext Zuckman says wealth translates into political power and
Speaker 1: an erosion of democracy. He is one of several economists,
Speaker 1: including Thomas Peaked and Emmanuel Says, who have elevated the
Speaker 1: issue in their field. Kelton, who thinks that generally a
Speaker 1: government doesn't need to raise taxes to spend acknowledges the
Speaker 1: reality on Capitol Hill and the question how are you
Speaker 1: going to pay for it? I mean, this is the
Speaker 1: sort of way it works in Washington, d C. Right,
Speaker 1: You're you're a candidate or you're a lawmaker, and you
Speaker 1: want to do some big, ambitious stuff and you've got
Speaker 1: an agenda, and it's going to cost a lot of money,
Speaker 1: and well, if you have to go where the money is, okay,
Speaker 1: where's the money. Well, I guess the rich people have
Speaker 1: all the money. You know, everybody knows that there are
Speaker 1: these concentrations of income and wealth in the hands of
Speaker 1: a small number of very, very well off people. Here's
Speaker 1: a breakdown of the plants. Sands is more ambitious, with
Speaker 1: his plan, cutting the average billionaire's well than half in
Speaker 1: the next fifteen years. The annual tax would apply to
Speaker 1: about one hundred and eighty thousand households. Warren's would apply
Speaker 1: to seventy thousand because her wealth threshold is higher. In
Speaker 1: a nutshell, both candidates would raise several trillion dollars from
Speaker 1: multimillionaires to be spent on social programs. But some research
Speaker 1: has shown that redistributing income may not be all that effective.
Speaker 1: William Gale is co director at the Tax Policy Center
Speaker 1: in Washington. His research shows that a small boost in
Speaker 1: taxes for the rich has a pretty negligible effect on
Speaker 1: overall inequality. After all, even if a billionaire hands over
Speaker 1: tens of millions of dollars, there's still a huge gap
Speaker 1: between them and someone working several part time gigs at
Speaker 1: a minimum wage. One question, of course, is how much
Speaker 1: should you is taxes? A second question is is that
Speaker 1: really the best or only way to narrow the inequality gap.
Speaker 1: We need to consider both government spending uh and tax policy.
Speaker 1: There's no guarantee of success. In fact, fifteen countries in
Speaker 1: Europe have tried to implement some kind of wealth tax
Speaker 1: in recent years, but only four still have one. Why
Speaker 1: the levies didn't raise a lot of money and they
Speaker 1: were pretty tough to collect. More on that in the
Speaker 1: next segment, what's the ideal solution? Then, Gail suggests closing
Speaker 1: income tax loopholes, improving education, and bolstering the social safety net.
Speaker 1: It's also messaging. It's not about punishing the rich. In fact,
Speaker 1: some rich people are actively supporting higher taxes. I'm more
Speaker 1: s Pearl. I'm the chairman of a group called the
Speaker 1: Patriotic Millionaires. We have a group of hundreds of wealthy
Speaker 1: business people and investors who are very concerned that the
Speaker 1: growing inequality is going to destabilize our country. We're at
Speaker 1: a turning point and we might end up with, you know,
Speaker 1: pitchforks or taxes, and I'll choose taxes. Pearl was formerly
Speaker 1: an executive at black Rock, one of the world's largest
Speaker 1: fund managers. There's a growing understanding that inequality isn't just
Speaker 1: an issue of morality but also basic economics. If the
Speaker 1: majority of people aren't increasing their wealth, they're spending is restrained,
Speaker 1: business formation is lower, and the economy that relies so
Speaker 1: much on consumption won't grow as fast. I made a
Speaker 1: lot of money because people pay their mortgage bills on time,
Speaker 1: and their cell phone bills and their iTunes bills, and
Speaker 1: money's trickled up from all of these people paying these
Speaker 1: little bills every month to those of us who have
Speaker 1: invested in the companies like Amazon and Google and Verizon,
Speaker 1: and the banks who make money from those monthly bills
Speaker 1: coming in. And without people who can make their payments
Speaker 1: every month, investors can't make money either. Wall Streets flagged
Speaker 1: some concern about a war in presidency as she rises
Speaker 1: in the polls. Others like billionaire investor Ray Dalio, and
Speaker 1: even ratings agency S and P have said inequality is
Speaker 1: one of the biggest issues putting the economy and political
Speaker 1: stability at risk. There's been some movement. A handful of
Speaker 1: places in the US have started rolling out taxes that
Speaker 1: hit companies, worsening the income divide. Portland, Oregon added a
Speaker 1: surcharge to companies where the top executive earns one hundred
Speaker 1: times more than the typical employee. Still, there's a long
Speaker 1: way to go for national policies to come and force,
Speaker 1: and the election is a full year away. The good news,
Speaker 1: politicians and voters have a lot of options, and look,
Speaker 1: the wealth taxes one policy that can help address the
Speaker 1: rights of inequality. But the other policies that are equally
Speaker 1: are almost as equally important. You know, fixing the income tax,
Speaker 1: corporate taxation, but also you know, anti trust, regulation of
Speaker 1: intellectual property, UH, access to education, reforming the healthcare system,
Speaker 1: and all of these matters. And UH, countries choose the
Speaker 1: level of inequality that they have through government polysis, and
Speaker 1: the choices really ours to make. For Bloomberg News in Washington,
Speaker 1: d C. I'm Catty Dmitrieva. So in the debate about
Speaker 1: wealth taxes, one claim you hear a lot in the
Speaker 1: US is that wealth taxes would make America or European.
Speaker 1: Howether that's a good thing or a bad thing, I
Speaker 1: guess it depends on your point of view, but wealth
Speaker 1: taxes certainly sound like something Europe would have a lot
Speaker 1: off with all of its emphasis on social solidarity and redistribution.
Speaker 1: So you might be surprised to hear that Switzerland's currently
Speaker 1: the only European country that raises a significant amount of
Speaker 1: money from wealth taxes. It's true that more than a
Speaker 1: dozen European countries have had wealth taxes at some point
Speaker 1: in the last few years, but nearly all of them
Speaker 1: have abolished them, and two countries that have largely junk
Speaker 1: their wealth taxes are Sweden and France. We have a
Speaker 1: Swedish economist in residents now at Bloomberg Economics, Johannah Jansen,
Speaker 1: based in Stockholm, and a French economist, Maiva Kuza, who
Speaker 1: is currently in Switzerland. So I thought it might be
Speaker 1: useful to talk to them about the experience there of
Speaker 1: wealth taxes. Yohannah, let me start with you tell me
Speaker 1: what happened to wealth taxes in Sweden. Well, you're right,
Speaker 1: we have abolished them. We abolished them in two thousand
Speaker 1: and seven after sixty years. Actually, and you're right, it
Speaker 1: was not because Swedes have a problem with taxing the rich.
Speaker 1: Actually it was that the tax after several years, included
Speaker 1: so many tweaks and exceptions that it was deemed to
Speaker 1: be unfair. In the end, and that is something that
Speaker 1: you hear a lot that it's not so much the
Speaker 1: principle of wealth taxes, it's the fact that you're then
Speaker 1: you and people try so hard to avoid them that
Speaker 1: they end up a very very extorting and messy exactly,
Speaker 1: that's it. And we had a number of well known
Speaker 1: corporate leaders that threatened to move abroad, and some did.
Speaker 1: Henderson Marrit's h and MS founder Arlen Passion did move also,
Speaker 1: i ke as in Rakampra did so too. Uh And
Speaker 1: in a bid to keep nohow in capital in the country,
Speaker 1: certain shares in publicly owned companies were actually made exempt
Speaker 1: and that, in combination with a fairly low threshold for
Speaker 1: this wealth tax, that meant that the tax was paid
Speaker 1: not by the wealthiest but by many middle and above
Speaker 1: average in com earners. But it does it does seem
Speaker 1: odd though, when you have a country that you know
Speaker 1: where high income folks are paying very high marginal tax rates.
Speaker 1: Do you think there was something just more visceral about
Speaker 1: people feeling that wealth should be shouldn't be taxed in
Speaker 1: the same way as income. Well, perhaps I think it's
Speaker 1: also that what we're seeing in Sweden now is that
Speaker 1: and It's like that with tax policy. If if it's
Speaker 1: like pruning a garden, if you tax something heavily, it
Speaker 1: will wither. If you reduce taxation, it will likely grow.
Speaker 1: And what we're seeing in Sweden now is that because
Speaker 1: capital taxes have been lowered while labor income taxes are
Speaker 1: still high, people tend to start their own companies. Even
Speaker 1: consultants start their own companies and instead of having a
Speaker 1: labor income, they make it a capital income. May even
Speaker 1: let's talk a little bit about the French experience. I mean,
Speaker 1: I don't quite remember it, but I know when I
Speaker 1: was first studying economics, President metals introduction of the wealth
Speaker 1: tax when he came in one was talked about as
Speaker 1: being the great kind of move against the tide of
Speaker 1: global opinion. Remember an eighty one. It was a period
Speaker 1: where market reforms were coming into the fourth Ronald Reagan
Speaker 1: and Margaret Thatcher, and his wealth tax was kind of
Speaker 1: symbolic of the fact that France was taking a different direction.
Speaker 1: But we have now Prepresident Macro has basically got rid
Speaker 1: of it in the last couple of years. Is that right, Yes,
Speaker 1: that's correct. So it was introduced your right by in
Speaker 1: one and it was partly abolished by Macro follow in
Speaker 1: the twenty seventeen addiction. So out of the wealth tax,
Speaker 1: they have kept the tax on housing wealth, which is
Speaker 1: about it the fourth of the total tax base that
Speaker 1: was in place before, and they have abolished the tax
Speaker 1: on financial wealth more generally. And the stated objective was
Speaker 1: actually to um increase productive investment into the French economy
Speaker 1: by avoiding that. Actually some capital moves apart or in
Speaker 1: UM look tax loopholes to avoid to avoid the wealth tax.
Speaker 1: Do you think it's going to have any of those effects?
Speaker 1: I mean, do you think it was ever a sort
Speaker 1: of negative in its effects as people said, and is
Speaker 1: now going to cause this great rebirth of growth or
Speaker 1: has it become more symbolic. So clearly there was a
Speaker 1: symbolic effect, and I think the signaling that President Macron
Speaker 1: was really poor business was quite strong from abolishing this tax.
Speaker 1: We're quite lucky that there has been a committee set
Speaker 1: up to assess the impact of the change to the
Speaker 1: wealth tax and the change to the taxation of capital
Speaker 1: um and they have given their first reports earlier this month,
Speaker 1: in October to last month, and so far it's realy
Speaker 1: to tell how much impact that will have It's quite
Speaker 1: difficult to know actually how much tax exile had happened
Speaker 1: before the tax was partly abolished, so it's difficult. But
Speaker 1: the French treas or the French Minister of Finance is
Speaker 1: starting to publish a lot of data and an animalized
Speaker 1: data and back season wealth taxes and wealth in general,
Speaker 1: so pretty that will be a good laboratory to understand.
Speaker 1: How so as well if taxes can affect behaviors and inequalities, well,
Speaker 1: I guess there is a bit ironic that you've got
Speaker 1: Macron kind of getting rid of largely getting rid of
Speaker 1: the wealth tax, just as American politicians and it seems
Speaker 1: like an awful lot of economists are all saying that
Speaker 1: maybe these kind of taxes are a good idea. And
Speaker 1: it is partly actually because of the data that that
Speaker 1: the French economist Thomas Piquity has been putting out there.
Speaker 1: So is this do you think that we will be
Speaker 1: sort of internationally moving more in favor of taxing wealth
Speaker 1: in one way or another, even if maybe the French
Speaker 1: way of doing it was not the right way of
Speaker 1: doing it. So generally wealth taxation is progressive because there
Speaker 1: is accomredation between with an income. So that means that
Speaker 1: if you start taxing higher were for the weddest households,
Speaker 1: so it's equivalent to increasing the effective tax rate and
Speaker 1: but with higher income. So I think that's the first
Speaker 1: that's a fast fashional way we might see more well spectation,
Speaker 1: especially if you feel that income including capital income is
Speaker 1: actually more difficult to tax. Because we're within equality has
Speaker 1: taken such a prominent focus in the debate, it's probably
Speaker 1: something we will see debated more in the next and
Speaker 1: we are seeing our heady debate in more in the
Speaker 1: economics and of physical or government policy debate. We're going
Speaker 1: to have a lot more debate around asset taxation, I
Speaker 1: think everywhere, but certainly as economists we probably is. It's
Speaker 1: annoying for people to hear, but economists tend to focus
Speaker 1: on the details of these things and it's going to
Speaker 1: matter quite a lot. I think about the details of
Speaker 1: those proposals on the US presidential campaign, and maybe we'll
Speaker 1: come back to it in a few months time, but
Speaker 1: in the meantime, Johanna Jeanson and Stockholm and may have
Speaker 1: a kuza in Zurich. Thank you very much. Thank you
Speaker 1: for having me. Thank you. Before we go this week,
Speaker 1: we thought we should go to Germany to reflect on
Speaker 1: one anniversary and one new beginning. The anniversary, of course,
Speaker 1: is the thirtieth anniversary of the fall of the Berlin Wall,
Speaker 1: and the new beginning is the arrival of Christine Lagarde
Speaker 1: on Monday this week for her first day in the
Speaker 1: office as President of the European Central Bank. Well Yana
Speaker 1: Randall is an economy and central bank editor of Bloomberg
Speaker 1: based in Frankfurt. Yanna, let's talk about the ECB first.
Speaker 1: That's your your bread and butter day to day. What
Speaker 1: have we seen of Christine Lagarde since her arrival at
Speaker 1: the u c B on Monday. We saw her walking
Speaker 1: into the c B, which which was actually quite nice.
Speaker 1: He took a few minutes to chat to reporters on
Speaker 1: on her first working day, and then she disappeared very
Speaker 1: quickly saying, um, she has a lot of catching up,
Speaker 1: a lot of people to get to know, to do.
Speaker 1: And the first speech she gave actually that very same day,
Speaker 1: Monday evening in Berlin to uh to applaud the efforts
Speaker 1: and and Lord wolf and Schoy Blue, former Finance Minister
Speaker 1: of Germany, She hasn't spoken about monetary policy yet, so
Speaker 1: that is something that we're very much looking forward to.
Speaker 1: But she has paid tribute in that sense to to
Speaker 1: a great leader that she knows very well from her
Speaker 1: time as French finance minister and um as head of
Speaker 1: the IMATH. Yeah, and wolf Going was a pretty towering
Speaker 1: figure during the whole of the Eurozone crisis. But you
Speaker 1: you literally wrote the book on Mario Drug with your
Speaker 1: Bloomberg colleague Alessandro Spetziel, behind the scenes look on how
Speaker 1: he saved the euro I think it's available in Italian now,
Speaker 1: but I think hopefully in English suit in all good bookstores.
Speaker 1: What do you expect to be the big contrast between
Speaker 1: the two, Christine Lagarde and Mario Drug. I think we
Speaker 1: will see a lot more from Christine Lagarde in the
Speaker 1: in the public eye. UM. I expect her to be
Speaker 1: much more outgoing, much more engaging with the public. To
Speaker 1: see her show up at events, give interviews, give speeches.
Speaker 1: That's something that Mario Druggi hasn't really done over the
Speaker 1: past couple of years. UM. He has basically only communicated
Speaker 1: during press conferences, the ones following the ECB decisions. Testimony
Speaker 1: in Parliament that sort of thing, but he hasn't really
Speaker 1: been out there explaining ECB policy to the public. And
Speaker 1: I think, um, look, guard, that's one of her pot
Speaker 1: forte's um to engage with the people. She's a very
Speaker 1: charming person. She likes to be with people, talk to people.
Speaker 1: So I think that'll that will do the institution very well,
Speaker 1: especially in the light um of criticism lately, especially in
Speaker 1: Germany where the CP isn't particularly well regarded or its
Speaker 1: monetary policy. You should say you're right about the charm.
Speaker 1: I mean, I think Mary Drug is quite charming. But
Speaker 1: I've interviewed Christine Laguard many times over the years, and
Speaker 1: she as a way she she can be quite kind
Speaker 1: of conspiratorial. You know, before the cameras are running, she
Speaker 1: compliments you have a little conversation around your boots that
Speaker 1: you're wearing or whatever it is. You know, She's just
Speaker 1: she's very good at putting people at ease and then
Speaker 1: communicating well, you're right. And it's the risk that she
Speaker 1: actually knows some of these people too well, particularly politicians.
Speaker 1: You know, if the ECB needs to stand as a
Speaker 1: bulwark against political pressures in Europe, just as any Central
Speaker 1: Bank hast too. Do you think that might be an
Speaker 1: issue that she has such strong relationships already with the politicians.
Speaker 1: I think actually quite to the contrary. She is somebody
Speaker 1: who really grows attached to the institution she leads. You
Speaker 1: saw that at the IMAF she adapted very quickly to
Speaker 1: the to the spirit of the institution and became a
Speaker 1: very outspoken defender of the institution, and I think we'll
Speaker 1: see something similar. And if anything, the close relations to governments,
Speaker 1: to finance ministers, to heads of states well help her
Speaker 1: do her job, because if you look at it, um,
Speaker 1: the e c B is really coming to an end
Speaker 1: of the line. They are running out of tools. It's
Speaker 1: of course something that a policymaker would never admit, but
Speaker 1: interest rates are already at a record low. Quee has
Speaker 1: limits and um, although they say, you know, they have
Speaker 1: some way to go. Ultimately she needs governments to to
Speaker 1: step up their game. They have been calling on governments
Speaker 1: to step up fiscal stimulus, UM, structural reforms, that sort
Speaker 1: of thing, and I think her relationships with the political
Speaker 1: elite in that sense can only help. Well, we shall see,
Speaker 1: you will see how things go, and we'll be back
Speaker 1: to talk to you, I'm sure in the in the
Speaker 1: next few months. But a last word on the big
Speaker 1: historic anniversary that Germany has been commemorating the thirty years
Speaker 1: since the fall of the Berlin Wall. It's hard to
Speaker 1: imagine a euro without a unified Germany. Thirty years ago
Speaker 1: we didn't have the Eurozone. Um. If you go to
Speaker 1: Berlin now, the on the surface, the unification process seems complete.
Speaker 1: You know, you wouldn't. You can't identify East and West
Speaker 1: just standing on that border in in in Berlin. But
Speaker 1: I know underneath, if you look at the economic data,
Speaker 1: and certainly if you look at the political polling for
Speaker 1: far right parties, it's still quite a divided nation. Is
Speaker 1: that what you find, Yana? Yeah, I would agree with that,
Speaker 1: And I think a lot of it has to do
Speaker 1: with how that unification or reunification came into being. A
Speaker 1: lot as rooted in the in the political decision, the
Speaker 1: economic decisions that were taken right in the nine nineties,
Speaker 1: in the early nineteen nineties. Um, And what you can
Speaker 1: what you can still feel today is that many Eastern
Speaker 1: German people are still scarred from from the process. About
Speaker 1: three million people lost their jobs in the early nineteen nineties.
Speaker 1: Now the labor force was only nine million people big,
Speaker 1: so that's a third of the labor force right there.
Speaker 1: And unemployment was was a total foreign concept for for
Speaker 1: somebody from from a communist country, so so that hit deeply.
Speaker 1: And um, things have obviously recovered since then, but unemployment
Speaker 1: is still higher in the East than it is in
Speaker 1: the West. People are actually working longer hours, they're making
Speaker 1: less money, they're less likely to get into leadership positions.
Speaker 1: So there is a sense of feeling left behind still
Speaker 1: among a lot of people in East Germany. And that
Speaker 1: is also one explanation why you see people voting for
Speaker 1: populist parties, populist on the right and on the left.
Speaker 1: And I think, you know, if anyone listening to this
Speaker 1: wonders where the economics really matters, that was the time
Speaker 1: when economics really mattered, because there was that the decision
Speaker 1: I think you were you're talking about it yet, the
Speaker 1: decision to have the conversion rate between the old the
Speaker 1: most mark and the mark deutschebak be one for one,
Speaker 1: that was the politically important thing, and all the economists
Speaker 1: at the time said, if you do that, you've got
Speaker 1: very unproductive Europe. East German workers who will overnight be
Speaker 1: put out of work, and that's exactly exactly what happened.
Speaker 1: Taken a long time to come back from. That shows
Speaker 1: that economic decisions really can make a difference. Yeah, very
Speaker 1: much so. I spoke actually many years back to the
Speaker 1: vice president of the East German Central Bank about exactly this.
Speaker 1: He said, Yeah, we knew that this was wrong from
Speaker 1: an economic point of view, but really politically there was
Speaker 1: no other way around, because how do you explain to
Speaker 1: people who have saved, who have worked, who have done
Speaker 1: nothing wrong, that their savings are basically worth only half
Speaker 1: of what they thought they were. Um. So that was
Speaker 1: one very very big decision that was taken as a
Speaker 1: matter of fact, you know, when when you looked at
Speaker 1: which companies were actually um productive or competitive in that sense,
Speaker 1: after after that whole transition, there was one company in
Speaker 1: all of East Germany which was and um it's the
Speaker 1: one that makes fancy China fancy porcelains. I should ask
Speaker 1: you personally, you were born in the East of Germany.
Speaker 1: What what's your memory I know you're terribly young, but
Speaker 1: what's your memory of the of the fall of the
Speaker 1: Berlin Wall? I have I have quite vivid memories of that.
Speaker 1: I grew up in Leipzish, which was one of the
Speaker 1: places where the Monday demonstrations were probably strongest leading up
Speaker 1: to the fall of the Berlin Wall. Um, so they
Speaker 1: led right by our house where we lived each Monday,
Speaker 1: and and it was a mixture of terrifying views and
Speaker 1: also very um hopeful views. The day it finally happened, Um,
Speaker 1: it was a very strange atmosphere, a strange atmosphere throughout
Speaker 1: the city. I remember going to West Berlin with my family,
Speaker 1: taking the train up there the Sunday, after walking across
Speaker 1: that border and and being greeted by presumings of other people.
Speaker 1: There were so many people and and and so many
Speaker 1: people from the east, so many people from the West
Speaker 1: just coming out to see to to give the kids
Speaker 1: chocolate and the parents coffee and and um, strange things
Speaker 1: that that you wouldn't necessarily give us gifts, but that
Speaker 1: were usually part of the packages that traveled from east
Speaker 1: to west. One of my most vivid memories is actually
Speaker 1: going into um a fruit and vegetable store, on on
Speaker 1: Sunday in West Berlin, you know, on the weekend after
Speaker 1: the wall broke, and just seeing what was on display there.
Speaker 1: I think we must have stood there for minutes, just
Speaker 1: John's dropping. I'd never seen a pineapple in my life.
Speaker 1: I didn't know, you know, half the fruits that were
Speaker 1: on display. That's kind of the luxury that that you
Speaker 1: as a kid did not remember, or walking by a
Speaker 1: toy store. It just, you know, it felt like heaven. Um,
Speaker 1: it felt like coming to a foreign place. Essentially, well
Speaker 1: we should. It is good to remember. Amazing things can happen.
Speaker 1: Yan at round Out. Thank you very much, pleasure, Thanks
Speaker 1: for listening to Stephanomics. We'll be back next week with
Speaker 1: more on the ground insights from around the global economy.
Speaker 1: In the meantime, you can find us on the Bloomberg
Speaker 1: Terminal website, app, or wherever you get your podcasts. We'd
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