WEBVTT - Nobel Laureate Krugman on 'Arguing With Zombies' 0:00:04.519 --> 0:00:08.560 This is Bloomberg Business Week with Carol Masser and Bloomberg 0:00:08.640 --> 0:00:12.560 Quick Takes Tim Stinovik on Bloomberg Radio. So I'll get 0:00:12.680 --> 0:00:15.240 right to our next guest, Paul Krugman. He is back 0:00:15.280 --> 0:00:18.759 with us. Nobel Laureate economist, New York Times columnist, City 0:00:18.840 --> 0:00:22.360 University of New York, Distinguished Professor of Economics. He's author 0:00:22.400 --> 0:00:25.200 of many many books, and his latest book now out 0:00:25.200 --> 0:00:28.880 in paper Book, arguing with zombies, economics, politics, and the 0:00:28.880 --> 0:00:32.040 fight for a better future. He is joining us on 0:00:32.080 --> 0:00:35.080 the phone in Princeton, New Jersey, and he also, by 0:00:35.120 --> 0:00:37.880 the way, tweeted out that he just got his second vaccine, 0:00:38.200 --> 0:00:41.400 COVID vaccine today. Paul, it is great to have you 0:00:41.479 --> 0:00:46.360 here back on Bloomberg. How are you. I'm a little wearie. 0:00:46.440 --> 0:00:48.440 I think there's a little bit of the second day 0:00:48.479 --> 0:00:51.120 effect of the of the vaccine. But I'm fine. Okay, 0:00:51.159 --> 0:00:52.680 So you are feeling a little bit. We've heard that 0:00:52.720 --> 0:00:54.480 from a fair amount of people, So you do feel 0:00:54.480 --> 0:00:58.640 a little something. Yeah, it's it's it's fine. It's the 0:00:58.680 --> 0:01:02.920 water is fine, jumped and we're ready. We're ready and eager. 0:01:03.640 --> 0:01:07.160 So let's talk about kind of this world where we are. 0:01:07.200 --> 0:01:09.039 We're gonna talk about your book in a moment, but 0:01:09.080 --> 0:01:10.640 I do want to ask you when you look at 0:01:10.640 --> 0:01:14.080 the US economy the impact of COVID. There are some 0:01:14.120 --> 0:01:17.320 economic reports that do feel like things are certainly getting better, 0:01:17.760 --> 0:01:21.200 labor markets still tough. How do you see the US economy? 0:01:21.840 --> 0:01:26.319 I think we still have another six months of rough 0:01:26.400 --> 0:01:29.640 times because it is very hard to do normal business 0:01:29.920 --> 0:01:35.120 when people are rightfully still afraid of of of COVID, 0:01:35.319 --> 0:01:37.920 and so we're going to be a pandemic depressed economy 0:01:38.680 --> 0:01:41.920 for well passed in the middle of this year. But 0:01:42.000 --> 0:01:44.760 I'm actually I'm quite optimistic about after that. I think 0:01:44.760 --> 0:01:48.600 we are We don't have the same kind of overhanging 0:01:48.720 --> 0:01:51.120 of excessive debts and so on that we had after 0:01:51.160 --> 0:01:54.560 the last crisis. We are apparently on the version of 0:01:54.640 --> 0:01:58.920 getting an adequate economic relief package. So I think we're 0:01:58.920 --> 0:02:02.600 going to have a probably gonna be feeling pretty optimistic 0:02:02.640 --> 0:02:05.200 by this time next year. Well, that's that's some that's 0:02:05.240 --> 0:02:07.400 some good news. Um, what about when it comes to 0:02:07.400 --> 0:02:11.120 the labor market specifically, how do we get millions of 0:02:11.160 --> 0:02:14.160 Americans who lost their job during this pandemic back to work. 0:02:15.160 --> 0:02:17.280 I think that's going to be a lot easier than 0:02:17.880 --> 0:02:23.040 people imagine. Uh, the job losses are concentrated. Uh, there 0:02:23.080 --> 0:02:25.360 are a lot of It's not all there, but a 0:02:25.360 --> 0:02:28.160 lot of the job losses are concentrated in sectors that 0:02:28.200 --> 0:02:32.960 are basically shut down because of pandemic risks. And once 0:02:33.000 --> 0:02:35.960 we have widespread vaccination. You know, this is all assuming 0:02:36.000 --> 0:02:38.280 that the variants don't get ahead of us and we 0:02:38.360 --> 0:02:40.560 lose control of the pandemic again. But once we have 0:02:41.000 --> 0:02:45.320 widespread vaccination effective herd immunity, people will start eating in 0:02:45.400 --> 0:02:48.080 restaurants again, people will start to travel again. There'll be 0:02:48.160 --> 0:02:51.240 some dislocations because we won't go back to exactly the 0:02:51.280 --> 0:02:54.360 same economy we had before. But you know, after the 0:02:54.960 --> 0:02:58.120 after the last crisis, there were many people were saying, oh, 0:02:58.440 --> 0:03:00.959 just those jobs are not coming back. Act workers don't 0:03:01.000 --> 0:03:03.960 have the right skills. They were totally wrong. It turns 0:03:04.000 --> 0:03:06.280 out that we were quite capable of getting back to 0:03:06.320 --> 0:03:08.959 full employment, and there's no ways to think that is true. Again, 0:03:09.440 --> 0:03:10.720 do you think that when we get on the other 0:03:10.720 --> 0:03:13.000 side of this that we do you you're optimistic, obviously, 0:03:13.040 --> 0:03:16.800 as you said that we do have potentially a run 0:03:16.800 --> 0:03:19.800 in the economy, a run perhaps in the financial markets 0:03:19.919 --> 0:03:22.520 just like we had after the financial crisis, which was 0:03:22.600 --> 0:03:25.440 kind of low and slow but kept on going for 0:03:25.480 --> 0:03:28.320 a long time. Well, this one looks to me like 0:03:28.600 --> 0:03:31.600 a lot faster. And there were reasons that there was 0:03:31.639 --> 0:03:34.160 a combination of reasons why it was so slow last time. 0:03:34.480 --> 0:03:37.040 One of it was that this there was this legacy 0:03:37.080 --> 0:03:41.119 of excess household debt, which is not the situation now. 0:03:41.480 --> 0:03:45.400 Another use that we had a lot of destructive disclosterity 0:03:45.520 --> 0:03:49.240 that was holding back to recovery. And uh, you know 0:03:49.280 --> 0:03:52.440 those bi elections in Georgia made all the difference. It 0:03:52.520 --> 0:03:54.800 means that this time and Democrats have learned a lesson. 0:03:54.920 --> 0:03:57.080 So now that they have, even if it's a razor 0:03:57.160 --> 0:04:00.000 the majority, they're they're not going to make that mistake again. 0:04:00.080 --> 0:04:02.360 They're going to go for a big package. And so 0:04:02.400 --> 0:04:04.600 I actually think this is gonna be a very different 0:04:04.600 --> 0:04:07.760 story if you believe some of the projections out there 0:04:07.760 --> 0:04:11.520 about growth, Uh, it's gonna be it really is Morning 0:04:11.520 --> 0:04:13.600 in America style growth that we may be looking at. 0:04:13.680 --> 0:04:15.880 We may be looking at something like you know, over 0:04:15.960 --> 0:04:19.599 a fourth quarter on fourth quarter six seven percent. This 0:04:19.680 --> 0:04:22.440 is this is looking at very very different, not at 0:04:22.480 --> 0:04:24.680 all the story you know, don't don't fight the last 0:04:24.680 --> 0:04:27.080 war on this one. Well, you know, it's interesting. So 0:04:27.120 --> 0:04:30.479 with that optimism, do you think we still need a 0:04:30.520 --> 0:04:32.440 stimulus package? And I think I know the answer to 0:04:32.480 --> 0:04:34.480 it because I know you've been supportive of it. Do 0:04:34.520 --> 0:04:38.080 you still think we need more help? Yeah? So it's 0:04:38.120 --> 0:04:41.479 not a stimulus package. It's mostly just not what it's about. 0:04:41.560 --> 0:04:45.479 It's a it's an economic rescue package. It is we 0:04:45.560 --> 0:04:47.840 have a miserable time. We won't be back to anything 0:04:47.880 --> 0:04:50.680 like full employment even with all of this stuff, until 0:04:51.279 --> 0:04:56.359 early next year. And in the meantime, mass unemployment, lots 0:04:56.360 --> 0:05:00.560 of disruption, many businesses and great and under travel stress. 0:05:01.320 --> 0:05:04.680 The state, local governments, it's very uneven, but many of 0:05:04.720 --> 0:05:08.760 them are still in deep trouble. And it's all about 0:05:08.800 --> 0:05:13.880 getting people through this. Not there, there's no it's gratuitous. 0:05:13.880 --> 0:05:16.040 We should not be having a lot of people suffering 0:05:16.040 --> 0:05:18.440 when we know that the economy is going to be 0:05:18.480 --> 0:05:21.520 coming back, when America is not poor, but a lot 0:05:21.520 --> 0:05:24.840 of individuals and a lot of businesses and some governments 0:05:24.880 --> 0:05:27.520 are very cash strapped. So this is all about getting 0:05:27.600 --> 0:05:30.640 us through. This is a bridge, is it's a bridge 0:05:30.640 --> 0:05:33.000 across a chasm. That we know is there, but we 0:05:33.040 --> 0:05:36.400 know is limited in in width. Are you optimistic about 0:05:36.400 --> 0:05:39.520 the political will to get something this large done? I mean, 0:05:39.600 --> 0:05:42.080 even as you write in your book, Paul Krugman, in 0:05:42.640 --> 0:05:46.680 century America, everything is political. This stimulus package certainly is 0:05:46.720 --> 0:05:50.760 one of those things. Yeah, it's uh, it's almost certainly. 0:05:50.960 --> 0:05:54.000 It's funny thing, the the simitly I hate calling it 0:05:54.040 --> 0:05:57.400 the stimulus package. The relief package is enormously popular, has 0:05:57.480 --> 0:06:02.160 gigantic probably approval, relatively little disapproval. Even Republicans approve of it, 0:06:02.480 --> 0:06:05.000 and it will probably not get a single Republican vote 0:06:05.000 --> 0:06:09.120 in Congress. Right, there's a serious disconnect there. Then they're disconnected. 0:06:09.200 --> 0:06:14.920 The partisanship of the professional politicians is enormous. It's absolutely 0:06:15.200 --> 0:06:18.080 if it's if it's good for America, and as a 0:06:18.120 --> 0:06:20.280 Democrat is in the White House, they're against it, and 0:06:20.360 --> 0:06:24.000 so it's going to be a party line vote. But 0:06:24.760 --> 0:06:29.080 at the moment, the Democrats, you know, Democrates, fifty senators 0:06:29.120 --> 0:06:31.919 plus Kamala Harris, they have a narrow majority in the 0:06:31.960 --> 0:06:34.760 House and they are probably going to stay unified. There 0:06:34.839 --> 0:06:37.600 may be a few things that are shaved off because 0:06:37.640 --> 0:06:40.000 the most conservative Democrats don't want them, but it's not. 0:06:40.600 --> 0:06:42.800 It's it's not going to be a modest package. It's 0:06:42.800 --> 0:06:44.720 going to be a really big thing all the same. Well, 0:06:44.720 --> 0:06:46.760 do you feel like some of those zombie ideas and 0:06:46.839 --> 0:06:48.760 zombie arguments are going to come out? Which is what 0:06:48.800 --> 0:06:51.000 you write about in your book? Uh, you know, some 0:06:51.080 --> 0:06:54.719 of those erroneous economic ideas that in particular you find 0:06:54.720 --> 0:06:57.200 the politicians kind of you know, trotting out when they 0:06:57.240 --> 0:06:59.800 need it. So I'm just curious what you're getting ready for. 0:07:00.880 --> 0:07:04.880 Oh well, with the the uh death of death fears, 0:07:04.880 --> 0:07:08.000 which sun didn't matter as long as Donald Trump was 0:07:08.040 --> 0:07:10.440 from the White House, are now back that death is 0:07:10.480 --> 0:07:12.720 an existential threat as long as there's a D after 0:07:12.760 --> 0:07:17.880 the president's name. Um, there are inflation, I mean there 0:07:18.640 --> 0:07:20.720 there is a better case for thinking that we might 0:07:20.760 --> 0:07:23.200 have some inflation now than there was last time. But 0:07:23.240 --> 0:07:27.240 the hyper inflation zombie is back in full force. And 0:07:27.320 --> 0:07:29.400 other stuff too. I mean, I think we're witnessing the 0:07:29.760 --> 0:07:32.680 birth of the new zombie. This whole thing in Texas 0:07:32.680 --> 0:07:36.000 where you have you know, the natural gas pipeline freeze 0:07:36.120 --> 0:07:40.080 and it's somehow or other windpower cost it. So that's 0:07:40.120 --> 0:07:43.440 a don't don't believe that evidence will ever change that. 0:07:43.600 --> 0:07:46.280 For ten years from now, everybody on one side of 0:07:46.280 --> 0:07:48.360 the political spectrum will know that somehow it was the 0:07:48.360 --> 0:07:51.560 windmills that caused the Great Freeze of Texas. So now 0:07:51.600 --> 0:07:54.400 the zombies. That's the thing about zombies. No matter how times, 0:07:54.560 --> 0:07:56.200 how many times you think you killed them, they just 0:07:56.280 --> 0:07:58.720 keep on shaveling along eating our brains. So I want 0:07:58.720 --> 0:08:01.440 to make sure I I get see you're not concerned 0:08:01.440 --> 0:08:04.120 about inflation with a and I'll use your term relief 0:08:04.160 --> 0:08:07.320 package of this size. No, I mean it's it is 0:08:07.360 --> 0:08:10.040 a big package. It could very well get us pretty 0:08:10.120 --> 0:08:13.120 much to full employment. But when I do the arithmetic, 0:08:13.560 --> 0:08:17.000 and when I think about the risk, it's anyone who 0:08:17.000 --> 0:08:19.120 thinks that we're going to be it's going to be 0:08:19.240 --> 0:08:22.080 nineteen seventy nine all over again, or something like that, 0:08:22.520 --> 0:08:26.280 it's the numbers just don't back there. Where this is 0:08:26.280 --> 0:08:28.840 a big package. It is so once it looks like 0:08:28.840 --> 0:08:31.280 it might actually be big enough, but it's not big 0:08:31.400 --> 0:08:35.000 enough to produce something that is actually scary inflation. Well, 0:08:35.000 --> 0:08:37.200 and it's interesting, and I have someone actually tweeting at 0:08:37.200 --> 0:08:38.800 me and they said, could you ask Paul if the 0:08:38.840 --> 0:08:42.800 FED should start buying bitcoin to pay off the national dead. Uh. 0:08:43.240 --> 0:08:46.960 I think you know. The difference between Bitcoin and game 0:08:47.000 --> 0:08:49.839 stop is that game stop has a problem that there 0:08:49.840 --> 0:08:52.400 was an actual real business I used for it, which 0:08:52.440 --> 0:08:54.679 meant that there was some kether to its value. Bitcoin, 0:08:54.760 --> 0:08:58.760 because no one actually uses it, it's purely speculative disguise. 0:08:58.800 --> 0:09:01.800 The limit. Well, what do you think ultimately happens? I mean, 0:09:01.920 --> 0:09:03.880 do you have you thought about I don't know, five 0:09:03.960 --> 0:09:06.920 years are we still talking about bitcoin? Is it now 0:09:06.960 --> 0:09:11.240 that it's through about? Is it? D like? What are 0:09:11.280 --> 0:09:14.679 your projections on how this plays out? Paul? I mean 0:09:14.720 --> 0:09:18.240 I have I have this problem, which is that the 0:09:18.240 --> 0:09:20.240 bitcoin has been around. It's hard to believe how long 0:09:20.280 --> 0:09:22.760 has been around, and it's still not actually money. People 0:09:22.760 --> 0:09:25.800 don't actually use it for any significant amount transactions. On 0:09:25.840 --> 0:09:29.160 the other hand, it just floats out there, and a 0:09:29.240 --> 0:09:31.120 lot of the things you can say about the uselessness 0:09:31.160 --> 0:09:34.360 of bitcoin can also say about gold, and gold has 0:09:34.440 --> 0:09:37.560 kept its value for you know, for five years, despite 0:09:37.920 --> 0:09:41.040 basically being a very little real world use. So maybe 0:09:41.080 --> 0:09:44.240 bitcoin just hangs in there. Uh. I don't know, it's hard, 0:09:44.400 --> 0:09:46.160 it's hard to figure. I can't quite get into the 0:09:46.200 --> 0:09:49.000 psychology but there it is. When you say hanging there, 0:09:49.040 --> 0:09:50.120 what do you what do you mean? Do you mean 0:09:50.160 --> 0:09:53.520 it becomes part of a balance sheet at corporations like 0:09:53.840 --> 0:09:57.400 Tesla said last week, like Elon Musk said, does it 0:09:57.480 --> 0:10:01.480 just hang out and continue to ride? Does it drop 0:10:01.480 --> 0:10:05.920 in value significantly? Not? Maybe out there, maybe there'll be 0:10:06.040 --> 0:10:09.320 a bitcoin at you name a price. It's completely arbitrary 0:10:09.320 --> 0:10:12.480 that maybe people will continue to hold bitcoin and say, well, 0:10:12.520 --> 0:10:16.120 bitcoin is valuable because other people think it's valuable, and 0:10:17.000 --> 0:10:20.679 it's uh, and there's never a moment of reckoning. I mean, 0:10:20.720 --> 0:10:23.400 it's I mean, there's an alternative story where one day 0:10:23.440 --> 0:10:26.680 people we have a widely coyote moment, people look down, 0:10:26.760 --> 0:10:29.559 realize there's nothing supporting it, and it just crashes to earth. 0:10:29.640 --> 0:10:32.080 But but you know that hasn't happened so far, and 0:10:32.120 --> 0:10:35.280 it's been around for a while, so maybe who knows. 0:10:35.320 --> 0:10:37.840 I mean, it's it's one of those things where I 0:10:37.920 --> 0:10:41.160 don't know that it that it's hard to make any 0:10:41.240 --> 0:10:44.000 rational argument about where the price should be. And maybe 0:10:44.040 --> 0:10:47.600 because there's no rational argument, it can be anything. One 0:10:47.600 --> 0:10:49.160 thing I did want to ask you, going back to 0:10:49.200 --> 0:10:52.320 the economy, Paul, is you know new administration but the 0:10:52.320 --> 0:10:56.760 four years of Donald Trump and his administration, what impact 0:10:56.920 --> 0:10:59.320 or lasting impact do you think that that had on 0:10:59.360 --> 0:11:02.679 the USC call to me, Well, there was a lot 0:11:02.720 --> 0:11:05.640 of wasted time, you know, we we had we spent 0:11:06.960 --> 0:11:10.679 uh whatever it was, I guess two hundred and eight 0:11:10.679 --> 0:11:13.880 weeks waiting for infrastructure weeks to actually happen, and it 0:11:13.960 --> 0:11:17.160 ever did. Um, So we didn't do any investment in 0:11:17.200 --> 0:11:19.880 the future. But I think one thing we did learn 0:11:20.679 --> 0:11:25.840 Trump uh ran really a quite stimulative fiscal policy. We 0:11:26.040 --> 0:11:29.880 it wasn't efficiently stimulative, but we did have sustained budget 0:11:29.920 --> 0:11:34.439 deficits and nothing bad happened as a result of those deficits. 0:11:34.480 --> 0:11:37.480 And we also learned that the economy could run hotter 0:11:38.000 --> 0:11:40.800 than people a lot harder than people have thought. I've 0:11:40.800 --> 0:11:44.920 looked back at the said thought four on the playlet 0:11:45.000 --> 0:11:48.400 was full employment, and so we we learned that the 0:11:48.440 --> 0:11:51.640 economy has more room to run. And that's something that 0:11:51.760 --> 0:11:55.640 somebody else, you know, something that Biden can can take 0:11:55.679 --> 0:11:59.360 advantage of that discovery and maybe actually usually the running 0:11:59.440 --> 0:12:02.559 room to actually build some infrastructure too. So it's it's 0:12:02.640 --> 0:12:05.160 it's one thing to get back to full employment, but 0:12:05.240 --> 0:12:08.120 it's it's another thing to tackle inequality in this country. 0:12:08.200 --> 0:12:10.880 And one thing that's happened and been laid bare during 0:12:10.880 --> 0:12:13.960 this pandemic has been the gap between the haves and 0:12:14.000 --> 0:12:17.400 have nots has grown, has grown even more than it 0:12:17.480 --> 0:12:20.320 was before. What is the best way to tackle inequality 0:12:20.480 --> 0:12:23.760 in the US? I think you have to do just 0:12:24.400 --> 0:12:26.360 it's you have to do a bunch of things. There's 0:12:26.400 --> 0:12:30.400 no single magic magic bullet. I mean, child child task 0:12:30.520 --> 0:12:33.640 credits can do a lot because it doesn't take a 0:12:33.640 --> 0:12:35.720 whole lot of money to vast and improve the lots 0:12:35.720 --> 0:12:39.520 of the lives of millions of children. Um minimum wage. 0:12:39.720 --> 0:12:41.840 I'm not sure we're going to get the fifteen dollars, 0:12:41.840 --> 0:12:45.920 but I'll hire minimum wage helps labor. One of the things, 0:12:45.960 --> 0:12:48.960 sort of under the radar things is that the bid 0:12:49.000 --> 0:12:53.400 administration is more pro union organizing than any administration we've 0:12:53.440 --> 0:12:56.560 had in decades, and that might make a difference in 0:12:56.640 --> 0:13:01.559 terms of enhancing workers bargaining power. And then there's other stuff. 0:13:01.559 --> 0:13:05.520 I mean, I don't know whether an Elizabeth were in 0:13:05.600 --> 0:13:09.040 wealth taxes is anywhere in their future, but you can 0:13:09.080 --> 0:13:12.480 make a start. There's certainly, um there's no one thing. 0:13:12.760 --> 0:13:16.160 What you just need is a government of Congress that 0:13:16.679 --> 0:13:19.959 that tries to improve the lot of people who are 0:13:19.960 --> 0:13:23.520 in the bottom half of the income distribution, and um, 0:13:23.600 --> 0:13:26.160 we really haven't done that at all for a long time, 0:13:26.240 --> 0:13:28.640 so we might be surprised at how well it works 0:13:28.640 --> 0:13:31.120 if we finally started doing it. Are are you concerned 0:13:31.120 --> 0:13:32.880 that a wealth tax would would drive people out of 0:13:32.880 --> 0:13:35.360 the country, would drive the wealthiest out of the country. 0:13:35.880 --> 0:13:39.200 I think it's would the mean a little bit. But 0:13:39.280 --> 0:13:41.920 you know the fact of the matter is that, let's 0:13:41.960 --> 0:13:45.480 put this way. Taxes are in New York City, which 0:13:45.520 --> 0:13:47.360 is where I spend most of my time, the tax 0:13:47.480 --> 0:13:49.599 rate on high income people in New York City is 0:13:49.640 --> 0:13:53.280 considerably higher than it is in, uh, you know, in 0:13:53.400 --> 0:13:55.600 other parts of the country. And they don't see a 0:13:55.600 --> 0:13:59.280 lot of wealthy people moving to Kansas. They're going to Miami. 0:13:59.320 --> 0:14:05.600 They're going to Miami, but some but even that, there's 0:14:05.800 --> 0:14:08.840 there's some mobility of people. But it's the idea that 0:14:08.880 --> 0:14:11.280 everybody is ready to move. There are a lot of 0:14:11.280 --> 0:14:13.400 things that matter in life more than your tax rate, 0:14:13.480 --> 0:14:15.800 and that that will continue to be true. Hey, listen, 0:14:15.840 --> 0:14:17.360 one thing I wanted to get your thoughts on, Paul, 0:14:17.400 --> 0:14:21.240 because we caught up our David Weston for this week's 0:14:21.280 --> 0:14:23.520 Wall Street Week caught up with Larry Summers, former U S. 0:14:23.560 --> 0:14:26.920 Treasury Secretary, and they talked about the stimulus plan. You know, 0:14:27.000 --> 0:14:30.480 Summers has been actually hang on for a second, because 0:14:30.760 --> 0:14:34.840 President Biden is walking to a podium. He's in Michigan. 0:14:35.000 --> 0:14:38.560 He is been touring a visor factory. Uh, and he 0:14:38.680 --> 0:14:42.040 is expected to make some comments. Looks like he's getting 0:14:42.040 --> 0:14:45.960 a little bit of an introduction by the folks that 0:14:46.000 --> 0:14:47.520 are guiding him on his tour. Do we want to 0:14:47.520 --> 0:14:49.000 go there or do we want to hold off? Guys? 0:14:49.360 --> 0:14:52.120 All right, we're gonna hold on. Let's so let's let's 0:14:52.280 --> 0:14:55.320 stay with um Paul Krugman, who's still with us. But 0:14:55.400 --> 0:14:57.480 he's been critical, and I think his concern is I 0:14:57.560 --> 0:14:59.800 was going to play some sound, but he cites used 0:14:59.840 --> 0:15:03.000 to cifically needs, concerned about people. I think you've talked 0:15:03.000 --> 0:15:06.000 about maybe people kind of shoring up their own finances, 0:15:06.040 --> 0:15:08.600 and he's concerned that that's not the best use of 0:15:09.160 --> 0:15:12.000 any kind of relief package, COVID relief package. What do 0:15:12.080 --> 0:15:16.680 you say to that? Oh, I uh. The there are 0:15:16.680 --> 0:15:19.240 different parts of the relief package, and the part that's 0:15:19.280 --> 0:15:22.520 the most popular, which is the fortune hundred dollar checks. 0:15:22.720 --> 0:15:25.920 Is also the least targeted, So some of that money 0:15:25.960 --> 0:15:28.680 will go to people who really badly need it, but 0:15:28.720 --> 0:15:30.280 a lot of the money will go to people who 0:15:30.280 --> 0:15:33.840 have been doing okay in the pandemic. Um. And if 0:15:33.880 --> 0:15:36.080 we were sure if money, I would worry about that, 0:15:36.400 --> 0:15:39.160 but we're not. The government can borrow an incredibly low 0:15:39.200 --> 0:15:43.400 interest rates. Debt is not a pressing concern. Um, Larry 0:15:43.600 --> 0:15:46.840 is I understand? I mean, Larry is, Larry is not stupid. 0:15:46.880 --> 0:15:49.000 Let's say let's say that, I mean, we actually had 0:15:49.000 --> 0:15:52.160 a debate on this at the Princeton webinar last week. Um. 0:15:52.320 --> 0:15:56.080 And it's a if people will spend a lot of that, 0:15:56.240 --> 0:16:00.440 there is some risk of overheating. But I think the 0:16:00.000 --> 0:16:02.800 the odds are that to the extent that we're giving 0:16:02.800 --> 0:16:05.680 a lot of money to people who are not urgently needed, 0:16:05.720 --> 0:16:09.000 but they're also likely to not spend it right away, 0:16:09.080 --> 0:16:12.400 So that I think it's you know, if we had 0:16:12.720 --> 0:16:17.080 unlimited time to craft a very careful proposal, and had 0:16:17.160 --> 0:16:20.840 unlimited ability to distinguish who really needed the money, then 0:16:20.920 --> 0:16:24.160 you could probably achieve what we needed with us somewhat 0:16:24.200 --> 0:16:27.280 smaller package. But that's not where we are. We need 0:16:27.320 --> 0:16:29.520 to get this thing out the door now, and so 0:16:29.880 --> 0:16:32.360 I'm okay with it. So yeah, so okay if some 0:16:32.400 --> 0:16:34.720 people save a little bit and shore up their finances. 0:16:34.800 --> 0:16:37.120 But you're thinking, you know, and I think I've we've 0:16:37.160 --> 0:16:39.120 heard this a lot that if we overshoot it, it's 0:16:39.120 --> 0:16:41.280 okay because there's a lot of people who are really 0:16:41.360 --> 0:16:44.800 hurting right now. Yeah, we've had an object lesson in 0:16:45.440 --> 0:16:48.000 from from two thousand nine about what happens if you understood, 0:16:48.040 --> 0:16:50.360 which is you don't get a second chance. That's a 0:16:50.360 --> 0:16:53.240 great but that's a great point, right we learned in 0:16:53.280 --> 0:16:58.480 the financial crisis. Yeah, well that's right. Occasionally some of us, uh, 0:16:58.560 --> 0:17:01.080 you know, the zombies keep on shamble along regardless, but 0:17:01.160 --> 0:17:03.800 some of us actually do, I hope, learn some lessons 0:17:03.840 --> 0:17:07.320 from from experience. Hey, Paul Kruegman, did you get a 0:17:07.400 --> 0:17:12.560 chance to check out yesterday's testimony from the CEO of 0:17:12.840 --> 0:17:18.920 Robin Hood and CEO of Reddit, CEO of Citadel and more. 0:17:20.280 --> 0:17:22.359 I you know, I read the accounts of it. I 0:17:22.400 --> 0:17:25.040 didn't sit through, and you know, I have to say, 0:17:25.119 --> 0:17:27.679 I just cannot get worked up about any of this. 0:17:28.119 --> 0:17:31.359 Why not, because look, we have a we have a 0:17:31.440 --> 0:17:33.480 huge problem of inequality. And I said, we have a 0:17:33.520 --> 0:17:36.680 huge problem that ordinary people are not not getting enough 0:17:36.720 --> 0:17:40.879 and are not are not don't have adequate lifestyles. Um, 0:17:40.920 --> 0:17:43.239 the way out of that is not for everybody to 0:17:43.240 --> 0:17:45.640 become a day trader. Al Right, this is not this 0:17:45.680 --> 0:17:49.080 is this is always going to be marginal. And the 0:17:49.600 --> 0:17:53.440 this whole stock trading thing that there are no good 0:17:53.440 --> 0:17:56.399 guys in this story. I mean the obviously the hedge 0:17:56.400 --> 0:17:58.480 funds are not lovable, but you know, putting a short 0:17:58.520 --> 0:18:02.280 squeeze uh on on on a hedge fund, even if 0:18:02.320 --> 0:18:04.760 it's done by a bunch of small investors, it's also 0:18:04.840 --> 0:18:08.679 not a lovable thing to be doing. And people are 0:18:08.680 --> 0:18:11.639 complaining that, you know that Robin Hood stopped trading, but 0:18:12.200 --> 0:18:15.399 the people who are blocked from buying at that point actually, 0:18:15.440 --> 0:18:18.359 in many cases were prevented from losing a lot of 0:18:18.359 --> 0:18:20.840 money because they would have been buying a game stop 0:18:20.880 --> 0:18:24.439 at ridiculous prices. So I but altogether this is like, 0:18:24.960 --> 0:18:28.199 this is like a drama that involves people and issues 0:18:28.240 --> 0:18:30.080 that I don't see why the rest of us should 0:18:30.119 --> 0:18:32.920 care about, but it does. It does raise a point, 0:18:32.920 --> 0:18:37.399 which is that regular people have access to financial markets 0:18:37.480 --> 0:18:39.919 now in a way that they have never had before 0:18:40.240 --> 0:18:43.600 with zero commission trading, and they can do what used 0:18:43.600 --> 0:18:45.840 to cost hundreds of dollars to do to make a 0:18:45.920 --> 0:18:48.560 single trade. Is that a good thing? Is it good 0:18:48.600 --> 0:18:52.040 to have that kind of access? Probably not in the end. 0:18:52.280 --> 0:18:53.720 I mean, I'm not going to say that should be 0:18:53.760 --> 0:18:57.200 denied because we can. It's a it's a free country, 0:18:57.240 --> 0:18:59.800 and if if this can be done, I don't want 0:18:59.800 --> 0:19:01.879 to be to paternalistic. But the fact that matter is 0:19:01.920 --> 0:19:05.119 that if you're an ordinary investor, you should not be 0:19:05.240 --> 0:19:08.280 doing You should not be stock picking, you should not 0:19:08.320 --> 0:19:11.520 be you don't have the resources to figure that out. 0:19:11.680 --> 0:19:15.840 And the uh, you know what what all the personal 0:19:15.880 --> 0:19:19.199 finance experts tell you buy index funds, do things that 0:19:19.480 --> 0:19:21.159 you know you should probably should be in the market some, 0:19:21.320 --> 0:19:23.400 but you should not be playing the market. And this 0:19:23.480 --> 0:19:26.200 is so making that easier for people to do is 0:19:26.240 --> 0:19:28.960 actually not a good thing. So I want to squeeze 0:19:29.000 --> 0:19:30.800 in because I know we will have to ultimately go 0:19:30.880 --> 0:19:32.600 to the president. But I want to ask you about 0:19:32.600 --> 0:19:35.080 something in your book, and you're right, you know, in 0:19:35.200 --> 0:19:37.360 terms of things that are important, the most important thing 0:19:37.640 --> 0:19:39.920 is and you say, sometimes I wonder whether I'm wasting 0:19:39.960 --> 0:19:42.720 my time talking about any other issue other than climate change. 0:19:43.000 --> 0:19:44.680 If we don't get that, right, if we don't put 0:19:44.720 --> 0:19:49.160 policies in place, nothing else matters. That's right, if if, 0:19:49.200 --> 0:19:55.160 if we really have climate change is potentially a civilization 0:19:55.200 --> 0:19:58.680 destroying fent. This is and it's you know, I don't 0:19:58.680 --> 0:20:01.240 really care about productivity as if there's no civilization to 0:20:01.280 --> 0:20:04.199 be productive in and so um so that is the 0:20:04.200 --> 0:20:09.399 most important thing. The the the technology is our friends. 0:20:09.920 --> 0:20:15.159 Renewable energy has been a miraculous story this past fifteen years, 0:20:15.320 --> 0:20:21.600 and the possibilities with actually fairly moderate policies to bring 0:20:21.680 --> 0:20:25.280 climate climate change under control are huge. So that's something 0:20:25.280 --> 0:20:28.320 that we should be very um excited about that we 0:20:28.359 --> 0:20:29.639 have to do it. And of course we have to 0:20:29.640 --> 0:20:32.000 go around and we have to be reasonable and not 0:20:32.080 --> 0:20:36.240 say somehow that windmills caused natural gas pipe plants to freeze. Right, 0:20:36.320 --> 0:20:38.160 that's you took the words right out of my mouth. 0:20:38.200 --> 0:20:40.280 I mean, we saw it happen this week with the 0:20:40.320 --> 0:20:45.440 governor of Texas. Um. I do wonder, in this political, 0:20:46.000 --> 0:20:50.160 politically charged environment, what is an effective way to get 0:20:50.160 --> 0:20:53.080 the urgency of the climate change message across Because there 0:20:53.080 --> 0:20:56.000 are a large number of people in Washington who do 0:20:56.080 --> 0:20:59.200 not think it's a priority, Well that's what that's what 0:20:59.200 --> 0:21:01.280 what may do them. And I don't know what what 0:21:01.440 --> 0:21:03.800 you can do except to try to make the case, 0:21:03.960 --> 0:21:06.840 and for those who who do have some power to 0:21:06.880 --> 0:21:09.879 do something about it, to to use the leavers they have. 0:21:10.160 --> 0:21:14.080 It's I mean, we're luckily. It turns out there was 0:21:14.080 --> 0:21:16.280