1 00:00:02,200 --> 00:00:06,800 Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio. 2 00:00:07,200 --> 00:00:10,119 Speaker 1: This weekend. On the podcast, I have an extra special guest, 3 00:00:10,560 --> 00:00:15,320 Speaker 1: ad Imposing, President of the Peterson Institute for International Economics. 4 00:00:15,840 --> 00:00:20,239 Speaker 1: This is really a whole lot of monetary policy, fiscal 5 00:00:20,320 --> 00:00:25,319 Speaker 1: discussion and just wonky good fun. He has worked all 6 00:00:25,360 --> 00:00:29,760 Speaker 1: over the world as an expert in both inflation deflation, 7 00:00:29,880 --> 00:00:34,040 Speaker 1: monetary policy fiscal policy. There aren't that many people who 8 00:00:34,080 --> 00:00:37,720 Speaker 1: have his breath of experience, whether it's at a think tank, 9 00:00:37,840 --> 00:00:40,159 Speaker 1: at the New York Fed, at the Bank of England. 10 00:00:40,680 --> 00:00:45,360 Speaker 1: This really is quite the fascinating discussion, and the timing 11 00:00:45,440 --> 00:00:49,600 Speaker 1: is perfect. We're recording this not knowing what the outcome 12 00:00:49,640 --> 00:00:53,280 Speaker 1: of the election is, and we're recording it on election day, 13 00:00:53,440 --> 00:00:57,800 Speaker 1: so it'll be interesting to see how our discussion plays 14 00:00:57,880 --> 00:01:02,280 Speaker 1: out in light of what probably is old news by now, 15 00:01:02,840 --> 00:01:06,560 Speaker 1: But the discussions of policy and the discussions of what 16 00:01:06,760 --> 00:01:11,720 Speaker 1: central bankers got right and wrong over history is timeless, 17 00:01:11,800 --> 00:01:14,559 Speaker 1: and I think if you're at all interested in what's 18 00:01:14,600 --> 00:01:20,479 Speaker 1: going on in banking, monetary policy, government management of emergencies 19 00:01:20,480 --> 00:01:24,319 Speaker 1: and recessions, you're going to find this to be absolutely fascinating. 20 00:01:24,360 --> 00:01:28,639 Speaker 1: So with no further Ado my conversation with Adam Posing. 21 00:01:30,280 --> 00:01:34,880 Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio. 22 00:01:35,319 --> 00:01:39,200 Speaker 1: My special guest today is an Imposing. He is the 23 00:01:39,280 --> 00:01:43,560 Speaker 1: president of the Peterson Institute for International Economics, where he 24 00:01:43,600 --> 00:01:47,760 Speaker 1: has served since he comes to us with a PhD 25 00:01:47,800 --> 00:01:51,720 Speaker 1: in political economy from Harvard. He has been an economist 26 00:01:51,760 --> 00:01:54,760 Speaker 1: at the Federal Reserve Bank of New York as well 27 00:01:54,800 --> 00:01:58,640 Speaker 1: as a voting member of the Monetary Policy Committee of 28 00:01:58,720 --> 00:02:02,960 Speaker 1: the Bank of England. In he co authored a book 29 00:02:03,040 --> 00:02:08,280 Speaker 1: on inflation targeting with some guy named Ben Bernanke. Adam Posen, 30 00:02:08,840 --> 00:02:12,800 Speaker 1: Welcome to Bloomberg. Thank you, Berry. Really excited to talk 31 00:02:12,800 --> 00:02:15,840 Speaker 1: with you. So let's have a conversation. I'm I expect 32 00:02:15,880 --> 00:02:19,920 Speaker 1: this to be good. Wonky fund and let's start with 33 00:02:19,919 --> 00:02:24,639 Speaker 1: with the Peterson Institute, globally recognized think tank focusing on 34 00:02:25,240 --> 00:02:29,359 Speaker 1: international relations and and economics. Tell us a bit about 35 00:02:29,360 --> 00:02:32,920 Speaker 1: the institution. How does it get its funding, what are 36 00:02:32,960 --> 00:02:37,200 Speaker 1: its goals and purposes? Thanks Verry, It's obviously a pleasure 37 00:02:37,240 --> 00:02:39,560 Speaker 1: for me to talk about it. The Peterson Institute for 38 00:02:39,600 --> 00:02:44,480 Speaker 1: International Economics was co founded forty years ago about by 39 00:02:44,800 --> 00:02:48,320 Speaker 1: Fred Bergston and Pete Peterson, who had been together in 40 00:02:48,360 --> 00:02:52,320 Speaker 1: government in the seventies in the early seventies, and they 41 00:02:52,320 --> 00:02:56,000 Speaker 1: both saw the US as being part of a global 42 00:02:56,040 --> 00:02:58,560 Speaker 1: economy that it wasn't yet realizing it was part of. 43 00:02:59,400 --> 00:03:03,600 Speaker 1: And the strong point of the Peterson Institute since that 44 00:03:03,680 --> 00:03:08,760 Speaker 1: time has been bringing together people with academic research grant 45 00:03:08,800 --> 00:03:12,600 Speaker 1: who want to work on real world problems, which is 46 00:03:12,720 --> 00:03:14,679 Speaker 1: in some ways may sound like, well, that's what a 47 00:03:14,760 --> 00:03:17,080 Speaker 1: thing tank does. But doing it with quality and some 48 00:03:17,160 --> 00:03:21,160 Speaker 1: amount of intellectual honesty and not being terribly partisan about 49 00:03:21,200 --> 00:03:25,600 Speaker 1: it is the trick. Um I got to take over 50 00:03:25,960 --> 00:03:29,600 Speaker 1: as the second leader of it as the president starting 51 00:03:29,600 --> 00:03:34,760 Speaker 1: in January. Michael Peterson, head to the Peterson Foundation, succeeded 52 00:03:34,800 --> 00:03:38,520 Speaker 1: Pete as the chair of our board, and together, I 53 00:03:38,560 --> 00:03:41,360 Speaker 1: think we've built on the values and the core that 54 00:03:41,840 --> 00:03:45,760 Speaker 1: uh Fred and Pete had and taken it in a 55 00:03:45,760 --> 00:03:49,120 Speaker 1: better direction. Further, um that it's not just about the 56 00:03:49,120 --> 00:03:53,000 Speaker 1: global economy, it's about how the global economy affects the 57 00:03:53,040 --> 00:03:56,400 Speaker 1: domestic well being of people. That it's not just about 58 00:03:56,400 --> 00:03:59,200 Speaker 1: how the US interacts with the global economy. But our 59 00:03:59,240 --> 00:04:02,800 Speaker 1: target audio in are the leaders in the main in 60 00:04:02,840 --> 00:04:07,160 Speaker 1: the major economies. Basically think the g twenty UM and 61 00:04:07,440 --> 00:04:12,600 Speaker 1: that we're doing more education and outreach and accessible publication 62 00:04:12,760 --> 00:04:16,560 Speaker 1: rather than academic work. So you raise an interesting question 63 00:04:16,560 --> 00:04:20,200 Speaker 1: that I have to address. Throughout most of my career 64 00:04:20,560 --> 00:04:24,200 Speaker 1: I followed a number of think tanks for pretty much 65 00:04:24,240 --> 00:04:29,680 Speaker 1: what you described nonpartisan research and analysis. But at the 66 00:04:29,760 --> 00:04:34,159 Speaker 1: same time, I've noticed a number of pretty well known 67 00:04:35,080 --> 00:04:38,719 Speaker 1: think tanks have kind of gone, you know, just full 68 00:04:39,320 --> 00:04:43,440 Speaker 1: partisan politics. What is that about. Aren't these thin tanks 69 00:04:43,480 --> 00:04:48,360 Speaker 1: supposed to maintain some sort of objectivity when they pursue 70 00:04:48,880 --> 00:04:52,360 Speaker 1: policy or have they all just become an arm of 71 00:04:52,480 --> 00:04:55,680 Speaker 1: various political parties. Well, some have become an arm and 72 00:04:55,760 --> 00:04:58,200 Speaker 1: some haven't. I mean, just speaking very blantly, Berry and 73 00:04:58,320 --> 00:05:00,040 Speaker 1: you had said about funding, and they don't mean a 74 00:05:00,120 --> 00:05:03,000 Speaker 1: duck that issue. We're much smaller than most the other 75 00:05:03,080 --> 00:05:05,200 Speaker 1: think tanks, and so we've been fortunate to be able 76 00:05:05,240 --> 00:05:10,440 Speaker 1: to choose UH supporters, starting with the Peterson Foundation covering 77 00:05:10,480 --> 00:05:12,760 Speaker 1: our our core. But then we have a market test 78 00:05:13,160 --> 00:05:17,359 Speaker 1: to raise of our money every year, and so we 79 00:05:17,440 --> 00:05:20,800 Speaker 1: have a balance um and we only take money that's 80 00:05:20,800 --> 00:05:24,200 Speaker 1: from private sector or individuals that's basically non restricted. Are 81 00:05:24,200 --> 00:05:28,400 Speaker 1: only about very broad things like trade or Macro. The 82 00:05:28,520 --> 00:05:31,600 Speaker 1: incentives to get part of in have always been there, 83 00:05:31,600 --> 00:05:33,960 Speaker 1: but they've gotten worse, just as it's been true for 84 00:05:34,080 --> 00:05:37,839 Speaker 1: everybody in Washington and everybody around the world recently, because 85 00:05:37,920 --> 00:05:41,240 Speaker 1: when the government ceases to value expertise and ceases the 86 00:05:41,360 --> 00:05:46,080 Speaker 1: value open debate, you only weigh in sometimes is to 87 00:05:46,080 --> 00:05:48,159 Speaker 1: be part of it. I mean, we worked with people 88 00:05:48,200 --> 00:05:51,960 Speaker 1: in both Bush administrations, the Clan administration of Bomb administration. 89 00:05:52,160 --> 00:05:55,240 Speaker 1: We have been completely shut out of any real meaningful 90 00:05:55,320 --> 00:06:00,159 Speaker 1: interaction with the Trump administration appointees. We don't have access 91 00:06:00,040 --> 00:06:02,960 Speaker 1: us by right, uh, and we have to earn it. 92 00:06:03,000 --> 00:06:05,480 Speaker 1: But in this case we're shut out because we speak 93 00:06:05,720 --> 00:06:07,760 Speaker 1: not what they want to hear. So you just got 94 00:06:07,760 --> 00:06:11,160 Speaker 1: to make your choice. And and and you know we 95 00:06:11,160 --> 00:06:15,120 Speaker 1: we chose to be on the outs rather than be 96 00:06:15,680 --> 00:06:20,640 Speaker 1: ridiculously partisans. So that raises another question. How does research 97 00:06:21,000 --> 00:06:25,000 Speaker 1: normally anyway, how does it have an impact on public policy? 98 00:06:25,560 --> 00:06:29,719 Speaker 1: What do think tanks do under let's just call it 99 00:06:29,760 --> 00:06:34,200 Speaker 1: a more traditional administration than the current one. Well, think 100 00:06:34,200 --> 00:06:38,840 Speaker 1: tanks at best, in our view, are served kind of 101 00:06:38,920 --> 00:06:43,240 Speaker 1: like well, they serve three purposes first, and is they 102 00:06:43,279 --> 00:06:45,400 Speaker 1: try to shoot down bad ideas. We're sort of like 103 00:06:45,440 --> 00:06:49,160 Speaker 1: an independent council of economic advisors. We try to explain 104 00:06:49,240 --> 00:06:52,080 Speaker 1: what are the costs, what are things that are already known, 105 00:06:52,640 --> 00:06:56,800 Speaker 1: what are unforeseen effects? And with the Trump administration has 106 00:06:56,839 --> 00:06:59,280 Speaker 1: been an awful lot of that. But that that's sort 107 00:06:59,320 --> 00:07:01,719 Speaker 1: of the first thing. The second thing you tried to 108 00:07:01,760 --> 00:07:06,880 Speaker 1: do is be a source of good ideas for what 109 00:07:07,000 --> 00:07:09,640 Speaker 1: are the problems, and say the six months to three 110 00:07:09,720 --> 00:07:12,880 Speaker 1: year time horizon. You're not trying to Monday, the earning 111 00:07:13,000 --> 00:07:16,120 Speaker 1: quarterback everything day to day, but you've got a bit 112 00:07:16,160 --> 00:07:19,920 Speaker 1: more leisure and a bit less political pressure. And ideally 113 00:07:20,080 --> 00:07:23,920 Speaker 1: your people are good and have insights from experience and research, 114 00:07:24,280 --> 00:07:26,600 Speaker 1: so they can say, here's a way of addressing this problem, 115 00:07:26,720 --> 00:07:29,880 Speaker 1: or here's the problem you've overlooked. And then the third 116 00:07:29,880 --> 00:07:31,680 Speaker 1: thing you try to do is contribute to the public 117 00:07:31,720 --> 00:07:35,800 Speaker 1: discussion and on both those lines, not to to talk 118 00:07:35,840 --> 00:07:40,120 Speaker 1: about what's good and what's bad. And in the normal times, again, 119 00:07:40,360 --> 00:07:43,160 Speaker 1: I mean it sounds very establishment. One doesn't have this 120 00:07:43,240 --> 00:07:45,400 Speaker 1: by right, one has to earn it. But in the 121 00:07:45,440 --> 00:07:49,000 Speaker 1: normal times, people want to hear what your think tank 122 00:07:49,120 --> 00:07:52,400 Speaker 1: says because they feel like it offers useful information, and 123 00:07:52,440 --> 00:07:55,720 Speaker 1: so officials want to discuss with you informally or occasionally 124 00:07:55,760 --> 00:07:59,120 Speaker 1: make their case formally so that they you can be 125 00:07:59,160 --> 00:08:02,640 Speaker 1: a sounding more and try to make policy better. The 126 00:08:02,680 --> 00:08:08,560 Speaker 1: one other thing I would say is that the ability 127 00:08:08,600 --> 00:08:13,080 Speaker 1: to affect policy in our view UM and the record 128 00:08:13,120 --> 00:08:16,800 Speaker 1: of Peterson Institute UM, is about sort of like a 129 00:08:16,800 --> 00:08:20,480 Speaker 1: baseball player. You're doing really well if you're averaging three 130 00:08:21,680 --> 00:08:25,440 Speaker 1: that you you don't always kill everything you seek to kill, 131 00:08:25,520 --> 00:08:29,520 Speaker 1: and you even less frequently get proposals accepted directly as 132 00:08:29,560 --> 00:08:32,320 Speaker 1: soon as you propose them. But over time you hope 133 00:08:32,360 --> 00:08:34,120 Speaker 1: to change the debate. And there are a number of 134 00:08:34,160 --> 00:08:37,000 Speaker 1: places I can cite where we've done that, including most 135 00:08:37,040 --> 00:08:42,199 Speaker 1: recently on fiscal policy with oliving Blanchard's leadership on trade 136 00:08:42,240 --> 00:08:46,719 Speaker 1: relations with China, and with TPP other things. So that 137 00:08:46,800 --> 00:08:49,800 Speaker 1: was actually a question I was thinking about, and you 138 00:08:49,960 --> 00:08:53,640 Speaker 1: pointed me right to it. In the US, are you 139 00:08:53,720 --> 00:08:59,080 Speaker 1: targeting the White House? Are you targeting Congress and fiscal policy, 140 00:08:59,200 --> 00:09:02,320 Speaker 1: or are you really aiming at at having influence on 141 00:09:02,360 --> 00:09:06,560 Speaker 1: the Federal reserve and monetary policy or some combination of 142 00:09:06,600 --> 00:09:09,200 Speaker 1: all of them. It's some combination of all of them, 143 00:09:09,240 --> 00:09:12,280 Speaker 1: somewhat opportunistically, I mean our commitment and I'd like to 144 00:09:12,280 --> 00:09:14,400 Speaker 1: think a number of other think thanks, but not all. 145 00:09:15,040 --> 00:09:18,400 Speaker 1: Our commitment is to be very open about what it 146 00:09:18,520 --> 00:09:21,079 Speaker 1: is we're pursuing, to say why we've gotten to the 147 00:09:21,120 --> 00:09:24,240 Speaker 1: agenda we have and these are the issues, and includes 148 00:09:24,280 --> 00:09:26,760 Speaker 1: disclosure of our funders, and disclosure of the background of 149 00:09:26,760 --> 00:09:29,240 Speaker 1: our fellows and and just say put it out there. 150 00:09:29,280 --> 00:09:33,840 Speaker 1: We believe that integration with the global economy on net 151 00:09:34,000 --> 00:09:37,280 Speaker 1: is much better for the US in terms of economic 152 00:09:37,320 --> 00:09:43,480 Speaker 1: well being, stability, peace, domestic politics, and and just dealing 153 00:09:43,520 --> 00:09:46,920 Speaker 1: with the big economic problems than the alternative. And so 154 00:09:47,240 --> 00:09:51,280 Speaker 1: we're just opportunistic. So if sometimes it's about writing our 155 00:09:51,480 --> 00:09:54,120 Speaker 1: eds and putting explainers on our website and trying to 156 00:09:54,120 --> 00:09:58,040 Speaker 1: reach the public that way. Sometimes it's appearing with influencers 157 00:09:58,120 --> 00:10:01,599 Speaker 1: like you or our friend Tom Key and Trincy Makar 158 00:10:02,600 --> 00:10:06,640 Speaker 1: or David Weston on Bloomberg. Sometimes it's giving briefings directly 159 00:10:06,679 --> 00:10:10,199 Speaker 1: the cabinet officials. Let me push back on you a 160 00:10:10,280 --> 00:10:14,520 Speaker 1: sec here, coming to channel my inner Donald Trump and say, hey, 161 00:10:14,640 --> 00:10:18,760 Speaker 1: we we've had the entire post war period to see 162 00:10:18,800 --> 00:10:23,040 Speaker 1: how US economic integration with the rest of the world 163 00:10:23,480 --> 00:10:27,920 Speaker 1: has worked. And for many Americans it hasn't worked. Globalization 164 00:10:28,040 --> 00:10:31,280 Speaker 1: and the rise of technology, We've exported a lot of 165 00:10:31,280 --> 00:10:35,480 Speaker 1: good paying jobs overseas. There's a huge swath of people 166 00:10:35,520 --> 00:10:38,600 Speaker 1: in America who have been left behind. How do you 167 00:10:38,679 --> 00:10:43,640 Speaker 1: respond to that criticism. Well, the first point is that 168 00:10:43,880 --> 00:10:45,800 Speaker 1: the main reason a huge swath of people in the 169 00:10:45,920 --> 00:10:50,160 Speaker 1: US have been left behind is because our politics, riven 170 00:10:50,200 --> 00:10:54,760 Speaker 1: by race, riven by regionalism, long before Trump, has made 171 00:10:54,880 --> 00:10:57,760 Speaker 1: us have the weakest welfare state and the weakest worker 172 00:10:57,840 --> 00:11:02,040 Speaker 1: protections in the world for a rich country. And so 173 00:11:03,120 --> 00:11:05,680 Speaker 1: go across the border of Canada, go across the Atlantic 174 00:11:05,720 --> 00:11:09,080 Speaker 1: to any Western European country, go the other direction to 175 00:11:09,120 --> 00:11:13,560 Speaker 1: Australia or Singapore or Japan, and workers have not been 176 00:11:13,640 --> 00:11:18,560 Speaker 1: left behind as much. So that that's actually not on globalization, 177 00:11:18,679 --> 00:11:23,319 Speaker 1: that's on us. And the second thing is that you 178 00:11:23,800 --> 00:11:27,600 Speaker 1: at some point that where people overselling globalization. I personally, 179 00:11:27,760 --> 00:11:31,400 Speaker 1: I think I can claim I largely haven't. But it's 180 00:11:31,440 --> 00:11:33,760 Speaker 1: about making the best of the reality you got. You're 181 00:11:33,760 --> 00:11:37,200 Speaker 1: not going to prevent people in China or Brazil or 182 00:11:37,280 --> 00:11:41,800 Speaker 1: India or Poland for making a living. They are entitled 183 00:11:41,800 --> 00:11:44,559 Speaker 1: to and they should. And so the question is given 184 00:11:44,600 --> 00:11:49,400 Speaker 1: that they exist, how do we integrate a system that 185 00:11:49,760 --> 00:11:52,400 Speaker 1: lets them make a living and cruise to hard benefit. 186 00:11:52,800 --> 00:11:56,560 Speaker 1: And so the fundamental contention of Trump that you know, 187 00:11:56,600 --> 00:11:58,680 Speaker 1: we've all been played for suckers, which of course is 188 00:11:58,760 --> 00:12:01,640 Speaker 1: his mental worldview at times, because that's his whole game plan, 189 00:12:02,240 --> 00:12:05,080 Speaker 1: that we've all been played for suckers. It just doesn't 190 00:12:05,120 --> 00:12:07,160 Speaker 1: hold up with the facts. I mean, when we talk 191 00:12:07,200 --> 00:12:10,520 Speaker 1: about the loss of these jobs in in you know, 192 00:12:10,800 --> 00:12:13,559 Speaker 1: it's it's happens in a country where you have a 193 00:12:13,600 --> 00:12:17,120 Speaker 1: hundred and fifty million jobs at any given time and 194 00:12:17,520 --> 00:12:20,880 Speaker 1: fifteen plus million, twenty million, thirty million people turn over 195 00:12:20,920 --> 00:12:24,280 Speaker 1: their jobs every year. The idea that over a twenty 196 00:12:24,360 --> 00:12:29,320 Speaker 1: year period manufacturing jobs shrunk by a couple of million, 197 00:12:30,200 --> 00:12:34,640 Speaker 1: you know, that's reality. And so the failures are not 198 00:12:34,679 --> 00:12:37,240 Speaker 1: about globalization. And what we've seen over the last four 199 00:12:37,320 --> 00:12:40,280 Speaker 1: years is the exact experiment. You roll back globalization and 200 00:12:40,320 --> 00:12:44,000 Speaker 1: it gets worse, not better. Right, Global labor arbitrage is 201 00:12:44,040 --> 00:12:46,560 Speaker 1: a real thing, and it's up to us to figure 202 00:12:46,600 --> 00:12:49,960 Speaker 1: out a way to respond to it proactively, as opposed 203 00:12:49,960 --> 00:12:56,079 Speaker 1: to sitting back and doing nothing. Beautifully said, So let's 204 00:12:56,080 --> 00:13:00,240 Speaker 1: talk a little bit about exploding dead and deficits have 205 00:13:00,360 --> 00:13:04,400 Speaker 1: been hearing about the evils of deficits my entire life. 206 00:13:04,920 --> 00:13:07,680 Speaker 1: I've heard warnings about the collapse of the currency and 207 00:13:07,840 --> 00:13:12,040 Speaker 1: hyper inflation and all these other things. And yet when 208 00:13:12,040 --> 00:13:14,959 Speaker 1: you look around the world at Japan or the US, 209 00:13:15,320 --> 00:13:19,120 Speaker 1: none of the warnings have come to fruition. So that 210 00:13:19,240 --> 00:13:22,120 Speaker 1: raises the question, a country with its own currency and 211 00:13:22,120 --> 00:13:26,160 Speaker 1: own own central bank, why should we really care about 212 00:13:26,520 --> 00:13:30,640 Speaker 1: annual deficits. Well, we shouldn't freak out about them the 213 00:13:30,679 --> 00:13:33,080 Speaker 1: way people kept trying to make us freak out about them. 214 00:13:33,120 --> 00:13:37,080 Speaker 1: That's for sure. Again, my colleague Olivia Blanchard of Peterson 215 00:13:37,559 --> 00:13:41,080 Speaker 1: the noted Economists, isn't doing a lot of the intellectual 216 00:13:41,240 --> 00:13:43,560 Speaker 1: groundwork the last couple of years to explain why this 217 00:13:43,640 --> 00:13:45,720 Speaker 1: is the case. But a bunch of us, including Olivier 218 00:13:45,880 --> 00:13:48,800 Speaker 1: and I and others, were already saying back in two 219 00:13:48,800 --> 00:13:53,120 Speaker 1: thousand two nine, Hey, don't destroy the economy for the 220 00:13:53,160 --> 00:13:57,240 Speaker 1: sake of the false fear that somebody you're going to 221 00:13:57,320 --> 00:14:00,719 Speaker 1: turn into grease. It goes to exactly the point you raised, Barry. 222 00:14:00,840 --> 00:14:03,000 Speaker 1: If you're a country and the can issue debt in 223 00:14:03,000 --> 00:14:07,160 Speaker 1: your own currency, and importantly, if you're a country where 224 00:14:07,160 --> 00:14:11,719 Speaker 1: it's credible that in future you can raise taxes if 225 00:14:11,760 --> 00:14:15,120 Speaker 1: you have to, then you don't need to worry so 226 00:14:15,240 --> 00:14:18,679 Speaker 1: much about that. But not worrying so much it's not 227 00:14:18,720 --> 00:14:21,520 Speaker 1: the same as not worrying at all, and so it's 228 00:14:21,560 --> 00:14:24,320 Speaker 1: just that it's less of a knife edge, particularly when 229 00:14:24,360 --> 00:14:26,720 Speaker 1: we're in a bad situation like we are now. And 230 00:14:26,760 --> 00:14:29,520 Speaker 1: by bad situation, I don't mean just the human horror 231 00:14:29,560 --> 00:14:32,440 Speaker 1: of the pandemic. I mean bad situation the kind of 232 00:14:32,440 --> 00:14:35,720 Speaker 1: sector stagnation that Larry Summers is and others have spoken about, 233 00:14:36,200 --> 00:14:40,360 Speaker 1: which is that we're in a period of fundamentally deficient 234 00:14:40,880 --> 00:14:44,960 Speaker 1: private sector demand for productive investment. The real interest that 235 00:14:45,040 --> 00:14:48,120 Speaker 1: the ore star, the underlying real interest rate of the 236 00:14:48,200 --> 00:14:52,600 Speaker 1: economy is very low and econ speak, and so at 237 00:14:52,640 --> 00:14:56,120 Speaker 1: that point everybody just starts chasing safety and has to 238 00:14:56,160 --> 00:14:58,280 Speaker 1: stick their money somewhere, and then it all goes into 239 00:14:58,320 --> 00:15:02,840 Speaker 1: treasuries and then so easedly safe assets. And then when 240 00:15:02,880 --> 00:15:06,520 Speaker 1: interest rates are that low, you're better off using fiscal 241 00:15:06,600 --> 00:15:10,240 Speaker 1: policy than not. But as our cousins at the Peterson 242 00:15:10,280 --> 00:15:13,120 Speaker 1: Foundation rightly point out, and as I've been saying for 243 00:15:13,120 --> 00:15:16,520 Speaker 1: several years now, you know what the debate should be about. 244 00:15:16,560 --> 00:15:19,120 Speaker 1: What you spend it on, not how much you're spending. 245 00:15:19,800 --> 00:15:22,040 Speaker 1: You know, that is where that is a more difficult 246 00:15:22,040 --> 00:15:25,400 Speaker 1: debate in politics, and it's more difficult to establish and 247 00:15:25,560 --> 00:15:29,360 Speaker 1: having simple rules of thumb at the GDP ratio is 248 00:15:29,400 --> 00:15:32,800 Speaker 1: bad wolves it turns out not true. But debating you know, 249 00:15:32,880 --> 00:15:36,960 Speaker 1: what's public investment, what's useful for the next generation, what's 250 00:15:36,960 --> 00:15:39,920 Speaker 1: going to have a bigger or lesser payoff? Which forms 251 00:15:39,920 --> 00:15:43,320 Speaker 1: of taxation are better or worse. That's the discussion you 252 00:15:43,360 --> 00:15:45,760 Speaker 1: should be having. Even if you can borrow against the 253 00:15:45,800 --> 00:15:48,400 Speaker 1: equity in your home. You know, it matters whether you 254 00:15:48,440 --> 00:15:50,760 Speaker 1: blow it all on Domino's pizza or whether you renovate 255 00:15:50,760 --> 00:15:52,960 Speaker 1: your kitchen, or whether you take that money and put 256 00:15:52,960 --> 00:15:56,600 Speaker 1: your kids through school. Huh quite interesting. Let me throw 257 00:15:56,680 --> 00:16:00,520 Speaker 1: the question back at you, not so much as to 258 00:16:00,640 --> 00:16:04,360 Speaker 1: the what we spend the money on, but the when 259 00:16:04,400 --> 00:16:07,840 Speaker 1: we spend the money. There wasn't a whole lot of 260 00:16:08,240 --> 00:16:13,760 Speaker 1: fiscal stimulus post Great Financial Crisis. There wasn't the usual 261 00:16:13,920 --> 00:16:20,480 Speaker 1: Keynsian countercyclical spending, and yet the tax cuts were an 262 00:16:20,720 --> 00:16:25,640 Speaker 1: enormous pro cyclical spends. How important is the when of 263 00:16:25,720 --> 00:16:30,040 Speaker 1: spending versus the wa of spending? They're both important. The 264 00:16:30,120 --> 00:16:34,520 Speaker 1: when of spending is kind of asymmetric. It's far more 265 00:16:34,560 --> 00:16:37,440 Speaker 1: important that you don't blow it when you need the spending, 266 00:16:37,480 --> 00:16:41,680 Speaker 1: as we did by reversing fiscal course in two thousand ten, 267 00:16:41,760 --> 00:16:45,040 Speaker 1: as the UK did, as Germany as member of other 268 00:16:45,040 --> 00:16:48,640 Speaker 1: countries along with the U s mistakenly did, versus really 269 00:16:48,680 --> 00:16:51,920 Speaker 1: stepping up and doing the fiscal as we did. I 270 00:16:51,960 --> 00:16:55,120 Speaker 1: say we, as the US did, UH and the other 271 00:16:55,160 --> 00:16:58,560 Speaker 1: major economies did last spring. You know, that's really important. 272 00:16:59,160 --> 00:17:02,480 Speaker 1: Wasting your money on as you put a pro cyclical, 273 00:17:03,200 --> 00:17:05,560 Speaker 1: feeding a boom when it didn't need the help tax 274 00:17:05,600 --> 00:17:11,159 Speaker 1: cuts we had in is bad, but it's less dangerous 275 00:17:11,280 --> 00:17:13,720 Speaker 1: than failing to spend when you need it. And this 276 00:17:13,840 --> 00:17:15,439 Speaker 1: is one of the funny things. I mean, it's like 277 00:17:15,520 --> 00:17:19,560 Speaker 1: with monetary policy. Monitary policy is asymmetric too. It's very 278 00:17:19,640 --> 00:17:22,800 Speaker 1: good at staving off the financial panics, it's not so 279 00:17:22,800 --> 00:17:26,960 Speaker 1: good at creating a boom um creating a recovery. So 280 00:17:27,160 --> 00:17:29,159 Speaker 1: you have to start take that into account when you're 281 00:17:29,200 --> 00:17:32,959 Speaker 1: assessing these things. So let me go right from the 282 00:17:33,000 --> 00:17:40,080 Speaker 1: deficit conversation to the increasing popularity of a modern monetary theory. 283 00:17:40,200 --> 00:17:43,320 Speaker 1: It seems to be gaining more and more acceptance in 284 00:17:43,359 --> 00:17:47,000 Speaker 1: recent years. What are your thoughts on MMT And if 285 00:17:47,040 --> 00:17:50,480 Speaker 1: we do see some sort of unified government in the 286 00:17:50,520 --> 00:17:53,879 Speaker 1: United States, do you do you think that's a possibility 287 00:17:53,920 --> 00:17:58,000 Speaker 1: and what might that mean for the deficit? Let me 288 00:17:58,000 --> 00:18:01,080 Speaker 1: take it in reverse order. I think, what if we 289 00:18:01,160 --> 00:18:05,240 Speaker 1: get unified government, a clear president with a mandate A 290 00:18:06,480 --> 00:18:11,080 Speaker 1: let's assume say Democrats controlling both houses of Congress, then 291 00:18:11,119 --> 00:18:15,040 Speaker 1: I would expect to see a significant shift in ongoing 292 00:18:15,119 --> 00:18:18,480 Speaker 1: fiscal policy even as the economy recovers. I would expect 293 00:18:18,560 --> 00:18:21,200 Speaker 1: to see reallocation of taxes. I would expect to see 294 00:18:21,200 --> 00:18:25,199 Speaker 1: and pray for, a carbon tax, but redistribution to some 295 00:18:25,280 --> 00:18:27,680 Speaker 1: of those revenues back to the people hit by it. 296 00:18:28,040 --> 00:18:32,520 Speaker 1: And I would expect to see a larger investment in infrastructure, healthcare, 297 00:18:33,240 --> 00:18:37,680 Speaker 1: and green energy. Now, whether that's m MT or not 298 00:18:38,600 --> 00:18:40,879 Speaker 1: isn't going to show up in the plans for the 299 00:18:40,920 --> 00:18:44,440 Speaker 1: first few years because interest rates are nil, the economy 300 00:18:44,480 --> 00:18:47,639 Speaker 1: is far from full employment. We've way under invested in 301 00:18:47,760 --> 00:18:51,680 Speaker 1: green and in healthcare and in infrastructure. So it makes 302 00:18:51,680 --> 00:18:53,560 Speaker 1: no difference where you call it m empty or not. 303 00:18:53,600 --> 00:18:55,719 Speaker 1: But some people will call it m empty and use 304 00:18:55,800 --> 00:18:59,840 Speaker 1: that as their justification. So then the question is what 305 00:19:00,080 --> 00:19:02,000 Speaker 1: is the m M T tell us it's different, And 306 00:19:02,040 --> 00:19:03,760 Speaker 1: where I would come down and the number of my 307 00:19:03,800 --> 00:19:07,000 Speaker 1: colleagues would come down is saying there's a difference between 308 00:19:08,280 --> 00:19:11,760 Speaker 1: saying the budget constraints are not as tight as people 309 00:19:11,880 --> 00:19:15,639 Speaker 1: used to think, especially in these current circumstances, versus the 310 00:19:15,680 --> 00:19:18,800 Speaker 1: budget constraint is a myth. You know, Stephanie Kelton, I 311 00:19:18,800 --> 00:19:22,640 Speaker 1: guess their name is talking about deficit myth. Those are 312 00:19:22,720 --> 00:19:26,800 Speaker 1: very different, you know, it's it's it's it's like saying 313 00:19:26,880 --> 00:19:30,080 Speaker 1: to a diabetic, right, you know, if you're taking your 314 00:19:30,080 --> 00:19:33,760 Speaker 1: meds and you're responsible, you can occasionally cheat. Is different 315 00:19:33,800 --> 00:19:36,120 Speaker 1: from saints to the diabetic. You don't have to take 316 00:19:36,119 --> 00:19:39,160 Speaker 1: your meds and Ben and Jerry's all the time. Right. 317 00:19:39,920 --> 00:19:43,160 Speaker 1: That's a That's a pretty pretty good way to describe it. 318 00:19:43,680 --> 00:19:50,760 Speaker 1: So that raises the issue of fiscal versus monetary policy. 319 00:19:50,800 --> 00:19:53,440 Speaker 1: What do you say to folks like Ray Dalio and 320 00:19:53,560 --> 00:19:58,520 Speaker 1: others who have been arguing the mostly monetary response and 321 00:19:58,560 --> 00:20:02,840 Speaker 1: the limited fiscal response after the financial crisis has led 322 00:20:02,880 --> 00:20:10,639 Speaker 1: to a substantial increase in wealth inequality and ongoing income inequality. Again, 323 00:20:10,760 --> 00:20:14,040 Speaker 1: the question is compared to what and and there's no 324 00:20:14,119 --> 00:20:16,639 Speaker 1: question we would have been better off for a variety 325 00:20:16,680 --> 00:20:21,640 Speaker 1: of reasons if we hadn't cut back on fiscal abruptly 326 00:20:21,680 --> 00:20:25,240 Speaker 1: in and we had had to sustained public investment campaign, 327 00:20:25,240 --> 00:20:27,840 Speaker 1: and then monetary policy would have been different. So again, 328 00:20:27,840 --> 00:20:31,600 Speaker 1: in conclusion, and I heard your interview with Dahlio Um, 329 00:20:31,640 --> 00:20:34,480 Speaker 1: you know, in sort of implication, I'm not that different. 330 00:20:34,720 --> 00:20:37,480 Speaker 1: But again, just like with globalization, you can't pretend the 331 00:20:37,520 --> 00:20:40,400 Speaker 1: rest of the world doesn't exist. You can't pretend inequality 332 00:20:40,480 --> 00:20:42,880 Speaker 1: is only the fault of the fat. I mean, the 333 00:20:42,960 --> 00:20:47,000 Speaker 1: reason the FED does some of these things is because 334 00:20:47,160 --> 00:20:50,919 Speaker 1: not just their bleeding hearts for inequality, but because fundamentally, 335 00:20:50,960 --> 00:20:53,800 Speaker 1: if you have massed unemployment, that is so much worse 336 00:20:53,880 --> 00:20:56,680 Speaker 1: for those people than the fact that some rich people 337 00:20:56,720 --> 00:21:00,000 Speaker 1: get ahead because stock prices go up. That has perm 338 00:21:00,000 --> 00:21:04,359 Speaker 1: and it's scarring effects on communities, on individuals, on families, 339 00:21:04,359 --> 00:21:07,520 Speaker 1: on education of the next generation. And so this is 340 00:21:07,560 --> 00:21:09,040 Speaker 1: one of the things I used to argue when I 341 00:21:09,119 --> 00:21:11,320 Speaker 1: was policy maker the Bank of England back in the 342 00:21:11,560 --> 00:21:15,280 Speaker 1: financial crisis. You can talk about all these other things 343 00:21:15,280 --> 00:21:19,160 Speaker 1: that are supposedly bad about expansionary monetary policy, but the 344 00:21:19,280 --> 00:21:24,520 Speaker 1: failure to act has incredibly bad, real tangible effects, not 345 00:21:24,600 --> 00:21:28,040 Speaker 1: just paper profits for a few people. And I'm against 346 00:21:28,080 --> 00:21:30,919 Speaker 1: an equality, but I'm mostly against inequality because what it 347 00:21:30,960 --> 00:21:34,160 Speaker 1: does to people on the bottom. I'm happy to tax 348 00:21:34,280 --> 00:21:36,119 Speaker 1: the heck out of the people on the top, but 349 00:21:36,240 --> 00:21:38,280 Speaker 1: the fact that the people in the top get ahead 350 00:21:38,640 --> 00:21:40,679 Speaker 1: isn't going to prevent me from helping the people on 351 00:21:40,720 --> 00:21:44,800 Speaker 1: the bottom. Uh. Quite interesting. So let's talk a little 352 00:21:44,840 --> 00:21:47,960 Speaker 1: bit about what's going on with Brexit and the Bank 353 00:21:48,040 --> 00:21:52,399 Speaker 1: of England and all the craziness in the UK. I 354 00:21:52,480 --> 00:21:56,640 Speaker 1: really like your quote. There are no economic benefits for Brexit. 355 00:21:57,119 --> 00:22:01,160 Speaker 1: The only issue is how large the costs are. Explain 356 00:22:01,240 --> 00:22:05,320 Speaker 1: that to us, Well, you can make a political argument 357 00:22:05,359 --> 00:22:09,360 Speaker 1: for Brexit, Berry. If you're a nationalist. You're worried about immigration, 358 00:22:09,480 --> 00:22:14,560 Speaker 1: you're worried about so called sovereignty culturally, you're worried about 359 00:22:14,600 --> 00:22:16,960 Speaker 1: Europe blowing up. You know, there are a lot of 360 00:22:17,000 --> 00:22:19,359 Speaker 1: reasons you can do. As a free citizen in Britain, 361 00:22:19,400 --> 00:22:21,600 Speaker 1: you could have voted for Brexit, but you can't make 362 00:22:21,640 --> 00:22:24,760 Speaker 1: it an economic argument. I mean, essentially, on on the 363 00:22:24,800 --> 00:22:28,959 Speaker 1: negative side, you're throwing up a supply shock with your 364 00:22:29,040 --> 00:22:32,160 Speaker 1: largest trading partner, which is Europe, which is six your 365 00:22:32,200 --> 00:22:36,600 Speaker 1: trade and which is a much larger share of the economy. 366 00:22:36,640 --> 00:22:38,640 Speaker 1: Trade is a much larger share of the British economy 367 00:22:38,640 --> 00:22:43,240 Speaker 1: than like for US or China, which are huge um 368 00:22:43,320 --> 00:22:47,640 Speaker 1: And so you're you're effectively putting terroriffs on yourself, and 369 00:22:47,800 --> 00:22:50,720 Speaker 1: not just tariffs, you're you're not part of the Single market. 370 00:22:50,800 --> 00:22:52,919 Speaker 1: So that means all the high end stuff that Britain 371 00:22:53,040 --> 00:22:57,960 Speaker 1: was exporting in terms of education, business services, financial services, 372 00:22:58,440 --> 00:23:01,960 Speaker 1: you're no longer going to be necessary ly usually recognized 373 00:23:02,000 --> 00:23:04,760 Speaker 1: standards and access on those. So you're throwing up this 374 00:23:04,960 --> 00:23:08,480 Speaker 1: huge spanner in the works, as the Brits would say, 375 00:23:08,800 --> 00:23:11,360 Speaker 1: and what are you getting for it? Well, you can 376 00:23:11,400 --> 00:23:13,200 Speaker 1: come up with a laundry list of things you think 377 00:23:13,200 --> 00:23:16,080 Speaker 1: are wrong with the European Union economically, including, if you 378 00:23:16,119 --> 00:23:22,800 Speaker 1: feel this way, over regulation, excessive welfare state, tight labor laws, uh, 379 00:23:23,320 --> 00:23:27,960 Speaker 1: demographic decline, weaknesses in the euro and as I pointed 380 00:23:28,000 --> 00:23:31,159 Speaker 1: out and started pointing out back in, none of those 381 00:23:31,400 --> 00:23:35,520 Speaker 1: applied to Britain. Essentially, Britain has the weakest labor laws, 382 00:23:35,680 --> 00:23:39,720 Speaker 1: the least welfare state of any of the rich countries 383 00:23:39,760 --> 00:23:43,000 Speaker 1: in Western Europe. And less than many of the countries 384 00:23:43,000 --> 00:23:47,639 Speaker 1: in Eastern Europe, and it's not part of Europe. So essentially, 385 00:23:47,680 --> 00:23:55,000 Speaker 1: all you're getting is a slight diminution in in certain 386 00:23:55,000 --> 00:23:58,560 Speaker 1: industries of regulatory conformity, and you're giving up a huge 387 00:23:58,600 --> 00:24:01,919 Speaker 1: amount of trade access. And so it gets even worse 388 00:24:02,040 --> 00:24:05,520 Speaker 1: because there were many places, including American companies, including Japanese 389 00:24:05,520 --> 00:24:09,919 Speaker 1: companies and others, who used Britain as their platform for 390 00:24:10,040 --> 00:24:13,320 Speaker 1: investment that if they wanted to produce stuff inside the EU, 391 00:24:13,480 --> 00:24:16,280 Speaker 1: or they wanted to have services or headquarters inside the 392 00:24:16,280 --> 00:24:19,959 Speaker 1: EU of a subsidiary, they did in Britain because they 393 00:24:20,000 --> 00:24:22,399 Speaker 1: like Britain. They liked the English, like the rule of laws, 394 00:24:22,440 --> 00:24:25,879 Speaker 1: they liked the place. And now that doesn't work, and 395 00:24:25,920 --> 00:24:28,840 Speaker 1: we're seeing that all these auto manufacturers, for example, for 396 00:24:29,080 --> 00:24:32,240 Speaker 1: Ni San, Toyota, land Rover, they're cutting back on their 397 00:24:32,240 --> 00:24:35,520 Speaker 1: investment in Britain. So there is no economic upside. So 398 00:24:35,640 --> 00:24:39,080 Speaker 1: I would argue, and others have argued that both the 399 00:24:39,240 --> 00:24:44,600 Speaker 1: UK and Germany were the big winners of the creation 400 00:24:44,680 --> 00:24:48,080 Speaker 1: of the European Union. What does that say to us 401 00:24:48,200 --> 00:24:52,800 Speaker 1: about the rise of popularism? And lots of folks after 402 00:24:52,840 --> 00:24:55,760 Speaker 1: the Brexit vote said, hey, you and America better pay 403 00:24:55,800 --> 00:25:00,560 Speaker 1: attention because the same factors driving US towards Brexit is 404 00:25:00,560 --> 00:25:03,680 Speaker 1: going to drive you towards a Trump presidency. That turned 405 00:25:03,720 --> 00:25:08,840 Speaker 1: out to be a pretty accurate prediction. Yeah, I agree, 406 00:25:09,000 --> 00:25:12,320 Speaker 1: And I mean I was part of that crowd. I 407 00:25:12,400 --> 00:25:15,080 Speaker 1: had said that there were huge echoes between Brexit and 408 00:25:15,119 --> 00:25:18,480 Speaker 1: Trump when Trump was running, you know, but I think 409 00:25:18,520 --> 00:25:22,119 Speaker 1: it's really important very that we emphasize that not everything 410 00:25:22,200 --> 00:25:27,240 Speaker 1: is about economics. People choose to do things that matter 411 00:25:27,320 --> 00:25:31,520 Speaker 1: to them that may be a bad idea economically. You 412 00:25:31,600 --> 00:25:33,960 Speaker 1: just don't want to lie to them about it. And 413 00:25:33,960 --> 00:25:36,320 Speaker 1: and I think that's where we are with both Trump 414 00:25:36,400 --> 00:25:40,040 Speaker 1: and Brexit, is that, you know, there are people who 415 00:25:40,080 --> 00:25:43,320 Speaker 1: are motivated for good reasons. There are people who are 416 00:25:43,359 --> 00:25:48,200 Speaker 1: motivated for single issue voters, whether it's you know, abortion 417 00:25:48,240 --> 00:25:54,000 Speaker 1: in the United States or um local government control in 418 00:25:54,040 --> 00:25:57,080 Speaker 1: the UK. And there are people, frankly who are motivated 419 00:25:57,119 --> 00:26:00,359 Speaker 1: by evil things like racism and native and in a 420 00:26:00,359 --> 00:26:05,680 Speaker 1: lot of which contributes to populism. And and so yeah, 421 00:26:05,880 --> 00:26:08,240 Speaker 1: the same force was there in the UK and in 422 00:26:08,320 --> 00:26:11,640 Speaker 1: the US UM and I think it has a lot 423 00:26:11,720 --> 00:26:15,960 Speaker 1: to do with less well educated white males status going 424 00:26:16,000 --> 00:26:21,480 Speaker 1: down and they get really pissed. And that's not some 425 00:26:21,600 --> 00:26:25,800 Speaker 1: inevitable results of economics. That's just the reality when you 426 00:26:25,840 --> 00:26:31,080 Speaker 1: have both technology advancing and justice advancing, that their privileged 427 00:26:31,119 --> 00:26:34,080 Speaker 1: positions start to break down and they get angry. And 428 00:26:34,119 --> 00:26:36,879 Speaker 1: in our democratic system they're allowed to express that anger. 429 00:26:37,280 --> 00:26:40,920 Speaker 1: I just don't want us saying, oh, there's something underlying 430 00:26:40,920 --> 00:26:43,800 Speaker 1: wrong with international economic integration. And there's a bunch of 431 00:26:43,800 --> 00:26:47,199 Speaker 1: political science work out there and polling work cleaned by 432 00:26:47,200 --> 00:26:50,040 Speaker 1: my colleague Marcus Nolan and my former colleague Caroline Freud, 433 00:26:50,400 --> 00:26:53,800 Speaker 1: where you can just document that people are voting for 434 00:26:53,840 --> 00:26:57,800 Speaker 1: these things. These parties, the Trump's Forage and in the 435 00:26:57,920 --> 00:27:04,280 Speaker 1: UK Brexit be because of their dislike of foreigners, because 436 00:27:04,440 --> 00:27:08,000 Speaker 1: their dislike of change, and and so the anti globalization 437 00:27:08,080 --> 00:27:11,000 Speaker 1: isn't because it's doing them harm necessarily, it's because they 438 00:27:11,040 --> 00:27:13,800 Speaker 1: perceive it as foreign and bad. And you can see 439 00:27:13,840 --> 00:27:17,280 Speaker 1: this in the UK because the single biggest predictor of 440 00:27:17,320 --> 00:27:19,960 Speaker 1: whether you voted for Brexit and the polling data was 441 00:27:20,000 --> 00:27:22,720 Speaker 1: whether you voted you would like to see the death 442 00:27:22,720 --> 00:27:26,560 Speaker 1: penalty pack and the death is never coming back in 443 00:27:26,600 --> 00:27:29,639 Speaker 1: the UK, but it was. It's a symbolic issue like 444 00:27:29,720 --> 00:27:33,240 Speaker 1: burning the flag in the US, and and so again 445 00:27:33,359 --> 00:27:37,040 Speaker 1: US economists have to be humbled but also straightforward and say, 446 00:27:37,359 --> 00:27:40,720 Speaker 1: you know, people make decisions, have enough to do with 447 00:27:40,720 --> 00:27:42,760 Speaker 1: the economics. All we can do is tell you that 448 00:27:42,920 --> 00:27:46,600 Speaker 1: things are lies about how good the economics are won't work. 449 00:27:47,640 --> 00:27:50,080 Speaker 1: So let me ask you, how does an American end 450 00:27:50,200 --> 00:27:53,399 Speaker 1: up on the Monetary Policy Committee of the Bank of 451 00:27:53,400 --> 00:27:56,240 Speaker 1: England And how did you take that? Because this is 452 00:27:56,280 --> 00:28:00,200 Speaker 1: a funny not ha ha, but you know, interesting thing 453 00:28:00,240 --> 00:28:04,960 Speaker 1: about globalization having once been very open and different in Britain. 454 00:28:05,680 --> 00:28:09,360 Speaker 1: Uh Tony Blair, who was Prime Minister well before I 455 00:28:09,440 --> 00:28:12,640 Speaker 1: got there, Um talked about having a government of all 456 00:28:12,760 --> 00:28:17,720 Speaker 1: the talents and so the central Bank jobs at the 457 00:28:18,080 --> 00:28:21,320 Speaker 1: for the members of the Monetary Policy Committee were publicly 458 00:28:21,359 --> 00:28:24,840 Speaker 1: advertised and people could apply and you didn't have to 459 00:28:24,880 --> 00:28:28,080 Speaker 1: be a UK or even any use citizen. Now I 460 00:28:28,080 --> 00:28:31,960 Speaker 1: mean to be fair, I had done work with the 461 00:28:32,000 --> 00:28:34,600 Speaker 1: Bank of England as part of my previous research and 462 00:28:34,680 --> 00:28:36,960 Speaker 1: policy work. I had been a visitor at the Bank 463 00:28:37,200 --> 00:28:41,880 Speaker 1: as a researcher for six months and probably more importantly, 464 00:28:42,160 --> 00:28:45,960 Speaker 1: I did some consulting work for then Prime Minister Gordon 465 00:28:46,000 --> 00:28:48,840 Speaker 1: Brown and Chancellor Alistair Darling at the start of the 466 00:28:48,920 --> 00:28:53,800 Speaker 1: financial crisis. Plus my research background had a lot to 467 00:28:53,800 --> 00:28:56,040 Speaker 1: do with both monetary policy and what had gone wrong 468 00:28:56,040 --> 00:28:59,480 Speaker 1: in Japan, so I was seen as relevant anyway long 469 00:28:59,520 --> 00:29:02,680 Speaker 1: storage or you know, after I was appointed, but before 470 00:29:02,680 --> 00:29:06,800 Speaker 1: I went over, I attended a party bizarrely with members 471 00:29:06,800 --> 00:29:11,240 Speaker 1: of the Federal Open Market Committee, including Gellan and bernankey 472 00:29:11,600 --> 00:29:17,600 Speaker 1: Um in summer of twenty two tho nine, and literally 473 00:29:17,640 --> 00:29:20,240 Speaker 1: four different FOMC members I counted came up to me 474 00:29:20,280 --> 00:29:22,239 Speaker 1: and said, you're going to the Bank of England. If 475 00:29:22,280 --> 00:29:25,720 Speaker 1: they pointed a foreigner at the f m C, Garbass 476 00:29:25,760 --> 00:29:30,600 Speaker 1: would burn the FED down, you know. So it wasn't 477 00:29:30,600 --> 00:29:33,520 Speaker 1: seem as strange. But I spent three years there. I 478 00:29:33,560 --> 00:29:36,440 Speaker 1: did my best and people I never seemed to get 479 00:29:36,480 --> 00:29:39,800 Speaker 1: attacked at all for being a foreigner. Huh, that's quite 480 00:29:39,880 --> 00:29:44,920 Speaker 1: quite interesting. I read a really interesting peace in a 481 00:29:45,080 --> 00:29:50,840 Speaker 1: local British newspaper or a national British newspaper. Actually I 482 00:29:50,880 --> 00:29:53,960 Speaker 1: was steered to it Um by one of your colleagues, 483 00:29:54,040 --> 00:29:57,280 Speaker 1: Danny Blancheflower. The quote about you as you would sit 484 00:29:57,320 --> 00:30:00,880 Speaker 1: in the room where the Monetary Policy the Committee met 485 00:30:01,320 --> 00:30:03,880 Speaker 1: and hanging on the wall as a picture of one 486 00:30:03,920 --> 00:30:07,800 Speaker 1: of the governors from the nineteen thirties, Montague Norman, who 487 00:30:07,840 --> 00:30:11,239 Speaker 1: I kind of remember from Lords of Finance, Am I am? 488 00:30:11,240 --> 00:30:14,880 Speaker 1: I getting that right exactly. And anyway, anyway, you would 489 00:30:14,880 --> 00:30:17,080 Speaker 1: sit there when you didn't know what to do, you 490 00:30:17,120 --> 00:30:21,080 Speaker 1: would think what would Governor Norman do? And then you 491 00:30:21,120 --> 00:30:25,240 Speaker 1: would do the exact opposite. So you have to explain that. Yeah, 492 00:30:25,320 --> 00:30:26,600 Speaker 1: I mean, I was, I was trying to be a 493 00:30:26,600 --> 00:30:30,320 Speaker 1: little bit cute, but I think it to keep pretty apt. 494 00:30:30,560 --> 00:30:33,800 Speaker 1: I mean, so imagine that you're sitting The way to 495 00:30:33,880 --> 00:30:36,720 Speaker 1: translate in U S terms is imagine you're making decisions 496 00:30:36,880 --> 00:30:40,520 Speaker 1: about government policy in the face of recession, and there's 497 00:30:40,520 --> 00:30:43,120 Speaker 1: a huge picture of Herbert Hoover on the wall in 498 00:30:43,120 --> 00:30:47,400 Speaker 1: the room, and you would probably do well saying, okay, 499 00:30:47,680 --> 00:30:50,160 Speaker 1: I look at Herbert Hoover, I think what would he do? 500 00:30:50,200 --> 00:30:54,120 Speaker 1: What did he do in thirty one? And I'm going 501 00:30:54,160 --> 00:30:58,680 Speaker 1: to do the opposite. And and it's not about personalities. 502 00:30:58,720 --> 00:31:06,240 Speaker 1: It's about Montague Orman represented a very old school, small 503 00:31:06,360 --> 00:31:12,840 Speaker 1: c conservative, but most importantly recessionist or a creative destruction 504 00:31:12,960 --> 00:31:17,840 Speaker 1: point of view that was proven dreadfully wrong by the 505 00:31:18,200 --> 00:31:25,200 Speaker 1: Great Depression. And um was that the liquidate capital, liquidate, labor, liquidate. 506 00:31:25,960 --> 00:31:29,960 Speaker 1: That school the view that the view that monetary policy 507 00:31:30,080 --> 00:31:32,320 Speaker 1: could only do harm by trying to be helpful, and 508 00:31:32,480 --> 00:31:36,040 Speaker 1: you wanted things to liquidate, liquidate, liquidate, as Andrew Mellon, 509 00:31:36,080 --> 00:31:38,960 Speaker 1: who was the Treasury Secretary of the US under Hoover said, 510 00:31:39,520 --> 00:31:42,360 Speaker 1: and that great book by Lords of Finance is a 511 00:31:42,400 --> 00:31:47,040 Speaker 1: beautiful portrayal of these ideologies. And Barry I can Green 512 00:31:47,080 --> 00:31:50,120 Speaker 1: the economic historians also written about this, and many others. 513 00:31:50,440 --> 00:31:53,080 Speaker 1: Mark Blythe has a book on austerity. But these ideas 514 00:31:53,120 --> 00:31:55,320 Speaker 1: to just keep coming back, they just keep coming back. 515 00:31:55,360 --> 00:31:58,520 Speaker 1: And so in two thousand nine, you know, the Bank 516 00:31:58,560 --> 00:32:01,800 Speaker 1: of England made a terrible mist ache letting there be 517 00:32:01,880 --> 00:32:05,400 Speaker 1: a run on on a major regional bank, Northern Rock, 518 00:32:06,000 --> 00:32:07,880 Speaker 1: because they thought, oh, we have to fight the moral 519 00:32:07,960 --> 00:32:10,760 Speaker 1: hazard and not tell people and not tell people that 520 00:32:10,760 --> 00:32:13,280 Speaker 1: that they're going to be bailed out. And then that provoked, 521 00:32:13,480 --> 00:32:15,640 Speaker 1: just as it did in the thirties, although thankfully on 522 00:32:15,640 --> 00:32:20,360 Speaker 1: a smaller scale, a series of bank problems. And similarly 523 00:32:20,440 --> 00:32:23,480 Speaker 1: there were people who were very reluctant to expand the 524 00:32:23,520 --> 00:32:27,920 Speaker 1: central bank balance sheet to do quee when the economy 525 00:32:27,960 --> 00:32:30,960 Speaker 1: was vastly unemployed. In my colleague day Blanche. However, as 526 00:32:30,960 --> 00:32:33,880 Speaker 1: you're calling now Bloomberg who you mentioned, Um, you know 527 00:32:34,000 --> 00:32:35,680 Speaker 1: he was way ahead of the Kirk. He was on 528 00:32:35,800 --> 00:32:39,040 Speaker 1: before me in two thousand and eight two nine saying hey, 529 00:32:39,040 --> 00:32:41,720 Speaker 1: wake up, people, we got to do something. You're making 530 00:32:41,720 --> 00:32:45,280 Speaker 1: me think about the UK is a little bit of 531 00:32:45,320 --> 00:32:49,240 Speaker 1: a special case. How much of this derives from the 532 00:32:49,400 --> 00:32:55,400 Speaker 1: sort of puritanical belief that you have to suffer through 533 00:32:55,480 --> 00:32:58,240 Speaker 1: pain before there's any sort of redemption. You have to 534 00:32:59,280 --> 00:33:04,160 Speaker 1: not smooth out the sharp edges of the cycle, and 535 00:33:04,160 --> 00:33:08,440 Speaker 1: and trying to reduce that ultimately makes things worse. Am 536 00:33:08,480 --> 00:33:11,200 Speaker 1: I over analyzing this? Or is? I don't think you are? 537 00:33:11,400 --> 00:33:13,440 Speaker 1: I think very you put it very well. This is 538 00:33:13,480 --> 00:33:19,160 Speaker 1: a recurring moralistic theme. Um. My old dissertation adviser Ben 539 00:33:19,240 --> 00:33:21,320 Speaker 1: Friedman and Harvard has a book coming out in the 540 00:33:21,360 --> 00:33:25,640 Speaker 1: spring that talks about how some of these moral ideas 541 00:33:25,720 --> 00:33:29,520 Speaker 1: from the late eighteenth century extend to her American economic 542 00:33:29,560 --> 00:33:33,840 Speaker 1: policy debates today, and that's why people vote against what 543 00:33:33,920 --> 00:33:38,400 Speaker 1: seems to be their self interest often. Um, you know, 544 00:33:38,400 --> 00:33:41,680 Speaker 1: there's this old tired Keynes quote which is still applicable. 545 00:33:41,800 --> 00:33:45,160 Speaker 1: People of affairs don't realize how much of the the slaves 546 00:33:45,200 --> 00:33:48,440 Speaker 1: of the ideas of some defunct economists. And this goes 547 00:33:48,480 --> 00:33:50,800 Speaker 1: back to the discussion you were having with Dalio compared 548 00:33:50,840 --> 00:33:54,640 Speaker 1: to me about the role of central banks and easy 549 00:33:54,720 --> 00:33:57,400 Speaker 1: monetary policy. If you look around the world right now, 550 00:33:57,960 --> 00:34:00,520 Speaker 1: or you look it around the world in two thousand nine, Intendant, 551 00:34:00,560 --> 00:34:03,760 Speaker 1: you thought your biggest problem was people who don't deserve 552 00:34:03,840 --> 00:34:06,680 Speaker 1: credit or getting credit, business stocks that shouldn't be up 553 00:34:06,680 --> 00:34:10,840 Speaker 1: are up. You're totally missing the point. And if you 554 00:34:10,920 --> 00:34:16,560 Speaker 1: think that the causes of these problems are because of 555 00:34:16,680 --> 00:34:20,680 Speaker 1: lacks credit, you're you're ignoring the evidence. What you can 556 00:34:20,920 --> 00:34:24,359 Speaker 1: do if you care about lacks credit is you can 557 00:34:24,440 --> 00:34:27,600 Speaker 1: worry about your accounting system. You can worry about your 558 00:34:27,600 --> 00:34:32,680 Speaker 1: bank supervision system. You can engage in tighter regulation and 559 00:34:32,680 --> 00:34:36,280 Speaker 1: and that's where the effort should be. If you're worried 560 00:34:36,320 --> 00:34:39,000 Speaker 1: about misallocation, and that should be something that goes on 561 00:34:39,080 --> 00:34:45,400 Speaker 1: all the time, not waiting for some purgatory apocalyptic period 562 00:34:45,520 --> 00:34:48,399 Speaker 1: to wipe out the stables. That is no way to act, 563 00:34:48,400 --> 00:34:50,560 Speaker 1: because you wipe out a lot of human beings doing that. 564 00:34:51,440 --> 00:34:55,480 Speaker 1: Quite fascinating. Let's talk a little bit about your work 565 00:34:55,760 --> 00:34:58,680 Speaker 1: at the New York Fed. What did you do there 566 00:34:58,719 --> 00:35:02,560 Speaker 1: as a research economist. Well, I got the job at 567 00:35:02,600 --> 00:35:04,960 Speaker 1: the New York Fed right out of grad school UM 568 00:35:05,000 --> 00:35:08,080 Speaker 1: and they hire every year several staff, as do all 569 00:35:08,200 --> 00:35:11,920 Speaker 1: the Federal Reserve banks, and the Federals are Board. I 570 00:35:11,960 --> 00:35:13,520 Speaker 1: didn't get a job at the Board, but I was 571 00:35:13,640 --> 00:35:15,400 Speaker 1: very fortunate to get the job I did at the 572 00:35:15,400 --> 00:35:19,400 Speaker 1: New York Fed. UM Rick Michigan, professor Columbia, who I 573 00:35:19,400 --> 00:35:22,319 Speaker 1: think you know UM at that time, had taken leave 574 00:35:22,320 --> 00:35:25,640 Speaker 1: for Colombia and was the executive vice president chief economist 575 00:35:25,680 --> 00:35:28,760 Speaker 1: at New York Fan. And he was building a real 576 00:35:29,040 --> 00:35:33,480 Speaker 1: network and exciting program, and he was very open and 577 00:35:33,520 --> 00:35:35,239 Speaker 1: good to me to let me be part of it 578 00:35:35,280 --> 00:35:40,080 Speaker 1: as a junior person. And the main point was that 579 00:35:41,120 --> 00:35:45,799 Speaker 1: we were reacting to threats to the Federal Reserve. At 580 00:35:45,840 --> 00:35:50,399 Speaker 1: that time, there were several people in Congress UM who, 581 00:35:50,640 --> 00:35:54,680 Speaker 1: including a couple of notable senators, who wanted to change 582 00:35:54,719 --> 00:35:57,600 Speaker 1: the mandate of the FED to a gold standard or 583 00:35:57,640 --> 00:36:02,440 Speaker 1: a very tight definition of price stability. And he and 584 00:36:02,600 --> 00:36:05,560 Speaker 1: some of the outside academic consultants, including a person named 585 00:36:05,600 --> 00:36:10,480 Speaker 1: Ben bernanke Um and I myself all thought this was 586 00:36:10,719 --> 00:36:13,880 Speaker 1: very dangerous and as the saying goes, you can't beat 587 00:36:13,960 --> 00:36:18,719 Speaker 1: something with nothing. So we looked around and happened upon 588 00:36:18,760 --> 00:36:21,000 Speaker 1: the fact that a bunch of other central banks, including 589 00:36:21,040 --> 00:36:23,120 Speaker 1: the Bank of England, Reserve Bank of New Zealand, the 590 00:36:23,160 --> 00:36:26,680 Speaker 1: Bank of Canada, Reserve Bank of Australia, had moved to 591 00:36:26,680 --> 00:36:30,200 Speaker 1: this thing called inflation targeting. And so I did a 592 00:36:30,239 --> 00:36:31,799 Speaker 1: bunch of other stuff while I was there, and Rick 593 00:36:31,880 --> 00:36:34,359 Speaker 1: Michigan certainly did a bunch of other stuff while he 594 00:36:34,440 --> 00:36:38,120 Speaker 1: was there. But our main output in this regard was 595 00:36:38,239 --> 00:36:43,200 Speaker 1: creating his book with Bernankee Michigan, the now late sadly 596 00:36:43,360 --> 00:36:47,680 Speaker 1: Thomas Labak, and myself looking at the international experience of 597 00:36:47,719 --> 00:36:52,360 Speaker 1: inflation targeting. And it was essentially meant to adjust, not 598 00:36:52,520 --> 00:36:54,680 Speaker 1: just to send the FED, but adjust to a couple 599 00:36:54,680 --> 00:36:59,480 Speaker 1: of realities of the time. That central banks hadn't been 600 00:36:59,520 --> 00:37:03,880 Speaker 1: transparent enough, and under Greenspan that was an issue. Uh 601 00:37:04,080 --> 00:37:07,440 Speaker 1: central banks had been a little too discretionary. And this 602 00:37:07,600 --> 00:37:09,920 Speaker 1: is how you ended up with the weekend to Bernie's 603 00:37:09,960 --> 00:37:12,560 Speaker 1: problem that if if Greenspan died, they wanted to problem 604 00:37:12,760 --> 00:37:14,960 Speaker 1: up because it was too much faith in an individual. 605 00:37:16,360 --> 00:37:22,480 Speaker 1: And three that central banks had to avoid being too 606 00:37:22,760 --> 00:37:26,680 Speaker 1: mechanically rules base because then you would get into trouble 607 00:37:26,719 --> 00:37:30,920 Speaker 1: by tightening policy or loosening policy to mechanically, and so 608 00:37:31,200 --> 00:37:33,440 Speaker 1: that was our contribution was to come up with this 609 00:37:33,520 --> 00:37:38,360 Speaker 1: alternative framework, or rather adapt the the alternative framework others 610 00:37:38,360 --> 00:37:42,240 Speaker 1: have been experimenting with for the FED, and talk about 611 00:37:42,280 --> 00:37:44,560 Speaker 1: what we had learned. Huh. So I want to talk 612 00:37:44,600 --> 00:37:49,160 Speaker 1: a little bit about the fed's independence and challenges to that. 613 00:37:49,280 --> 00:37:53,120 Speaker 1: But before we get there, you raised the issue of 614 00:37:53,160 --> 00:37:58,440 Speaker 1: the gold standard, which seems so anachronistic. I just have 615 00:37:58,600 --> 00:38:03,560 Speaker 1: to ask what would happen if the US ever went 616 00:38:03,640 --> 00:38:08,080 Speaker 1: back on a gold standard. Within very short time, you 617 00:38:08,120 --> 00:38:14,200 Speaker 1: would have two things. You would have money flying out 618 00:38:14,200 --> 00:38:17,560 Speaker 1: of the US because people would want to cash out 619 00:38:17,800 --> 00:38:20,960 Speaker 1: the currency. It's like an exchange rate peg. You have 620 00:38:21,120 --> 00:38:24,279 Speaker 1: people betting against the ability to maintain it. So think 621 00:38:24,280 --> 00:38:28,160 Speaker 1: of and George Soros's famous bet against the British pound. 622 00:38:29,120 --> 00:38:32,359 Speaker 1: And you would start having greater fluctuations in the real 623 00:38:32,440 --> 00:38:38,200 Speaker 1: economy because you would be determining monetary policy by arbitrarily 624 00:38:38,280 --> 00:38:41,160 Speaker 1: the amount of gold showing up in the world essentially, 625 00:38:41,360 --> 00:38:47,000 Speaker 1: and they would not be flexible in reaction to the realities. 626 00:38:47,320 --> 00:38:49,360 Speaker 1: Um so it would look more like the late nineteenth 627 00:38:49,360 --> 00:38:52,040 Speaker 1: century when the US was subject to capital flight in 628 00:38:52,080 --> 00:38:56,840 Speaker 1: the US was subject to sharp fluctuations and real activity 629 00:38:57,000 --> 00:39:02,440 Speaker 1: driven by monetary policy, regular recession, regular depressions until the FED, 630 00:39:03,320 --> 00:39:05,960 Speaker 1: at least arguably until the FED came around in the twenties. 631 00:39:06,480 --> 00:39:08,920 Speaker 1: And and again, the FED wasn't the miracle worker was 632 00:39:09,000 --> 00:39:12,920 Speaker 1: more Again asymmetric was about getting the FED, getting the 633 00:39:12,960 --> 00:39:15,799 Speaker 1: money supply out of being the cause of problems. It 634 00:39:15,880 --> 00:39:18,880 Speaker 1: wasn't about this. So it's fixing everything and making everything wonderful. 635 00:39:19,520 --> 00:39:22,680 Speaker 1: But that's those those two aspects of the nineteenth century 636 00:39:22,719 --> 00:39:25,120 Speaker 1: would be back, and that would be a definite step 637 00:39:25,160 --> 00:39:27,319 Speaker 1: backwards for the US. So let's talk a little bit 638 00:39:27,360 --> 00:39:33,359 Speaker 1: about FED independence. This particular president has been very aggressive 639 00:39:33,520 --> 00:39:38,160 Speaker 1: in jaw boning the FED chair publicly. I know that 640 00:39:38,200 --> 00:39:42,160 Speaker 1: went on behind closed doors in the past, But how 641 00:39:42,239 --> 00:39:45,719 Speaker 1: independent is the Federal Reserve and how much has it 642 00:39:45,840 --> 00:39:52,120 Speaker 1: changed during this administration. So my doctoral dissertation, which is 643 00:39:52,160 --> 00:39:57,759 Speaker 1: now twice six twenty seven years ago um was on 644 00:39:57,800 --> 00:40:02,319 Speaker 1: this very topic. And what I argue was independence of 645 00:40:02,400 --> 00:40:05,840 Speaker 1: the FED or any central bank depends on having a 646 00:40:05,920 --> 00:40:10,120 Speaker 1: political constituency that supports it, and that sort of like 647 00:40:10,160 --> 00:40:14,840 Speaker 1: the Supreme Court. You can't go vastly away from public 648 00:40:14,880 --> 00:40:18,719 Speaker 1: opinion because in the end they'll change the institution. So 649 00:40:18,840 --> 00:40:23,360 Speaker 1: independence is something that has to be managed and measured. 650 00:40:24,280 --> 00:40:30,080 Speaker 1: And I think that J. Powell, Chair, current Chair of 651 00:40:30,160 --> 00:40:34,640 Speaker 1: the Federal Reserve, has done a terrific job of navigating 652 00:40:34,719 --> 00:40:40,440 Speaker 1: the public threats from President Trump and others. And you 653 00:40:40,480 --> 00:40:43,920 Speaker 1: can see this in the way that Congress has supported 654 00:40:43,920 --> 00:40:47,359 Speaker 1: the measures they've taken. That they did something which I 655 00:40:47,400 --> 00:40:51,560 Speaker 1: think proved to be absolutely right, the provision of liquidity 656 00:40:51,600 --> 00:40:54,600 Speaker 1: and cross national swap lines at the start of the 657 00:40:54,640 --> 00:40:59,080 Speaker 1: pandemic economic effects in March April, and they didn't get 658 00:40:59,080 --> 00:41:03,040 Speaker 1: attacked by cos and they had to account for themselves 659 00:41:03,040 --> 00:41:05,400 Speaker 1: to Congress as they should. But you know, there were 660 00:41:05,440 --> 00:41:09,120 Speaker 1: people including Ben bernanke Let alone me, who were very 661 00:41:09,160 --> 00:41:11,520 Speaker 1: worried that we would need those swap lines in the 662 00:41:11,560 --> 00:41:15,719 Speaker 1: next crisis and who had conversa attack. But J. Pale 663 00:41:15,840 --> 00:41:20,680 Speaker 1: had made enough, vested enough credibility and communication to do 664 00:41:20,840 --> 00:41:25,239 Speaker 1: that safely. And similarly on the monetary policy measures now 665 00:41:25,320 --> 00:41:30,480 Speaker 1: and the changes that Chair Clarata Chair Powell, Vice Chair Clarata, 666 00:41:30,719 --> 00:41:35,440 Speaker 1: Governor Brainer and others pushed in the mandate of the 667 00:41:35,520 --> 00:41:38,160 Speaker 1: Fed or rather they shouldn't say the mandate the strategic 668 00:41:38,200 --> 00:41:41,160 Speaker 1: framework of the FED to be less preempt upon inflation 669 00:41:41,239 --> 00:41:45,279 Speaker 1: more concerned with unemployment. So I think the independence of 670 00:41:45,320 --> 00:41:50,960 Speaker 1: the FED has been quite fine um in recent years. 671 00:41:51,040 --> 00:41:54,200 Speaker 1: But it's taken a lot of work, and not just 672 00:41:54,320 --> 00:41:59,040 Speaker 1: pr work, but genuine engagement with the public and with Congress. 673 00:41:59,080 --> 00:42:00,719 Speaker 1: And I give them a lot of at it. I 674 00:42:00,840 --> 00:42:04,160 Speaker 1: always said to people who were wondering about things, that 675 00:42:05,400 --> 00:42:08,360 Speaker 1: you know, the the FETE isn't really scared of the President. 676 00:42:08,440 --> 00:42:11,720 Speaker 1: The FETE is scared of Congress, because Congress can change 677 00:42:11,719 --> 00:42:14,000 Speaker 1: the Federal Reserve Act at any time. What do you 678 00:42:14,000 --> 00:42:16,920 Speaker 1: make of a book like in the Fed by Ron 679 00:42:17,000 --> 00:42:20,680 Speaker 1: Paul when something like that comes out, what's the response 680 00:42:20,800 --> 00:42:26,440 Speaker 1: within the institution to what is clearly a congressional threat. Well, 681 00:42:26,440 --> 00:42:30,240 Speaker 1: this is in the same spirit that Michigan, bernanke Laubach 682 00:42:30,280 --> 00:42:35,200 Speaker 1: and I were writing about inflation targeting plus years ago, 683 00:42:35,760 --> 00:42:39,080 Speaker 1: that you try to be responsive but in a way 684 00:42:39,120 --> 00:42:44,200 Speaker 1: that is substantive and honest and not over promising and 685 00:42:44,280 --> 00:42:50,960 Speaker 1: not denying, but also not pretending that people should believe 686 00:42:51,040 --> 00:42:54,480 Speaker 1: the lies told about your institution. And so it's interesting, 687 00:42:54,520 --> 00:42:57,239 Speaker 1: I mean a year ago August I was at the 688 00:42:57,320 --> 00:43:01,399 Speaker 1: FIT Sanuel Jackson Hole conference when that was when right 689 00:43:01,440 --> 00:43:06,160 Speaker 1: after Chair pal speech, President Trump tweeted that basically the 690 00:43:06,280 --> 00:43:08,600 Speaker 1: chair the FED was as much of an enemy as 691 00:43:08,640 --> 00:43:12,400 Speaker 1: a Chinese general, which you know, was looney tunes and 692 00:43:12,560 --> 00:43:15,960 Speaker 1: was horrible. And you could see Chair Pale and then 693 00:43:16,000 --> 00:43:18,480 Speaker 1: the other FED officials being quite chicken by this. But 694 00:43:18,560 --> 00:43:22,800 Speaker 1: then over time, you know, he tweet tomp just throughout 695 00:43:22,880 --> 00:43:25,880 Speaker 1: so many tweets about so many things, including the FED, 696 00:43:26,040 --> 00:43:28,359 Speaker 1: it just became noise. And they were right to just 697 00:43:28,440 --> 00:43:30,480 Speaker 1: sort of I don't want to say rise above it. 698 00:43:30,520 --> 00:43:33,160 Speaker 1: You can't rise above it, but to withstand it and 699 00:43:33,200 --> 00:43:37,279 Speaker 1: not overreact. Yeah, if if only the President was able 700 00:43:37,320 --> 00:43:40,600 Speaker 1: to put his own FED chairman into place. Maybe. Oh wait, 701 00:43:41,239 --> 00:43:45,680 Speaker 1: wasn't Jerome Pale a Trump appointee. I don't understand. He 702 00:43:45,760 --> 00:43:50,200 Speaker 1: seems to constantly be appointing people who he is against. 703 00:43:50,440 --> 00:43:58,640 Speaker 1: I'm a little perplexed by that. Sigh. The ironies are great. So, 704 00:43:58,640 --> 00:44:01,800 Speaker 1: so let's talk a little bit about how the FED 705 00:44:02,000 --> 00:44:06,839 Speaker 1: acted during the Great Financial Crisis. It seemed that Congress 706 00:44:07,000 --> 00:44:09,920 Speaker 1: was a little bit a wall. What what sort of 707 00:44:10,520 --> 00:44:14,080 Speaker 1: rating would you give the Fed for what they did 708 00:44:14,200 --> 00:44:17,719 Speaker 1: let's call it oh eight oh nine, And I think 709 00:44:17,760 --> 00:44:21,160 Speaker 1: the FED under Britian key, but with everyone involved, did 710 00:44:21,200 --> 00:44:25,560 Speaker 1: a very good job in two thousand nine into two 711 00:44:25,600 --> 00:44:28,440 Speaker 1: thousand ten. I think there's a lot of room for 712 00:44:28,520 --> 00:44:33,680 Speaker 1: criticism of the FED from two thousand five to what 713 00:44:33,719 --> 00:44:36,440 Speaker 1: about the decade before that? Let me have you roll 714 00:44:36,520 --> 00:44:40,400 Speaker 1: further back. We see green Span kind of ironically, and 715 00:44:40,560 --> 00:44:45,279 Speaker 1: I ran less government involvement, acolyte. He seemed to have 716 00:44:45,480 --> 00:44:49,960 Speaker 1: his hands on that tiller pretty regularly, um, trying to 717 00:44:50,040 --> 00:44:53,719 Speaker 1: guide the economy. What what rating would you give the 718 00:44:53,719 --> 00:44:59,000 Speaker 1: FED in the nine nineties, And again, forgive my bias, No, no, 719 00:44:59,120 --> 00:45:01,200 Speaker 1: it's fine. And I think this is a discussion that 720 00:45:01,239 --> 00:45:04,520 Speaker 1: has to be had. I just thought emphasize two thousand 721 00:45:06,440 --> 00:45:09,120 Speaker 1: the FED saved the world in many ways. The question 722 00:45:09,200 --> 00:45:11,239 Speaker 1: is how much of the world needing saving was due 723 00:45:11,320 --> 00:45:14,360 Speaker 1: to past actions of the FED. And as I was 724 00:45:14,400 --> 00:45:16,960 Speaker 1: saying in earlier part of our conversation, very I think 725 00:45:17,000 --> 00:45:20,080 Speaker 1: you have to make a distinction between monetary policy and 726 00:45:20,520 --> 00:45:25,240 Speaker 1: regulation and supervision of the financial system. And Greenspan actually 727 00:45:25,320 --> 00:45:30,600 Speaker 1: was quite good at monetary policy, and his activism was smart, 728 00:45:30,719 --> 00:45:37,280 Speaker 1: I mean, and but he was a he was totally 729 00:45:37,360 --> 00:45:41,160 Speaker 1: in rand on regulation as as Mike as My late 730 00:45:41,239 --> 00:45:45,320 Speaker 1: colleague Mike Musa, a former Youth Chicago professor, once said, 731 00:45:45,360 --> 00:45:48,239 Speaker 1: you know, you don't want a conscientious objector as the 732 00:45:48,280 --> 00:45:51,759 Speaker 1: commandant of the Marine Corps. You don't want Alan Greenspan 733 00:45:52,000 --> 00:45:55,399 Speaker 1: as the as the lead regulator supervisor in the US 734 00:45:55,480 --> 00:45:59,440 Speaker 1: financial system, you know. And I thought that was brilliant. 735 00:45:59,480 --> 00:46:02,880 Speaker 1: And so you go back and there were just so 736 00:46:02,920 --> 00:46:08,400 Speaker 1: many lapses and intentional decisions on regulation and supervision that 737 00:46:08,520 --> 00:46:12,359 Speaker 1: were poor that got us to the fragility in the 738 00:46:12,400 --> 00:46:15,840 Speaker 1: situation we were in. I don't think the monetary policy 739 00:46:16,080 --> 00:46:18,680 Speaker 1: was perfect, but I think was damn good. But it 740 00:46:18,719 --> 00:46:22,040 Speaker 1: was totally undercut by the Lace Affair approach to regulation 741 00:46:22,120 --> 00:46:25,719 Speaker 1: and supervision. So you're talking my book now, I'm right 742 00:46:25,760 --> 00:46:30,600 Speaker 1: there with you. Although arguably I could make a case 743 00:46:30,719 --> 00:46:36,080 Speaker 1: that Greenspans rate cuts in the OH one recession and 744 00:46:36,120 --> 00:46:40,400 Speaker 1: then what he did following the nine eleven attacks, it 745 00:46:40,520 --> 00:46:43,800 Speaker 1: filled the room with gas for the eight or nine spark, 746 00:46:44,239 --> 00:46:47,200 Speaker 1: because just look at what happened with inflation and any 747 00:46:47,239 --> 00:46:51,160 Speaker 1: asset priced in either dollars or affected by low rates. 748 00:46:51,800 --> 00:46:55,399 Speaker 1: I guess so, But you know, to me, the I mean, 749 00:46:55,400 --> 00:46:58,239 Speaker 1: there's there's something to that. I think it's more oxygen 750 00:46:58,280 --> 00:47:02,560 Speaker 1: than fuel. If if there's no one to one with, 751 00:47:02,560 --> 00:47:06,080 Speaker 1: was how much the monetary policy loosened versus how much 752 00:47:06,160 --> 00:47:08,480 Speaker 1: as a price inflation you got. That's just not there 753 00:47:08,480 --> 00:47:11,040 Speaker 1: in the data. But there is a fact which I 754 00:47:11,080 --> 00:47:13,000 Speaker 1: was pointing out at the time that if you if 755 00:47:13,000 --> 00:47:16,160 Speaker 1: you run a loose regulatory policy, then there is at 756 00:47:16,200 --> 00:47:20,920 Speaker 1: least the possibility of this kind of explosion conflagration, and 757 00:47:20,920 --> 00:47:25,200 Speaker 1: and so to me, you know, it was about the 758 00:47:25,280 --> 00:47:28,600 Speaker 1: low standards and mortgage lending. It was about the low 759 00:47:28,719 --> 00:47:32,560 Speaker 1: standards of leverage. It was about the low standards of 760 00:47:32,719 --> 00:47:37,200 Speaker 1: supervision of non banks. It was about the encouragement of 761 00:47:37,239 --> 00:47:40,120 Speaker 1: banks to get into all kinds of businesses they shouldn't 762 00:47:40,120 --> 00:47:42,000 Speaker 1: have been in. I don't mean glass Steagle, I mean 763 00:47:42,680 --> 00:47:47,399 Speaker 1: various types of very speculatory, speculative thing. So, I mean 764 00:47:47,400 --> 00:47:50,279 Speaker 1: we can debate that, but uh, you know, I I 765 00:47:50,360 --> 00:47:53,560 Speaker 1: don't put a huge thing on on the huge weight 766 00:47:53,600 --> 00:47:57,040 Speaker 1: on the monetary policies in the early two thousand's, But 767 00:47:57,120 --> 00:47:59,000 Speaker 1: I'm not going to debate it as long as you 768 00:47:59,080 --> 00:48:01,719 Speaker 1: are on the same book, Mary that they blew it 769 00:48:01,760 --> 00:48:04,520 Speaker 1: on supervision and right, I could live with that. So 770 00:48:04,800 --> 00:48:07,440 Speaker 1: I have a slide in one of the presentations I 771 00:48:07,520 --> 00:48:11,319 Speaker 1: give where it's just a series of media headlines every 772 00:48:11,360 --> 00:48:14,640 Speaker 1: single year for like twelve years the FED is out 773 00:48:14,680 --> 00:48:18,360 Speaker 1: of AMMO. And clearly they have not been out of AMMO. 774 00:48:18,920 --> 00:48:23,359 Speaker 1: But here you are in Is that closer to reality 775 00:48:23,400 --> 00:48:26,560 Speaker 1: today than it was back in two thousand nine or 776 00:48:26,880 --> 00:48:31,759 Speaker 1: or eleven or fifteen. Will the FED ever run out 777 00:48:31,760 --> 00:48:34,960 Speaker 1: of AMMO? Depends what you're trying to shoot and and 778 00:48:35,000 --> 00:48:37,400 Speaker 1: this is why I don't like the AMMA thing. Beyond 779 00:48:37,400 --> 00:48:40,280 Speaker 1: the sort of much ismo of you know, old white 780 00:48:40,280 --> 00:48:43,200 Speaker 1: academic guys like me talking about bazookas, which is kind 781 00:48:43,200 --> 00:48:48,919 Speaker 1: of absurd. Um, it's really about the tool for the job. So, 782 00:48:49,160 --> 00:48:52,960 Speaker 1: if the job is fighting a deflationary shock, if the 783 00:48:53,040 --> 00:48:55,680 Speaker 1: job is a lock up in financial markets, if the 784 00:48:55,760 --> 00:49:00,279 Speaker 1: job is a panic producing widening spreads, if the job 785 00:49:00,360 --> 00:49:03,160 Speaker 1: is a sudden withdrawal of liquidity by the by the 786 00:49:03,160 --> 00:49:06,160 Speaker 1: banking system or the household sector, the FED has infinite demo. 787 00:49:06,920 --> 00:49:09,239 Speaker 1: It can do what it needs to stave that off. 788 00:49:10,320 --> 00:49:13,000 Speaker 1: This is what I meant by asymmetry. If the FED 789 00:49:13,520 --> 00:49:18,120 Speaker 1: is job is to try to reflate the economy, create 790 00:49:18,719 --> 00:49:25,200 Speaker 1: ongoing growth and recovery. It's not screwing up is necessary, 791 00:49:25,239 --> 00:49:28,200 Speaker 1: but it's not sufficient. It's, as Kines would say, pushing 792 00:49:28,239 --> 00:49:31,640 Speaker 1: on a string. Again, there's so many analogies. It just 793 00:49:31,719 --> 00:49:35,239 Speaker 1: think of the FED as a defensive specialist, not a 794 00:49:35,280 --> 00:49:38,839 Speaker 1: shooting guard. Right. So if it's got the wrong kind 795 00:49:38,880 --> 00:49:42,640 Speaker 1: of shock, it can handle it. But you don't want 796 00:49:42,640 --> 00:49:45,279 Speaker 1: them making the three point shot because they're not going 797 00:49:45,320 --> 00:49:49,080 Speaker 1: to make it. So let's address that the bigger threat 798 00:49:49,280 --> 00:49:54,759 Speaker 1: over the past decade arguably has not been inflation, but deflation. 799 00:49:55,719 --> 00:49:59,800 Speaker 1: What are the possibilities that we might see negative rates 800 00:50:00,480 --> 00:50:03,319 Speaker 1: continue to expand the around the world. Might we see 801 00:50:03,320 --> 00:50:07,640 Speaker 1: them here in the US? And what tools does the 802 00:50:07,719 --> 00:50:12,279 Speaker 1: FED have to combat them? I viewed the decline in 803 00:50:14,120 --> 00:50:18,360 Speaker 1: long term rates as something beyond the fence control largely 804 00:50:18,640 --> 00:50:23,040 Speaker 1: and is driven by real factors. Geta Gobinev. The Chief 805 00:50:23,040 --> 00:50:25,759 Speaker 1: Economy I MF just recently had an up d in 806 00:50:25,800 --> 00:50:31,840 Speaker 1: the Financial Times talking about how unprecedentedly global negative rates 807 00:50:32,080 --> 00:50:35,719 Speaker 1: negative at least nominal rates are on government debt and 808 00:50:35,880 --> 00:50:39,080 Speaker 1: Larry Summers again to give them credit for for envisioning 809 00:50:39,120 --> 00:50:42,359 Speaker 1: the secure stagnation. You know we're in when I've been 810 00:50:42,360 --> 00:50:44,959 Speaker 1: writing my peers and colleges raining but this for several years. 811 00:50:45,000 --> 00:50:48,320 Speaker 1: Now that that you're in you're in a fundamentally different 812 00:50:48,400 --> 00:50:52,719 Speaker 1: environment that the real rate to return on capital is well, 813 00:50:52,840 --> 00:50:56,399 Speaker 1: the risk appetite is low, the inflationary pressures are well. 814 00:50:57,040 --> 00:51:02,400 Speaker 1: On top of that is the fact that ultimately, and 815 00:51:02,480 --> 00:51:04,719 Speaker 1: this is my point of who and it used to 816 00:51:05,239 --> 00:51:08,279 Speaker 1: call me a throwback for thinking this, but now people 817 00:51:08,280 --> 00:51:12,120 Speaker 1: are coming around, is that you can't have sustained inflation 818 00:51:12,200 --> 00:51:14,960 Speaker 1: and a rich democracy unless you have sustained wage growth 819 00:51:15,239 --> 00:51:18,959 Speaker 1: just doesn't happen. And this is kind of where Chaire 820 00:51:19,040 --> 00:51:21,759 Speaker 1: Powell and others on the Federal Market Committee have been 821 00:51:21,760 --> 00:51:24,719 Speaker 1: talking for the last year or two and and we 822 00:51:24,719 --> 00:51:26,879 Speaker 1: were just starting to maybe get to the point there 823 00:51:26,920 --> 00:51:30,359 Speaker 1: was going to be some wage inflation before the pandemic hit. 824 00:51:31,360 --> 00:51:34,399 Speaker 1: And you mentioned Danny Plashmard. Danny and I were out 825 00:51:34,400 --> 00:51:36,640 Speaker 1: there in two thousand fourteen with a few other people 826 00:51:37,000 --> 00:51:40,520 Speaker 1: screaming that the Fed had vastly underestimated the amount of 827 00:51:40,560 --> 00:51:43,000 Speaker 1: labor market flack, that they were worried about inflation way 828 00:51:43,040 --> 00:51:46,640 Speaker 1: too soon. Um. But the other piece of this is 829 00:51:46,920 --> 00:51:48,879 Speaker 1: I've done a lot of work in Japan. Everybody should 830 00:51:48,920 --> 00:51:50,680 Speaker 1: be looking at what happened in Japan over the last 831 00:51:50,680 --> 00:51:53,239 Speaker 1: twenty five years as relevant for what's happening in the 832 00:51:53,239 --> 00:51:57,560 Speaker 1: rest of the world now. You know, because wages don't 833 00:51:57,560 --> 00:52:02,280 Speaker 1: tend to fall, you get unemployment instead, and because normal 834 00:52:02,360 --> 00:52:05,480 Speaker 1: prices are are sticky and eCOM speak, people don't tend 835 00:52:05,560 --> 00:52:07,960 Speaker 1: to cut prices that much, although they do more now 836 00:52:08,000 --> 00:52:10,920 Speaker 1: in the Internet age, and they used to. Deflation is 837 00:52:11,040 --> 00:52:12,759 Speaker 1: less of a threat than we thought it was. You know, 838 00:52:12,800 --> 00:52:14,520 Speaker 1: if you go back to stuff I was writing twenty 839 00:52:14,600 --> 00:52:18,560 Speaker 1: years ago, Chrobman, BERNANKEI others, we were very, very worried 840 00:52:18,640 --> 00:52:22,200 Speaker 1: that deflation would be a downward negative spiral and would 841 00:52:22,239 --> 00:52:25,160 Speaker 1: accelerate and wouldn't make matters much worse. And what Japan 842 00:52:25,200 --> 00:52:28,200 Speaker 1: has shown us is now deflation is kind of a 843 00:52:28,239 --> 00:52:30,919 Speaker 1: sticky mess. You get into it, it's hard to get out. 844 00:52:31,440 --> 00:52:34,359 Speaker 1: It's an ongoing drag on you. But it doesn't tend 845 00:52:34,360 --> 00:52:39,359 Speaker 1: to spiral out of control. So upshot, I don't think 846 00:52:39,400 --> 00:52:42,960 Speaker 1: we need to worry too much about deflation because it's 847 00:52:43,000 --> 00:52:44,880 Speaker 1: not as bad as we once thought it was and 848 00:52:44,920 --> 00:52:47,560 Speaker 1: it's not that likely. But I do think we need 849 00:52:47,600 --> 00:52:51,120 Speaker 1: to worry about the underlying problems of the global economy, 850 00:52:51,239 --> 00:52:54,600 Speaker 1: that we're in a low interest rate, low yield, low 851 00:52:54,680 --> 00:52:58,160 Speaker 1: risk appetite world, that there isn't the next technological advance, 852 00:52:58,239 --> 00:53:00,960 Speaker 1: the next big thing in in in Mike lewis speaking, 853 00:53:01,320 --> 00:53:05,960 Speaker 1: so look at look at the causes, not the effects. 854 00:53:06,000 --> 00:53:08,719 Speaker 1: So I have to ask you an obvious question. If 855 00:53:09,440 --> 00:53:12,680 Speaker 1: the incoming president were to nominate you to a seat 856 00:53:12,760 --> 00:53:15,840 Speaker 1: on the Federal Reserve Board, is that is that something 857 00:53:15,880 --> 00:53:18,759 Speaker 1: you would accept? What would you do in that role? 858 00:53:19,400 --> 00:53:22,440 Speaker 1: I think it's very unlikely they would, because even though 859 00:53:22,480 --> 00:53:27,640 Speaker 1: I am fully qualified, they, the Democratic majority in Congress 860 00:53:27,680 --> 00:53:31,520 Speaker 1: and the Buying campaign have both said with good reason 861 00:53:32,200 --> 00:53:34,920 Speaker 1: that the FED needs to rebalance the number of women 862 00:53:34,920 --> 00:53:38,280 Speaker 1: and people of color in important positions. And there's plenty 863 00:53:38,280 --> 00:53:40,160 Speaker 1: of good women and people of color it can be 864 00:53:40,160 --> 00:53:43,440 Speaker 1: appointed before I would be. But if I was offered 865 00:53:43,480 --> 00:53:46,960 Speaker 1: the opportunity to serve an policy and a senior role, 866 00:53:48,200 --> 00:53:51,920 Speaker 1: I am very much sentimentally and believe I can make 867 00:53:51,960 --> 00:53:55,000 Speaker 1: a contribution as a central banker. I love my current 868 00:53:55,080 --> 00:53:58,640 Speaker 1: job running the Peterson Institute. It's a great thing for me, 869 00:53:58,760 --> 00:54:01,360 Speaker 1: and I hope we do some good the world. But 870 00:54:01,640 --> 00:54:04,360 Speaker 1: if it turned out that there was reason for me 871 00:54:04,400 --> 00:54:07,600 Speaker 1: to enter public service, I would do it. So I 872 00:54:07,680 --> 00:54:10,319 Speaker 1: have to ask you a question that lately I've been 873 00:54:10,320 --> 00:54:13,360 Speaker 1: sneaking into a lot of people. What are your thoughts 874 00:54:13,400 --> 00:54:17,960 Speaker 1: on blockchain and crypto. I'm a a little bit of 875 00:54:17,960 --> 00:54:20,400 Speaker 1: a skeptic. It sort of seems like a solution in 876 00:54:20,440 --> 00:54:24,360 Speaker 1: search of a problem. But what does blockchain mean to 877 00:54:24,520 --> 00:54:31,480 Speaker 1: the international monetary system? Might this ever become mainstreams as 878 00:54:31,600 --> 00:54:36,840 Speaker 1: part of our economic global currency? You know, I think 879 00:54:37,239 --> 00:54:39,759 Speaker 1: there's a saying talk about central banking. There's this there's 880 00:54:39,760 --> 00:54:43,760 Speaker 1: a reference in central banking to what's called the plumbing um, 881 00:54:43,760 --> 00:54:47,920 Speaker 1: which is the the payment system things that have to work, 882 00:54:48,440 --> 00:54:51,440 Speaker 1: but which are sort of clunky, big, not very glamorous 883 00:54:51,480 --> 00:54:56,200 Speaker 1: underlying things. And though blockchain and particular bitcoin and some 884 00:54:56,239 --> 00:54:59,880 Speaker 1: of the other cybercurrency aspects have been promoted as sex 885 00:55:00,120 --> 00:55:03,760 Speaker 1: hot fintech, they're really plumbing. They're they're really They're really 886 00:55:03,840 --> 00:55:07,360 Speaker 1: just a better, a better gauge of pipe that doesn't 887 00:55:07,360 --> 00:55:10,760 Speaker 1: tend to get clocked up very much. So I think 888 00:55:11,040 --> 00:55:13,000 Speaker 1: we are going to over the next few years, seem 889 00:55:13,080 --> 00:55:14,760 Speaker 1: much more use of it. And I think it's frankly 890 00:55:14,760 --> 00:55:17,759 Speaker 1: not going to matter very much all right, I know 891 00:55:17,840 --> 00:55:20,720 Speaker 1: I only have you for a limited amount of time, 892 00:55:21,239 --> 00:55:24,760 Speaker 1: So let's jump to our favorite questions. We ask these 893 00:55:25,239 --> 00:55:28,239 Speaker 1: of all our guests, and let's start out with streaming. 894 00:55:28,719 --> 00:55:33,440 Speaker 1: Give us some of your favorite Netflix or Amazon videos 895 00:55:33,520 --> 00:55:37,680 Speaker 1: that you might be entertaining yourself with during this pandemic 896 00:55:38,239 --> 00:55:42,240 Speaker 1: Work from home era, Yeah, the pandemic work from home era? 897 00:55:42,400 --> 00:55:46,440 Speaker 1: And just how horrible the world is? My wife and 898 00:55:46,480 --> 00:55:49,200 Speaker 1: I find we we we can't watch anything serious, so 899 00:55:49,280 --> 00:55:52,800 Speaker 1: we're very stereotypical. We've watched a bunch of all the 900 00:55:52,880 --> 00:55:55,640 Speaker 1: seasons of Great British Bake off of our Great British 901 00:55:55,680 --> 00:55:58,480 Speaker 1: Baking shows, it's called In the US, we started watching 902 00:55:58,520 --> 00:56:02,360 Speaker 1: The Crown and as a former residence of the United Kingdom, 903 00:56:02,960 --> 00:56:07,120 Speaker 1: that also has extra fun. We decided bizarrely to start 904 00:56:07,160 --> 00:56:15,480 Speaker 1: rewatching Colombo from the beginning. Um, that's not art, but 905 00:56:15,680 --> 00:56:19,520 Speaker 1: it's it's it's kind of comforting, and it's better for 906 00:56:19,640 --> 00:56:23,560 Speaker 1: us than the Hallmark Christmas movies, let's put it that way. Um. 907 00:56:23,600 --> 00:56:26,839 Speaker 1: You know, so I don't really have anything that fabulous 908 00:56:26,840 --> 00:56:29,560 Speaker 1: to recommend to people. In terms of podcasts, we listened 909 00:56:29,560 --> 00:56:32,359 Speaker 1: to a lot of food and wine podcasts. We listened 910 00:56:32,400 --> 00:56:37,399 Speaker 1: to visible we listen. I listened to yours. Um. There's 911 00:56:37,440 --> 00:56:40,160 Speaker 1: a podcast called the History of English, meaning the history 912 00:56:40,200 --> 00:56:43,000 Speaker 1: of the English language, not the English people, which is 913 00:56:43,040 --> 00:56:48,840 Speaker 1: totally geeky and quite fun. Um. Anyway, nothing nothing, terribly 914 00:56:48,960 --> 00:56:51,759 Speaker 1: would tray to to suggest to your audience that they 915 00:56:51,760 --> 00:56:55,000 Speaker 1: haven't heard of. So usually when people give me a 916 00:56:55,080 --> 00:56:57,680 Speaker 1: run of things they're watching, I can come up with 917 00:56:57,760 --> 00:57:03,320 Speaker 1: something they might enjoy. I just started streaming earlier last 918 00:57:03,360 --> 00:57:06,600 Speaker 1: month a show I completely missed the first time around 919 00:57:07,120 --> 00:57:11,440 Speaker 1: that I'm trying to figure if you would like it? Madmen? 920 00:57:11,560 --> 00:57:14,560 Speaker 1: Have have you seen any of it? Okay, yeah, so 921 00:57:14,600 --> 00:57:16,880 Speaker 1: we skipped it the first time around, and it's me. 922 00:57:17,280 --> 00:57:21,640 Speaker 1: It's a few episodes. It's so visually gorgeous, so I'm tempted, 923 00:57:21,680 --> 00:57:27,160 Speaker 1: but it's also just so uncomfortable, right. I mean, it's 924 00:57:27,160 --> 00:57:32,680 Speaker 1: portraying the reality, which is useful, but again, don't see that. 925 00:57:33,720 --> 00:57:37,320 Speaker 1: So that was the question. I've asked some people. I'm 926 00:57:37,360 --> 00:57:39,720 Speaker 1: I have a couple of years on you, but not many. 927 00:57:39,760 --> 00:57:42,080 Speaker 1: But I've been asking people who are ten and twenty 928 00:57:42,160 --> 00:57:45,880 Speaker 1: years older than me, how hyperbolic is this? How exaggerated 929 00:57:45,960 --> 00:57:49,360 Speaker 1: is it for television? And the consensus seems to be No, 930 00:57:49,520 --> 00:57:54,120 Speaker 1: that's a pretty accurate portrayal, which is just shocking to me. No, 931 00:57:54,280 --> 00:57:55,880 Speaker 1: and that's what I've heard. And of course then there's 932 00:57:55,920 --> 00:57:59,800 Speaker 1: the occasionally mentioned but obviously they are racism that it's 933 00:58:00,040 --> 00:58:04,800 Speaker 1: this is totally white group of people basically, and so 934 00:58:05,040 --> 00:58:06,680 Speaker 1: you know, it's one of these things where I give 935 00:58:06,720 --> 00:58:11,040 Speaker 1: them credit. They're portraying the reality accurately, and it's incredibly uncomfortable. 936 00:58:11,880 --> 00:58:14,840 Speaker 1: So I'm gonna check out that History of English. It 937 00:58:14,880 --> 00:58:18,520 Speaker 1: sounds interesting. Tell us about some of your early mentors 938 00:58:18,640 --> 00:58:22,760 Speaker 1: who helped to shape your career. Well, I've mentioned already 939 00:58:22,800 --> 00:58:25,240 Speaker 1: as we went along two of the people who were 940 00:58:25,280 --> 00:58:28,200 Speaker 1: most important to my career Ben Freedman of Harvard and 941 00:58:28,280 --> 00:58:30,560 Speaker 1: Rick Michigan of the Federal Reserve when I dealt with 942 00:58:30,640 --> 00:58:33,840 Speaker 1: him in Columbia, both of whom sort of took me 943 00:58:33,880 --> 00:58:38,000 Speaker 1: as I am somebody who's not as mathematically facile, technical 944 00:58:38,120 --> 00:58:42,840 Speaker 1: and much more real world than most good economics PhDs, 945 00:58:43,080 --> 00:58:46,840 Speaker 1: and gave me opportunities encouragement that sort of go my 946 00:58:46,960 --> 00:58:52,640 Speaker 1: political economy policy oriented route. The other two really key 947 00:58:52,680 --> 00:58:56,400 Speaker 1: mentors for me are one Fred Bergston, who was, as 948 00:58:56,400 --> 00:58:59,080 Speaker 1: I mentioned, my predecessor, and the fallco founder with p. 949 00:58:59,240 --> 00:59:02,520 Speaker 1: Peterson of the Insto for International Economics now Paterson Notes 950 00:59:02,600 --> 00:59:05,640 Speaker 1: to Do and from the time I got to p 951 00:59:05,840 --> 00:59:11,400 Speaker 1: I A in Fred taught me about reaching a policy audience, 952 00:59:11,440 --> 00:59:14,880 Speaker 1: reaching a public and also gave me the opportunity to 953 00:59:14,920 --> 00:59:17,880 Speaker 1: develop to think about running think tanks and what's involved 954 00:59:17,920 --> 00:59:22,920 Speaker 1: with the personnelis. And the through line between Ben and 955 00:59:23,040 --> 00:59:26,840 Speaker 1: Rick and Fred was that they all were real world, 956 00:59:26,960 --> 00:59:30,280 Speaker 1: not in since we weren't all academics writing books and articles, 957 00:59:30,720 --> 00:59:32,360 Speaker 1: but real world in the sense of the stuff we 958 00:59:32,400 --> 00:59:34,760 Speaker 1: did had to have some implications for the real world 959 00:59:34,840 --> 00:59:37,320 Speaker 1: and had to be checked against the real world. And 960 00:59:37,360 --> 00:59:40,120 Speaker 1: so my final mentors, really, frankly were my parents. My 961 00:59:40,160 --> 00:59:44,080 Speaker 1: mother and father, Harold and a pos And were both physicists. 962 00:59:44,320 --> 00:59:47,520 Speaker 1: They were both civil servants in the US UM, my 963 00:59:47,600 --> 00:59:50,120 Speaker 1: father for the Year Force, my mother for the Smithsonian 964 00:59:50,840 --> 00:59:54,080 Speaker 1: and UM. As a result, I was brought up to 965 00:59:54,160 --> 00:59:58,160 Speaker 1: know always how difficult it was to know something, how 966 00:59:58,640 --> 01:00:02,680 Speaker 1: important was to check things erically, how cool it was 967 01:00:02,760 --> 01:00:06,920 Speaker 1: when you did really understand something, and also, perhaps surprisingly 968 01:00:07,040 --> 01:00:12,000 Speaker 1: to have a very broad set of interest um my parents. 969 01:00:12,120 --> 01:00:14,200 Speaker 1: The other big lesson for my parents, which was less 970 01:00:14,200 --> 01:00:16,720 Speaker 1: about mentoring and more about my values. In addition to 971 01:00:16,760 --> 01:00:20,360 Speaker 1: the sort of attempt at scientific objectivity although I wasn't 972 01:00:20,360 --> 01:00:25,400 Speaker 1: a physicist, is that they had very very tough lives. 973 01:00:25,480 --> 01:00:27,600 Speaker 1: They were children of immigrants and grew up in poverty, 974 01:00:27,640 --> 01:00:32,240 Speaker 1: both of them, and very narrow misses from having life 975 01:00:32,280 --> 01:00:35,640 Speaker 1: and career go very askew. And so that made me 976 01:00:35,760 --> 01:00:38,800 Speaker 1: very aware, even though I was brought up my infinitely 977 01:00:38,840 --> 01:00:42,440 Speaker 1: better off than they were. UM that you know, you 978 01:00:42,560 --> 01:00:49,480 Speaker 1: had to be very aware of the tacit knowledge of 979 01:00:49,600 --> 01:00:54,520 Speaker 1: navigating places, of navigating institutions, and navigating relationships. And not 980 01:00:54,600 --> 01:00:56,640 Speaker 1: that I've done it perfectly by any means, but I 981 01:00:56,760 --> 01:01:00,000 Speaker 1: was very aware of that from a young age. UM, 982 01:01:00,080 --> 01:01:03,920 Speaker 1: and so right now quite unsuccessfully, but I'm trying to 983 01:01:03,960 --> 01:01:07,120 Speaker 1: pay it forward, both in terms of the individuals the 984 01:01:07,200 --> 01:01:09,560 Speaker 1: younger people at the Peters Institute who I tried to help, 985 01:01:09,800 --> 01:01:13,320 Speaker 1: and more generally working with other think tanks. We're trying 986 01:01:13,360 --> 01:01:17,520 Speaker 1: to create something so that people of minority backgrounds, people 987 01:01:17,560 --> 01:01:20,200 Speaker 1: of less privileged backgrounds can be taught some of this 988 01:01:20,280 --> 01:01:23,760 Speaker 1: tacit knowledge, so we can have more people of diverse 989 01:01:23,800 --> 01:01:30,120 Speaker 1: backgrounds succeeding in the policy research profession. Quite interesting, So 990 01:01:30,400 --> 01:01:33,560 Speaker 1: we've both mentioned a couple of books. Let's talk about 991 01:01:33,800 --> 01:01:37,280 Speaker 1: what you're reading. Tell us some of your favorite books, 992 01:01:37,280 --> 01:01:40,560 Speaker 1: and tell us what you might be reading currently. UM. 993 01:01:40,600 --> 01:01:46,400 Speaker 1: So similarly to on the Netflix, Amazon TV watching, I 994 01:01:46,800 --> 01:01:50,439 Speaker 1: must admit I am terrible about having done attention span 995 01:01:50,520 --> 01:01:53,120 Speaker 1: to read serious stuff right now. Frankly so, I'm sending 996 01:01:53,160 --> 01:01:54,680 Speaker 1: a lot of time reading The New Yorker, the New 997 01:01:54,720 --> 01:02:03,080 Speaker 1: York Review of Books, UM, courts, various, The Atlantic, UM, 998 01:02:03,200 --> 01:02:06,320 Speaker 1: and not that much in book links. But when I 999 01:02:06,360 --> 01:02:11,360 Speaker 1: think about some of my favorite books of recent years, 1000 01:02:11,480 --> 01:02:13,960 Speaker 1: I mean you mentioned Lords of Finance, which I think 1001 01:02:14,040 --> 01:02:19,000 Speaker 1: was superb. I think the the Robert Gordon book The 1002 01:02:19,080 --> 01:02:22,960 Speaker 1: Rise and Fall of American Growth was incredibly important. I 1003 01:02:23,000 --> 01:02:28,240 Speaker 1: think some of Krugman's earlier collections of essays, but going 1004 01:02:28,240 --> 01:02:30,840 Speaker 1: back to one of his earliest the The Age of 1005 01:02:30,840 --> 01:02:34,240 Speaker 1: Diminished Expectations was ahead of its time. It wasn't right 1006 01:02:34,360 --> 01:02:38,480 Speaker 1: for the period it was, but it's right now. UM. 1007 01:02:38,520 --> 01:02:42,360 Speaker 1: I really try to read a lot of history and 1008 01:02:42,360 --> 01:02:47,000 Speaker 1: and I've become addicted to UM. There's this Oxford very 1009 01:02:47,000 --> 01:02:52,080 Speaker 1: short introduction series which let's turned academic summarize what's going 1010 01:02:52,160 --> 01:02:55,040 Speaker 1: on in a field. And I've been using that as 1011 01:02:55,080 --> 01:02:58,120 Speaker 1: my crime notes. And and I'll give a shout out 1012 01:02:58,160 --> 01:03:00,600 Speaker 1: to Adam Two's n M I U I. I didn't 1013 01:03:00,640 --> 01:03:04,600 Speaker 1: absolutely adore his book Crash, but his previous book The Deluge, 1014 01:03:04,680 --> 01:03:08,320 Speaker 1: about the US role or and the internetal economy around 1015 01:03:08,320 --> 01:03:11,880 Speaker 1: World War One and after, I thought was terrific and 1016 01:03:12,640 --> 01:03:17,880 Speaker 1: very important perspective on what's going on in the world today. 1017 01:03:18,120 --> 01:03:22,520 Speaker 1: You're reading list, especially in the magazines, sounds shockingly similar 1018 01:03:23,080 --> 01:03:27,840 Speaker 1: to mine. Um. I don't preselect people who only agree 1019 01:03:27,880 --> 01:03:31,960 Speaker 1: with me, but by by coincidence, and in fact, I 1020 01:03:32,000 --> 01:03:34,960 Speaker 1: try and seek out people who will who I will 1021 01:03:35,000 --> 01:03:39,959 Speaker 1: disagree with, but by coincidence, your your periodical reading list 1022 01:03:40,040 --> 01:03:42,160 Speaker 1: is very similar to mine. And I think a lot 1023 01:03:42,160 --> 01:03:45,840 Speaker 1: of people do not understand that we are in a 1024 01:03:46,080 --> 01:03:51,440 Speaker 1: golden age of long form journalism. The reportage that has 1025 01:03:51,480 --> 01:03:55,160 Speaker 1: been taking place has just been the New york I mean, 1026 01:03:55,200 --> 01:03:57,080 Speaker 1: I know some people don't love the tone of The 1027 01:03:57,120 --> 01:04:00,880 Speaker 1: Atlantic or The New Yorker, but but the reporting has 1028 01:04:00,960 --> 01:04:04,320 Speaker 1: just been spectacular. I I completely agree with you, And 1029 01:04:04,320 --> 01:04:06,360 Speaker 1: again I didn't come into this knowing that you and 1030 01:04:06,400 --> 01:04:09,360 Speaker 1: I with a line. I just figured I listened to you, 1031 01:04:09,440 --> 01:04:11,760 Speaker 1: and I think you're smart and it's a long gladly 1032 01:04:11,760 --> 01:04:14,919 Speaker 1: aligned Um. But in terms of you know, I think 1033 01:04:15,040 --> 01:04:16,880 Speaker 1: David Remnick and his team at the New Yorker I've 1034 01:04:16,920 --> 01:04:19,680 Speaker 1: been killing it forever. I think Jeffrey Goldberg and what 1035 01:04:19,720 --> 01:04:23,520 Speaker 1: The Atlantic has done, particularly since Trump has been outstanding. 1036 01:04:24,080 --> 01:04:26,880 Speaker 1: I think New York Review of Books, after some turmoil, 1037 01:04:27,240 --> 01:04:30,280 Speaker 1: UM has gotten back to being an incredibly good source. 1038 01:04:30,520 --> 01:04:32,920 Speaker 1: But yeah, that those are those are some. But then 1039 01:04:32,920 --> 01:04:37,120 Speaker 1: there's all this wonderful stuff that gets aggregated now, you know, 1040 01:04:37,160 --> 01:04:39,400 Speaker 1: and you wonder about the business model, how how can 1041 01:04:39,520 --> 01:04:41,440 Speaker 1: how can these things be sustained? I mean there are 1042 01:04:41,440 --> 01:04:44,560 Speaker 1: people also in the newspapers. I mean my friend Peter 1043 01:04:44,600 --> 01:04:47,200 Speaker 1: Goodman at the New York Times New Yor went also 1044 01:04:47,280 --> 01:04:50,000 Speaker 1: with the New York Times. Um, you know, there's a 1045 01:04:50,080 --> 01:04:52,640 Speaker 1: there's a laundry list of people in in you know, 1046 01:04:53,720 --> 01:04:56,360 Speaker 1: David Lynch and others at that and Heather Long at 1047 01:04:56,360 --> 01:04:59,640 Speaker 1: the at the Washington Post. Less long form usually, you know, 1048 01:04:59,720 --> 01:05:02,000 Speaker 1: it is a good to atre journalism. There's also a 1049 01:05:02,000 --> 01:05:07,200 Speaker 1: bunch of cowardly things going on by editorials editorial writers, 1050 01:05:07,200 --> 01:05:10,439 Speaker 1: but the stuff that's real, individual essays and reporting, there's 1051 01:05:10,480 --> 01:05:13,960 Speaker 1: a wealth of worthwhile things to read. Now, no doubt, 1052 01:05:14,080 --> 01:05:16,160 Speaker 1: So what sort of The other thing I have to 1053 01:05:16,200 --> 01:05:19,800 Speaker 1: plug is The Guardian. The Guardian. I read The Guardian 1054 01:05:19,920 --> 01:05:22,720 Speaker 1: every day and I don't agree with all of it, 1055 01:05:22,760 --> 01:05:26,280 Speaker 1: but it is fantastic, both reporting and essays Guardians and 1056 01:05:27,000 --> 01:05:29,400 Speaker 1: I think a lot of people don't realize that how 1057 01:05:29,560 --> 01:05:34,160 Speaker 1: unique their financial structure is. They have an endowment that 1058 01:05:34,400 --> 01:05:38,280 Speaker 1: essentially supports them to some degree. They haven't been under 1059 01:05:38,320 --> 01:05:42,880 Speaker 1: the same pressure as a lot of other reporters or 1060 01:05:43,200 --> 01:05:47,720 Speaker 1: newspapers that I'm curious if that sort of structure might 1061 01:05:47,800 --> 01:05:50,640 Speaker 1: catch on in the future. I agree with you, and 1062 01:05:50,760 --> 01:05:53,280 Speaker 1: you know, you look at Bloomberg and you look at 1063 01:05:53,400 --> 01:05:56,520 Speaker 1: Washington Post, and both of those have not quite the 1064 01:05:56,560 --> 01:06:03,120 Speaker 1: same structure, but have philanthropically mind it, mega billionaire backers 1065 01:06:03,440 --> 01:06:08,200 Speaker 1: up pockets who want the journalism to be high quality 1066 01:06:08,240 --> 01:06:10,480 Speaker 1: and all. And I think that's amazing and clearly the 1067 01:06:10,520 --> 01:06:13,680 Speaker 1: Sulzburgers to some degree, I've had that same model in 1068 01:06:13,760 --> 01:06:17,560 Speaker 1: mind for The Times, um. But yeah, the Guardian, I 1069 01:06:17,600 --> 01:06:20,440 Speaker 1: think is a potential model going forward. And they're not 1070 01:06:21,200 --> 01:06:24,280 Speaker 1: totally they don't have a multi billion dollar backing, but 1071 01:06:24,400 --> 01:06:28,600 Speaker 1: they've managed to sustain quality to The Times is one 1072 01:06:28,600 --> 01:06:32,960 Speaker 1: of the few lucky winners in this political environment. There 1073 01:06:33,120 --> 01:06:35,640 Speaker 1: their subscription seems to have gone through the roof of 1074 01:06:35,680 --> 01:06:37,880 Speaker 1: the past four years. Well, I mean this goes back 1075 01:06:37,960 --> 01:06:40,439 Speaker 1: to to sound like an economism, and this goes back 1076 01:06:40,480 --> 01:06:43,640 Speaker 1: to a very fundamental point that Paul Krugman in the 1077 01:06:43,720 --> 01:06:47,480 Speaker 1: Different Forms of Others raised twenty years ago, which is 1078 01:06:47,560 --> 01:06:51,320 Speaker 1: one of the effects of the Internet, of globalization of 1079 01:06:51,320 --> 01:06:55,240 Speaker 1: technology especially is that we're living in a world of superstars, 1080 01:06:55,360 --> 01:06:59,680 Speaker 1: that the market is global, and so when you are 1081 01:06:59,760 --> 01:07:02,760 Speaker 1: taught up in your field, you get outsized rewards, and 1082 01:07:02,760 --> 01:07:05,320 Speaker 1: then you also get network effects, and you also start 1083 01:07:06,000 --> 01:07:09,480 Speaker 1: deterring and losing the local And this is true in 1084 01:07:09,560 --> 01:07:13,080 Speaker 1: journalism as well as in other fields and and business. 1085 01:07:13,640 --> 01:07:15,800 Speaker 1: And what's been very sad, and there's a lot of 1086 01:07:15,840 --> 01:07:19,200 Speaker 1: documentation about this is we've seen there's a very good 1087 01:07:19,320 --> 01:07:22,240 Speaker 1: NBAUR working paper on this from within the last year. 1088 01:07:22,280 --> 01:07:27,040 Speaker 1: I think, on um, you know, where you lose local newspapers, 1089 01:07:27,160 --> 01:07:30,360 Speaker 1: you see corruption go up, you see voter misinformation go up. 1090 01:07:31,080 --> 01:07:36,360 Speaker 1: So I totally respect that these these bastions of independence 1091 01:07:36,360 --> 01:07:40,080 Speaker 1: and quality like The Post, the Watching Post, New York Times, 1092 01:07:40,120 --> 01:07:44,920 Speaker 1: the Guardian, the Financial Times, the Economist, and basically boomer 1093 01:07:45,560 --> 01:07:50,040 Speaker 1: are doing wonderful things, but we also need some kind 1094 01:07:50,080 --> 01:07:53,720 Speaker 1: of philanthropic model or something to provide local reporting, the whole, 1095 01:07:54,000 --> 01:07:57,560 Speaker 1: the whole governments and business accountable. So I know there's 1096 01:07:57,600 --> 01:08:01,080 Speaker 1: a recent book, Winners Take All, but previously and I 1097 01:08:01,120 --> 01:08:03,640 Speaker 1: want to say, Cornell is a professor who wrote a 1098 01:08:03,640 --> 01:08:08,000 Speaker 1: book called The Winner Take All Society that discusses exactly 1099 01:08:08,160 --> 01:08:13,040 Speaker 1: what you're referring to, which is that that long tail 1100 01:08:13,160 --> 01:08:18,560 Speaker 1: fat head very much Robert Frank who actually, yeah, I apologize, 1101 01:08:18,560 --> 01:08:20,960 Speaker 1: I should have thought mentioned that book, Yes, exactly makes 1102 01:08:20,960 --> 01:08:25,599 Speaker 1: that argument. Yeah, absolutely so, So let's talk about recent 1103 01:08:25,720 --> 01:08:29,200 Speaker 1: college grads. If if someone came out of college and 1104 01:08:29,439 --> 01:08:34,960 Speaker 1: was asking you for advice on a career in economics 1105 01:08:35,080 --> 01:08:38,200 Speaker 1: or monetary policy, or or going on a think tank, 1106 01:08:39,240 --> 01:08:41,960 Speaker 1: what sort of advice would you give them? I mean, 1107 01:08:41,960 --> 01:08:45,000 Speaker 1: going to a think tank. You is a very bizarre, 1108 01:08:45,280 --> 01:08:49,200 Speaker 1: specialized little nature, right, it's it's it's it's a lovely 1109 01:08:49,320 --> 01:08:51,880 Speaker 1: nature for those of those who like it, But it's 1110 01:08:52,040 --> 01:08:55,080 Speaker 1: generally not, even though I sort of went to work 1111 01:08:55,120 --> 01:08:57,439 Speaker 1: with that mind issarily not something you should plan for. 1112 01:08:57,800 --> 01:09:00,160 Speaker 1: Not because it's like you shouldn't plan for play in 1113 01:09:00,200 --> 01:09:02,400 Speaker 1: the NBA that's not There are more think things and 1114 01:09:02,479 --> 01:09:05,120 Speaker 1: more jobs now than there's ever been, but just that 1115 01:09:05,280 --> 01:09:08,840 Speaker 1: it's still a weird niche profession. If your goal is 1116 01:09:10,000 --> 01:09:13,160 Speaker 1: to use economic analysis to make the world a better 1117 01:09:13,200 --> 01:09:17,840 Speaker 1: play and particularly to affect public policy, then there is 1118 01:09:17,920 --> 01:09:21,360 Speaker 1: a broad said of of ways you can do it. 1119 01:09:21,479 --> 01:09:24,559 Speaker 1: And for young people, the first and to me most 1120 01:09:24,600 --> 01:09:30,639 Speaker 1: important thing is focus on learning how to think about data. 1121 01:09:31,320 --> 01:09:34,600 Speaker 1: And I don't mean necessarily roch Jetty and you know 1122 01:09:34,640 --> 01:09:37,680 Speaker 1: the epitome of data science nowadays. I don't necessarily me 1123 01:09:37,760 --> 01:09:41,519 Speaker 1: being very technical, but being empirical minded and of course 1124 01:09:41,560 --> 01:09:45,720 Speaker 1: some technical skill to go with that is helpful. UM. 1125 01:09:45,920 --> 01:09:48,799 Speaker 1: And and learning just how messy it is to gather 1126 01:09:49,160 --> 01:09:53,200 Speaker 1: and deal with the world data. And I would also 1127 01:09:53,960 --> 01:09:57,680 Speaker 1: encourage young people to I mean it's trite, but but 1128 01:09:57,840 --> 01:10:02,080 Speaker 1: to work on the written and oral communication. UM. What 1129 01:10:02,240 --> 01:10:05,760 Speaker 1: the problem is with written in oral communication among young 1130 01:10:05,800 --> 01:10:08,080 Speaker 1: people now is very different than what it was when 1131 01:10:08,120 --> 01:10:10,360 Speaker 1: I first started was in a position to be hiring 1132 01:10:10,360 --> 01:10:14,559 Speaker 1: people ten twenty years ago. Then the problem was people 1133 01:10:14,600 --> 01:10:18,879 Speaker 1: being too pro licks to to to profligate with words, 1134 01:10:19,120 --> 01:10:23,360 Speaker 1: to confusing, unwilling to take a stand. Now the problem 1135 01:10:23,439 --> 01:10:26,719 Speaker 1: is teaching people how to make a longer form argument, 1136 01:10:27,560 --> 01:10:31,479 Speaker 1: but both ways you got to do that. And then 1137 01:10:31,600 --> 01:10:34,640 Speaker 1: the final thing, which is my fundamental belief in my 1138 01:10:34,800 --> 01:10:40,000 Speaker 1: career um is be internationally minded. Not necessarily that you 1139 01:10:40,040 --> 01:10:44,960 Speaker 1: need to work on international policy, but that the way 1140 01:10:45,040 --> 01:10:47,479 Speaker 1: things are in your home country, including the US, are 1141 01:10:47,520 --> 01:10:49,960 Speaker 1: not necessarily the way things are done around the world, 1142 01:10:49,960 --> 01:10:52,639 Speaker 1: and they're not necessarily the best way. And that sounds 1143 01:10:52,680 --> 01:10:55,439 Speaker 1: incredibly obvious, probably to you and the people listen to 1144 01:10:55,479 --> 01:10:59,960 Speaker 1: your podcast very but you know, the extent we're seeing 1145 01:11:00,040 --> 01:11:03,640 Speaker 1: it now in the U s elections and the US politics, 1146 01:11:03,720 --> 01:11:06,240 Speaker 1: just the extent to which people have no concept of 1147 01:11:06,280 --> 01:11:10,799 Speaker 1: how the US compares and and acts compared to others, 1148 01:11:11,080 --> 01:11:13,280 Speaker 1: and with the ways in which it's similar to others 1149 01:11:13,280 --> 01:11:16,360 Speaker 1: in the ways in which it's different. So I think 1150 01:11:16,360 --> 01:11:19,640 Speaker 1: that's really important. Yeah, I couldn't agree more that no 1151 01:11:19,760 --> 01:11:23,240 Speaker 1: one country has monopoly on good ideas, and we certainly 1152 01:11:23,240 --> 01:11:27,080 Speaker 1: should borrow freely. Our final question, what do you know 1153 01:11:27,160 --> 01:11:32,360 Speaker 1: about the world of economics, international relations, politics today that 1154 01:11:32,479 --> 01:11:35,240 Speaker 1: you wish you knew twenty five or so years ago 1155 01:11:35,760 --> 01:11:39,000 Speaker 1: when your career was just ramping up. You were kind 1156 01:11:39,000 --> 01:11:40,760 Speaker 1: of to send you a list of questions and this 1157 01:11:40,800 --> 01:11:44,000 Speaker 1: one was the hardest one actually for me to think 1158 01:11:44,000 --> 01:11:47,479 Speaker 1: about ahead of time. Um, I don't know why, because 1159 01:11:47,479 --> 01:11:50,960 Speaker 1: it's the perfectly reasonable question. I guess, I guess the 1160 01:11:50,960 --> 01:11:55,519 Speaker 1: the The main thing that I wish I had known 1161 01:11:55,680 --> 01:11:59,280 Speaker 1: twenty years ago, twenty five years ago that I didn't 1162 01:12:00,120 --> 01:12:05,559 Speaker 1: is just, frankly, to be more woke that how much, 1163 01:12:05,880 --> 01:12:12,400 Speaker 1: despite my my liberalism and fancy education and attempted objectivity, 1164 01:12:12,600 --> 01:12:15,920 Speaker 1: I had overlooked a lot of the fundamental injustices in 1165 01:12:15,960 --> 01:12:19,640 Speaker 1: the world. And I had overlooked a lot of our history. 1166 01:12:19,880 --> 01:12:24,479 Speaker 1: And I am very ashamed to this day of how 1167 01:12:24,560 --> 01:12:26,720 Speaker 1: late I was to waking up to some of them. 1168 01:12:27,479 --> 01:12:31,960 Speaker 1: That's really interesting. You know, we're recording this on election day, 1169 01:12:32,040 --> 01:12:36,320 Speaker 1: so we don't know what the outcome is. But arguably 1170 01:12:37,280 --> 01:12:42,320 Speaker 1: the reaction of much of the public to not just 1171 01:12:42,600 --> 01:12:46,360 Speaker 1: the racial injustice and the you know, the killing of 1172 01:12:46,479 --> 01:12:50,240 Speaker 1: unarmed African American males or or anyone for that matter, 1173 01:12:50,720 --> 01:12:55,960 Speaker 1: but the police response to peaceful protests, I think a 1174 01:12:56,000 --> 01:12:59,080 Speaker 1: lot of people who were not quote unquote woke, we're 1175 01:12:59,439 --> 01:13:05,120 Speaker 1: very much shocked by that behavior. It's not what you 1176 01:13:05,120 --> 01:13:08,439 Speaker 1: think of when you think of as America, at least 1177 01:13:08,439 --> 01:13:12,719 Speaker 1: in privileged, wealthy, white society. It's not what you think exactly. 1178 01:13:12,880 --> 01:13:16,720 Speaker 1: And I'm just so ashamed of that. I remember. I mean, 1179 01:13:16,720 --> 01:13:19,719 Speaker 1: obviously it matters much more to save innocent people's lives 1180 01:13:19,720 --> 01:13:21,880 Speaker 1: than what I'm ashamed or not ashamed, but I am 1181 01:13:21,920 --> 01:13:25,559 Speaker 1: ashamed of it. I I I remember one of the 1182 01:13:25,600 --> 01:13:30,360 Speaker 1: first times I went abroad, which was in I went 1183 01:13:30,439 --> 01:13:34,640 Speaker 1: to conference or economic students in Italy. Is our conference 1184 01:13:35,720 --> 01:13:38,920 Speaker 1: got me there anyway, and I remember talking with somebody 1185 01:13:39,000 --> 01:13:41,400 Speaker 1: was from Spain, and this person was saying, to me, 1186 01:13:41,720 --> 01:13:44,040 Speaker 1: you Americans think you're so free. When I was there, 1187 01:13:44,120 --> 01:13:46,800 Speaker 1: the state police are walking around like the fascist we 1188 01:13:46,880 --> 01:13:49,160 Speaker 1: used to have and doing this and that. And I 1189 01:13:49,320 --> 01:13:52,160 Speaker 1: remember being horrified at that he could say such a thing, 1190 01:13:52,200 --> 01:13:54,280 Speaker 1: And how could I think, how could he think that? 1191 01:13:54,479 --> 01:13:58,479 Speaker 1: He must be totally wrong, and you know, and I 1192 01:13:58,560 --> 01:14:01,920 Speaker 1: had always made the comfortable assumption, Yeah, if you're black 1193 01:14:02,120 --> 01:14:04,719 Speaker 1: or even Jewish, you don't want to be driving alone 1194 01:14:04,800 --> 01:14:08,080 Speaker 1: in Alabama. Sure, but you know, over time, it's all 1195 01:14:08,120 --> 01:14:12,720 Speaker 1: going away, you know. And that was obviously totally oblivious 1196 01:14:12,800 --> 01:14:16,479 Speaker 1: to the reality of life for for particularly blackmails, but 1197 01:14:16,520 --> 01:14:19,879 Speaker 1: all kinds of people in the US, and the behavior 1198 01:14:19,920 --> 01:14:24,040 Speaker 1: of police and it's just, you know, we don't know, 1199 01:14:24,120 --> 01:14:26,040 Speaker 1: As you just said, it's election a we don't know 1200 01:14:26,080 --> 01:14:30,800 Speaker 1: what's going to happen. But I hope whoever wins week, 1201 01:14:30,880 --> 01:14:34,360 Speaker 1: we we have to try to be more just to 1202 01:14:34,560 --> 01:14:37,680 Speaker 1: not kill innocent people. It shouldn't be that hard, right 1203 01:14:37,760 --> 01:14:41,240 Speaker 1: newslash we shouldn't kill innocent people. Let me alight, it 1204 01:14:41,320 --> 01:14:45,479 Speaker 1: sounds fatuous, I'd like I'd like to start with that. Well, well, 1205 01:14:45,520 --> 01:14:51,679 Speaker 1: I will tell you, as much as people have been 1206 01:14:51,720 --> 01:14:56,120 Speaker 1: critical of the current president, I give him points for 1207 01:14:56,320 --> 01:15:03,640 Speaker 1: at least accidentally revealing how much the underlying structure of 1208 01:15:03,640 --> 01:15:08,479 Speaker 1: the United States has been under stress in a variety 1209 01:15:08,520 --> 01:15:13,120 Speaker 1: of ways. I like you, you know, I grew up 1210 01:15:13,120 --> 01:15:16,320 Speaker 1: a pretty or at least the last twenty years, fairly 1211 01:15:16,400 --> 01:15:22,799 Speaker 1: privileged life. I assume that that had gotten much better 1212 01:15:23,360 --> 01:15:27,120 Speaker 1: than it was, and if anything, we've learned over the 1213 01:15:27,160 --> 01:15:32,400 Speaker 1: past few years that it's much worse than many Americans assume. 1214 01:15:32,479 --> 01:15:36,360 Speaker 1: And I think people are starting to realize that. Yeah, 1215 01:15:36,560 --> 01:15:39,559 Speaker 1: and that again, I mean, this is this is where 1216 01:15:40,240 --> 01:15:43,120 Speaker 1: you know, it's important, hugely important, and I'm grateful for 1217 01:15:43,120 --> 01:15:46,719 Speaker 1: this opportunity Mary to talk economic policy and these things 1218 01:15:46,800 --> 01:15:49,960 Speaker 1: matter greatly. But you know, there's a lot of stuff 1219 01:15:49,960 --> 01:15:55,080 Speaker 1: that that economics is not the motivation. Economics is only 1220 01:15:55,120 --> 01:15:58,280 Speaker 1: a small part of the impact that we have to face, 1221 01:15:58,600 --> 01:16:01,479 Speaker 1: and it's not it's not because you know, you had 1222 01:16:01,560 --> 01:16:04,479 Speaker 1: Lisa Cook on recently, who I think is terrific and 1223 01:16:04,560 --> 01:16:06,559 Speaker 1: she actually worked with me at New York FED a 1224 01:16:06,600 --> 01:16:09,200 Speaker 1: long time ago, you know, and you can frame it 1225 01:16:09,240 --> 01:16:11,960 Speaker 1: in terms of as she does sometimes in terms of 1226 01:16:12,000 --> 01:16:16,320 Speaker 1: the lost potential and in addition to the injustice. But 1227 01:16:16,479 --> 01:16:20,559 Speaker 1: ultimately it's got to be about the injustice, not about 1228 01:16:21,960 --> 01:16:25,599 Speaker 1: just economically. It would be nice. Thanks Adam for being 1229 01:16:25,680 --> 01:16:28,720 Speaker 1: so generous with your time. We have been speaking with 1230 01:16:28,760 --> 01:16:33,200 Speaker 1: Adam Posing, President of the Peterson Institute for International Economics. 1231 01:16:33,640 --> 01:16:36,800 Speaker 1: If you enjoy this conversation, well look up an Inch 1232 01:16:36,880 --> 01:16:39,200 Speaker 1: or down an Inch on Apple iTunes and you could 1233 01:16:39,240 --> 01:16:43,200 Speaker 1: see any of the previous three hundred and fifty such 1234 01:16:43,240 --> 01:16:47,080 Speaker 1: conversations we've recorded over the past six years. We love 1235 01:16:47,160 --> 01:16:52,000 Speaker 1: your comments, feedback and suggestions right to us at m 1236 01:16:52,040 --> 01:16:55,639 Speaker 1: IB podcast at Bloomberg dot net. Be sure to check 1237 01:16:55,640 --> 01:16:59,040 Speaker 1: out my weekly column that's at Bloomberg dot com slash Opinion. 1238 01:16:59,600 --> 01:17:03,520 Speaker 1: Sign up for our daily reads at Ridholtz dot com. 1239 01:17:03,560 --> 01:17:06,280 Speaker 1: Follow me on Twitter at Ridholts give us a review 1240 01:17:06,439 --> 01:17:09,880 Speaker 1: on Apple iTunes. I would be remiss if I did 1241 01:17:09,960 --> 01:17:12,680 Speaker 1: not thank the crack staff that helps put these conversations 1242 01:17:12,680 --> 01:17:17,759 Speaker 1: together each week. Michael Boyle is my producer. Tim Harrow 1243 01:17:18,040 --> 01:17:22,160 Speaker 1: is my audio engineer. Attica val Brund is our project manager. 1244 01:17:22,479 --> 01:17:26,440 Speaker 1: Michael Batnick is my head of research. I'm Barry Riholts. 1245 01:17:26,640 --> 01:17:30,160 Speaker 1: You've been listening to Masters in Business on Bloomberg Radio.