1
00:00:06,640 --> 00:00:10,960
Speaker 1: Hello, Odd Lots listeners, it's Joe Wisenthal. So on Thursday,

2
00:00:11,000 --> 00:00:14,600
Speaker 1: September nine, Tracy Elloway and I hosted the first ever

3
00:00:14,840 --> 00:00:17,759
Speaker 1: Odd Lots Variety Show at the w n y C

4
00:00:18,120 --> 00:00:22,840
Speaker 1: Green Space in Manhattan. The show featured Sam Antar, Lee

5
00:00:22,920 --> 00:00:27,120
Speaker 1: book Eyed, Brad Setzer, Uh, Stephanie Kelton. We even had

6
00:00:27,160 --> 00:00:31,040
Speaker 1: a surprise guest, one of the Spy Kids. If you

7
00:00:31,120 --> 00:00:34,040
Speaker 1: know that story, you should be excited about that, and

8
00:00:34,080 --> 00:00:36,159
Speaker 1: if you don't, well, then this will be a treat

9
00:00:36,280 --> 00:00:39,640
Speaker 1: for you. And we even had musical guests, so we

10
00:00:39,680 --> 00:00:44,879
Speaker 1: had the country singing economist Merle Hazard and I sing

11
00:00:44,960 --> 00:00:47,040
Speaker 1: a few of my own songs. So on this week's

12
00:00:47,040 --> 00:00:50,080
Speaker 1: Odd Lots, we're going to feature the full length audio

13
00:00:50,560 --> 00:00:53,240
Speaker 1: that we recorded at the live show, so that even

14
00:00:53,280 --> 00:00:55,320
Speaker 1: if you weren't able to make it out that night,

15
00:00:55,680 --> 00:00:59,360
Speaker 1: you can still hear the great conversations and music from

16
00:00:59,400 --> 00:01:01,920
Speaker 1: that night. And if you'd like to see video from

17
00:01:01,960 --> 00:01:04,400
Speaker 1: the event, you can find it on the Bloomberg Markets

18
00:01:04,400 --> 00:01:08,200
Speaker 1: and Finance channel on YouTube or just by searching Odd

19
00:01:08,240 --> 00:01:11,319
Speaker 1: Lots Variety Show will also be featuring video clips and

20
00:01:11,360 --> 00:01:14,520
Speaker 1: teasers from the event on social media. You can check

21
00:01:14,520 --> 00:01:17,840
Speaker 1: it out on Twitter from the handle at Podcasts, and

22
00:01:18,000 --> 00:01:22,600
Speaker 1: I'm sure that Tracy Alloway and I will be tweeting

23
00:01:22,760 --> 00:01:26,440
Speaker 1: links to it plenty. If you missed it, don't worry

24
00:01:26,480 --> 00:01:30,479
Speaker 1: because we are very hopeful and confident that this won't

25
00:01:30,520 --> 00:01:34,039
Speaker 1: have been the last Odd Lot Variety show. So thanks

26
00:01:34,040 --> 00:02:10,600
Speaker 1: everyone for listening and enjoy the show. Hi, thanks everyone

27
00:02:10,680 --> 00:02:14,840
Speaker 1: for coming. I'm Joe Wisenthal and I'm Tracy Alloway, and

28
00:02:15,080 --> 00:02:17,960
Speaker 1: welcome to the Odd Lots Variety Show. It's our first

29
00:02:18,000 --> 00:02:20,680
Speaker 1: ever live event and we're so happy to have you

30
00:02:20,720 --> 00:02:22,920
Speaker 1: all here. Um. I have to say I'm a little

31
00:02:22,960 --> 00:02:26,240
Speaker 1: disappointed because I wanted our first odd LODs live event

32
00:02:26,280 --> 00:02:29,000
Speaker 1: to be an odd LODs Live poker tournament. But this

33
00:02:29,120 --> 00:02:32,480
Speaker 1: is also cool. I'm not disappointed. Uh. Just a couple

34
00:02:32,520 --> 00:02:34,400
Speaker 1: of notes before we start. We have some really really

35
00:02:34,400 --> 00:02:37,360
Speaker 1: great people backstage, some guests that we've been wanting to

36
00:02:37,400 --> 00:02:40,519
Speaker 1: get on the podcast for a very long time. One

37
00:02:40,560 --> 00:02:44,680
Speaker 1: housekeeping note, this is being recorded in audio format. Of course,

38
00:02:44,720 --> 00:02:47,920
Speaker 1: it's also being recorded in video format, so please just

39
00:02:48,000 --> 00:02:51,560
Speaker 1: be mindful of that, and other than that, enjoy the show.

40
00:02:51,800 --> 00:02:53,280
Speaker 1: One other thing, we don't have time for Q and

41
00:02:53,320 --> 00:02:57,000
Speaker 1: A unfortunately, but we'll have cocktails and reception afterwards. Who

42
00:02:57,040 --> 00:02:59,079
Speaker 1: can hang out and mingle and ask questions that you

43
00:02:59,120 --> 00:03:01,519
Speaker 1: didn't get a chance to ask. So let's get started,

44
00:03:01,680 --> 00:03:05,560
Speaker 1: all right. Our first guest is a criminal, is actual

45
00:03:05,680 --> 00:03:10,160
Speaker 1: convicted felon. He is the former CFO of Crazy Eddie,

46
00:03:10,160 --> 00:03:13,000
Speaker 1: which for any long time New Yorker may remember their

47
00:03:13,080 --> 00:03:18,440
Speaker 1: ads in the seventies and eighties, who was an electronics retailer. Uh.

48
00:03:18,760 --> 00:03:22,680
Speaker 1: Also a fraud through and through from the beginning. Uh.

49
00:03:22,720 --> 00:03:24,679
Speaker 1: And so we have the CFO. He now does work

50
00:03:24,680 --> 00:03:35,200
Speaker 1: on forensic accounting. And I want to bring in Samanta.

51
00:03:39,520 --> 00:03:44,040
Speaker 1: Uh So, who are you? What do you do? I'm

52
00:03:44,040 --> 00:03:49,160
Speaker 1: a retired criminal? Are you reformed criminal? Do you think

53
00:03:49,160 --> 00:03:51,760
Speaker 1: i'd be here right now if I didn't get caught? Well,

54
00:03:51,800 --> 00:03:55,920
Speaker 1: maybe I would as a legitimate CEO that hasn't gotten

55
00:03:55,960 --> 00:04:02,800
Speaker 1: caught yet. Do criminals ever truly retire? Yeah, because you know,

56
00:04:02,880 --> 00:04:05,840
Speaker 1: after a while, you know it's um, you know what

57
00:04:06,000 --> 00:04:08,560
Speaker 1: what's what's What's the benefit of doing any more crime?

58
00:04:08,840 --> 00:04:10,680
Speaker 1: Even though at times I feel like I'd love to

59
00:04:10,720 --> 00:04:12,560
Speaker 1: do crime again. After meeting some of the people in

60
00:04:12,600 --> 00:04:14,760
Speaker 1: this room here, I said, oh man, this would be

61
00:04:14,760 --> 00:04:18,000
Speaker 1: easy just to go back into the game. Again, So

62
00:04:18,080 --> 00:04:20,839
Speaker 1: tell us about how you got into the business and

63
00:04:21,120 --> 00:04:23,679
Speaker 1: what was crazy Eddie, and how did you become at CFO.

64
00:04:24,360 --> 00:04:29,760
Speaker 1: Crazy as was a small garden variety electronics operation. Uh.

65
00:04:30,040 --> 00:04:33,240
Speaker 1: We engage mostly in income tax evasions. Stealing the sales

66
00:04:33,279 --> 00:04:36,320
Speaker 1: tax gave us the competitive advantage because that's six or

67
00:04:36,320 --> 00:04:39,120
Speaker 1: seven percent we can steal. Gave us the opportunity to

68
00:04:39,160 --> 00:04:42,680
Speaker 1: discount more to customers and still make money. So we

69
00:04:42,680 --> 00:04:47,599
Speaker 1: were pretty much being competitive by you know, by by

70
00:04:47,640 --> 00:04:50,680
Speaker 1: evading taxes in the old days. Uh. It was a

71
00:04:50,720 --> 00:04:53,400
Speaker 1: family oriented business. We wanted to grow and they wanted

72
00:04:53,440 --> 00:04:57,680
Speaker 1: somebody in the inside family member to to be the

73
00:04:57,720 --> 00:04:59,919
Speaker 1: CFO of the company if the company grew to assert

74
00:05:00,040 --> 00:05:02,200
Speaker 1: and level. So they picked me because I was the

75
00:05:02,240 --> 00:05:04,839
Speaker 1: nerd that read the Wall Street Journal and barons when

76
00:05:04,839 --> 00:05:07,159
Speaker 1: he was twelve years old. So they put me through

77
00:05:07,200 --> 00:05:09,080
Speaker 1: college so I can become an accountant to help them

78
00:05:09,080 --> 00:05:12,120
Speaker 1: commit more sophisticated crimes in the future. So eventually I

79
00:05:12,120 --> 00:05:14,559
Speaker 1: go to brew College right over here in twenty third Street,

80
00:05:14,839 --> 00:05:16,760
Speaker 1: I get my c p A. And of course I

81
00:05:16,880 --> 00:05:19,839
Speaker 1: become a criminal mastermind, you know, doing white collar crime.

82
00:05:20,400 --> 00:05:23,440
Speaker 1: I went to college to become an effective white collar criminal,

83
00:05:23,680 --> 00:05:26,239
Speaker 1: white collar criminal should never cheat themselves out of getting

84
00:05:26,240 --> 00:05:28,400
Speaker 1: a good education. So I was one of those kids

85
00:05:28,440 --> 00:05:31,200
Speaker 1: that cheated in school anything. I earned my grades because

86
00:05:31,240 --> 00:05:32,680
Speaker 1: I wanted to be the best at what I was

87
00:05:32,720 --> 00:05:34,840
Speaker 1: doing in crime. Did you know that was the ultimate

88
00:05:34,880 --> 00:05:39,000
Speaker 1: destination was crime at the time, and you were okay,

89
00:05:39,160 --> 00:05:42,200
Speaker 1: And it was fun a lot of money when I

90
00:05:42,240 --> 00:05:44,520
Speaker 1: was fourteen years old. They got a fifteen hundred dollar

91
00:05:44,560 --> 00:05:47,599
Speaker 1: bonus in nineteen seventy one in cash. Does anybody have

92
00:05:47,640 --> 00:05:50,600
Speaker 1: any fourteen year old kids? Imagine if your kid came

93
00:05:50,600 --> 00:05:53,799
Speaker 1: home with a fifteen hundred dollar cash bonus today even

94
00:05:54,120 --> 00:05:56,240
Speaker 1: and the money, of course is not worth as much

95
00:05:56,279 --> 00:05:58,719
Speaker 1: as it was back then. Go ahead. So what was

96
00:05:58,720 --> 00:06:01,479
Speaker 1: the most useful thing you learned from accounting for a

97
00:06:01,560 --> 00:06:05,279
Speaker 1: life of criminality? Is that people are very, very gullible.

98
00:06:05,680 --> 00:06:09,440
Speaker 1: People are too trusting. Uh. As a criminal, I learned

99
00:06:09,480 --> 00:06:12,440
Speaker 1: to consider your humanity as a weakness to be exploited

100
00:06:12,440 --> 00:06:14,880
Speaker 1: in the execution of my crimes. In other words, your

101
00:06:14,920 --> 00:06:18,640
Speaker 1: good nature. You're wanting to trust people, You wanted to

102
00:06:18,680 --> 00:06:21,240
Speaker 1: give people a benefit of the doubt. That gave me

103
00:06:21,320 --> 00:06:25,200
Speaker 1: the opportunity to execute my crimes. Second part is is

104
00:06:25,240 --> 00:06:28,080
Speaker 1: that people are you steal more with a smile than

105
00:06:28,120 --> 00:06:30,480
Speaker 1: you can without have gone? Anybody knows how I was

106
00:06:30,520 --> 00:06:33,320
Speaker 1: working the crowd. He has shaking hands, smiling, and everybody

107
00:06:33,400 --> 00:06:37,440
Speaker 1: was happy with me. Right. You see, if if people

108
00:06:37,560 --> 00:06:39,880
Speaker 1: like you, it's easy at to steal from them because

109
00:06:40,200 --> 00:06:43,080
Speaker 1: they feel like they're comfortable with you. So let's talk Uh,

110
00:06:43,279 --> 00:06:46,839
Speaker 1: that's nice and theoretical, but let's talk practical. So obviously,

111
00:06:47,000 --> 00:06:48,640
Speaker 1: I'm sure there's a lot of people that would like

112
00:06:48,720 --> 00:06:51,800
Speaker 1: to steal the income tax or the sales tax that

113
00:06:51,839 --> 00:06:54,280
Speaker 1: they owe. But you have auditors who are forced to

114
00:06:54,360 --> 00:06:56,679
Speaker 1: come in. So how do you like dupe the people

115
00:06:57,080 --> 00:07:00,200
Speaker 1: whose job it is to make sure that you're not dealing.

116
00:07:00,320 --> 00:07:03,560
Speaker 1: When it comes to fraud, the distraction is always more

117
00:07:03,600 --> 00:07:05,760
Speaker 1: important than the law. Now, line is not a problem.

118
00:07:05,760 --> 00:07:07,560
Speaker 1: You can ask me any question here and I'll lie

119
00:07:07,600 --> 00:07:09,120
Speaker 1: to you right to your face, as you will know

120
00:07:09,200 --> 00:07:11,840
Speaker 1: the difference. But the point is is that if you

121
00:07:11,880 --> 00:07:15,600
Speaker 1: can distract somebody from doing their job, chances are they're

122
00:07:15,640 --> 00:07:17,320
Speaker 1: not going to ask you the question that you have

123
00:07:17,400 --> 00:07:20,040
Speaker 1: the law about. So in the crazy Eddie case, let's

124
00:07:20,080 --> 00:07:22,560
Speaker 1: take auditors. The audits would be done over a period

125
00:07:22,560 --> 00:07:25,080
Speaker 1: of say eight weeks, so they'd have to be twelve

126
00:07:25,080 --> 00:07:27,040
Speaker 1: and a half percent each week, right, So by week

127
00:07:27,080 --> 00:07:28,960
Speaker 1: six out of eight, they should have seventy five percent

128
00:07:29,040 --> 00:07:31,000
Speaker 1: of the work done in seventy five percent at a

129
00:07:31,080 --> 00:07:33,320
Speaker 1: time and twenty percent of the work left to do

130
00:07:33,400 --> 00:07:35,680
Speaker 1: in twenty five percent at time. My job was to

131
00:07:35,720 --> 00:07:38,160
Speaker 1: store them by having only twenty five percent of the

132
00:07:38,160 --> 00:07:40,440
Speaker 1: work done in seventy five percent at a time, so

133
00:07:40,480 --> 00:07:42,280
Speaker 1: that they had have to do seventy five percent of

134
00:07:42,280 --> 00:07:44,160
Speaker 1: the work and only twenty five percent at a time,

135
00:07:44,160 --> 00:07:46,960
Speaker 1: which is causedn't the cram rush to get things done

136
00:07:47,120 --> 00:07:49,840
Speaker 1: and miss key order procedures? And that worked every single year.

137
00:07:49,880 --> 00:07:52,280
Speaker 1: Do you know why? Because in the nineteen eighties there

138
00:07:52,320 --> 00:07:55,960
Speaker 1: were no females in accounting doing none. It was a

139
00:07:55,960 --> 00:07:58,960
Speaker 1: male dominated profession and most of the leg work was

140
00:07:59,000 --> 00:08:01,760
Speaker 1: done by twenty one twenty five year old kids fresh

141
00:08:01,760 --> 00:08:04,000
Speaker 1: out of college that was single. And what's the easiest

142
00:08:04,040 --> 00:08:06,520
Speaker 1: way to distract the mail order to from doing their

143
00:08:06,600 --> 00:08:13,120
Speaker 1: jobs female accountants is beautiful as you and they would

144
00:08:13,160 --> 00:08:15,760
Speaker 1: they spent most of that time flirting with the females

145
00:08:15,800 --> 00:08:18,600
Speaker 1: instead of doing their jobs. And every single year, like

146
00:08:18,760 --> 00:08:21,360
Speaker 1: Pavlov with the dog, you put the wood in front

147
00:08:21,360 --> 00:08:23,520
Speaker 1: of the dog gets salivates. Well, you put the female

148
00:08:23,520 --> 00:08:25,320
Speaker 1: in front of the account and they salivate. They don't

149
00:08:25,320 --> 00:08:27,800
Speaker 1: even do anything else. That's pretty much how we're able

150
00:08:27,840 --> 00:08:30,320
Speaker 1: to succeed for us. We didn't get caught because of

151
00:08:30,320 --> 00:08:33,440
Speaker 1: our aortors. We got caught because somebody I thought that

152
00:08:33,520 --> 00:08:36,679
Speaker 1: Crazy A's was a goldmine, and they took advantage of

153
00:08:36,679 --> 00:08:38,760
Speaker 1: a dropping the stock price and they took over the

154
00:08:38,800 --> 00:08:41,000
Speaker 1: company right from out under us. In other words, we

155
00:08:41,000 --> 00:08:43,520
Speaker 1: were benefited. We were we were a victim of our

156
00:08:43,520 --> 00:08:47,360
Speaker 1: own fraud. No oh, I was gonna say, talk to

157
00:08:47,480 --> 00:08:50,520
Speaker 1: us about that moment. What happened when when you heard

158
00:08:50,520 --> 00:08:52,840
Speaker 1: that someone was actually interested in the company and you

159
00:08:52,920 --> 00:08:55,640
Speaker 1: knew that it was a fraud. Well, we tried to

160
00:08:55,640 --> 00:08:57,840
Speaker 1: take it over at seven dollars this ship we thought,

161
00:08:57,880 --> 00:09:00,240
Speaker 1: we knew that people were hunting the company to take

162
00:09:00,280 --> 00:09:02,240
Speaker 1: it over. So we've made a bid at seven dollars

163
00:09:02,280 --> 00:09:04,040
Speaker 1: a year and excited, Why are you gonna pay seven

164
00:09:04,040 --> 00:09:06,960
Speaker 1: dollars a share for a company you know it is worthless?

165
00:09:07,160 --> 00:09:08,959
Speaker 1: Because we weren't going to use our money anyway. We're

166
00:09:08,960 --> 00:09:11,000
Speaker 1: gonna defraud the idiots on Wall Street take all the

167
00:09:11,200 --> 00:09:13,280
Speaker 1: money have them finance to take on. We're gonna get

168
00:09:14,000 --> 00:09:16,200
Speaker 1: the company for nothing. So we've got seven dollars a year,

169
00:09:16,240 --> 00:09:18,600
Speaker 1: and guess what submediate out to actually bet eight dollars

170
00:09:18,679 --> 00:09:21,320
Speaker 1: a year, thinking that we were trying to steal the company.

171
00:09:21,360 --> 00:09:23,960
Speaker 1: In fact, the initial investigation into the Crazy Eddy fraud,

172
00:09:24,160 --> 00:09:28,120
Speaker 1: the SEC thought that we deliberately understated on numbers to

173
00:09:28,240 --> 00:09:31,720
Speaker 1: take over the company on the cheap. Well, I want

174
00:09:31,760 --> 00:09:34,800
Speaker 1: to like back up a second, what is the difference?

175
00:09:34,840 --> 00:09:38,200
Speaker 1: And we we uh. Sam was a guest on a

176
00:09:38,240 --> 00:09:40,200
Speaker 1: recorded podcast, and I thought this was one of the

177
00:09:40,200 --> 00:09:43,880
Speaker 1: most key ideas that he said. There is a difference

178
00:09:43,960 --> 00:09:46,440
Speaker 1: in the nature of fraud when you're a private company

179
00:09:46,520 --> 00:09:50,480
Speaker 1: versus public company. The economics of crime change when you

180
00:09:50,520 --> 00:09:53,920
Speaker 1: go public. So what's the difference. You get a better

181
00:09:54,080 --> 00:10:00,320
Speaker 1: bang for the buck overstating your income as a public company,

182
00:10:00,400 --> 00:10:05,320
Speaker 1: even if it means overpaying your taxes then understating your

183
00:10:05,360 --> 00:10:10,240
Speaker 1: income as a private company and evading your taxes. For instance,

184
00:10:10,280 --> 00:10:13,480
Speaker 1: if I steal a million dollars from my own companies

185
00:10:13,520 --> 00:10:15,400
Speaker 1: a private company, in other words, I skim a million

186
00:10:15,440 --> 00:10:18,040
Speaker 1: dollars and I don't show it as income and we

187
00:10:18,080 --> 00:10:22,400
Speaker 1: have at tax rate, I'm evading four hundred thousand dollars

188
00:10:22,400 --> 00:10:27,360
Speaker 1: in taxes. Simple math. Right, one million dollars, four hundred

189
00:10:27,400 --> 00:10:30,559
Speaker 1: thousand dollars. Right. If I now I'm a public company

190
00:10:30,600 --> 00:10:33,880
Speaker 1: and I put that million dollars back into the company, right,

191
00:10:34,160 --> 00:10:37,480
Speaker 1: I have an inflated pre tax income of one million dollars.

192
00:10:37,679 --> 00:10:41,000
Speaker 1: I'm gonna overpay my taxes by four hundred thousand. I'm

193
00:10:41,000 --> 00:10:45,280
Speaker 1: gonna have an inflated net income of six hundred thousand dollars.

194
00:10:45,360 --> 00:10:47,760
Speaker 1: And if my company is trading at a multiple of

195
00:10:47,760 --> 00:10:51,760
Speaker 1: earnings let's say thirty times earnings pe ratio, I'm creating

196
00:10:51,840 --> 00:10:56,160
Speaker 1: eighteen million dollars and fictitious wealth by overpaying my taxes

197
00:10:56,200 --> 00:10:59,160
Speaker 1: by four hundred thousand dollars agains. Who's most stock? Crazy?

198
00:10:59,200 --> 00:11:03,400
Speaker 1: Any people? The hand of family does? We created a

199
00:11:03,520 --> 00:11:07,280
Speaker 1: security screud by going legit. We said it was more

200
00:11:07,400 --> 00:11:11,200
Speaker 1: profitable to screw investors than to than to screw the

201
00:11:11,200 --> 00:11:14,400
Speaker 1: internal revenue service. That was the whole idea behind the

202
00:11:14,440 --> 00:11:17,679
Speaker 1: crazy Eddy for it. Okay, I'm gonna jump forward again.

203
00:11:18,120 --> 00:11:20,440
Speaker 1: What was it like in prison? And did you do

204
00:11:20,720 --> 00:11:23,360
Speaker 1: a Shawshank redemption kind of thing where you started doing

205
00:11:23,360 --> 00:11:28,600
Speaker 1: everyone's tax accounting for the kids, and my kids are here, um,

206
00:11:28,800 --> 00:11:30,760
Speaker 1: believe it or that I didn't. I didn't go to prison.

207
00:11:30,800 --> 00:11:33,559
Speaker 1: I got house arrested when they were young because they

208
00:11:33,559 --> 00:11:35,920
Speaker 1: were too young to be traumatized by what was going on.

209
00:11:36,360 --> 00:11:38,760
Speaker 1: They'd see daddy wearing an ankle bracelet, so they bring

210
00:11:38,800 --> 00:11:42,960
Speaker 1: their friends over if they daddy's ankle bracelet. So did

211
00:11:43,000 --> 00:11:46,480
Speaker 1: you tell on your own family members? Yes, but not

212
00:11:46,559 --> 00:11:49,400
Speaker 1: my immediate family, my cousins. Yes, of course. Absolutely. Do

213
00:11:49,440 --> 00:11:50,880
Speaker 1: you think I'm gonna go to jail for them? Have

214
00:11:50,960 --> 00:11:54,520
Speaker 1: to have some standards? YEA. One thing I'm very curious

215
00:11:54,559 --> 00:11:56,400
Speaker 1: about it. We just have a couple of minutes left.

216
00:11:56,520 --> 00:11:59,959
Speaker 1: Is these days with computers and all kinds of more

217
00:12:00,000 --> 00:12:03,400
Speaker 1: are easy, you know, ease of tracking inventory? Is it

218
00:12:03,480 --> 00:12:06,719
Speaker 1: harder to do? For all these days? Crime evolves? I'll

219
00:12:06,720 --> 00:12:10,200
Speaker 1: give you one one example. Computers and everything. One of

220
00:12:10,240 --> 00:12:12,920
Speaker 1: the things one of the questions raised by Wall Street

221
00:12:12,920 --> 00:12:14,800
Speaker 1: prior to us going public was what we had an

222
00:12:14,840 --> 00:12:17,480
Speaker 1: adequate computer system? Which we didn't. So what do we do?

223
00:12:17,760 --> 00:12:21,400
Speaker 1: We get them? Um? Computer World magazine to bring one

224
00:12:21,400 --> 00:12:24,640
Speaker 1: of their beautiful female reporters over right, and she writes

225
00:12:24,679 --> 00:12:29,079
Speaker 1: this story about crazy at these computer system that tracks inventory,

226
00:12:29,160 --> 00:12:31,280
Speaker 1: and we put a nice lady in with with a

227
00:12:31,320 --> 00:12:33,520
Speaker 1: smini skirt in front of the computers and all of

228
00:12:33,559 --> 00:12:36,480
Speaker 1: the red, orange and yellow lights are going on, and

229
00:12:36,520 --> 00:12:41,559
Speaker 1: people think we have a great computer system. If a

230
00:12:41,720 --> 00:12:44,120
Speaker 1: traction is always more important than the life. If you

231
00:12:44,160 --> 00:12:47,720
Speaker 1: were going to do it fraud today, in modern times,

232
00:12:47,840 --> 00:12:50,560
Speaker 1: what would it be multi level marketing or time shares?

233
00:12:50,679 --> 00:12:54,040
Speaker 1: Because it's legitimate fraud. I see people. I've done work

234
00:12:54,080 --> 00:12:56,800
Speaker 1: on the forensic side on that. I see people getting

235
00:12:56,800 --> 00:12:59,280
Speaker 1: fleeced all the time by these industries pretending to be

236
00:12:59,400 --> 00:13:03,079
Speaker 1: legitimate businesses. I mean they might be good investments for

237
00:13:03,160 --> 00:13:05,360
Speaker 1: Wall Street. I'm not he had to talk about investments,

238
00:13:05,400 --> 00:13:07,360
Speaker 1: And actually I haven't been in the market for over

239
00:13:07,400 --> 00:13:10,840
Speaker 1: a decade, but I will tell you these these these

240
00:13:10,840 --> 00:13:14,760
Speaker 1: companies are the scum of American capitalism, the ruination of

241
00:13:14,800 --> 00:13:18,440
Speaker 1: American capitals. They should not be allowed to exist. All right,

242
00:13:18,720 --> 00:13:21,800
Speaker 1: Sam answer the former CFO of Crazy Eddie, Thank you

243
00:13:21,920 --> 00:13:35,520
Speaker 1: very much for your lessons for us. Thank you all right.

244
00:13:36,960 --> 00:13:40,480
Speaker 1: Moving swiftly along, We're gonna bring up our next panel.

245
00:13:40,679 --> 00:13:42,439
Speaker 1: And those of you that listen to a plots know

246
00:13:42,559 --> 00:13:45,720
Speaker 1: that obviously we talk a lot about financial markets on

247
00:13:45,760 --> 00:13:48,480
Speaker 1: the show, and I think sometimes there's a tendency to

248
00:13:48,559 --> 00:13:51,679
Speaker 1: think that markets are sort of divorced from people's day

249
00:13:51,679 --> 00:13:54,600
Speaker 1: to day lives, when in fact they matter a lot

250
00:13:54,679 --> 00:13:57,960
Speaker 1: to how everyone lives. So for our next panel, we're

251
00:13:57,960 --> 00:14:00,800
Speaker 1: going to focus on some big moments in the debt market,

252
00:14:00,920 --> 00:14:03,960
Speaker 1: specifically UM and big moments in the debt market that

253
00:14:04,000 --> 00:14:07,920
Speaker 1: have actually changed the world in various ways. Our next

254
00:14:07,960 --> 00:14:12,920
Speaker 1: two panelists are Brad Setser, an American economist and former

255
00:14:12,920 --> 00:14:16,080
Speaker 1: staff economist at the Treasury Department. Many of you probably

256
00:14:16,120 --> 00:14:18,520
Speaker 1: follow him on Twitter, and if you don't, you definitely

257
00:14:18,559 --> 00:14:21,080
Speaker 1: should because he has great insights. And we also have

258
00:14:21,200 --> 00:14:25,640
Speaker 1: Lee book Eye, who's been described previously as the philosopher

259
00:14:25,800 --> 00:14:30,239
Speaker 1: King of sovereign debt lawyers. He's represented nearly every country

260
00:14:30,280 --> 00:14:34,000
Speaker 1: that's gone bankrupt since the nineteen eighties and really reshaped

261
00:14:34,040 --> 00:14:37,240
Speaker 1: the way that we think about sovereign debt. His mere

262
00:14:37,400 --> 00:14:41,280
Speaker 1: presence at airports have been known to move a country's

263
00:14:41,280 --> 00:14:45,120
Speaker 1: debt market. Uh, and he's recently retired from the law firm.

264
00:14:45,160 --> 00:14:47,440
Speaker 1: Cleary Gotlieb and we managed to get him out of

265
00:14:47,520 --> 00:14:51,000
Speaker 1: his semi retirement to come talk to us. So very exciting.

266
00:14:51,080 --> 00:14:57,520
Speaker 1: Let's bring them on right. Uh, So we purposefully gave

267
00:14:57,560 --> 00:15:00,200
Speaker 1: ourselves a really sort of a vague intro, which means

268
00:15:00,240 --> 00:15:02,040
Speaker 1: I now have to struggle to think what the first

269
00:15:02,080 --> 00:15:04,400
Speaker 1: question is. But I think we want to focus on

270
00:15:05,800 --> 00:15:09,400
Speaker 1: debt crisis to begin with. Do they all look the same?

271
00:15:09,600 --> 00:15:12,760
Speaker 1: Is there a common thread? How do you actually spot

272
00:15:12,840 --> 00:15:16,560
Speaker 1: a debt crisis coming? Lee? Let's start with you. They

273
00:15:16,600 --> 00:15:19,480
Speaker 1: don't all look the same, but they have one thing

274
00:15:19,560 --> 00:15:24,240
Speaker 1: in common. They're all a crisis um and they never

275
00:15:25,400 --> 00:15:29,720
Speaker 1: come in isolation. A sovereign debt crisis will almost always

276
00:15:29,760 --> 00:15:34,000
Speaker 1: be accompanied by a banking crisis, or trade crisis, a

277
00:15:34,120 --> 00:15:40,560
Speaker 1: currency crisis, sometimes a social crisis. Uh. The pressure on

278
00:15:40,760 --> 00:15:46,200
Speaker 1: the politicians who are there when the crisis begins is

279
00:15:46,240 --> 00:15:51,240
Speaker 1: intense because they all know that history suggests that the

280
00:15:51,240 --> 00:15:54,680
Speaker 1: politicians there when a crisis begins are rarely the ones

281
00:15:54,800 --> 00:15:59,240
Speaker 1: there when it ends. Bread By the way, I just

282
00:15:59,280 --> 00:16:03,240
Speaker 1: want to tell quick anecdote about Brad because we're here. So.

283
00:16:03,360 --> 00:16:06,840
Speaker 1: I think it was probably fourteen years ago and I

284
00:16:06,880 --> 00:16:09,360
Speaker 1: was like unemployed. I hadn't been in New York that long.

285
00:16:09,600 --> 00:16:13,760
Speaker 1: I applied for a job to like blog about economics

286
00:16:13,840 --> 00:16:17,440
Speaker 1: or something, and Brad was my interviewer and I bombed

287
00:16:17,440 --> 00:16:19,680
Speaker 1: the interview and I think at the job, but we

288
00:16:19,840 --> 00:16:23,640
Speaker 1: that's because he asked me about Argentina had just defaulted

289
00:16:23,680 --> 00:16:26,200
Speaker 1: a couple of years ago, and he asked me some

290
00:16:26,280 --> 00:16:29,080
Speaker 1: question about Argentina. Was like, you know, he asked my

291
00:16:29,080 --> 00:16:31,240
Speaker 1: way through. I had no idea, so I bombed. I

292
00:16:31,240 --> 00:16:34,600
Speaker 1: didn't get it. But we're now here and I'm you know,

293
00:16:34,800 --> 00:16:38,360
Speaker 1: he's at the hot seat. So and once again Argentina

294
00:16:38,920 --> 00:16:43,160
Speaker 1: isn't the news. Uh so, Brad, why does Argentina first

295
00:16:43,200 --> 00:16:48,600
Speaker 1: of all? Uh? Second of all, why does Argentina? Why

296
00:16:48,600 --> 00:16:51,760
Speaker 1: did they default so much? What's the deal with that? Well?

297
00:16:52,080 --> 00:16:54,600
Speaker 1: I made probably one of the biggest hiring mistakes in

298
00:16:54,640 --> 00:16:59,480
Speaker 1: my life. Um. We we'd actually hired Felix Salmon, who

299
00:16:59,480 --> 00:17:04,080
Speaker 1: would turned to be a pretty good blog so we

300
00:17:04,080 --> 00:17:07,439
Speaker 1: could have put together Felix and Joe and like, uh,

301
00:17:07,920 --> 00:17:11,760
Speaker 1: probably been a successful blogging firm. Um. So, what does

302
00:17:11,920 --> 00:17:14,400
Speaker 1: Argentina default so much? I guess it's because people lend

303
00:17:14,440 --> 00:17:19,320
Speaker 1: them so much money? Okay, why do people keep lending

304
00:17:19,359 --> 00:17:22,640
Speaker 1: them money? Because this seems to happen literally at this point,

305
00:17:22,680 --> 00:17:29,000
Speaker 1: almost every five years. I think people consistently overestimate Argentina's

306
00:17:29,040 --> 00:17:39,119
Speaker 1: capacity to repay. Yeah, they just kind of gets like

307
00:17:39,320 --> 00:17:45,560
Speaker 1: squonky sovereign debty. Uh, Argentina doesn't have a big export base.

308
00:17:46,000 --> 00:17:51,120
Speaker 1: It exports soybeans and UH soybean oil. It hasn't developed

309
00:17:51,160 --> 00:17:54,760
Speaker 1: other export industries, so exports are very small share of

310
00:17:54,880 --> 00:17:58,840
Speaker 1: Argentina's economy. If you have a small share of exports,

311
00:17:59,359 --> 00:18:03,359
Speaker 1: you have less capacity to support foreign currency debt. Yet

312
00:18:03,480 --> 00:18:07,320
Speaker 1: Argentina keeps borrowing in foreign currency. So I mean essentially

313
00:18:07,400 --> 00:18:12,879
Speaker 1: every time what would normally be a currency move and appreciation,

314
00:18:13,400 --> 00:18:17,840
Speaker 1: it turns into a debt crisis. So I described Lee's

315
00:18:17,880 --> 00:18:22,560
Speaker 1: career saying that he's represented in numerous governments. So give

316
00:18:22,640 --> 00:18:25,919
Speaker 1: us your opinion on why those governments keep tapping the

317
00:18:25,960 --> 00:18:30,560
Speaker 1: market for money that apparently they can't actually afford. Look,

318
00:18:30,640 --> 00:18:36,480
Speaker 1: in the twenty first century, no sovereign borrows money in

319
00:18:36,520 --> 00:18:39,800
Speaker 1: the international markets with the expectation that they'll ever have

320
00:18:39,880 --> 00:18:45,320
Speaker 1: to repay it. If by repay you mean devote current

321
00:18:45,359 --> 00:18:49,679
Speaker 1: resources to settle that liability. They borrow it in the

322
00:18:49,840 --> 00:18:53,600
Speaker 1: sure and certain hope that when it matures they will

323
00:18:53,640 --> 00:18:56,119
Speaker 1: be able to go back into the market and borrow

324
00:18:56,160 --> 00:19:00,520
Speaker 1: from someone else to pay that back, and when that matures,

325
00:19:00,520 --> 00:19:07,920
Speaker 1: they'll do the same so on in perpetuity. I sometimes

326
00:19:07,920 --> 00:19:11,600
Speaker 1: think of sovereign debt that it used to be a

327
00:19:11,720 --> 00:19:15,280
Speaker 1: joke that if you had a pal who was on

328
00:19:15,359 --> 00:19:19,320
Speaker 1: a diet and you saw them about to tuck into

329
00:19:19,359 --> 00:19:23,280
Speaker 1: a chocolate declaire, you were supposed to say to them, Now,

330
00:19:23,400 --> 00:19:29,080
Speaker 1: remember a moment on the lips. A lifetime on the hips.

331
00:19:30,240 --> 00:19:35,439
Speaker 1: Sovereign debt is that when a sovereign borrows money today, uh,

332
00:19:35,880 --> 00:19:39,960
Speaker 1: that debt in a net sense, will probably stay on

333
00:19:40,040 --> 00:19:46,760
Speaker 1: its balance sheet forever. That which is why sovereign debt

334
00:19:46,800 --> 00:19:53,240
Speaker 1: stocks almost always go up. They will occasionally go down,

335
00:19:53,280 --> 00:19:58,840
Speaker 1: but almost always go up relentlessly, remorselessly. Well, Brad, you

336
00:19:58,920 --> 00:20:02,720
Speaker 1: mentioned that argent Tina is particularly ill suited to take

337
00:20:02,720 --> 00:20:06,840
Speaker 1: on foreign currency debt due to its immature export base.

338
00:20:07,520 --> 00:20:10,199
Speaker 1: Why not adopt a different model? Why do they have

339
00:20:10,320 --> 00:20:16,560
Speaker 1: to borrow from borrow from international markets? Well, I mean

340
00:20:16,600 --> 00:20:20,080
Speaker 1: they have at times tried a different model. I mean,

341
00:20:20,320 --> 00:20:22,920
Speaker 1: for better or for worse. The Kushners were frozen out

342
00:20:22,920 --> 00:20:25,800
Speaker 1: of the market for a long period of time. They

343
00:20:25,800 --> 00:20:28,360
Speaker 1: still kind of wanted to run budget deficits, so they

344
00:20:28,520 --> 00:20:32,720
Speaker 1: kind of borrowed from the Central Bank to UH finance

345
00:20:32,800 --> 00:20:36,639
Speaker 1: government spending. Mockery came along and said, I wanted to

346
00:20:36,680 --> 00:20:40,320
Speaker 1: go back to be a more legitimate form of finance.

347
00:20:41,040 --> 00:20:44,639
Speaker 1: UH and Argentina, in addition to having a small export sector,

348
00:20:44,920 --> 00:20:49,280
Speaker 1: has a really small banking sector. Lots of historical reasons,

349
00:20:49,400 --> 00:20:52,920
Speaker 1: the history of inflation, so we couldn't finance the budget

350
00:20:52,920 --> 00:20:57,680
Speaker 1: deficit with the banking sector. The market was there and

351
00:20:57,840 --> 00:21:04,399
Speaker 1: the temptation was strong, Uh Lee should they do? Should

352
00:21:04,400 --> 00:21:06,359
Speaker 1: they do a different approach? And I'm also curious, like

353
00:21:06,760 --> 00:21:09,960
Speaker 1: after Mockery one, everyone's like, yeah, he's going to do

354
00:21:10,040 --> 00:21:12,679
Speaker 1: all the liberal reforms that people want. And the i

355
00:21:12,800 --> 00:21:15,320
Speaker 1: m F is excited because they're gonna do some playbook

356
00:21:15,520 --> 00:21:17,879
Speaker 1: and obviously, as we've seen over the last several months,

357
00:21:17,880 --> 00:21:21,199
Speaker 1: it's completely failed. How much burden is there on the

358
00:21:21,800 --> 00:21:24,920
Speaker 1: or as a responsibility on the international community, whether it's

359
00:21:25,119 --> 00:21:29,080
Speaker 1: organizations like the i m F. Two, try that playbook

360
00:21:29,119 --> 00:21:31,960
Speaker 1: again and sort of think, like, you know, how much

361
00:21:32,000 --> 00:21:34,560
Speaker 1: is it their fault for adopting this pattern that just

362
00:21:34,760 --> 00:21:38,800
Speaker 1: isn't working. Well, here's a curious asymmetry in the international

363
00:21:38,880 --> 00:21:44,720
Speaker 1: financial markets. Organizations like the I m F. Every year

364
00:21:45,000 --> 00:21:47,520
Speaker 1: by their articles of agreement will send a team of

365
00:21:47,560 --> 00:21:51,919
Speaker 1: economists down to every one of their members analyze the

366
00:21:51,960 --> 00:21:57,360
Speaker 1: fiscal policies and usually criticize them, sometimes brutally, but they

367
00:21:57,400 --> 00:22:01,360
Speaker 1: have no power at that stage to get the country

368
00:22:01,400 --> 00:22:05,280
Speaker 1: to change policy. It is only when the country cannot

369
00:22:05,400 --> 00:22:07,720
Speaker 1: pay its debts and comes to the I m F

370
00:22:07,800 --> 00:22:10,399
Speaker 1: and asks for a program that the IMF can begin

371
00:22:10,800 --> 00:22:15,720
Speaker 1: to say, you must adopt these fiscal adjustment measures. It's

372
00:22:15,720 --> 00:22:21,800
Speaker 1: a curious asymmetry. It's as though the medical profession was

373
00:22:22,040 --> 00:22:28,240
Speaker 1: unable to tell patients to avoid smoking cigarettes, that they

374
00:22:28,240 --> 00:22:31,600
Speaker 1: could only help them when they come in with the

375
00:22:31,680 --> 00:22:35,919
Speaker 1: consequences of it. So is the solution to debt crises

376
00:22:36,040 --> 00:22:39,159
Speaker 1: doesn't always have to be fiscal adjustment or austerity or

377
00:22:39,200 --> 00:22:42,960
Speaker 1: are there alternatives that are just never pursued? Well, debt

378
00:22:43,000 --> 00:22:47,360
Speaker 1: crisis you you started this question, Tracy. Debt crisis come

379
00:22:47,480 --> 00:22:51,960
Speaker 1: in different forms. Sometimes often I guess they are caused

380
00:22:51,960 --> 00:22:57,080
Speaker 1: by chronic fiscal mismanagement of the economy, but not always

381
00:22:57,840 --> 00:23:02,480
Speaker 1: um There have been debt is caused by natural disasters,

382
00:23:02,520 --> 00:23:07,920
Speaker 1: the hurricane, the the earthquake, the tidal wave. UH Debt

383
00:23:07,960 --> 00:23:12,720
Speaker 1: crisis can be caused by a Lehman moment in the

384
00:23:12,760 --> 00:23:18,720
Speaker 1: international markets. Debt crisis can be caused by some other sovereign,

385
00:23:18,880 --> 00:23:26,040
Speaker 1: some other place in the world misbehaving or the victim

386
00:23:26,200 --> 00:23:30,800
Speaker 1: of gross misfortune, which causes the investor community to recoil.

387
00:23:31,600 --> 00:23:36,840
Speaker 1: And it's almost like you're seeing them wake up and

388
00:23:37,440 --> 00:23:41,960
Speaker 1: remember the risks of sovereign nothing and then they pull back.

389
00:23:42,359 --> 00:23:46,240
Speaker 1: And when they pull back, Uh, going back to my

390
00:23:46,359 --> 00:23:52,320
Speaker 1: earlier analogy, Uh, when all the debt is assumed to

391
00:23:52,400 --> 00:23:57,240
Speaker 1: be refinanciable and it no longer is refinanciable, then there's

392
00:23:57,240 --> 00:24:01,320
Speaker 1: a debt crisis. Bread. Do you think some other model

393
00:24:01,720 --> 00:24:03,960
Speaker 1: should be pursued? I mean, let's say you could go

394
00:24:04,000 --> 00:24:07,359
Speaker 1: back in time too, after right after Mockery went to

395
00:24:07,400 --> 00:24:10,520
Speaker 1: the election or some other point. Was there another path

396
00:24:10,600 --> 00:24:15,120
Speaker 1: that plausibly could have been taken by Argentina to avoid this?

397
00:24:15,240 --> 00:24:17,520
Speaker 1: And I don't mean like, you know, more austerity per se,

398
00:24:17,560 --> 00:24:20,320
Speaker 1: because whatever, you know, it's tough, But was there like

399
00:24:20,320 --> 00:24:26,000
Speaker 1: a totally different approach they could have taken. I in

400
00:24:26,160 --> 00:24:31,400
Speaker 1: Argentina's particular case, there were choices, but I'm not sure

401
00:24:31,400 --> 00:24:36,400
Speaker 1: the choices would have avoided some form of austerity. One

402
00:24:36,600 --> 00:24:41,040
Speaker 1: choice would have been to borrow more in pass uh,

403
00:24:41,119 --> 00:24:43,399
Speaker 1: not to borrow in dollars. I mean, you get into

404
00:24:43,440 --> 00:24:46,160
Speaker 1: debt trouble most typically when you borrow in a currency

405
00:24:46,200 --> 00:24:49,160
Speaker 1: that is not your own. There may be some differences

406
00:24:49,200 --> 00:24:53,960
Speaker 1: across cases, but that's the commonality. Otherwise you can sort

407
00:24:53,960 --> 00:24:57,479
Speaker 1: of print your way out of the crisis. Uh So,

408
00:24:57,640 --> 00:25:02,240
Speaker 1: once Mockery decided not to borrow into in Paso's I

409
00:25:02,280 --> 00:25:06,640
Speaker 1: think there were on a difficult trajectory. So you could

410
00:25:06,640 --> 00:25:10,119
Speaker 1: have borrowed more in Pasos. You could have retained some

411
00:25:10,200 --> 00:25:13,639
Speaker 1: of the capital controls, tried to lock in the domestic

412
00:25:13,800 --> 00:25:18,120
Speaker 1: investors and forced them to keep buying Argentina's debt. Uh.

413
00:25:18,160 --> 00:25:21,560
Speaker 1: And in that world, if you had not been relying

414
00:25:21,640 --> 00:25:25,119
Speaker 1: as heavily on the central bank for financing, you probably

415
00:25:25,160 --> 00:25:28,360
Speaker 1: would have had to have run smaller fiscal deficits at

416
00:25:28,400 --> 00:25:32,200
Speaker 1: the time. The other question, which sort of Lee avoided

417
00:25:32,400 --> 00:25:35,639
Speaker 1: is that once you get into trouble and wants you default,

418
00:25:35,920 --> 00:25:37,600
Speaker 1: then it becomes a question of how much you want

419
00:25:37,600 --> 00:25:40,520
Speaker 1: to pay back ah. And so one way of avoiding

420
00:25:41,200 --> 00:25:45,560
Speaker 1: too much austerity after you have stopped paying is to

421
00:25:46,160 --> 00:25:49,439
Speaker 1: strike a generous deal with your creditors and gives yourself

422
00:25:49,480 --> 00:25:54,080
Speaker 1: a fresh start right on this Notely, do you hate creditors? No,

423
00:25:54,440 --> 00:26:03,280
Speaker 1: certainly not um. Look, the countries, all countries, but particularly

424
00:26:03,320 --> 00:26:09,200
Speaker 1: developing economies, can benefit enormously from access to capital markets

425
00:26:09,280 --> 00:26:15,560
Speaker 1: if it is done with moderation and maturity. Ah. The problem,

426
00:26:15,600 --> 00:26:19,439
Speaker 1: and this goes to Joe's Yo's you were dancing around this,

427
00:26:19,720 --> 00:26:23,719
Speaker 1: But the answer to your question is that the political

428
00:26:23,920 --> 00:26:29,240
Speaker 1: flesh is notoriously weak. Look, politicians like to spend money

429
00:26:29,280 --> 00:26:32,960
Speaker 1: it helps them get re elected. Politicians don't like to

430
00:26:33,320 --> 00:26:36,720
Speaker 1: tax because it doesn't help them get reelected. They don't

431
00:26:36,760 --> 00:26:41,960
Speaker 1: like to cut services because that doesn't help them. Uh. Borrowing,

432
00:26:42,080 --> 00:26:46,520
Speaker 1: particularly borrowing from outside your own country. So in the

433
00:26:46,560 --> 00:26:52,040
Speaker 1: international markets is the way to cover that deficit. Ah.

434
00:26:52,080 --> 00:26:57,240
Speaker 1: It allows you to spend money without raising taxes um

435
00:26:57,440 --> 00:26:59,920
Speaker 1: and for as long as it lasts, it's the one

436
00:27:00,000 --> 00:27:06,800
Speaker 1: a full thing. But the problem is it is for

437
00:27:07,200 --> 00:27:13,560
Speaker 1: most politicians to tempting and they will borrow often to

438
00:27:14,040 --> 00:27:18,160
Speaker 1: the saturation point of what the market will lend them.

439
00:27:18,240 --> 00:27:22,520
Speaker 1: And that is where global economics comes in. If you

440
00:27:22,920 --> 00:27:25,480
Speaker 1: live in a time as we have for ten years

441
00:27:26,040 --> 00:27:28,879
Speaker 1: in which the central banks, major central banks of the

442
00:27:28,920 --> 00:27:32,760
Speaker 1: world have driven interest rates to near zero and have

443
00:27:33,080 --> 00:27:36,960
Speaker 1: pumped massive amounts of liquidity into the market through quantitative

444
00:27:36,960 --> 00:27:42,920
Speaker 1: easing and similar programs. There's enormous amount of money slashing

445
00:27:42,960 --> 00:27:47,320
Speaker 1: around that will need a home and they will welcome

446
00:27:47,480 --> 00:27:50,119
Speaker 1: a borrower willing to take it. So there you have

447
00:27:50,800 --> 00:27:57,520
Speaker 1: a confluence of two dangerous things. A tendency of politicians

448
00:27:57,560 --> 00:28:00,040
Speaker 1: to borrow as much as they can and attend and

449
00:28:00,119 --> 00:28:05,800
Speaker 1: see of a market, not a tendency a financial imperative

450
00:28:06,400 --> 00:28:09,840
Speaker 1: to lend money to someone at the best interest rate

451
00:28:09,880 --> 00:28:13,520
Speaker 1: they can. Let's talk about a country that's even worse

452
00:28:13,560 --> 00:28:17,840
Speaker 1: shaped by a long shot, I think than Argentina, and

453
00:28:18,200 --> 00:28:21,000
Speaker 1: that is Venezuela. And Tracy mentioned Lee that you were

454
00:28:21,119 --> 00:28:25,880
Speaker 1: in retirement, but give it all the rusteny retirement semi retirement.

455
00:28:25,960 --> 00:28:29,639
Speaker 1: So you are involved in some way in Venezuela, but

456
00:28:29,640 --> 00:28:33,040
Speaker 1: you're not working for Maduro right, No, okay, So what's

457
00:28:33,040 --> 00:28:36,840
Speaker 1: going what what's your what are you doing with Venezuela? Yeah,

458
00:28:36,960 --> 00:28:41,640
Speaker 1: I am acting as what we're calling a strategic advisor

459
00:28:41,760 --> 00:28:47,040
Speaker 1: to the Guideau administration in Venezuela. And what's on the

460
00:28:47,080 --> 00:28:49,480
Speaker 1: agenda for helping them? And how much can you actually

461
00:28:49,480 --> 00:28:52,640
Speaker 1: do as long as Maduro is cleaning onto power. Well,

462
00:28:52,680 --> 00:28:58,000
Speaker 1: that's the problem. Until that man takes the hint that

463
00:28:58,080 --> 00:29:02,720
Speaker 1: he should exit the political stage. There isn't much that

464
00:29:02,800 --> 00:29:06,760
Speaker 1: can be done with respect to the country's external debt.

465
00:29:06,840 --> 00:29:09,840
Speaker 1: The country owes north of a hundred and fifty billion

466
00:29:09,960 --> 00:29:16,920
Speaker 1: US dollars. Its economy has been utterly decimated by twenty

467
00:29:17,000 --> 00:29:23,160
Speaker 1: years of corruption and grotesque economic mismanagement. There is a

468
00:29:23,240 --> 00:29:27,280
Speaker 1: deep humanitarian crisis in the country. There is a serious

469
00:29:27,400 --> 00:29:36,080
Speaker 1: refugee crisis at at you know, levels proportional to Syria um.

470
00:29:36,160 --> 00:29:41,040
Speaker 1: But there is no possibility of dealing with that debt

471
00:29:41,080 --> 00:29:51,200
Speaker 1: stock until Mr Maduro says audios, thoughts and suggestions approach

472
00:29:51,240 --> 00:29:54,640
Speaker 1: forward for Venezuela. I mean, Venezuela is going to be

473
00:29:54,760 --> 00:29:59,080
Speaker 1: like the super Bowl for sovereign debt lawyers. Once the

474
00:29:59,400 --> 00:30:03,719
Speaker 1: restructure and get started. You have every single possible issue.

475
00:30:04,360 --> 00:30:08,040
Speaker 1: You have two sovereign borrowers, one sovereign, one quasi sovereign,

476
00:30:08,200 --> 00:30:12,560
Speaker 1: the PETAVSA, the state oil company, both of whom owe

477
00:30:12,560 --> 00:30:17,640
Speaker 1: a decent amount in international bonds. The legal equivalence or

478
00:30:17,720 --> 00:30:22,479
Speaker 1: non equivalents between their debts is to be determined. Ample

479
00:30:22,520 --> 00:30:27,960
Speaker 1: scope for creativity. The contractual provisions in Venezuela's bonds are

480
00:30:28,080 --> 00:30:31,360
Speaker 1: very old school, which means that they have more litigation

481
00:30:31,400 --> 00:30:36,480
Speaker 1: possibilities and avenues and fewer tools to facilitate a restructuring

482
00:30:36,880 --> 00:30:42,680
Speaker 1: than a modern restructuring clause would allow. You have an

483
00:30:42,720 --> 00:30:47,840
Speaker 1: issue of equity between bond holders and sovereign creditors like China,

484
00:30:48,440 --> 00:30:51,520
Speaker 1: like Russia, but then Russia has played a kind of

485
00:30:51,560 --> 00:30:56,000
Speaker 1: clever game because Russia hasn't lent necessarily as Russia. Russia

486
00:30:56,040 --> 00:31:00,480
Speaker 1: has lent as Rosneft, the state oil company. Uh sort

487
00:31:00,480 --> 00:31:06,040
Speaker 1: of seems like the sovereign, but it isn't technically the sovereign.

488
00:31:06,560 --> 00:31:11,800
Speaker 1: You have a whole host of court claims for past

489
00:31:11,880 --> 00:31:17,160
Speaker 1: expropriation whose relative rank uh I think is not clear

490
00:31:17,520 --> 00:31:20,840
Speaker 1: compared to other obligations. We may have a different view,

491
00:31:21,400 --> 00:31:25,840
Speaker 1: and so I think it uh it it has every

492
00:31:26,000 --> 00:31:31,160
Speaker 1: avenue of complexity that one could ever imagine, combined with

493
00:31:31,920 --> 00:31:36,120
Speaker 1: the greatest need for debt reduction. I think one can imagine,

494
00:31:37,360 --> 00:31:43,040
Speaker 1: Brad how important our debt relationships to international politics, Because

495
00:31:43,040 --> 00:31:45,800
Speaker 1: on the one hand, you are building up a relationship

496
00:31:45,840 --> 00:31:49,560
Speaker 1: between two companies. This country owes that country some money

497
00:31:49,720 --> 00:31:53,040
Speaker 1: or vice versa. But on the other hand, you can

498
00:31:53,040 --> 00:31:56,000
Speaker 1: see it as a point of antagonism when things start

499
00:31:56,040 --> 00:31:58,360
Speaker 1: to go wrong or whenever there's tensions. And the one

500
00:31:58,360 --> 00:32:01,640
Speaker 1: I'm thinking about right now is China and the US

501
00:32:01,720 --> 00:32:05,080
Speaker 1: and one trillion dollars plus worth of U S treasuries

502
00:32:05,080 --> 00:32:11,920
Speaker 1: held by China. Yeah. Look, I probably made my my

503
00:32:12,080 --> 00:32:15,360
Speaker 1: name by tracking China's treasury holdings before anyone else thought

504
00:32:15,360 --> 00:32:19,440
Speaker 1: it was interesting. Uh. And the boring reality is that

505
00:32:19,520 --> 00:32:24,160
Speaker 1: the treasuries have been the most boring aspect of the

506
00:32:24,960 --> 00:32:29,720
Speaker 1: trade war. China hasn't used them as leverage. China probably

507
00:32:29,800 --> 00:32:33,080
Speaker 1: can't use them effectively as leverage. I think China has

508
00:32:33,120 --> 00:32:36,920
Speaker 1: been disappointed by the fact that it's law, you know,

509
00:32:36,960 --> 00:32:39,160
Speaker 1: it's it's treasury holdings, which at one point in time,

510
00:32:39,280 --> 00:32:43,920
Speaker 1: like China's GDP, they've kind of come down. Treasury and agencies,

511
00:32:43,960 --> 00:32:48,120
Speaker 1: to be correct, um, have never really provided them with

512
00:32:48,200 --> 00:32:52,960
Speaker 1: much leverage over the US political system. Uh. Soybean farmers,

513
00:32:52,960 --> 00:32:56,360
Speaker 1: on the other hand, are a much more potent political force.

514
00:32:57,080 --> 00:32:59,800
Speaker 1: I think that's partially because the US borrows in its

515
00:32:59,800 --> 00:33:04,240
Speaker 1: own currency, partially because the FED can buy far more

516
00:33:04,280 --> 00:33:08,200
Speaker 1: bonds than China could ever sell, and partially because the

517
00:33:08,240 --> 00:33:13,160
Speaker 1: relationship with China was always arm's length. The US never

518
00:33:13,240 --> 00:33:17,440
Speaker 1: really wanted China to accumulate so many reserves, and as

519
00:33:17,440 --> 00:33:23,440
Speaker 1: a result, the US never promised China much of a return.

520
00:33:23,560 --> 00:33:25,720
Speaker 1: I think the Chinese learned this. I think one of

521
00:33:25,760 --> 00:33:31,080
Speaker 1: the one of my seces is that frustration with a

522
00:33:31,200 --> 00:33:36,240
Speaker 1: lack of leverage provided by treasury bonds contributed to China's

523
00:33:36,280 --> 00:33:40,800
Speaker 1: decision to lend more through its policy banks, more through

524
00:33:40,840 --> 00:33:46,160
Speaker 1: the Belt and Road initiative, more through direct close relationships,

525
00:33:47,160 --> 00:33:52,600
Speaker 1: loans to specific politicians, specific companies, and less through a

526
00:33:52,680 --> 00:33:55,600
Speaker 1: deep liquid bond market like the treasury market. So I

527
00:33:55,600 --> 00:33:58,280
Speaker 1: don't know if people know this or not, but Tracy

528
00:33:58,400 --> 00:34:03,000
Speaker 1: has contributed to um the tensions between the U S

529
00:34:03,040 --> 00:34:05,760
Speaker 1: and China with an article that she wrote a couple

530
00:34:05,840 --> 00:34:08,440
Speaker 1: of weeks ago. So apparently there's some people that like

531
00:34:08,480 --> 00:34:11,560
Speaker 1: bought some old Chinese bonds from like the early nineteen hundreds,

532
00:34:11,600 --> 00:34:13,440
Speaker 1: like in an antique shop or something like that, that

533
00:34:13,719 --> 00:34:17,000
Speaker 1: they just say their bonds, and now they're trying to

534
00:34:17,080 --> 00:34:21,640
Speaker 1: lobby the Trump administration to get to enforce uh, I

535
00:34:21,640 --> 00:34:24,560
Speaker 1: mean you describe it. They want Trump to make China

536
00:34:24,600 --> 00:34:28,840
Speaker 1: pay them. Sure, they want Trump to basically exert pressure

537
00:34:29,200 --> 00:34:34,240
Speaker 1: on China to pay this hundred year old that the

538
00:34:34,280 --> 00:34:38,799
Speaker 1: People's Republic of China actually repudiated back in nineteen So Lee,

539
00:34:38,920 --> 00:34:40,520
Speaker 1: we were talking about this earlier. Do they have do

540
00:34:40,560 --> 00:34:42,919
Speaker 1: you think they have any sort of shot at these people?

541
00:34:43,040 --> 00:34:45,799
Speaker 1: Like picked up some pieces of paper and anyway, wait,

542
00:34:46,520 --> 00:34:49,279
Speaker 1: is China going to be represented by Lee? In which

543
00:34:49,320 --> 00:34:58,600
Speaker 1: case legally I think not. Um. Whether Mr Trump wishes

544
00:34:58,680 --> 00:35:03,319
Speaker 1: to use this or rattle this saber that I don't know.

545
00:35:04,040 --> 00:35:08,080
Speaker 1: But these bonds were actually the subject of litigation back

546
00:35:08,120 --> 00:35:12,560
Speaker 1: in the nineteen eighties UH and the courts decided that

547
00:35:12,880 --> 00:35:16,640
Speaker 1: the statute of limitations had run on these obligations. It

548
00:35:16,719 --> 00:35:20,600
Speaker 1: isn't just China, by the way, there are Czarist Russian

549
00:35:20,640 --> 00:35:25,040
Speaker 1: bonds for that went into default in nineteen seventeen. They

550
00:35:25,120 --> 00:35:29,160
Speaker 1: slash around, UH. And there was actually a very interesting

551
00:35:29,719 --> 00:35:35,640
Speaker 1: situation in the mid nineties when Russia wanted to issue

552
00:35:35,719 --> 00:35:39,480
Speaker 1: euro bonds in Europe. The French government said to the

553
00:35:39,560 --> 00:35:43,560
Speaker 1: Russian government, not until you pay us some money to

554
00:35:43,719 --> 00:35:49,680
Speaker 1: settle the old Czarist bonds that are held by French citizens.

555
00:35:49,719 --> 00:35:52,960
Speaker 1: And they paid them I think five million dollars to

556
00:35:53,080 --> 00:35:56,480
Speaker 1: do that. So these things slosh around. It's it's there

557
00:35:56,480 --> 00:35:58,640
Speaker 1: are other countries, by the way, that may be a

558
00:35:58,719 --> 00:36:01,279
Speaker 1: little bit of option value if something could happen where

559
00:36:01,280 --> 00:36:05,879
Speaker 1: they're worth. My image is most of these things are

560
00:36:06,040 --> 00:36:10,440
Speaker 1: framed and on bathroom walls. Uh and break the glass

561
00:36:10,600 --> 00:36:16,120
Speaker 1: when Mr Trump tells you too, they are beautiful debt certificates.

562
00:36:16,120 --> 00:36:18,680
Speaker 1: I'm just going to say that they're very gorgeous and

563
00:36:18,760 --> 00:36:21,120
Speaker 1: we should all buy them for the art value at least,

564
00:36:21,280 --> 00:36:25,160
Speaker 1: um Lee, we'd be remiss if we didn't ask you,

565
00:36:25,200 --> 00:36:30,200
Speaker 1: in your forty plus your career, what your most interesting

566
00:36:30,760 --> 00:36:34,680
Speaker 1: moment was, jetting in and out of countries, often in

567
00:36:34,800 --> 00:36:41,160
Speaker 1: bankruptcy or on the verge. Interesting is hard adjective, but

568
00:36:41,719 --> 00:36:50,160
Speaker 1: most tense I think was Greece. Greece in twenty ten

569
00:36:51,760 --> 00:36:56,720
Speaker 1: encountered a terrible debt crisis. Grease a member of the Eurozone,

570
00:36:57,400 --> 00:37:02,919
Speaker 1: member of the European Union. Uh so it had as

571
00:37:03,000 --> 00:37:08,040
Speaker 1: its domestic currency the euro, but it wasn't a domestic

572
00:37:08,080 --> 00:37:13,160
Speaker 1: currency like the Argentine pesos. The Greeks unilaterally couldn't print it,

573
00:37:13,719 --> 00:37:17,600
Speaker 1: and so in that sense it was a foreign currency. Um.

574
00:37:17,719 --> 00:37:24,359
Speaker 1: They owed north of three hundred billion euros, virtually all

575
00:37:24,400 --> 00:37:29,520
Speaker 1: of it in the form of bonds, and the question

576
00:37:29,800 --> 00:37:36,960
Speaker 1: was would a debt restructuring for that debt stock force

577
00:37:37,719 --> 00:37:41,520
Speaker 1: Greece to leave the Eurozone, possibly force it to leave

578
00:37:41,640 --> 00:37:45,960
Speaker 1: the European Union to bring back the drachma. And that

579
00:37:46,120 --> 00:37:51,760
Speaker 1: had enormous political consequences across Europe because many in Europe

580
00:37:51,920 --> 00:37:58,120
Speaker 1: thought that the UH, the Eurozone, the monetary union was indissoluble,

581
00:37:59,120 --> 00:38:02,200
Speaker 1: and had it proved even not to be, might there

582
00:38:02,280 --> 00:38:07,319
Speaker 1: have been others who would leave? Might the market have

583
00:38:07,600 --> 00:38:12,680
Speaker 1: looked at Greece and said, if Greece can restructure, maybe

584
00:38:13,440 --> 00:38:17,840
Speaker 1: Spain could, maybe Italy could, maybe La Belle France could,

585
00:38:18,440 --> 00:38:23,960
Speaker 1: and would that not bring a cataclysm upon European finance?

586
00:38:24,040 --> 00:38:29,560
Speaker 1: So it was a tense period. We're almost wrapped up

587
00:38:29,600 --> 00:38:32,200
Speaker 1: before we go, Um, I just want to turn the

588
00:38:32,200 --> 00:38:34,640
Speaker 1: subject a little bit because Brad, you know, we're talking

589
00:38:34,640 --> 00:38:38,120
Speaker 1: about US China and the trade war, and sometimes you

590
00:38:38,160 --> 00:38:40,040
Speaker 1: come on TV and I said, what's your prediction for

591
00:38:40,080 --> 00:38:42,799
Speaker 1: the trade war? So, with you know less than a

592
00:38:42,840 --> 00:38:45,960
Speaker 1: minute to go at this point, what is your prediction

593
00:38:46,080 --> 00:38:48,120
Speaker 1: for where things are going with you as China trade

594
00:38:49,400 --> 00:38:53,280
Speaker 1: I I, my guess this is one of the cases

595
00:38:53,360 --> 00:38:56,640
Speaker 1: where you can get on TV simply by reading the

596
00:38:56,680 --> 00:39:01,719
Speaker 1: president's Twitter account and saying that the best predictor of

597
00:39:01,880 --> 00:39:04,719
Speaker 1: what US trade policy will be will be with the

598
00:39:04,760 --> 00:39:08,359
Speaker 1: tone of his past ten tweets. If the past ten

599
00:39:08,440 --> 00:39:12,879
Speaker 1: tweets are J. Powell is the biggest threat to human civilization,

600
00:39:13,440 --> 00:39:18,040
Speaker 1: then he's probably not thinking about escalating with China. If

601
00:39:18,080 --> 00:39:21,680
Speaker 1: his last ten tweets or I'm a tariff man, he

602
00:39:21,840 --> 00:39:25,480
Speaker 1: probably is going to escalate with China. So the recent

603
00:39:25,680 --> 00:39:29,520
Speaker 1: pattern of tweets seem to be back on J. Poweh

604
00:39:29,719 --> 00:39:34,680
Speaker 1: is not the world's best central banker, rather than China

605
00:39:34,840 --> 00:39:37,680
Speaker 1: is our greatest enemy. So right now I'm putting slightly

606
00:39:37,840 --> 00:39:41,440
Speaker 1: higher odds on a kind of what's called the mini deal.

607
00:39:41,880 --> 00:39:45,560
Speaker 1: China buy some soybeans, the US doesn't escalate any further.

608
00:39:45,600 --> 00:39:48,040
Speaker 1: I don't think the Trump administration really wants to do

609
00:39:48,080 --> 00:39:51,480
Speaker 1: the last round of tariffs anyway, and then that provides

610
00:39:51,719 --> 00:39:54,480
Speaker 1: sort of an unspoken truce to go through the election.

611
00:39:55,920 --> 00:39:57,759
Speaker 1: All right, We're going to leave it there. That's Lee

612
00:39:57,800 --> 00:40:00,799
Speaker 1: book Eyed and Brad Setser, thank you so treating with us.

613
00:40:08,560 --> 00:40:11,000
Speaker 1: All right. I have to be very careful with this

614
00:40:11,120 --> 00:40:14,200
Speaker 1: next intro because it's slightly last minute, and it's also

615
00:40:14,320 --> 00:40:18,759
Speaker 1: not on your lineup. It's a surprise guest who we're

616
00:40:18,800 --> 00:40:22,359
Speaker 1: not going to name. Instead, we're going to bring him

617
00:40:22,360 --> 00:40:25,399
Speaker 1: out and we're gonna play a game, and you all

618
00:40:25,400 --> 00:40:28,319
Speaker 1: are going to have to guess who he is, and

619
00:40:28,360 --> 00:40:31,120
Speaker 1: you're gonna have to do so by asking questions that

620
00:40:31,200 --> 00:40:33,799
Speaker 1: can be answered in yes or no format. And there

621
00:40:33,840 --> 00:40:35,600
Speaker 1: are a couple of people and hear who I know

622
00:40:35,600 --> 00:40:37,560
Speaker 1: know who this person is, so please don't ruin it

623
00:40:37,920 --> 00:40:40,840
Speaker 1: for everyone else. Yes, all right, let's bring him on

624
00:40:40,960 --> 00:40:47,480
Speaker 1: the special guest. You can clap even though you don't

625
00:40:47,480 --> 00:40:51,640
Speaker 1: know who he is. All right, who is it? Who

626
00:40:51,719 --> 00:40:54,440
Speaker 1: is it? Who wants to get shouted out? Is being recorded?

627
00:40:54,520 --> 00:41:06,279
Speaker 1: So you know right to ask loud? Ye? Yes, keep

628
00:41:06,320 --> 00:41:14,479
Speaker 1: become financial frauds if you committed no good question? What's

629
00:41:14,480 --> 00:41:21,400
Speaker 1: your Twitter handle? Don't don't have one? Mystery? Do you

630
00:41:21,440 --> 00:41:25,040
Speaker 1: specialize the reco part? I do not. I barely know

631
00:41:25,040 --> 00:41:29,479
Speaker 1: what that is. She's a big point, you guy, No

632
00:41:29,960 --> 00:41:32,680
Speaker 1: good guess though, that's a good guy. You work on

633
00:41:32,680 --> 00:41:35,600
Speaker 1: the podcast? The question was does he work? Do you

634
00:41:35,640 --> 00:41:40,279
Speaker 1: work on the podcast? But you're welcome to like, I'll

635
00:41:40,280 --> 00:41:43,640
Speaker 1: come on. Are you related to we work in any way?

636
00:41:44,320 --> 00:41:47,719
Speaker 1: Is it a good question. Are you really do work? Yeah,

637
00:41:47,719 --> 00:41:53,279
Speaker 1: I'm interested in exactly Yeah the news, so yeah, fair enough,

638
00:41:53,320 --> 00:41:57,560
Speaker 1: but we work. Questions do you work now? Are you

639
00:41:57,600 --> 00:42:03,879
Speaker 1: involved in country music? Involved? That's a good question. No, unfortunately,

640
00:42:04,000 --> 00:42:08,960
Speaker 1: you're have an opinion on platinum coins. No, you know what?

641
00:42:08,960 --> 00:42:10,960
Speaker 1: Iven you know what? I love that like no one

642
00:42:11,080 --> 00:42:14,480
Speaker 1: just even like anywhere in the wallparks like I swear,

643
00:42:14,600 --> 00:42:18,680
Speaker 1: none of you have asked remotely like you're not You're

644
00:42:18,680 --> 00:42:23,279
Speaker 1: not getting warm at all. It's not even close. No,

645
00:42:23,600 --> 00:42:26,880
Speaker 1: if I did, I had one. Do you work for

646
00:42:26,920 --> 00:42:39,239
Speaker 1: the government. I'm kind of young, but no I did not. No, yeah,

647
00:42:39,239 --> 00:42:42,200
Speaker 1: I got it's getting worse. Actually, want questions are getting

648
00:42:42,200 --> 00:42:48,160
Speaker 1: further away the towel. Let's not tell. Okay, so there's

649
00:42:48,160 --> 00:42:50,239
Speaker 1: a hint. Why don't you show the hint because it's

650
00:42:50,280 --> 00:42:53,600
Speaker 1: been like two minutes and it's not getting better. You

651
00:42:53,600 --> 00:42:59,520
Speaker 1: guys are getting anywhere close. Ye, this in particular is

652
00:42:59,560 --> 00:43:06,080
Speaker 1: the import in peace. Yes, there, you're one of the

653
00:43:06,160 --> 00:43:11,520
Speaker 1: thirteen kids. It's eleven. Actually we'll give that just to

654
00:43:11,520 --> 00:43:14,000
Speaker 1: be clear, Just to be clear. So the shirt, in

655
00:43:14,080 --> 00:43:18,360
Speaker 1: case you didn't see it, says uh sp dr. And

656
00:43:18,440 --> 00:43:21,359
Speaker 1: that was enough for someone to say that you were

657
00:43:21,400 --> 00:43:23,600
Speaker 1: one of the kids. So who are the kids? What's

658
00:43:23,600 --> 00:43:25,880
Speaker 1: going on? I'm going to do the unveiled before people

659
00:43:25,880 --> 00:43:29,760
Speaker 1: start talking about platinum coins again UM or bitcoin. So

660
00:43:30,160 --> 00:43:33,439
Speaker 1: the Spy eleven, also known as the Spy Kids, are

661
00:43:33,560 --> 00:43:39,920
Speaker 1: eleven pretty random. UM, now millennials who have about two

662
00:43:40,320 --> 00:43:44,080
Speaker 1: fifty billion dollars tied to them in the form of

663
00:43:44,080 --> 00:43:47,759
Speaker 1: the world's biggest e t F, the SPDR SMP five

664
00:43:48,000 --> 00:43:51,319
Speaker 1: d E t F, known by the ticker sp Y.

665
00:43:51,520 --> 00:43:56,560
Speaker 1: I still can't believe this is real. So what's the deal? Well, basically,

666
00:43:56,960 --> 00:44:01,680
Speaker 1: Spy was created as a unitary investment try UM partially

667
00:44:01,760 --> 00:44:03,680
Speaker 1: because it would be easy to get through the SEC

668
00:44:03,880 --> 00:44:07,600
Speaker 1: regulations UM at the time. To create this type of vehicle,

669
00:44:07,640 --> 00:44:09,960
Speaker 1: they had to basically get two separate divisions of the

670
00:44:10,080 --> 00:44:14,280
Speaker 1: SEC to come together and approve it, which, if anybody

671
00:44:14,320 --> 00:44:18,160
Speaker 1: has worked with regulators, that's incredibly difficult. Oh gosh, it's

672
00:44:18,239 --> 00:44:23,320
Speaker 1: so it's probably around nine when this document was created. UM.

673
00:44:23,360 --> 00:44:26,200
Speaker 1: I've probably more leading up into that. I think probably

674
00:44:26,239 --> 00:44:29,759
Speaker 1: late eighties early nineties as well. But UM. This so

675
00:44:29,800 --> 00:44:32,239
Speaker 1: basically what a unitary investment trust is. Just to give

676
00:44:32,239 --> 00:44:35,759
Speaker 1: a little legal background, is UM it's a vehicle that

677
00:44:35,840 --> 00:44:39,279
Speaker 1: they put these investments into for this initial et f

678
00:44:40,000 --> 00:44:43,239
Speaker 1: UM that is connected to not only does it have

679
00:44:43,280 --> 00:44:47,440
Speaker 1: a date limit to to go against the rule of perpetuities,

680
00:44:47,440 --> 00:44:50,280
Speaker 1: but they also have measuring lives, which is us eleven

681
00:44:50,360 --> 00:44:53,359
Speaker 1: kids who are all kind of family members who are

682
00:44:53,360 --> 00:44:56,240
Speaker 1: born around the time that this was created. So um

683
00:44:56,320 --> 00:44:59,040
Speaker 1: for example, myself and two of my cousins who couldn't

684
00:44:59,080 --> 00:45:01,360
Speaker 1: make it tonight A are also on our part of

685
00:45:01,400 --> 00:45:04,080
Speaker 1: the eleven. But you didn't know that you were actually

686
00:45:04,160 --> 00:45:07,759
Speaker 1: listed on this legal document until one of our reporters

687
00:45:07,800 --> 00:45:11,839
Speaker 1: actually called you up. What was that conversation, like, did

688
00:45:11,920 --> 00:45:15,880
Speaker 1: you think immediately that it was a scam? Yes? Actually

689
00:45:16,000 --> 00:45:17,839
Speaker 1: I was like it was this was just a few

690
00:45:17,880 --> 00:45:20,960
Speaker 1: weeks ago. Yes, this was probably mid August. Yeah, You've

691
00:45:21,000 --> 00:45:25,000
Speaker 1: going your whole life without knowing that the world's largest

692
00:45:25,040 --> 00:45:26,640
Speaker 1: et f how much is in it now a quarter

693
00:45:26,640 --> 00:45:31,480
Speaker 1: of a trillion dollars, is continue It's continued existence is

694
00:45:31,520 --> 00:45:36,479
Speaker 1: contingent on you and ten other people being alive. Yes, okay,

695
00:45:36,480 --> 00:45:38,280
Speaker 1: I just want to get that clear. And you found

696
00:45:38,280 --> 00:45:41,239
Speaker 1: this out a few weeks ago, Yes, I mean that

697
00:45:41,440 --> 00:45:43,680
Speaker 1: the lead and email it's like you're connected to this

698
00:45:43,960 --> 00:45:46,919
Speaker 1: massive billion dollar fund. I mean that reads like any

699
00:45:47,239 --> 00:45:51,040
Speaker 1: Nigerian prince scam. Like what it guys, You're getting real elaborate,

700
00:45:51,120 --> 00:45:53,960
Speaker 1: like you know, businesses are giving this info away in

701
00:45:54,000 --> 00:45:55,840
Speaker 1: these hacks. Like why do you got to do all this?

702
00:45:56,040 --> 00:45:59,319
Speaker 1: I'm still a little confused. What was the legal requirement?

703
00:45:59,760 --> 00:46:01,720
Speaker 1: I still don't know. Well, so I have a question

704
00:46:01,760 --> 00:46:04,400
Speaker 1: on this because you actually touched on it already, the

705
00:46:04,520 --> 00:46:08,680
Speaker 1: rule against perpetuities. Have you just become an expert in

706
00:46:08,760 --> 00:46:11,960
Speaker 1: this in the past three or four weeks a little bit?

707
00:46:12,080 --> 00:46:14,680
Speaker 1: My um, so, my mom who put us on this

708
00:46:14,719 --> 00:46:18,120
Speaker 1: list was actual AMEX council at the time for the

709
00:46:18,160 --> 00:46:21,400
Speaker 1: American Stock Exchange who kind of helped push and create

710
00:46:21,440 --> 00:46:25,000
Speaker 1: this product. Um, and yeah, she she kind of explained

711
00:46:25,000 --> 00:46:29,800
Speaker 1: it to me. It's it's very it's basically to avoid

712
00:46:29,880 --> 00:46:33,520
Speaker 1: having something that can go on in essentially perpetuity. Um,

713
00:46:33,600 --> 00:46:37,000
Speaker 1: you can't have any for example of trust, it could

714
00:46:37,560 --> 00:46:39,399
Speaker 1: if you had to go on in perpetuity, can be

715
00:46:39,480 --> 00:46:42,879
Speaker 1: doling out assets forever in theory. But that's why they

716
00:46:42,880 --> 00:46:46,920
Speaker 1: have these rules in place to kind of limit these things.

717
00:46:46,960 --> 00:46:50,120
Speaker 1: And one of them is to use measuring lives. And

718
00:46:50,200 --> 00:46:53,120
Speaker 1: that's what we are essentially present that like they've made

719
00:46:53,160 --> 00:46:55,239
Speaker 1: so much money on this, and I assume you don't

720
00:46:55,239 --> 00:46:57,919
Speaker 1: get anything. I was that was my first question, And yes,

721
00:46:58,040 --> 00:47:00,120
Speaker 1: I was quite like, and I do I get, like

722
00:47:00,680 --> 00:47:04,640
Speaker 1: I don't know royalty or anything. Yeah, a couple of yeah,

723
00:47:04,719 --> 00:47:08,399
Speaker 1: like does someone I mean clearly not because you didn't

724
00:47:08,400 --> 00:47:11,040
Speaker 1: know about this until recently. But how did they know

725
00:47:11,160 --> 00:47:16,600
Speaker 1: that you're alive? I you know, that's funny that that

726
00:47:16,719 --> 00:47:19,279
Speaker 1: was a question we had, like who's tracking Is there

727
00:47:19,320 --> 00:47:22,880
Speaker 1: anybody tracking us? You know? My cousin joked, it's like

728
00:47:22,920 --> 00:47:25,520
Speaker 1: the Born Supremacy where they have all like the faces

729
00:47:25,600 --> 00:47:28,319
Speaker 1: and and la heartbeats going like on the screen and all.

730
00:47:29,200 --> 00:47:31,839
Speaker 1: I don't think anybody did. I don't think anybody So

731
00:47:32,000 --> 00:47:33,960
Speaker 1: I think the thing to understand here when this was

732
00:47:34,000 --> 00:47:37,120
Speaker 1: all done, this was part of a sixty page legal

733
00:47:37,200 --> 00:47:39,440
Speaker 1: document that was meant to be filed at the SEC

734
00:47:39,760 --> 00:47:42,160
Speaker 1: and like lost forever, you know, it just would end

735
00:47:42,239 --> 00:47:45,319
Speaker 1: up in some random government. They weren't expecting these things

736
00:47:45,400 --> 00:47:48,799
Speaker 1: all be digitalized and put up on Edgar filings um

737
00:47:48,840 --> 00:47:53,120
Speaker 1: and easily searched by people on Twitter. Apparently, um, not

738
00:47:53,320 --> 00:47:56,240
Speaker 1: easily searched. I did that search by the way, well somebody,

739
00:47:56,280 --> 00:47:58,839
Speaker 1: I thought somebody, Well somebody had found here, yeah and

740
00:47:58,880 --> 00:48:00,719
Speaker 1: sent it to us yet. Okay, but it took a

741
00:48:00,760 --> 00:48:04,560
Speaker 1: long time too. It took years for them to find it. Yeah.

742
00:48:04,840 --> 00:48:07,399
Speaker 1: Have you met the other spy kids? Are you all friends? Now?

743
00:48:07,640 --> 00:48:09,279
Speaker 1: I like to think that you're all going to go

744
00:48:09,320 --> 00:48:12,680
Speaker 1: on vacation together and some room together, right like? That

745
00:48:12,719 --> 00:48:15,360
Speaker 1: seems like it would be like a major financial stability

746
00:48:15,440 --> 00:48:17,120
Speaker 1: risk to have you all the same plane or the

747
00:48:17,120 --> 00:48:20,040
Speaker 1: same building, right like. It's yeah, it does not seem

748
00:48:20,080 --> 00:48:23,040
Speaker 1: like a good idea. Um no, actually, so two of them,

749
00:48:23,280 --> 00:48:26,040
Speaker 1: uh other names on the list, I don't know. I mean,

750
00:48:26,040 --> 00:48:28,200
Speaker 1: their their names are out there already. I guess Pete

751
00:48:28,200 --> 00:48:30,600
Speaker 1: and Paul Pavelka are my cousins and they were also

752
00:48:30,680 --> 00:48:34,000
Speaker 1: kind of born around the same time. So my mom thought, well, yeah,

753
00:48:34,080 --> 00:48:36,880
Speaker 1: let's put them on there as well. What do you actually,

754
00:48:36,880 --> 00:48:38,719
Speaker 1: by the way, what do you do besides I have

755
00:48:38,760 --> 00:48:42,840
Speaker 1: two So I actually work in public relations for a

756
00:48:42,920 --> 00:48:46,480
Speaker 1: financial PR firm and routh I'm group got to get

757
00:48:46,480 --> 00:48:51,839
Speaker 1: the plug. Sorry, uh yeah right, um, so there's no

758
00:48:52,120 --> 00:48:54,920
Speaker 1: So it's not that weird that financial reporters reached out

759
00:48:54,960 --> 00:48:56,640
Speaker 1: to me. It was kind of like, but the weird

760
00:48:56,719 --> 00:49:00,279
Speaker 1: question was like, is your name Kevin Patrick McGrath. Now,

761
00:49:00,320 --> 00:49:02,520
Speaker 1: I don't use my middle name on anything like. I

762
00:49:02,520 --> 00:49:05,239
Speaker 1: think it's probably on two documents connected to me and

763
00:49:05,320 --> 00:49:07,279
Speaker 1: it's so that was like when I was like, what,

764
00:49:07,400 --> 00:49:09,440
Speaker 1: like what is this all? Like? That was really the

765
00:49:09,480 --> 00:49:11,279
Speaker 1: thing that ticked me. I was like, where does this

766
00:49:11,360 --> 00:49:14,040
Speaker 1: come from? Are you putting it on your business card?

767
00:49:14,160 --> 00:49:18,560
Speaker 1: Spy kid? I haven't yet, but I'm thinking about it.

768
00:49:19,680 --> 00:49:22,719
Speaker 1: Also thinking about getting some identity protection service. That's right

769
00:49:23,800 --> 00:49:29,200
Speaker 1: if if anyone wants to help crowdfund some identity theft

770
00:49:29,280 --> 00:49:33,600
Speaker 1: protection for Kevin whose full name and birth date is

771
00:49:33,680 --> 00:49:36,359
Speaker 1: widely available, um, and we should probably do that. Can

772
00:49:36,440 --> 00:49:39,680
Speaker 1: I just say, I'm I'm extremely impressed that, Like how

773
00:49:39,840 --> 00:49:43,319
Speaker 1: particularly you talk about like securities law and the law

774
00:49:43,840 --> 00:49:46,920
Speaker 1: relating to perpetuities and stuff like that. You know, I mean,

775
00:49:46,960 --> 00:49:49,440
Speaker 1: I guess like you're probably crammed after like discovering all

776
00:49:49,480 --> 00:49:51,960
Speaker 1: this and what to learn everything, but I am very impressed. Oh,

777
00:49:52,000 --> 00:49:54,640
Speaker 1: thank you? And um, now it's part of that be sure,

778
00:49:54,680 --> 00:49:57,000
Speaker 1: I definitely read into it. But um, also just being

779
00:49:57,040 --> 00:49:59,160
Speaker 1: around my mom my whole life and she was just

780
00:49:59,360 --> 00:50:02,040
Speaker 1: very talked about work very well, Oh yeah, what did

781
00:50:02,120 --> 00:50:05,360
Speaker 1: she say so someone, I assume you asked her like mom, Yeah,

782
00:50:05,440 --> 00:50:09,600
Speaker 1: so before I think maybe shortly before Rachel was able

783
00:50:09,640 --> 00:50:13,799
Speaker 1: to contact me at work. Rachel is the Bloomberg reporter. Correct. Um,

784
00:50:14,080 --> 00:50:16,879
Speaker 1: she she had called my home and gotten my dad

785
00:50:16,920 --> 00:50:19,319
Speaker 1: on the line. So he's like, calm, like, obviously this

786
00:50:19,360 --> 00:50:21,640
Speaker 1: has to be connected your mother. And I realized that

787
00:50:21,680 --> 00:50:23,840
Speaker 1: once I saw someone sent me the filing and I

788
00:50:23,920 --> 00:50:25,920
Speaker 1: saw that it was Spy And I had known Spider

789
00:50:25,960 --> 00:50:28,680
Speaker 1: from a kid, from being a kid, because obviously they

790
00:50:28,680 --> 00:50:31,239
Speaker 1: had the really cool merch and spy. You know, as

791
00:50:31,520 --> 00:50:33,000
Speaker 1: as your eight year old kid, you go to like

792
00:50:33,080 --> 00:50:35,360
Speaker 1: your parents like the swag room at their office and

793
00:50:35,400 --> 00:50:37,320
Speaker 1: you see like spiders, and I was like, awesome, like

794
00:50:37,360 --> 00:50:40,880
Speaker 1: I'm grabbing all that. Um, you're perfectly made for all thoughts.

795
00:50:40,960 --> 00:50:46,239
Speaker 1: By the way, if you think that's cool exactly, Um,

796
00:50:46,320 --> 00:50:49,120
Speaker 1: And yeah, I was just kind of I called her

797
00:50:49,200 --> 00:50:50,920
Speaker 1: up and I was like Mom, like did you do this?

798
00:50:51,000 --> 00:50:55,200
Speaker 1: And she's like did I do that? She was she

799
00:50:55,440 --> 00:50:58,440
Speaker 1: did not remember. Again, this was just a very It

800
00:50:58,560 --> 00:51:00,000
Speaker 1: was going to be more like I knew one day

801
00:51:00,120 --> 00:51:04,719
Speaker 1: conversation and I know that's the more exciting. Uh, but no,

802
00:51:04,880 --> 00:51:07,000
Speaker 1: I think it was just for them. It was very routine.

803
00:51:07,040 --> 00:51:08,560
Speaker 1: It was just kind of like a call going around

804
00:51:08,560 --> 00:51:11,080
Speaker 1: the office, like, Hey, does anybody had recently had kids?

805
00:51:11,080 --> 00:51:12,879
Speaker 1: Who know somebody had recently kids? Would want to put

806
00:51:12,920 --> 00:51:19,480
Speaker 1: their name on this fund? And now now I'm on. Yeah, alright,

807
00:51:19,800 --> 00:51:21,719
Speaker 1: Kevin McGrath, thank you so much for coming on and

808
00:51:21,760 --> 00:51:24,040
Speaker 1: being our surprise guest, and thanks everyone for playing the

809
00:51:24,080 --> 00:51:33,480
Speaker 1: game right. And now it's time for the first musical

810
00:51:33,520 --> 00:51:38,040
Speaker 1: break of the evening. Our guest today is America's foremost

811
00:51:38,160 --> 00:51:43,759
Speaker 1: country singing economist, possibly maybe the only one. You might

812
00:51:43,920 --> 00:51:46,719
Speaker 1: know him from his smash hit that came out during

813
00:51:46,760 --> 00:51:50,920
Speaker 1: the crisis, Inflation or Deflation, which asked the crucial question

814
00:51:51,440 --> 00:51:53,719
Speaker 1: would we face that, would we be more like Zimbabwe

815
00:51:54,280 --> 00:51:57,680
Speaker 1: or Japan? And so far I think Japan is winning. Uh.

816
00:51:57,840 --> 00:52:02,200
Speaker 1: He has some new numbers live from Nashville, Tennessee. Uh.

817
00:52:02,520 --> 00:52:15,839
Speaker 1: Merl Hazard, thank you Joe and Tracy for that very

818
00:52:15,920 --> 00:52:21,560
Speaker 1: kind introduction. Mic on there, all right, you're all ready

819
00:52:21,600 --> 00:52:26,960
Speaker 1: to hear some down home music about high finance. All right, Well,

820
00:52:27,000 --> 00:52:30,120
Speaker 1: my name is Merl Hazard, and that's Hazard with the

821
00:52:30,239 --> 00:52:34,160
Speaker 1: Z as in zero interest rate policy, the songs that

822
00:52:34,200 --> 00:52:36,520
Speaker 1: I've done over the last twelve years or so since

823
00:52:36,520 --> 00:52:44,480
Speaker 1: the crisis have been about UH economics, finance, banking, derivatives,

824
00:52:44,880 --> 00:52:50,200
Speaker 1: and asset back securities. There are songs about life, and

825
00:52:50,320 --> 00:52:52,520
Speaker 1: people do sometimes ask me how a country singer from

826
00:52:52,560 --> 00:52:54,200
Speaker 1: Nashville could kind of get into that kind of thing,

827
00:52:54,680 --> 00:52:57,440
Speaker 1: But to me, it really just comes natural. My daddy

828
00:52:57,520 --> 00:53:00,600
Speaker 1: was a coal miner and my mama was a supervisor

829
00:53:00,640 --> 00:53:05,680
Speaker 1: and compliance at Morgan Stanley being winter. Now, this first

830
00:53:05,680 --> 00:53:08,040
Speaker 1: song I want to do is on a monetary topic,

831
00:53:08,239 --> 00:53:13,120
Speaker 1: and it's seen seigniorage. And if I said seigniorage, I'm

832
00:53:13,120 --> 00:53:15,160
Speaker 1: not gonna quiz anybody. But does that mean a lot,

833
00:53:15,360 --> 00:53:19,080
Speaker 1: a little, or nothing? Okay, So for some of you

834
00:53:19,120 --> 00:53:21,799
Speaker 1: it's a new topic. Basically, when a government produces its

835
00:53:21,800 --> 00:53:24,880
Speaker 1: money supply, it makes a profit. Could be an emperor

836
00:53:24,920 --> 00:53:29,680
Speaker 1: in ancient times, a king, queen, modern government. They could

837
00:53:29,680 --> 00:53:32,960
Speaker 1: be stamping coins with images, they could be printing paper,

838
00:53:33,480 --> 00:53:36,040
Speaker 1: they could be doing electronically. They make a profit. They

839
00:53:36,120 --> 00:53:38,560
Speaker 1: use it in part to pay their army, and now

840
00:53:38,640 --> 00:53:42,239
Speaker 1: central banks actually by securities and make interesting dividends on

841
00:53:42,320 --> 00:53:46,040
Speaker 1: this creative money. And that's seigniorage. So I figured that's

842
00:53:46,040 --> 00:53:49,359
Speaker 1: a pretty good topic for a song. And uh, it's

843
00:53:49,400 --> 00:53:51,200
Speaker 1: to the two and I'm going to use an old melody.

844
00:53:51,280 --> 00:53:53,480
Speaker 1: You may recognize this by a guy named Harry Warren,

845
00:53:53,560 --> 00:53:57,920
Speaker 1: has been going for decades. But Junior, you're ready, Oh,

846
00:53:58,200 --> 00:54:02,000
Speaker 1: this is my son Merle Junior, good company on guitar

847
00:54:05,280 --> 00:54:11,359
Speaker 1: and you're ready to do that signorage? All right? All

848
00:54:11,400 --> 00:54:14,879
Speaker 1: the money you print and the coins that you meant,

849
00:54:15,040 --> 00:54:20,319
Speaker 1: that's seigniorage on as much as you make. There's no

850
00:54:20,440 --> 00:54:25,759
Speaker 1: interest to pay that seignior ridge from the hills to

851
00:54:25,840 --> 00:54:29,120
Speaker 1: the plains, like a dream of John Keynes. It's state income.

852
00:54:31,360 --> 00:54:34,920
Speaker 1: Every central bank knows that as M zero grows they

853
00:54:34,920 --> 00:54:41,000
Speaker 1: can make some even gangsters with cash in an illegal stash.

854
00:54:41,120 --> 00:54:46,960
Speaker 1: That's seigniorage for a central bank earns as the black

855
00:54:47,000 --> 00:54:54,560
Speaker 1: market churns. This is true. Money's value is strange. It's

856
00:54:54,600 --> 00:55:01,520
Speaker 1: a means of exchange and of storridge. That is how

857
00:55:01,640 --> 00:55:06,959
Speaker 1: central banks printing dollars and Frank's stern siniorage. Yes, senior ridge,

858
00:55:07,880 --> 00:55:21,040
Speaker 1: that's send George, thank you, thank you. What do you think?

859
00:55:21,600 --> 00:55:23,320
Speaker 1: It's a much better response than we got at the

860
00:55:23,360 --> 00:55:28,080
Speaker 1: cracker barrel in Chattanooga. It is. So. I hope y'all

861
00:55:28,080 --> 00:55:31,200
Speaker 1: are watching the PBS series on country music that just

862
00:55:31,239 --> 00:55:35,160
Speaker 1: started up. It's really good. And uh, you know, I

863
00:55:35,280 --> 00:55:39,839
Speaker 1: love Nashville, where I live and where Merle grew up.

864
00:55:39,880 --> 00:55:43,160
Speaker 1: He lives here now, but uh, you know, Nashville. We

865
00:55:43,280 --> 00:55:48,200
Speaker 1: got hot Chicken, We've got um the Grand Old Opry,

866
00:55:48,520 --> 00:55:51,840
Speaker 1: and we've got the headquarters of Lions Bernstein. It's pretty

867
00:55:51,920 --> 00:55:55,480
Speaker 1: much everything a man neat um this, let's see. And

868
00:55:55,480 --> 00:55:57,480
Speaker 1: you know, one thing I love about country music is

869
00:55:57,520 --> 00:55:59,239
Speaker 1: you can take an idea, the kind of idea you

870
00:55:59,280 --> 00:56:01,359
Speaker 1: wake up in the middle night. You might forget when

871
00:56:01,360 --> 00:56:03,359
Speaker 1: you wake up or dimly recall. But if you're write

872
00:56:03,360 --> 00:56:06,000
Speaker 1: down a few words to make them rhyme, put a

873
00:56:06,000 --> 00:56:09,319
Speaker 1: few chords on it, you've got something. Well that's what

874
00:56:09,360 --> 00:56:11,960
Speaker 1: I try to do with this next song. And it's

875
00:56:12,000 --> 00:56:14,360
Speaker 1: called The Fed is watching the Market? Are you ready?

876
00:56:14,440 --> 00:56:23,200
Speaker 1: I'm ready? All right? The Fed? The one, two, three, four,

877
00:56:23,360 --> 00:56:28,600
Speaker 1: The Fed is watching the market. The market is watching

878
00:56:28,760 --> 00:56:34,120
Speaker 1: the Fed. It's a game of follow the leader, but

879
00:56:34,280 --> 00:56:38,400
Speaker 1: I can't tell which one is being led. The Fed

880
00:56:38,760 --> 00:56:43,880
Speaker 1: is watching the market, the markets watching back In return,

881
00:56:44,840 --> 00:56:48,400
Speaker 1: fundamentals are in tatters. I'm not sure it even matters

882
00:56:48,600 --> 00:56:52,800
Speaker 1: what companies possess or or what they hear. The FED

883
00:56:53,200 --> 00:56:58,280
Speaker 1: is watching the market. They're trying to protect us from shocks.

884
00:56:59,000 --> 00:57:04,400
Speaker 1: Where they speak of financial conditions, I'm thinking they really

885
00:57:04,400 --> 00:57:10,800
Speaker 1: mean stocks. The FED is watching the market. The market

886
00:57:11,000 --> 00:57:15,560
Speaker 1: is returning it's gaze. It makes some people wealthy, yet

887
00:57:15,600 --> 00:57:21,360
Speaker 1: still it feels unhealthy when chrice valued part ways. FED

888
00:57:21,760 --> 00:57:27,760
Speaker 1: believes in free markets, except not the market for cash.

889
00:57:28,120 --> 00:57:32,480
Speaker 1: It helps to make bubbles more likely. Your cut rates

890
00:57:32,600 --> 00:57:36,800
Speaker 1: the first sign of a crash. The FED is watching

891
00:57:36,960 --> 00:57:40,400
Speaker 1: the market, But is there any bit of meat left

892
00:57:40,440 --> 00:57:45,959
Speaker 1: in the soup? Incentives are perverse, Evaluation is recursive. We're

893
00:57:46,000 --> 00:57:49,960
Speaker 1: caught in a financial feedback loop. Yes, we're caught in

894
00:57:50,000 --> 00:57:54,320
Speaker 1: a financial feedback loop. Yes, we're caught in a financial

895
00:57:54,400 --> 00:57:59,680
Speaker 1: feedback loop. Yes, we're called in a financial feedback I

896
00:57:59,720 --> 00:58:07,840
Speaker 1: think got the idea. Thank you, thank you all, thank

897
00:58:07,840 --> 00:58:09,720
Speaker 1: you well. If you're getting we're gonna do one more

898
00:58:09,760 --> 00:58:12,160
Speaker 1: song for you. And if you're getting into these songs, uh,

899
00:58:12,480 --> 00:58:14,720
Speaker 1: check out the website merl hazard dot com. There are

900
00:58:14,760 --> 00:58:18,480
Speaker 1: songs on YouTube. There's some streaming things, uh, you know,

901
00:58:18,760 --> 00:58:22,600
Speaker 1: Spotify and Apple Music and even on iTunes. So if

902
00:58:22,600 --> 00:58:25,360
Speaker 1: you've got, uh holidays are coming up. And if you've

903
00:58:25,360 --> 00:58:28,360
Speaker 1: got colleagues at the financial firms where some of you work,

904
00:58:28,400 --> 00:58:31,600
Speaker 1: and they are intellectual and mildly depressed, I'm told this

905
00:58:32,120 --> 00:58:35,960
Speaker 1: will cheer them up. You may Samantha friendship or get

906
00:58:36,000 --> 00:58:38,520
Speaker 1: a promotion or something out of it. So this next

907
00:58:38,520 --> 00:58:42,840
Speaker 1: song is about them. The statutory framework under which the

908
00:58:42,960 --> 00:58:46,080
Speaker 1: Federal Reserve operates the US Central Bank. Yeah, it's a

909
00:58:46,080 --> 00:58:50,680
Speaker 1: good topic. Uh So I respect central bankers that they

910
00:58:50,680 --> 00:58:53,000
Speaker 1: have a really hard job in any country. I think

911
00:58:53,000 --> 00:58:55,600
Speaker 1: they have an even perhaps even harder job in the

912
00:58:55,680 --> 00:59:00,120
Speaker 1: US because the the statue gives them to conflicting goals US.

913
00:59:01,080 --> 00:59:04,920
Speaker 1: And imagining myself in that position, I wrote this Lament

914
00:59:05,160 --> 00:59:09,160
Speaker 1: of the American Central Banker, which will finish up with

915
00:59:09,200 --> 00:59:17,480
Speaker 1: and the title is dual Mandate Junior. It's awfully hard

916
00:59:17,520 --> 00:59:24,560
Speaker 1: to be a central banker. For rich folks like to

917
00:59:24,760 --> 00:59:32,640
Speaker 1: see the currency strong, but the average Joe's not overjoyed

918
00:59:32,840 --> 00:59:38,360
Speaker 1: if he's destitute, unemployed. Seems like every time I choose,

919
00:59:39,280 --> 00:59:45,920
Speaker 1: I'm choosing wrong. The right says I should tighten up

920
00:59:46,000 --> 00:59:49,720
Speaker 1: on credit, not Donald Trump, most of the right to

921
00:59:49,880 --> 00:59:56,160
Speaker 1: keep the risk of inflation nice and low, while the

922
00:59:56,320 --> 01:00:01,520
Speaker 1: left and many economics scholars are jin me to print

923
01:00:01,560 --> 01:00:06,120
Speaker 1: more dollars. I'm torn between the two ways I could go.

924
01:00:08,320 --> 01:00:17,320
Speaker 1: I've got a due mandate, due mandate. I gotta keep

925
01:00:17,480 --> 01:00:24,480
Speaker 1: prices stable while giving jobs to those for able due mandate,

926
01:00:26,360 --> 01:00:31,760
Speaker 1: due mandate. My job is harder than you'll ever know.

927
01:00:35,360 --> 01:00:37,920
Speaker 1: Unlike here in the US, the Bank of England has

928
01:00:37,960 --> 01:00:42,880
Speaker 1: it relatively easy ban con England, and so I hear

929
01:00:43,680 --> 01:00:49,440
Speaker 1: does Europe's DCB, Europe the Uncentral Their goal is for

930
01:00:49,560 --> 01:00:54,880
Speaker 1: stable price. That's simpler. It must be nice a single mandate,

931
01:00:55,520 --> 01:01:02,960
Speaker 1: unlike poor on mucky meat. Because I've got up due mandate,

932
01:01:04,840 --> 01:01:12,360
Speaker 1: due mandate, I gottau solve labors troubles without creating financial

933
01:01:12,680 --> 01:01:20,920
Speaker 1: bubbles due mandate, do mandate. It's tough for me to

934
01:01:21,160 --> 01:01:31,080
Speaker 1: make our economy equal. My job is harder thanuel ever know.

935
01:01:34,440 --> 01:01:36,520
Speaker 1: All Right, thank you all very much. It's great to

936
01:01:36,560 --> 01:02:20,280
Speaker 1: be here. And I'm like, all right, well, we've come

937
01:02:20,320 --> 01:02:24,720
Speaker 1: to the final interview of the night, and um, I

938
01:02:24,760 --> 01:02:26,960
Speaker 1: think unless you've been living under a rock over the

939
01:02:27,040 --> 01:02:29,880
Speaker 1: last year or so, you've probably heard in the news

940
01:02:30,040 --> 01:02:34,440
Speaker 1: a lot of debate and discussion about modern monetary theory.

941
01:02:34,640 --> 01:02:37,360
Speaker 1: Probably a lot of it um has been caricature. It's

942
01:02:37,360 --> 01:02:39,560
Speaker 1: like other people who just say print the money, they

943
01:02:39,640 --> 01:02:42,560
Speaker 1: kind of do um. But also so it's also kind

944
01:02:42,560 --> 01:02:47,400
Speaker 1: of caricatured um. Anyway, tonight we have with us the

945
01:02:47,520 --> 01:02:50,320
Speaker 1: person who I think has done more than anyone else

946
01:02:50,880 --> 01:02:54,200
Speaker 1: these uh these days to be a proponent and an

947
01:02:54,240 --> 01:02:58,360
Speaker 1: advocate and a voice for MMT, and that is Stephanie Kelton.

948
01:02:58,480 --> 01:03:00,680
Speaker 1: She is a professor. It's Tony Brooks. She's also an

949
01:03:00,720 --> 01:03:04,840
Speaker 1: economic advisor to the Bernie Sanders campaign. In addition to

950
01:03:05,160 --> 01:03:07,120
Speaker 1: talking a little bit about what m m T is,

951
01:03:07,120 --> 01:03:09,440
Speaker 1: we're going to get her perspective on the state of

952
01:03:09,440 --> 01:03:12,640
Speaker 1: the economy and economics right now, because we live in

953
01:03:12,640 --> 01:03:17,960
Speaker 1: interesting times, large deficits by historical standards, very interest rates

954
01:03:17,960 --> 01:03:20,800
Speaker 1: by historical standards, and yet things aren't working and we're

955
01:03:20,800 --> 01:03:24,160
Speaker 1: not having inflation like people would have expected. Wage growth

956
01:03:24,200 --> 01:03:27,720
Speaker 1: has been poor GDP growth across the developed world very

957
01:03:27,720 --> 01:03:31,040
Speaker 1: mediocre since the crisis. So I wanna you know, economists

958
01:03:31,040 --> 01:03:33,880
Speaker 1: are scratching their head. They're looking forward to hearing how

959
01:03:33,920 --> 01:03:39,240
Speaker 1: I MMT economist examined some of these puzzles of modern

960
01:03:39,360 --> 01:03:48,920
Speaker 1: economic life. So it's definitely called what do you say

961
01:03:49,000 --> 01:03:51,280
Speaker 1: when do people say that about mm T, Like, oh, yeah,

962
01:03:51,400 --> 01:03:58,040
Speaker 1: just print the money. Well, you just said it, I said, stage, Um,

963
01:03:58,160 --> 01:04:00,120
Speaker 1: what do I say? I don't know what else to

964
01:04:00,200 --> 01:04:02,920
Speaker 1: say except you know what we've been saying for now

965
01:04:03,200 --> 01:04:06,200
Speaker 1: two decades? Uh and print then I thought it just

966
01:04:06,200 --> 01:04:07,760
Speaker 1: started in the last couple of years. You guys have

967
01:04:07,760 --> 01:04:09,120
Speaker 1: been at it for We've been at it for a

968
01:04:09,200 --> 01:04:11,600
Speaker 1: little while, and as far as I can tell, none

969
01:04:11,600 --> 01:04:13,680
Speaker 1: of us has ever said MMT is about, you know,

970
01:04:13,760 --> 01:04:17,080
Speaker 1: printing the money. But it gets shorthanded that way, and

971
01:04:17,200 --> 01:04:19,440
Speaker 1: it's like nails on a chalkboard every time I do

972
01:04:19,480 --> 01:04:21,200
Speaker 1: an interview. Now I sit down and I say, okay,

973
01:04:21,200 --> 01:04:23,720
Speaker 1: we're gonna do this on the understanding that you're not

974
01:04:23,720 --> 01:04:25,640
Speaker 1: going to run a story that says MMT is about

975
01:04:25,640 --> 01:04:27,760
Speaker 1: printing money. And so we do the interview. In the

976
01:04:27,760 --> 01:04:31,240
Speaker 1: headline reads economists says print more money. You know. Okay,

977
01:04:31,240 --> 01:04:32,880
Speaker 1: so nothing I can do. I'm going to take the

978
01:04:32,880 --> 01:04:35,760
Speaker 1: bait in that case. What is MMT about? And why

979
01:04:36,040 --> 01:04:39,920
Speaker 1: has it suddenly sort of exploded into maybe not entirely

980
01:04:39,960 --> 01:04:45,040
Speaker 1: the public consciousness, but certainly um this demographic. Well, it's

981
01:04:45,080 --> 01:04:47,560
Speaker 1: like the impossible question to say, you know, what is

982
01:04:47,680 --> 01:04:51,320
Speaker 1: MMT about, because it's, uh, it's a group project that

983
01:04:51,440 --> 01:04:55,080
Speaker 1: started more than two decades ago with UM maybe a

984
01:04:55,120 --> 01:04:59,600
Speaker 1: half a dozen economists in the early years, producing scholarship

985
01:04:59,760 --> 01:05:03,760
Speaker 1: on questions from you know, the Eurozone, to trade, to

986
01:05:03,800 --> 01:05:07,680
Speaker 1: social security, to government finance that deficits to the you know,

987
01:05:07,760 --> 01:05:10,240
Speaker 1: I mean, it's this enormous project. So there's no way

988
01:05:10,280 --> 01:05:12,560
Speaker 1: to just say this is what MMT is in like,

989
01:05:13,000 --> 01:05:15,720
Speaker 1: you know, a sound bite. But I think most people

990
01:05:15,760 --> 01:05:17,680
Speaker 1: when they think of MMT, they think of it as

991
01:05:18,560 --> 01:05:22,600
Speaker 1: UM an analytic framework. So it's a mac we're macro economists.

992
01:05:22,600 --> 01:05:26,800
Speaker 1: So it's an analytic framework that tries to update the

993
01:05:26,880 --> 01:05:31,520
Speaker 1: lens through which we UM understand the monetary system and

994
01:05:31,640 --> 01:05:34,960
Speaker 1: the policy options that are available I guess in the

995
01:05:35,040 --> 01:05:38,600
Speaker 1: post Bretton Woods, post gold standard era. And so we're

996
01:05:38,600 --> 01:05:41,800
Speaker 1: basically saying, look, there's policy space that has opened up

997
01:05:41,800 --> 01:05:44,200
Speaker 1: around us since we have gone off of the gold

998
01:05:44,240 --> 01:05:47,240
Speaker 1: standard or fixed exchange rates, and we're not taking full

999
01:05:47,240 --> 01:05:50,360
Speaker 1: advantage of that space. We could be doing better, and

1000
01:05:50,440 --> 01:05:53,240
Speaker 1: so we're trying to you know, shine a light on

1001
01:05:53,320 --> 01:05:55,800
Speaker 1: some of those things. So what was the impetus when

1002
01:05:55,880 --> 01:05:59,040
Speaker 1: when this first started. Was it that something has changed

1003
01:05:59,080 --> 01:06:01,640
Speaker 1: about either the finance system or the economy and we

1004
01:06:01,680 --> 01:06:05,640
Speaker 1: want to understand the existing world better. Or was it

1005
01:06:06,080 --> 01:06:08,720
Speaker 1: the policy prescription that you were after, because I think

1006
01:06:08,720 --> 01:06:11,360
Speaker 1: nowadays lots of people here m MT they think full employment,

1007
01:06:11,400 --> 01:06:14,479
Speaker 1: they think universal healthcare, that sort of thing, which which

1008
01:06:15,000 --> 01:06:18,400
Speaker 1: was the inspiration behind I don't think it was either. Actually,

1009
01:06:18,480 --> 01:06:21,240
Speaker 1: I mean I think back to you know, when I

1010
01:06:21,280 --> 01:06:25,160
Speaker 1: started training as an economist from undergrad let's say, to

1011
01:06:25,320 --> 01:06:28,160
Speaker 1: graduate school. It was the mid nineties, and you know,

1012
01:06:28,200 --> 01:06:30,600
Speaker 1: there were already different schools of thought out there. The

1013
01:06:30,640 --> 01:06:34,920
Speaker 1: post Kaynsians were saying very different things from more mainstream

1014
01:06:34,960 --> 01:06:37,840
Speaker 1: types of economists, and especially when it came to the

1015
01:06:37,880 --> 01:06:42,320
Speaker 1: financial system, to banking and finance and those sort of questions. So, um,

1016
01:06:42,400 --> 01:06:45,919
Speaker 1: we were always kind of agitated by the way that

1017
01:06:46,280 --> 01:06:51,680
Speaker 1: mainstream economists describe how finance works in particular, so we

1018
01:06:51,760 --> 01:06:54,120
Speaker 1: had a different narrative set up from the very beginning.

1019
01:06:54,200 --> 01:06:56,920
Speaker 1: But then, you know, with m MT, I think it

1020
01:06:57,040 --> 01:07:00,440
Speaker 1: started evolving as we started to think differently about the

1021
01:07:00,520 --> 01:07:04,160
Speaker 1: role of taxes and the relationship between money and taxes

1022
01:07:04,280 --> 01:07:08,240
Speaker 1: and state finance, and it kind of opened up around

1023
01:07:08,320 --> 01:07:11,680
Speaker 1: the question of launching the Euro, I think really because

1024
01:07:11,720 --> 01:07:13,880
Speaker 1: we were looking at countries that were making a decision

1025
01:07:13,880 --> 01:07:18,040
Speaker 1: to abandon their currencies and adopt a common currency, and

1026
01:07:18,080 --> 01:07:22,760
Speaker 1: that's sort of I think sparked the broader interest. So

1027
01:07:22,920 --> 01:07:25,760
Speaker 1: you mentioned that essentially it's an analytical framework, and as

1028
01:07:25,800 --> 01:07:29,720
Speaker 1: I mentioned in the intro, I think we're people would agree.

1029
01:07:29,760 --> 01:07:32,040
Speaker 1: We're at a moment where a lot of people feel

1030
01:07:32,120 --> 01:07:36,360
Speaker 1: unsatisfied with the existing answers that economists have given, or

1031
01:07:36,360 --> 01:07:40,720
Speaker 1: that mainstream economists have given on things like the recovery.

1032
01:07:40,720 --> 01:07:44,760
Speaker 1: Why hasn't growth been faster? Why hasn't inflation picked up

1033
01:07:45,480 --> 01:07:49,640
Speaker 1: despite cutting rates and these trillion dollar deficits. What's your

1034
01:07:49,760 --> 01:07:52,600
Speaker 1: answer to that? What is the let's start with that.

1035
01:07:52,720 --> 01:07:56,400
Speaker 1: Why hasn't inflation picked up despite all these things that

1036
01:07:56,440 --> 01:07:59,840
Speaker 1: economists would have said, oh, yeah, that'll definitely cause inflation. Well,

1037
01:07:59,880 --> 01:08:04,360
Speaker 1: I think the models are too mechanistic and they lead

1038
01:08:04,480 --> 01:08:08,360
Speaker 1: us to too simple and understanding of really complex phenomenon

1039
01:08:08,400 --> 01:08:11,000
Speaker 1: like inflation. And so if you're trained like I was

1040
01:08:11,160 --> 01:08:14,520
Speaker 1: maybe in the early years, to think that, um, you know,

1041
01:08:14,760 --> 01:08:17,519
Speaker 1: money is inflation is something that happens when you print

1042
01:08:17,520 --> 01:08:21,599
Speaker 1: too much money, or you know, the Milton Friedman. Inflation

1043
01:08:21,640 --> 01:08:24,320
Speaker 1: is always an everywhere monetary phenomenon. So if you seek

1044
01:08:24,479 --> 01:08:28,120
Speaker 1: central banks doing things like que and people say quantitative

1045
01:08:28,120 --> 01:08:30,639
Speaker 1: easing is printing money, and printing money leads to inflation,

1046
01:08:30,640 --> 01:08:32,719
Speaker 1: then we all come to expect that if you believe

1047
01:08:32,760 --> 01:08:36,759
Speaker 1: that inflation automatically picks up because the labor market gets tight,

1048
01:08:37,200 --> 01:08:40,479
Speaker 1: and your market, your your model tells you that tight

1049
01:08:40,560 --> 01:08:43,560
Speaker 1: labor markets working through a Phillips curve sort of relationship,

1050
01:08:43,720 --> 01:08:46,280
Speaker 1: lead to pressure on wages that then lead to increased pressure.

1051
01:08:46,640 --> 01:08:50,360
Speaker 1: It's basically the models are too simple and we have

1052
01:08:50,439 --> 01:08:53,000
Speaker 1: too much faith in them. Well, actually on that point,

1053
01:08:53,360 --> 01:08:56,200
Speaker 1: because I get the logic of this idea that okay,

1054
01:08:56,280 --> 01:09:01,120
Speaker 1: unemployment falls and then workers have more borrowing bargaining power,

1055
01:09:01,160 --> 01:09:03,080
Speaker 1: and then that leads to higher wages, and then they

1056
01:09:03,160 --> 01:09:06,760
Speaker 1: have more um you know, more purchasing power and so on,

1057
01:09:07,160 --> 01:09:09,439
Speaker 1: what is the conceptual flow Because we haven't even really

1058
01:09:09,479 --> 01:09:12,640
Speaker 1: seen robust wage growth by any stretch, even though the

1059
01:09:12,720 --> 01:09:15,759
Speaker 1: unemployment rate is below four percent. So just like breaking

1060
01:09:15,760 --> 01:09:18,880
Speaker 1: it down, like, why does even the most simple, seemingly

1061
01:09:18,960 --> 01:09:22,920
Speaker 1: logical idea that low unemployment would have all these positive

1062
01:09:22,960 --> 01:09:25,200
Speaker 1: effects on prices? Why does that not even seem to

1063
01:09:25,200 --> 01:09:27,160
Speaker 1: be worked well. I think most of it has to

1064
01:09:27,200 --> 01:09:29,679
Speaker 1: do with one key phrase that you just use, which

1065
01:09:29,680 --> 01:09:35,519
Speaker 1: is bargaining power, and how is bargaining power exercise through unions?

1066
01:09:36,000 --> 01:09:38,240
Speaker 1: And what's happened to unions over the course of the

1067
01:09:38,320 --> 01:09:40,760
Speaker 1: last thirty years. I mean, they've mostly been decimated. So

1068
01:09:41,240 --> 01:09:45,120
Speaker 1: it's pretty hard to tell a rational story about how,

1069
01:09:45,160 --> 01:09:48,680
Speaker 1: even as the labor market titans, workers are supposed to

1070
01:09:48,720 --> 01:09:53,200
Speaker 1: exercise the power in the negotiating process. If they don't

1071
01:09:53,200 --> 01:09:55,400
Speaker 1: have union representation, what are they supposed to do walk

1072
01:09:55,400 --> 01:09:57,280
Speaker 1: in and just sit down with the boss, kick their

1073
01:09:57,320 --> 01:09:59,120
Speaker 1: feet up on the table and say, I'm here for

1074
01:09:59,160 --> 01:10:01,840
Speaker 1: the raise. You know, labor markets tight, let's go. It's

1075
01:10:01,920 --> 01:10:06,000
Speaker 1: just not there. The mechanisms aren't in place for that

1076
01:10:06,120 --> 01:10:09,320
Speaker 1: to happen for for huge swaths of the American workforce.

1077
01:10:09,960 --> 01:10:12,120
Speaker 1: So here's one thing I sometimes wonder, but if if

1078
01:10:12,200 --> 01:10:14,719
Speaker 1: everyone in the U S at least woke up tomorrow

1079
01:10:14,720 --> 01:10:17,600
Speaker 1: and accepted m m T as the analytical framework for

1080
01:10:17,640 --> 01:10:21,280
Speaker 1: the economy, what would change like? What would that world

1081
01:10:21,400 --> 01:10:25,240
Speaker 1: look like, and what would that change from the current

1082
01:10:25,240 --> 01:10:27,960
Speaker 1: scenario actually tell us about what's wrong with the way

1083
01:10:27,960 --> 01:10:30,240
Speaker 1: we think about economics. I mean, honestly, I think the

1084
01:10:30,240 --> 01:10:33,240
Speaker 1: biggest thing that changes is the conversation that we have.

1085
01:10:33,479 --> 01:10:37,120
Speaker 1: I mean, if if we had a better set of

1086
01:10:37,200 --> 01:10:40,080
Speaker 1: lenses and we were able to see more clearly, you know,

1087
01:10:40,160 --> 01:10:43,639
Speaker 1: the nature of the space around us, the monetary system,

1088
01:10:43,680 --> 01:10:45,080
Speaker 1: the way it works. I just think that a lot

1089
01:10:45,120 --> 01:10:47,080
Speaker 1: of the questions we asked today, and a lot of

1090
01:10:47,080 --> 01:10:49,880
Speaker 1: the things that we presume stand in the way of

1091
01:10:50,320 --> 01:10:53,920
Speaker 1: you know, Congress passing legislation that would do something more ambitious,

1092
01:10:53,920 --> 01:10:56,200
Speaker 1: like what we can't because trillion dollar deficits, or we

1093
01:10:56,240 --> 01:10:57,960
Speaker 1: can't because China has all this debt, or we can't

1094
01:10:57,960 --> 01:11:01,120
Speaker 1: because look what happened to Greece, or we can't be right. Um,

1095
01:11:01,160 --> 01:11:04,000
Speaker 1: at least that would go away, and then we would

1096
01:11:04,000 --> 01:11:07,040
Speaker 1: have a very different conversation even the tax cuts. Right

1097
01:11:07,080 --> 01:11:10,880
Speaker 1: if we were looking through an MMT lens and we said,

1098
01:11:10,920 --> 01:11:13,200
Speaker 1: the Republicans are looking to do between a trillion and

1099
01:11:13,200 --> 01:11:15,160
Speaker 1: a half or two trillion, depending on how you want

1100
01:11:15,160 --> 01:11:18,920
Speaker 1: to cost it out in tax cuts. Instead of saying, um,

1101
01:11:18,960 --> 01:11:20,559
Speaker 1: we can't afford it, will blow a hole in the

1102
01:11:20,560 --> 01:11:22,519
Speaker 1: budget and all this kind of stuff, we would have

1103
01:11:22,720 --> 01:11:25,240
Speaker 1: a different conversation. It would be about you know, the

1104
01:11:25,640 --> 01:11:29,520
Speaker 1: presumed effectiveness in terms of job creation and the potential

1105
01:11:29,560 --> 01:11:32,439
Speaker 1: inflation risk in an economy that may or may not

1106
01:11:32,479 --> 01:11:34,720
Speaker 1: be closer to full employment. So I just think, you know,

1107
01:11:34,760 --> 01:11:37,280
Speaker 1: social security, Are we really going to have a conversation

1108
01:11:37,360 --> 01:11:40,760
Speaker 1: about the government's ability to keep its promise to future retirees,

1109
01:11:40,800 --> 01:11:43,280
Speaker 1: their dependence and the disabled. If we're not afraid of

1110
01:11:43,320 --> 01:11:45,720
Speaker 1: running out of money, then the conversation changes. Then it

1111
01:11:45,760 --> 01:11:48,760
Speaker 1: becomes about demographics and inflation risk. And I just think

1112
01:11:48,760 --> 01:11:53,559
Speaker 1: we have a richer, more substantive national debate than this,

1113
01:11:53,920 --> 01:11:58,920
Speaker 1: you know, arbitrary, frivolous conversation about you know, entitlements driving

1114
01:11:59,000 --> 01:12:02,040
Speaker 1: us into a debt crisis, which is as I mentioned,

1115
01:12:02,120 --> 01:12:04,160
Speaker 1: insure you are on one of the teams in the

1116
01:12:04,200 --> 01:12:07,639
Speaker 1: primary and you met uh speaking of like the sound

1117
01:12:07,720 --> 01:12:10,640
Speaker 1: of like screeching chalkboards. How much does it hurt you

1118
01:12:10,680 --> 01:12:14,800
Speaker 1: when you hear Democratic candidates blast the tax cuts on

1119
01:12:14,840 --> 01:12:18,400
Speaker 1: the grounds that it blew out the deficits. It does,

1120
01:12:18,560 --> 01:12:22,280
Speaker 1: But I haven't heard that much of it, and I'm encouraged.

1121
01:12:22,320 --> 01:12:24,639
Speaker 1: You know what, It's funny, Joe, because what I hear

1122
01:12:24,680 --> 01:12:29,240
Speaker 1: Democrats saying is that they would like to repeal all

1123
01:12:29,360 --> 01:12:32,559
Speaker 1: or much of the Republican tax cuts, not because they

1124
01:12:32,680 --> 01:12:34,599
Speaker 1: blew a hole in the deficit. We got to repair

1125
01:12:34,640 --> 01:12:37,400
Speaker 1: that damage, but because they want to use those tax

1126
01:12:37,439 --> 01:12:40,160
Speaker 1: cuts to quote pay for something else. In other words,

1127
01:12:40,400 --> 01:12:43,160
Speaker 1: it's the same as saying I want to use the

1128
01:12:43,200 --> 01:12:46,519
Speaker 1: deficit to build infrastructure. It's no different. It's tantamount to

1129
01:12:46,560 --> 01:12:48,679
Speaker 1: saying I want to keep the deficit, but I want

1130
01:12:48,680 --> 01:12:52,840
Speaker 1: to direct it towards some other aim, right. I mean so,

1131
01:12:52,920 --> 01:12:56,719
Speaker 1: even though we have some Democrats complaining about Republicans expanding

1132
01:12:56,760 --> 01:12:59,559
Speaker 1: deficit for very specific purposes, there are quite a few

1133
01:12:59,640 --> 01:13:02,640
Speaker 1: higher file Democrats who seem to be embracing mm T,

1134
01:13:02,960 --> 01:13:06,200
Speaker 1: whereas Republicans who actually have a de facto history a

1135
01:13:06,320 --> 01:13:10,680
Speaker 1: blow of embracing MMT haven't done that. Why do you

1136
01:13:10,720 --> 01:13:15,040
Speaker 1: think that is? Do you mean openly invoking so they'll

1137
01:13:15,040 --> 01:13:18,320
Speaker 1: expand the deficit for their pet projects, um in a

1138
01:13:18,400 --> 01:13:21,000
Speaker 1: sort of m MT way, But they don't seem to

1139
01:13:21,040 --> 01:13:23,640
Speaker 1: embrace the theory in the way that some Democrats. Well,

1140
01:13:23,680 --> 01:13:27,320
Speaker 1: it's better to embrace it actively than to embrace it rhetorically.

1141
01:13:27,479 --> 01:13:30,840
Speaker 1: So I get in some sense, you know, it's more

1142
01:13:30,920 --> 01:13:36,719
Speaker 1: encouraging to see someone pushing through an agenda UM that

1143
01:13:37,000 --> 01:13:41,040
Speaker 1: doesn't hue to the hysteria around dead indeficits. Is this

1144
01:13:41,160 --> 01:13:46,280
Speaker 1: my preferred um set of policies. No um. But you know,

1145
01:13:46,760 --> 01:13:49,760
Speaker 1: it's not as if it's encouraging just because a few

1146
01:13:49,760 --> 01:13:53,960
Speaker 1: Democrats have invoked MMT, because at the same time, you know,

1147
01:13:54,040 --> 01:13:57,639
Speaker 1: the Speaker of the House has reinstated PAGO, and that's

1148
01:13:57,680 --> 01:14:01,519
Speaker 1: not terribly encouraging. If you're looking the potential to take

1149
01:14:01,560 --> 01:14:05,480
Speaker 1: the House and the Senate and then move ambitious progressive legislation,

1150
01:14:05,520 --> 01:14:07,479
Speaker 1: you're not going to do it in an environment in

1151
01:14:07,560 --> 01:14:10,240
Speaker 1: which PAGO is in place, which is a rule that

1152
01:14:11,000 --> 01:14:14,400
Speaker 1: exists in the House of Representatives today that says you

1153
01:14:14,439 --> 01:14:16,880
Speaker 1: can't add to the deficit, so everything has to be

1154
01:14:16,920 --> 01:14:20,040
Speaker 1: deficit neutral. So I mean, it's it's good and bad,

1155
01:14:20,120 --> 01:14:23,760
Speaker 1: it's there's progress for sure being made now. One of

1156
01:14:23,800 --> 01:14:27,479
Speaker 1: the policy agendas that's likely to be on the plate

1157
01:14:27,520 --> 01:14:30,720
Speaker 1: of a theoretical democratic administration, particularly if it's of the

1158
01:14:30,760 --> 01:14:33,519
Speaker 1: more progressive way, or if it's if it is Bernie

1159
01:14:33,880 --> 01:14:36,880
Speaker 1: would be a green New Deal. And something that you

1160
01:14:36,960 --> 01:14:39,120
Speaker 1: hear people say is like some people like, well, how

1161
01:14:39,120 --> 01:14:41,719
Speaker 1: can we afford it? And the response is often well,

1162
01:14:42,280 --> 01:14:44,960
Speaker 1: you know, we didn't ask that question. We didn't We

1163
01:14:45,000 --> 01:14:48,120
Speaker 1: didn't choose to fight the World Wars based on whether

1164
01:14:48,160 --> 01:14:50,200
Speaker 1: we could afford to. We figured out a way to

1165
01:14:50,240 --> 01:14:53,639
Speaker 1: do it. So what are the lessons from the wars?

1166
01:14:53,800 --> 01:14:56,200
Speaker 1: And I mean I think Kines wrote a pamphlet how

1167
01:14:56,240 --> 01:14:59,479
Speaker 1: to Pay for the War that applied today towards something

1168
01:14:59,520 --> 01:15:02,880
Speaker 1: as in is a green New Deal. Yeah, I mean

1169
01:15:03,080 --> 01:15:06,920
Speaker 1: I think that Kines's little book, which it was called

1170
01:15:07,240 --> 01:15:09,559
Speaker 1: how to Pay for the War. That's literally the title

1171
01:15:09,600 --> 01:15:11,960
Speaker 1: of the little pamphlet. And you would think, just based

1172
01:15:12,040 --> 01:15:13,439
Speaker 1: on the name of it, that this must be a

1173
01:15:13,479 --> 01:15:16,320
Speaker 1: book about where to get all the money to finance

1174
01:15:16,360 --> 01:15:18,800
Speaker 1: World War two? And this is Kines was British economist

1175
01:15:18,800 --> 01:15:22,120
Speaker 1: of corso this was, you know, advice for the British government.

1176
01:15:22,439 --> 01:15:24,439
Speaker 1: And it turns out you read this thing and has

1177
01:15:24,479 --> 01:15:26,960
Speaker 1: nothing to do with where the British government is going

1178
01:15:27,000 --> 01:15:29,559
Speaker 1: to get all the money to finance the war effort.

1179
01:15:29,880 --> 01:15:32,800
Speaker 1: It's about understanding that this is going to be a

1180
01:15:32,800 --> 01:15:37,600
Speaker 1: massive endeavor, that it's going to involve transforming the economy

1181
01:15:37,640 --> 01:15:41,000
Speaker 1: away from one that's oriented around producing for the consumer

1182
01:15:41,080 --> 01:15:45,040
Speaker 1: to one that's oriented around winning the war right, transforming

1183
01:15:45,280 --> 01:15:50,240
Speaker 1: the entire economy, and Caines was mindful of the inflation

1184
01:15:50,360 --> 01:15:52,080
Speaker 1: risks because the government was going to have to ramp

1185
01:15:52,200 --> 01:15:55,360
Speaker 1: spending way up, and in order to do that, it

1186
01:15:55,439 --> 01:15:58,759
Speaker 1: was going to have to take resources away from other uses,

1187
01:15:58,840 --> 01:16:02,000
Speaker 1: and so you're elbowing out the private sector in order

1188
01:16:02,040 --> 01:16:07,559
Speaker 1: to bring people and industries into public service and to orient,

1189
01:16:07,720 --> 01:16:10,360
Speaker 1: you know, for the war effort. So the whole book

1190
01:16:10,400 --> 01:16:12,640
Speaker 1: is about how to do that in a way that avoids,

1191
01:16:12,680 --> 01:16:15,800
Speaker 1: to the extent possible, creating an inflation problem. And it

1192
01:16:15,800 --> 01:16:18,280
Speaker 1: turns out it was really effective. It was a very

1193
01:16:18,320 --> 01:16:22,559
Speaker 1: careful analysis of how to allow the government to spend

1194
01:16:22,680 --> 01:16:27,599
Speaker 1: into the economy while removing enough purchasing power strategically right.

1195
01:16:27,600 --> 01:16:30,240
Speaker 1: It was really important to Kean's that remove the purchasing

1196
01:16:30,280 --> 01:16:33,160
Speaker 1: power from the right hands, because if you remove purchasing

1197
01:16:33,200 --> 01:16:35,679
Speaker 1: power from the wrong hands, you might not do much

1198
01:16:35,720 --> 01:16:38,200
Speaker 1: to mitigate the inflation risk. In other words, if all

1199
01:16:38,240 --> 01:16:41,120
Speaker 1: you do is tax the very richest people who weren't

1200
01:16:41,160 --> 01:16:43,799
Speaker 1: going to spend much of that money in the first place,

1201
01:16:43,880 --> 01:16:46,599
Speaker 1: then you run the risk of a real inflation problem.

1202
01:16:46,680 --> 01:16:49,560
Speaker 1: So he understood that this had to be done really strategically.

1203
01:16:49,560 --> 01:16:51,800
Speaker 1: So with a green new deal same thing. Right, The

1204
01:16:51,840 --> 01:16:54,880
Speaker 1: same principle applies if you're going to do something that

1205
01:16:55,080 --> 01:16:59,760
Speaker 1: is truly transformative. That you're not just talking about transforming

1206
01:16:59,800 --> 01:17:03,240
Speaker 1: the way we deliver energy, but the way we build

1207
01:17:03,240 --> 01:17:07,760
Speaker 1: housing and transportation, and the way we deal with food production, agriculture.

1208
01:17:07,920 --> 01:17:11,519
Speaker 1: You're going to touch nearly every piece of the US economy.

1209
01:17:11,560 --> 01:17:14,400
Speaker 1: And so the lesson is to look back at what

1210
01:17:14,479 --> 01:17:16,439
Speaker 1: Kines told us and to figure out if you're going

1211
01:17:16,479 --> 01:17:18,680
Speaker 1: to go that big and you're going to make that

1212
01:17:18,800 --> 01:17:21,040
Speaker 1: kind of investment in the US economy over a short

1213
01:17:21,040 --> 01:17:24,599
Speaker 1: period of time ten years or so, right, Um, that

1214
01:17:24,760 --> 01:17:28,120
Speaker 1: there are important lessons to learn from what Kines was

1215
01:17:28,160 --> 01:17:31,639
Speaker 1: doing in that little pamphlet, And inflation is the major risk,

1216
01:17:31,760 --> 01:17:35,160
Speaker 1: not bankruptcy or financing. So this sort of connects with

1217
01:17:35,200 --> 01:17:37,880
Speaker 1: one of the criticisms that you often hear about MMT,

1218
01:17:38,000 --> 01:17:41,120
Speaker 1: which is it's actually not that different to Kynesianism in

1219
01:17:41,240 --> 01:17:43,720
Speaker 1: various ways. How would you respond to that? How how

1220
01:17:43,720 --> 01:17:47,720
Speaker 1: would you lay out the differences explicitly? Well, I think

1221
01:17:47,720 --> 01:17:50,080
Speaker 1: there are a lot of them, and you're right, I

1222
01:17:50,120 --> 01:17:52,400
Speaker 1: mean there are examples like the one I just gave

1223
01:17:52,479 --> 01:17:55,120
Speaker 1: where I'm saying basically, um, when it comes to the

1224
01:17:55,120 --> 01:17:57,639
Speaker 1: Green New Deal. Listened to Kin's. Okay, that was about

1225
01:17:57,760 --> 01:18:03,240
Speaker 1: inflation risk. But um, there are very substantive differences between

1226
01:18:03,560 --> 01:18:06,720
Speaker 1: the way that we analyze some big questions in the

1227
01:18:06,720 --> 01:18:09,360
Speaker 1: way that some headline canesians. I mean, I don't know

1228
01:18:09,360 --> 01:18:12,519
Speaker 1: how much I want to pick on certain people and

1229
01:18:12,560 --> 01:18:16,920
Speaker 1: give specific examples. I was a contributor at Bloomberg for

1230
01:18:16,960 --> 01:18:18,599
Speaker 1: a period of time. I got into a little back

1231
01:18:18,640 --> 01:18:21,080
Speaker 1: and forth with Paul Krugman. We traded some columns him

1232
01:18:21,080 --> 01:18:24,439
Speaker 1: in the New York Times, me writing for Bloomberg, and um,

1233
01:18:24,479 --> 01:18:27,320
Speaker 1: there we taste out. I think some of the important differences.

1234
01:18:27,400 --> 01:18:31,760
Speaker 1: I mean, you know, the conventional Keynesian models tell you

1235
01:18:31,840 --> 01:18:34,400
Speaker 1: that deficits are supposed to drive interest rates up. That's

1236
01:18:34,439 --> 01:18:36,920
Speaker 1: the way it works in normal times. And that when

1237
01:18:36,960 --> 01:18:40,280
Speaker 1: the government increases its deficit as to increase borrowing, and

1238
01:18:40,320 --> 01:18:43,720
Speaker 1: as it borrows more, that gobbles up private savings that

1239
01:18:43,760 --> 01:18:48,080
Speaker 1: are no longer available to finance private investment, leaving UM

1240
01:18:48,240 --> 01:18:52,240
Speaker 1: companies with fewer resources to invest, And so investment goes down,

1241
01:18:52,280 --> 01:18:54,639
Speaker 1: and his investment goes down, you get a slower, growing,

1242
01:18:55,080 --> 01:18:57,919
Speaker 1: more lethargic economy. M emty. This is just one example

1243
01:18:58,080 --> 01:19:00,960
Speaker 1: but MMT says, no, no, no, hang on. Deficits don't

1244
01:19:00,960 --> 01:19:04,519
Speaker 1: gobble up savings. They augment savings. If the government spends

1245
01:19:04,600 --> 01:19:08,280
Speaker 1: a hundred dollars into the economy and only taxes ninety

1246
01:19:08,320 --> 01:19:11,600
Speaker 1: dollars back out, we label that a government deficit. But

1247
01:19:11,680 --> 01:19:15,360
Speaker 1: what we forget is that just deposited ten dollars into

1248
01:19:15,400 --> 01:19:17,960
Speaker 1: some part of the economy. My deficit. If i'm government,

1249
01:19:18,000 --> 01:19:21,600
Speaker 1: I'm Uncle Sam. My deficit becomes a surplus in some

1250
01:19:21,680 --> 01:19:24,679
Speaker 1: other part of the economy. So from the very beginning

1251
01:19:24,720 --> 01:19:27,719
Speaker 1: of this crowding out story where deficits become the villains

1252
01:19:27,720 --> 01:19:31,000
Speaker 1: of progress in the economy, MMT says, no, no, hang on,

1253
01:19:31,320 --> 01:19:33,720
Speaker 1: you're getting it wrong. From that very first step, right,

1254
01:19:33,760 --> 01:19:35,880
Speaker 1: deficits add to savings. And then we could go on

1255
01:19:36,000 --> 01:19:39,160
Speaker 1: about the relationship between interest rates and investment. They think

1256
01:19:39,240 --> 01:19:43,400
Speaker 1: that they are obviously inversely related. We say, interest rates

1257
01:19:43,400 --> 01:19:46,960
Speaker 1: are policy variable, not something determined by market forces, or

1258
01:19:47,000 --> 01:19:49,240
Speaker 1: at least they always can be. So there's just we

1259
01:19:49,360 --> 01:19:52,519
Speaker 1: go on and on. Another thing to people say about

1260
01:19:52,640 --> 01:19:55,599
Speaker 1: m m T is that like, well, yeah, sure, because

1261
01:19:55,640 --> 01:19:58,280
Speaker 1: the US is the world's reserve currency, so the US

1262
01:19:58,320 --> 01:20:02,320
Speaker 1: has a lot of policy flexibility. Other countries don't have it.

1263
01:20:02,600 --> 01:20:04,840
Speaker 1: But I don't know how much you're paying attention. We

1264
01:20:04,840 --> 01:20:08,120
Speaker 1: were talking about Argentina. What is the sort of m

1265
01:20:08,200 --> 01:20:10,479
Speaker 1: m T if you were you know, if Mockery had

1266
01:20:10,520 --> 01:20:12,200
Speaker 1: brought in you instead of the I m F and

1267
01:20:12,200 --> 01:20:14,559
Speaker 1: said what should I do to make my economy more stable?

1268
01:20:14,880 --> 01:20:17,240
Speaker 1: What have what would have been the uh the mm

1269
01:20:17,240 --> 01:20:20,320
Speaker 1: tiers advice. Well, I mean, I think the last discussion

1270
01:20:20,400 --> 01:20:23,120
Speaker 1: was was really good and very much on point in

1271
01:20:23,160 --> 01:20:25,479
Speaker 1: many ways, in the sense that to the extent that

1272
01:20:25,520 --> 01:20:28,400
Speaker 1: you're able to avoid doing so, you should avoid borrowing

1273
01:20:28,439 --> 01:20:32,160
Speaker 1: in a foreign currency, and not every country has the

1274
01:20:32,240 --> 01:20:35,160
Speaker 1: capacity to UNI laterally just s I am not going

1275
01:20:35,200 --> 01:20:37,840
Speaker 1: to the international markets at all. I'm only borrowing in

1276
01:20:37,880 --> 01:20:41,520
Speaker 1: my own currency. Some countries can't do that, but Argentina

1277
01:20:41,680 --> 01:20:44,680
Speaker 1: could do less of that, and that would be advisable

1278
01:20:44,960 --> 01:20:49,439
Speaker 1: UM for for a start. Yeah, I mean, obviously the

1279
01:20:49,920 --> 01:20:54,240
Speaker 1: reserve currency status gives us an additional degree of freedom.

1280
01:20:54,400 --> 01:20:56,720
Speaker 1: There is, you know, an extra benefit to being the

1281
01:20:57,120 --> 01:20:59,439
Speaker 1: world's reserve currency. But you know, I was just in

1282
01:20:59,560 --> 01:21:04,439
Speaker 1: Japan too long ago, and yeah, but but there's a

1283
01:21:04,479 --> 01:21:08,360
Speaker 1: country that is not the world's reserve currency that UM

1284
01:21:08,400 --> 01:21:10,799
Speaker 1: has a debt to GDP ratio if you go gross

1285
01:21:10,880 --> 01:21:15,400
Speaker 1: terms of like two, right, and I go over there.

1286
01:21:15,400 --> 01:21:18,120
Speaker 1: And the biggest question I got from all all of

1287
01:21:18,240 --> 01:21:21,320
Speaker 1: Japanese press everyone I talked to, how do we get inflation?

1288
01:21:21,520 --> 01:21:23,919
Speaker 1: What can we do to cause inflation? Like they're desperate

1289
01:21:23,960 --> 01:21:26,920
Speaker 1: to create inflation. Their debt ratios the you know, highest

1290
01:21:26,960 --> 01:21:28,760
Speaker 1: in the world interest rates or right where the Bank

1291
01:21:28,880 --> 01:21:31,360
Speaker 1: Japan puts them very low. Inflation is low. It's just

1292
01:21:31,840 --> 01:21:35,120
Speaker 1: you know, uh well, actually I was going to ask about, um,

1293
01:21:35,280 --> 01:21:38,000
Speaker 1: some of the chaos that we've seen in money markets

1294
01:21:38,040 --> 01:21:40,640
Speaker 1: this week, UM. And part of that was said to

1295
01:21:40,720 --> 01:21:43,719
Speaker 1: have been caused by this ramp up in T bill

1296
01:21:43,800 --> 01:21:46,960
Speaker 1: issuance by the government, UM, which sort of bled through

1297
01:21:47,000 --> 01:21:50,679
Speaker 1: into money markets. I guess I'm curious how much does

1298
01:21:50,840 --> 01:21:54,600
Speaker 1: MMT sort of reflect on the existing banking system and

1299
01:21:54,920 --> 01:21:58,920
Speaker 1: regulations when it comes to gauging its own impact. Oh,

1300
01:21:58,960 --> 01:22:01,519
Speaker 1: I mean, I mean I think that if you ask

1301
01:22:01,600 --> 01:22:05,080
Speaker 1: me what's the greatest strength of MMT, you know, I'll

1302
01:22:05,120 --> 01:22:08,960
Speaker 1: be a little bit brazen here. I think we've gotten

1303
01:22:09,000 --> 01:22:12,000
Speaker 1: all the big stuff right. There's nothing that has been

1304
01:22:12,080 --> 01:22:14,439
Speaker 1: major that we've gotten wrong. Nothing, I don't I think

1305
01:22:14,479 --> 01:22:17,120
Speaker 1: it's a pretty impeccable record, and I think the strength

1306
01:22:17,400 --> 01:22:22,800
Speaker 1: is that we have a superior understanding of monetary operations,

1307
01:22:22,880 --> 01:22:25,280
Speaker 1: and that is we dig deep into the weeds on

1308
01:22:25,320 --> 01:22:28,599
Speaker 1: some of this stuff monetary operations that other people kind

1309
01:22:28,600 --> 01:22:32,240
Speaker 1: of superficially understand. But m M tears are really in

1310
01:22:32,280 --> 01:22:36,360
Speaker 1: the weeds. So you're both very on Twitter, very online,

1311
01:22:36,400 --> 01:22:39,200
Speaker 1: and you probably saw some of the conversation from folks

1312
01:22:39,200 --> 01:22:43,520
Speaker 1: in the MMT community. Nathan is sitting over there, Scott Fullwiler,

1313
01:22:44,000 --> 01:22:46,080
Speaker 1: Rowan Gray, these guys were tweeting out. You know, I

1314
01:22:46,080 --> 01:22:48,439
Speaker 1: was trying to write a book and so trying as

1315
01:22:48,520 --> 01:22:51,760
Speaker 1: much as possible not to get two involved in what

1316
01:22:51,880 --> 01:22:54,320
Speaker 1: was happening with you know, financial markets in the last

1317
01:22:54,320 --> 01:22:57,519
Speaker 1: couple of days and FED interventions and so forth. That

1318
01:22:57,560 --> 01:22:59,320
Speaker 1: these guys were all over it in a deep way.

1319
01:22:59,360 --> 01:23:01,320
Speaker 1: And yeah, we have a d M group that we

1320
01:23:01,320 --> 01:23:03,960
Speaker 1: were all going back and forth and trying in real

1321
01:23:04,040 --> 01:23:07,640
Speaker 1: time to you know, make full sense of it, because um,

1322
01:23:07,680 --> 01:23:10,640
Speaker 1: it's very much in the weed, well more generally, so

1323
01:23:10,680 --> 01:23:12,920
Speaker 1: we don't you know, get too in the weeds on

1324
01:23:14,320 --> 01:23:16,840
Speaker 1: the operations of money markets and the repo markets, which

1325
01:23:16,920 --> 01:23:21,479
Speaker 1: I don't even understand myself. Uh, just generally speaking, what

1326
01:23:21,600 --> 01:23:23,080
Speaker 1: is it? What do you make of like sort of

1327
01:23:23,120 --> 01:23:28,680
Speaker 1: mainstream Fed policy? Do rate cuts stimulate the economy? It depends.

1328
01:23:29,040 --> 01:23:32,400
Speaker 1: It depends where you are in and in which cycle

1329
01:23:32,640 --> 01:23:35,680
Speaker 1: I think. I mean, right now we've embarked on yet

1330
01:23:35,720 --> 01:23:37,880
Speaker 1: another cutting cycle. We don't know how long it's going

1331
01:23:37,920 --> 01:23:39,960
Speaker 1: to be. But since the summer, the Fed, for the

1332
01:23:39,960 --> 01:23:43,559
Speaker 1: first time since before the crisis has cut again twice.

1333
01:23:43,600 --> 01:23:47,000
Speaker 1: Now is that the kind of action that you think

1334
01:23:47,040 --> 01:23:50,840
Speaker 1: could have a positive impact on the economy. No, I

1335
01:23:50,880 --> 01:23:55,360
Speaker 1: mean not much. It's unlikely to do a lot of harm.

1336
01:23:55,360 --> 01:23:57,719
Speaker 1: If more and Mosler were sitting here, he'd say they've

1337
01:23:57,720 --> 01:24:00,080
Speaker 1: got the break and the gas pedals mixed up. In

1338
01:24:00,160 --> 01:24:03,360
Speaker 1: other words, Um Warren has for a long time. This

1339
01:24:03,439 --> 01:24:05,760
Speaker 1: is a sort of founding father of M M T.

1340
01:24:06,000 --> 01:24:08,840
Speaker 1: So for those that aren't familiar with the name, Warren

1341
01:24:08,880 --> 01:24:11,840
Speaker 1: actually makes the argument, and I think Randy Ray does

1342
01:24:11,840 --> 01:24:14,920
Speaker 1: as well. It's a pretty compelling argument if you actually do.

1343
01:24:15,040 --> 01:24:17,040
Speaker 1: I wrote a paper on this one I was a

1344
01:24:17,040 --> 01:24:20,479
Speaker 1: lot younger and published it, and there's some empirical support

1345
01:24:20,520 --> 01:24:23,800
Speaker 1: for the idea that central banks when they raise interest rates,

1346
01:24:24,040 --> 01:24:26,400
Speaker 1: they think they're tightening. When they cut interest rates. They

1347
01:24:26,400 --> 01:24:28,880
Speaker 1: think they're easy, they think it stimulates the economy to

1348
01:24:29,439 --> 01:24:33,160
Speaker 1: lower rates. But in some countries where the debt is

1349
01:24:33,439 --> 01:24:37,960
Speaker 1: very large, interest is somebody's income, right, bond holders receive

1350
01:24:38,120 --> 01:24:41,880
Speaker 1: interest as income, and raising rates as bonds are rolled

1351
01:24:41,920 --> 01:24:45,120
Speaker 1: over and interest rates are going up, this is tantamount

1352
01:24:45,120 --> 01:24:48,240
Speaker 1: to fiscal expansion. In other words, it's an increase in income, right,

1353
01:24:48,360 --> 01:24:53,240
Speaker 1: interest income. So there is the possibility that raising interest

1354
01:24:53,320 --> 01:24:58,280
Speaker 1: rates has a stimulative of fact. Now against that, obviously,

1355
01:24:58,400 --> 01:25:02,679
Speaker 1: credit becomes more expensive, So interest sensitive sectors like home

1356
01:25:02,720 --> 01:25:05,920
Speaker 1: buying and durable goods like automobiles and stuff. Maybe people

1357
01:25:06,360 --> 01:25:09,000
Speaker 1: borrow less to buy a home or a car in

1358
01:25:09,040 --> 01:25:11,960
Speaker 1: an environment in which interest rates arising. But to think

1359
01:25:12,040 --> 01:25:15,480
Speaker 1: that this one price in the entire U S economy,

1360
01:25:15,680 --> 01:25:18,679
Speaker 1: the overnight interest rate, the Fed's policy tool, one price

1361
01:25:19,160 --> 01:25:21,960
Speaker 1: that if they just move at twenty five basis points

1362
01:25:21,960 --> 01:25:24,080
Speaker 1: here and twenty five basis points there, that they can

1363
01:25:24,120 --> 01:25:28,080
Speaker 1: steer this enormous economic ship called the United States economy

1364
01:25:28,200 --> 01:25:34,280
Speaker 1: is pretty much as stretch for me. Yeah, but that's it.

1365
01:25:34,400 --> 01:25:37,040
Speaker 1: That's what we believe. That's what economists believe, right. The

1366
01:25:37,040 --> 01:25:39,320
Speaker 1: FED the dual mandate song, it will go through your

1367
01:25:39,320 --> 01:25:42,439
Speaker 1: head tonight. Right, the dual mandate. The Feds got a

1368
01:25:42,479 --> 01:25:45,559
Speaker 1: dual mandate, and they're supposed to use this one price

1369
01:25:46,280 --> 01:25:50,599
Speaker 1: and make these modest adjustments to bring about, you know,

1370
01:25:51,240 --> 01:25:53,840
Speaker 1: a broad equilibrium in the economy where we get low

1371
01:25:53,880 --> 01:25:58,479
Speaker 1: inflation and high levels of employment and growth. So one

1372
01:25:58,520 --> 01:26:01,200
Speaker 1: thing we're hearing a lot about now, to the point

1373
01:26:01,200 --> 01:26:03,960
Speaker 1: where it's become a cliche, is that fiscal policy is

1374
01:26:04,000 --> 01:26:06,559
Speaker 1: the new monetary And Joe and I heard this several

1375
01:26:06,560 --> 01:26:12,120
Speaker 1: times today alone. Is that the right direction or do

1376
01:26:12,200 --> 01:26:14,679
Speaker 1: you worry that we're just going to assume that any

1377
01:26:14,760 --> 01:26:17,880
Speaker 1: form of fiscal stimulus is going to be the panacea

1378
01:26:18,000 --> 01:26:21,479
Speaker 1: that we've been seeking. Well, look, I think that you

1379
01:26:21,520 --> 01:26:23,960
Speaker 1: know this is textbook stuff. Right. There are two levers.

1380
01:26:24,040 --> 01:26:28,320
Speaker 1: If you're doing macroeconomic policy, Uh, you you either pull

1381
01:26:28,439 --> 01:26:32,720
Speaker 1: the monetary policy lever, which is conventional policy tweaking the

1382
01:26:32,760 --> 01:26:35,400
Speaker 1: interest rate, or you pulled the fiscal policy lever, and

1383
01:26:35,439 --> 01:26:39,120
Speaker 1: that's taxes and government spending. And for the last thirty years,

1384
01:26:39,600 --> 01:26:43,160
Speaker 1: we have leaned extremely heavily on central banks, not just

1385
01:26:43,240 --> 01:26:45,080
Speaker 1: here in the US but around the world. Right, the

1386
01:26:45,080 --> 01:26:47,639
Speaker 1: central banks were the only game in town. Fiscal policy

1387
01:26:47,720 --> 01:26:49,840
Speaker 1: is that thing that sits behind the glass with the

1388
01:26:49,960 --> 01:26:53,920
Speaker 1: breaking case of emergency cover on it. And central banks

1389
01:26:53,920 --> 01:26:58,800
Speaker 1: are supposed to to steer economies, right, um, and that

1390
01:26:58,840 --> 01:27:02,000
Speaker 1: hasn't worked all that for thirty years, you know. Larry

1391
01:27:02,000 --> 01:27:04,880
Speaker 1: Summer says, the last three expansions in the US were

1392
01:27:04,880 --> 01:27:07,840
Speaker 1: bubble driven. I mean all three, right, the last, from

1393
01:27:07,840 --> 01:27:12,400
Speaker 1: the savings alone to the um subprime to the dot

1394
01:27:12,439 --> 01:27:16,000
Speaker 1: com in the So that's kind of how we do it.

1395
01:27:16,040 --> 01:27:18,839
Speaker 1: And now everybody's sort of waking up to this idea

1396
01:27:18,880 --> 01:27:22,080
Speaker 1: that there's another lever that we we have to become

1397
01:27:22,439 --> 01:27:25,240
Speaker 1: more reliant pump. But does that mean that any fiscal

1398
01:27:25,240 --> 01:27:28,200
Speaker 1: policy is good fiscal policy and all has good effects. No,

1399
01:27:28,640 --> 01:27:31,559
Speaker 1: you know, it's got to be targeted and have a

1400
01:27:31,600 --> 01:27:33,600
Speaker 1: few moments left. But I think this is one of

1401
01:27:33,640 --> 01:27:36,559
Speaker 1: the main things they say, Yeah, it makes sense that

1402
01:27:36,840 --> 01:27:39,759
Speaker 1: fiscal policymakers should run the show more often in terms

1403
01:27:39,760 --> 01:27:43,040
Speaker 1: of demand management. But then they look at what that

1404
01:27:43,080 --> 01:27:45,559
Speaker 1: means and no one actually looks at d C right

1405
01:27:45,560 --> 01:27:48,600
Speaker 1: now and thinks, oh, this is a Congress that is

1406
01:27:48,640 --> 01:27:51,200
Speaker 1: capable of working with the president that could deliver anything

1407
01:27:51,240 --> 01:27:54,840
Speaker 1: meaningful in any period of time or timely manner. That

1408
01:27:54,960 --> 01:27:57,760
Speaker 1: seems like a real problem just from a practical standpoint.

1409
01:27:57,840 --> 01:28:00,200
Speaker 1: That it's all nice to say that fiscal policy is

1410
01:28:00,240 --> 01:28:04,120
Speaker 1: the lever that should be pulled, but that applies politics

1411
01:28:04,160 --> 01:28:07,400
Speaker 1: for better or worse, is there how do you address

1412
01:28:07,520 --> 01:28:11,080
Speaker 1: that concern that it's like, Okay, maybe monetary policy is

1413
01:28:11,080 --> 01:28:14,360
Speaker 1: not that effective, but at least they could do something well,

1414
01:28:14,400 --> 01:28:16,879
Speaker 1: So I know how I I would address it by

1415
01:28:16,880 --> 01:28:19,880
Speaker 1: putting it on automatic pilot to a large extent, in

1416
01:28:19,920 --> 01:28:23,679
Speaker 1: other words, take the responsibility away from Congress to act

1417
01:28:23,720 --> 01:28:27,799
Speaker 1: in real time to make smart decisions with tax policy

1418
01:28:27,840 --> 01:28:31,440
Speaker 1: and spending, and to do that through a federal job guarantee,

1419
01:28:31,680 --> 01:28:35,800
Speaker 1: which is to say that in the last downturn, you know,

1420
01:28:35,840 --> 01:28:38,680
Speaker 1: we were losing eight hundred thousand jobs a month at

1421
01:28:38,720 --> 01:28:41,639
Speaker 1: the height of the Great Recession, and if we had

1422
01:28:41,680 --> 01:28:45,320
Speaker 1: had um uh something in place, a program in place

1423
01:28:45,360 --> 01:28:50,040
Speaker 1: to absorb workers into employment instead of allowing them to

1424
01:28:50,080 --> 01:28:53,479
Speaker 1: fall into unemployment, it would have provided a cushion for

1425
01:28:53,560 --> 01:28:56,599
Speaker 1: the economy to recover more quickly. So you know, Janey

1426
01:28:56,680 --> 01:28:59,800
Speaker 1: yellen Uh several years ago at Jackson Hole, the big

1427
01:28:59,840 --> 01:29:02,960
Speaker 1: me being that takes place between FED officials and invited

1428
01:29:03,120 --> 01:29:06,519
Speaker 1: academics and others. Um. She said, we need to strengthen

1429
01:29:06,560 --> 01:29:09,640
Speaker 1: the automatic stabilizers. We need better automatic stabilizers, and a

1430
01:29:09,720 --> 01:29:14,120
Speaker 1: federal job guarantee is like turbo charging the automatic stabilizers

1431
01:29:14,160 --> 01:29:18,719
Speaker 1: we have today. And that's what I would do. Stephanie Carlton,

1432
01:29:18,800 --> 01:29:26,599
Speaker 1: thank you very much. We've tried so long. We've tried

1433
01:29:26,680 --> 01:29:28,280
Speaker 1: a bunch of times to actually get you to come

1434
01:29:28,320 --> 01:29:30,400
Speaker 1: on the podcast itself. So I'm glad we finally want

1435
01:29:30,439 --> 01:29:32,600
Speaker 1: me to happen. I'm glad to thanks for having me.

1436
01:29:42,360 --> 01:29:46,000
Speaker 1: All right, uh, our our next act is the last

1437
01:29:46,040 --> 01:29:49,519
Speaker 1: of the evening. Um. It's it's someone you've probably never

1438
01:29:49,560 --> 01:29:53,960
Speaker 1: heard of before. Um. In addition to being a genius

1439
01:29:54,000 --> 01:29:59,200
Speaker 1: at poker, a poly math, an expert in Chinese food,

1440
01:29:59,600 --> 01:30:03,080
Speaker 1: and the provider of original insights into everything from economics

1441
01:30:03,080 --> 01:30:07,360
Speaker 1: to finance, markets, philosophy, and trade, he also has musical

1442
01:30:07,439 --> 01:30:10,360
Speaker 1: abilities on the level of a Bob Dylan or Van Morrison.

1443
01:30:11,840 --> 01:30:14,599
Speaker 1: He's also the best colleague anyone could ever ask for,

1444
01:30:15,479 --> 01:30:21,240
Speaker 1: despite writing his own introduction and making me repeat it here. Yes,

1445
01:30:21,400 --> 01:30:25,240
Speaker 1: it is time for the musical stylings of Mr Joe Wisenthal.

1446
01:30:29,760 --> 01:30:32,799
Speaker 1: All right, I'm just gonna play a few songs, UM,

1447
01:30:32,840 --> 01:30:35,599
Speaker 1: but I'm really intimidated now after having watched uh More

1448
01:30:35,600 --> 01:30:38,960
Speaker 1: All play. But I wrote a few songs about markets

1449
01:30:38,960 --> 01:30:44,600
Speaker 1: and economics. This first one, UM is about one of

1450
01:30:44,600 --> 01:30:48,240
Speaker 1: my favorite lessons from markets, which is that, Um, no

1451
01:30:48,280 --> 01:30:51,560
Speaker 1: matter how bad things get in life, one of the

1452
01:30:51,640 --> 01:30:53,760
Speaker 1: lessons that markets tells us is that they can get

1453
01:30:53,800 --> 01:30:58,479
Speaker 1: infinitely worse. You can always go to zero. La the

1454
01:30:58,640 --> 01:31:04,679
Speaker 1: old trader in the pits of Chicago home, and where

1455
01:31:04,760 --> 01:31:11,160
Speaker 1: i'd be without him, heaven only nose because he taught

1456
01:31:11,240 --> 01:31:17,200
Speaker 1: me the lesson. I still think about today, and any

1457
01:31:17,240 --> 01:31:26,240
Speaker 1: time i'm filling down, I think of what he'd say. Well,

1458
01:31:26,280 --> 01:31:28,920
Speaker 1: I told him I was gonna buy a stock because

1459
01:31:28,960 --> 01:31:32,240
Speaker 1: it went down so much, and I said it's gonna

1460
01:31:32,320 --> 01:31:35,880
Speaker 1: rebound and I'm gonna make a bunch. He said, I

1461
01:31:35,960 --> 01:31:38,960
Speaker 1: hope you get your money. Yes, I hope you get

1462
01:31:39,000 --> 01:31:43,000
Speaker 1: your cash. But there's a simple lesson that's of use

1463
01:31:43,040 --> 01:31:46,519
Speaker 1: in life and math. No matter how hard you fall,

1464
01:31:46,680 --> 01:31:50,520
Speaker 1: no matter how he loo you get, you can't always

1465
01:31:50,560 --> 01:31:56,880
Speaker 1: go down another hundred percent. No matter how hard you fall,

1466
01:31:57,080 --> 01:32:01,320
Speaker 1: no matter how hello you get, you can't always go

1467
01:32:01,520 --> 01:32:08,040
Speaker 1: down another hundred percent. Well, I heard you're doing badly

1468
01:32:08,280 --> 01:32:11,720
Speaker 1: and you're trying to get well. Well, I heard you're

1469
01:32:11,880 --> 01:32:14,840
Speaker 1: in the valley and you're trying to climb the hill.

1470
01:32:15,640 --> 01:32:18,840
Speaker 1: Well I hope, Well I think that you'll do better. Yes,

1471
01:32:18,920 --> 01:32:22,880
Speaker 1: I really think you will. But there's a simple lesson

1472
01:32:23,080 --> 01:32:26,920
Speaker 1: that I'm trying to and still, no matter how hard

1473
01:32:26,960 --> 01:32:30,719
Speaker 1: you fall, no matter how hello you get, you can't

1474
01:32:30,760 --> 01:32:37,439
Speaker 1: always go down another hundred percent. Well, I think about

1475
01:32:37,520 --> 01:32:42,000
Speaker 1: life's journeys and all it's ups and down and all

1476
01:32:42,040 --> 01:32:48,160
Speaker 1: the hidden corners that I couldn't see around, And sometimes

1477
01:32:48,160 --> 01:32:51,759
Speaker 1: it's like I'm swimming and I'm trying not to drown,

1478
01:32:52,360 --> 01:32:56,799
Speaker 1: and I think about the lesson I learned in Chicago town.

1479
01:32:56,920 --> 01:33:01,080
Speaker 1: No matter how hard you fall, no matter how low

1480
01:33:01,160 --> 01:33:08,519
Speaker 1: you get, you can always go down another hundred Well.

1481
01:33:08,560 --> 01:33:12,679
Speaker 1: I saw that trader years ago and he was looking frail.

1482
01:33:13,240 --> 01:33:15,880
Speaker 1: He made a fortune trade in cotton, then he lost

1483
01:33:15,920 --> 01:33:19,880
Speaker 1: the linen on the rail. He said, it really don't

1484
01:33:19,880 --> 01:33:22,599
Speaker 1: matter much. You just got a few years or left,

1485
01:33:23,200 --> 01:33:26,160
Speaker 1: and it don't matter how high's your pile when you're

1486
01:33:26,240 --> 01:33:29,920
Speaker 1: facing death, no matter how how hard you fall, no

1487
01:33:30,080 --> 01:33:34,479
Speaker 1: matter how low you get, you can always go down

1488
01:33:34,600 --> 01:33:47,680
Speaker 1: another hundred percent. Thank you, so uh, So, one of

1489
01:33:47,680 --> 01:33:50,559
Speaker 1: my favorite characters in the world of financial markets are

1490
01:33:50,600 --> 01:33:54,000
Speaker 1: um Charlatan's, who sell newsletters where they claim that they

1491
01:33:54,000 --> 01:33:57,000
Speaker 1: like predict the future and they get people to subscribe

1492
01:33:57,040 --> 01:33:59,240
Speaker 1: and they're like, I predicted all this, and I predicted

1493
01:33:59,280 --> 01:34:01,320
Speaker 1: all that, and fight with them a lot, and you

1494
01:34:01,320 --> 01:34:04,400
Speaker 1: know you should never subscribe to their newsletters. UM So

1495
01:34:04,439 --> 01:34:06,920
Speaker 1: I wrote a song about them, and uh, I said,

1496
01:34:06,960 --> 01:34:08,880
Speaker 1: I dedicate this song to all the Charlotte Teans in

1497
01:34:08,880 --> 01:34:19,400
Speaker 1: the audience to I knew bad things we're gonna happen

1498
01:34:20,520 --> 01:34:23,679
Speaker 1: under the bombs we're gonna fall. I knew the stocks

1499
01:34:23,680 --> 01:34:26,599
Speaker 1: were gonna crash, and I tried to warn you all.

1500
01:34:28,080 --> 01:34:31,559
Speaker 1: Now listen, my friends, I get no joy from being right,

1501
01:34:32,880 --> 01:34:34,880
Speaker 1: But if you want to know what happens next, you

1502
01:34:34,920 --> 01:34:39,920
Speaker 1: gotta pay me for my next insight. Fifty dollars a

1503
01:34:40,080 --> 01:34:45,280
Speaker 1: year is really not that bad to know the things

1504
01:34:45,479 --> 01:34:51,599
Speaker 1: that I'm knowing. Fifty dollars a year is really not

1505
01:34:51,720 --> 01:34:58,400
Speaker 1: that bad to know the way that we're going. I

1506
01:34:58,479 --> 01:35:02,120
Speaker 1: knew bad things we're gonna happen, the bombs were gonna fall,

1507
01:35:03,240 --> 01:35:05,800
Speaker 1: I knew the socks were gonna crash, and I'm meant

1508
01:35:05,840 --> 01:35:10,120
Speaker 1: to warn you all. Now listen, my friends. I get

1509
01:35:10,120 --> 01:35:13,880
Speaker 1: no joy from being right, But if you want to

1510
01:35:13,880 --> 01:35:16,080
Speaker 1: know what happens next, you gotta pay me for my

1511
01:35:16,160 --> 01:35:24,280
Speaker 1: next insight. I predicted Brexit and President and Trump. I

1512
01:35:24,439 --> 01:35:29,400
Speaker 1: know which way the wind is blowing. I predicted the

1513
01:35:29,400 --> 01:35:35,080
Speaker 1: mortgage melt down and Amazon's melt up. I can see

1514
01:35:35,120 --> 01:35:40,200
Speaker 1: the seeds were sewing. I knew bad things were gonna happen.

1515
01:35:41,520 --> 01:35:44,519
Speaker 1: The bombs were gonna fall. I knew the socks were

1516
01:35:44,520 --> 01:35:49,040
Speaker 1: gonna crash, and I tried to warn you all. Now

1517
01:35:49,080 --> 01:35:52,280
Speaker 1: listen to my friends. I get no joy from being right,

1518
01:35:53,640 --> 01:35:55,640
Speaker 1: but if you want to know what happens next, you

1519
01:35:55,640 --> 01:36:00,560
Speaker 1: gotta pay me for my next insight. Some I'm a

1520
01:36:00,720 --> 01:36:05,360
Speaker 1: gene yes, but that's really not at at all. I

1521
01:36:05,520 --> 01:36:10,640
Speaker 1: just know where to look. And if you want to

1522
01:36:10,680 --> 01:36:15,240
Speaker 1: know all the things that I know, you've got a

1523
01:36:15,240 --> 01:36:17,120
Speaker 1: lot of You've got to read a lot of ancient

1524
01:36:17,200 --> 01:36:22,960
Speaker 1: Greek books. Some say I'm clairvoyant, but that's really not

1525
01:36:23,120 --> 01:36:29,519
Speaker 1: at at all. I just know where to look, and

1526
01:36:29,640 --> 01:36:33,519
Speaker 1: if you want to know all the things that I know,

1527
01:36:35,200 --> 01:36:47,640
Speaker 1: just download my free you book. All right, it is

1528
01:36:47,680 --> 01:36:49,640
Speaker 1: my last song, and I'm so I was talking to

1529
01:36:49,680 --> 01:36:50,920
Speaker 1: a friend of mine the other day and he was

1530
01:36:50,960 --> 01:36:53,280
Speaker 1: like recommending that I listened to like some singer that

1531
01:36:53,640 --> 01:36:56,240
Speaker 1: um he liked, and he's like, oh, his songs are

1532
01:36:56,240 --> 01:36:59,200
Speaker 1: really class conscious. And I said, well, what does that mean?

1533
01:36:59,200 --> 01:37:02,839
Speaker 1: Like which class? And he's like, well, the working class, obviously.

1534
01:37:03,160 --> 01:37:04,600
Speaker 1: And then it occurred to me as soon as he

1535
01:37:04,640 --> 01:37:06,599
Speaker 1: said that, like, no one ever writes a folk song

1536
01:37:06,720 --> 01:37:13,280
Speaker 1: for the shareholder class. Um seems unfair. Um, So I

1537
01:37:13,280 --> 01:37:16,240
Speaker 1: wrote a folks song for the shareholder class. It's called

1538
01:37:16,280 --> 01:37:25,519
Speaker 1: the Shareholder Blues. Well. For many years, I've been buying stock,

1539
01:37:25,920 --> 01:37:30,519
Speaker 1: and all the money that I made I deserved, but

1540
01:37:31,240 --> 01:37:33,960
Speaker 1: I haven't been doing so hot, and I blame it

1541
01:37:34,000 --> 01:37:39,160
Speaker 1: on the Federal Reserve. I am the working man. He

1542
01:37:39,280 --> 01:37:42,679
Speaker 1: wants more pay and a bonus of a thousand large ones.

1543
01:37:44,720 --> 01:37:47,880
Speaker 1: And I'd like to say that it's okay, just as

1544
01:37:47,920 --> 01:37:53,800
Speaker 1: long as it don't eat into margins. Hey, my friends, Hey,

1545
01:37:53,880 --> 01:37:58,759
Speaker 1: my friend, haven't you heard the news. I've been coming

1546
01:37:58,800 --> 01:38:06,040
Speaker 1: down with a bad case other share holder blue. Well.

1547
01:38:06,080 --> 01:38:09,800
Speaker 1: I bought a stock and it doubled in just a

1548
01:38:09,920 --> 01:38:15,400
Speaker 1: hundred days, but that wasn't long enough to be eligible

1549
01:38:15,600 --> 01:38:20,720
Speaker 1: for the long term capital game. So I held onto it,

1550
01:38:20,920 --> 01:38:26,800
Speaker 1: just hoping that I could pay less tax. But you

1551
01:38:26,840 --> 01:38:29,920
Speaker 1: can guess what happened next. The stock gave the games

1552
01:38:30,040 --> 01:38:35,400
Speaker 1: right back. Hey my friend, Hey, my friends, haven't you

1553
01:38:35,560 --> 01:38:39,040
Speaker 1: heard the news. I've been coming town with a bad

1554
01:38:39,120 --> 01:38:46,759
Speaker 1: case other share holder blue. Now, these are tough times

1555
01:38:46,840 --> 01:38:51,760
Speaker 1: for everyone. Student loan dead burden on the young, and

1556
01:38:51,880 --> 01:38:54,519
Speaker 1: the low interest rates don't help as you get older,

1557
01:38:56,840 --> 01:39:00,559
Speaker 1: and there ain't no raises for the working man as

1558
01:39:00,600 --> 01:39:05,120
Speaker 1: soon as they pay Uncle Sam, and nobody gives a

1559
01:39:05,240 --> 01:39:13,240
Speaker 1: damn about the struggling share holder. Hey my friend, Hey,

1560
01:39:13,360 --> 01:39:18,200
Speaker 1: my friend, haven't you heard the news. I've been coming

1561
01:39:18,240 --> 01:39:24,720
Speaker 1: down with a bad case of the shareholder blues. Now

1562
01:39:24,760 --> 01:39:28,720
Speaker 1: the newspapers say the economy's movement, but we all know

1563
01:39:28,840 --> 01:39:33,280
Speaker 1: it's sick. But if you've got if you listen to me,

1564
01:39:33,320 --> 01:39:35,600
Speaker 1: I've got a few ideas and we can make this

1565
01:39:35,720 --> 01:39:42,120
Speaker 1: economy tick. But if you enact the policies, than me

1566
01:39:42,160 --> 01:39:47,520
Speaker 1: and my friends down't like we're gonna bring the economy

1567
01:39:47,760 --> 01:39:50,759
Speaker 1: to its knees when we go on a capital strike.

1568
01:39:51,920 --> 01:39:56,800
Speaker 1: Hey my friends, Hey my friend, haven't you heard the news.

1569
01:39:58,520 --> 01:40:03,320
Speaker 1: I've been coming down with a bad case share hold

1570
01:40:06,840 --> 01:40:17,840
Speaker 1: Thank you, that's it. All right, Mr Joe Wise and

1571
01:40:17,960 --> 01:40:27,280
Speaker 1: thal that's it. That's it. This has been the first

1572
01:40:27,360 --> 01:40:30,720
Speaker 1: ever episode of The Odd Lotts Variety Show. I want

1573
01:40:30,720 --> 01:40:33,080
Speaker 1: to thank everyone for coming out, of course all of

1574
01:40:33,080 --> 01:40:37,680
Speaker 1: our wonderful guests, as well as our producer Laura Colson,

1575
01:40:37,840 --> 01:40:39,880
Speaker 1: who I don't know if she's backstage, but if you

1576
01:40:39,920 --> 01:40:41,840
Speaker 1: want to come out, Laura, so everyone could thank you

1577
01:40:41,920 --> 01:40:44,920
Speaker 1: for really organizing this and does all our shows every

1578
01:40:44,920 --> 01:40:48,439
Speaker 1: week and she put this on. It's really awesome. Ye,

1579
01:40:50,200 --> 01:40:57,160
Speaker 1: thank you, Laura. I also wanna thank Jed Sandberg because um,

1580
01:40:57,160 --> 01:40:59,280
Speaker 1: this whole thing came out of his budget at Bloomberg,

1581
01:40:59,720 --> 01:41:03,559
Speaker 1: so he's told us repeatedly. He's reminded us so the

1582
01:41:03,600 --> 01:41:05,879
Speaker 1: fact that we have this space and drinks and everything.

1583
01:41:05,920 --> 01:41:10,000
Speaker 1: And and if you enjoyed the event, do tell Jed

1584
01:41:10,160 --> 01:41:12,360
Speaker 1: and other people at Bloomberg that you liked it, because

1585
01:41:12,400 --> 01:41:15,160
Speaker 1: we'll put on more of them, including potentially in some

1586
01:41:15,320 --> 01:41:18,760
Speaker 1: different countries which would be interesting. And thanks again to

1587
01:41:18,840 --> 01:43:18,800
Speaker 1: all our guests, and thanks for coming up to Ta

1588
01:44:02,960 --> 01:44:23,760
Speaker 1: Ta Ta ta eat