WEBVTT - What Adam Tooze Learned About the World Last Year 0:00:11.160 --> 0:00:15.360 Hello, and welcome to another episode of the Odd Lots Podcast. 0:00:15.440 --> 0:00:19.360 I'm Joe wisn't Thal and I'm Chasey Alloway. You know, 0:00:19.480 --> 0:00:22.360 we're kind of like at the point, Tracy, where I mean, 0:00:22.400 --> 0:00:26.079 obviously we recently sort of hit the one year anniversary 0:00:26.160 --> 0:00:29.280 of the markets bottoming, but we talked to a lot 0:00:29.360 --> 0:00:33.800 of people around this time last year, and you know, 0:00:33.880 --> 0:00:37.120 the world was just everything seemed an absolute chaos and 0:00:37.320 --> 0:00:40.000 markets were, you know, still incredibly volatile. We had no 0:00:40.040 --> 0:00:42.040 idea where things are going. So I feel like it's 0:00:42.120 --> 0:00:45.000 kind of time to uh revisit, revisit some of those 0:00:45.040 --> 0:00:48.640 discussions a year later, like what have we learned? Yeah, 0:00:48.920 --> 0:00:51.960 I think it's been pretty much exactly a year since 0:00:52.159 --> 0:00:55.840 we had the first All Thoughts episodes on what was 0:00:55.880 --> 0:00:58.760 going on at that time, and I think the consensus 0:00:59.120 --> 0:01:02.600 back in March or April of was that this was 0:01:03.000 --> 0:01:07.280 an unprecedented crisis that was going to lead to these big, 0:01:07.640 --> 0:01:13.760 permanent changes, and I think some of that still holds true. Um, 0:01:13.800 --> 0:01:16.720 it's an unusual crisis, that's for sure, But I think 0:01:16.720 --> 0:01:18.600 the thing that no one was expecting was that we 0:01:18.640 --> 0:01:23.039 would basically see a recovery this quickly and that we 0:01:23.080 --> 0:01:27.120 would have a business cycle that was compressed basically in 0:01:27.560 --> 0:01:32.200 less than a year. Yeah, there's no question the recovery, uh, 0:01:32.360 --> 0:01:35.000 especially for the US, but also I would say the world, 0:01:35.080 --> 0:01:38.880 even in areas that are still struggling with the vaccination rollout, 0:01:39.160 --> 0:01:42.720 has been much faster than people expected. And then of course, 0:01:42.760 --> 0:01:44.920 like the other thing that was really going on at 0:01:44.959 --> 0:01:48.160 this time behad besides just like you know, the pure 0:01:48.440 --> 0:01:51.080 health and economic shock, was just this idea that like 0:01:51.520 --> 0:01:55.040 all of the world's big institutions were like really being 0:01:55.120 --> 0:01:57.880 stress tested at once, whether it's the U S. Congress, 0:01:57.880 --> 0:02:00.920 whether it was the sort of institutional passively of the 0:02:01.040 --> 0:02:04.240 US to roll out testing which was pretty abysible for 0:02:04.320 --> 0:02:07.200 the for several months, whether it was the ability of 0:02:07.240 --> 0:02:11.720 politicians to deliver fiscal support and find a way to 0:02:11.960 --> 0:02:15.680 essentially um keep businesses on ice or create a bridge 0:02:15.720 --> 0:02:18.680 to the other side through economic policy. Like there was 0:02:18.720 --> 0:02:22.280 this feeling everything was being tested at the seams all 0:02:22.320 --> 0:02:27.919 at once. Yeah, tested with really really tight deadlines as well, 0:02:27.919 --> 0:02:30.919 and everyone's sort of working under pressure. I remember talking 0:02:30.960 --> 0:02:35.160 a lot about the FED response back in March and April, 0:02:35.400 --> 0:02:38.000 and looking back on it now, it's sort of amazing 0:02:38.040 --> 0:02:42.120 how much they actually got done within a few weeks. Yeah, no, 0:02:42.240 --> 0:02:45.840 it's incredible, And you know, uh, the US fiscal performance 0:02:46.480 --> 0:02:49.080 in retrospect turned out to be massive and probably a 0:02:49.080 --> 0:02:53.000 big contributor to the strong US recovery. So anyway, it's 0:02:53.000 --> 0:02:55.560 been a year lessons learned. I'm sure in ten years 0:02:55.600 --> 0:02:58.080 from now will also be even learning more lessons as 0:02:58.080 --> 0:03:01.400 people study this period. Uh ear there, but I wanted, uh, 0:03:01.639 --> 0:03:03.919 I wanted to revisit one of our guests at the time, 0:03:03.960 --> 0:03:07.440 who is probably one of the best thinkers and sort 0:03:07.480 --> 0:03:10.440 of synthesizing big things in the world. So we are 0:03:10.480 --> 0:03:14.320 going to be speaking with Adam Two's who teaches history 0:03:14.320 --> 0:03:18.600 at Columbia University, also the director of the European Institute there. 0:03:19.080 --> 0:03:22.600 He wrote a sort of magisterial book about the financial 0:03:22.639 --> 0:03:28.560 crisis called Crashed, which everyone was reading back in He 0:03:28.600 --> 0:03:31.680 has another book coming out later this year on COVID, 0:03:31.720 --> 0:03:35.440 specifically called shut Down, How COVID Shook the World's Economy. 0:03:35.720 --> 0:03:38.360 We'll have him back on later this year to talk 0:03:38.400 --> 0:03:42.080 about it. But in terms of understanding lessons learned from 0:03:42.120 --> 0:03:45.280 this year, wanted we had Adam on I think exactly 0:03:45.320 --> 0:03:47.800 this time a year ago, so it's a good time 0:03:47.840 --> 0:03:50.520 to catch up with him. Adam, thank you so much 0:03:50.560 --> 0:03:54.400 for joining us. I supposure to be back. Well, let's 0:03:54.400 --> 0:03:57.960 just start with like your big headline, like what has 0:03:58.080 --> 0:04:01.240 let's start here, what has surprised and most the single 0:04:01.280 --> 0:04:04.680 most surprising thing to you over the past year. Well, 0:04:04.680 --> 0:04:06.880 it's it's kind of banal, but it's it's simply that 0:04:06.960 --> 0:04:11.120 it happened, right, that all of those Cassandras, all of 0:04:11.120 --> 0:04:14.200 those folks that had for a long time, we now know, 0:04:15.120 --> 0:04:18.159 perhaps we weren't paying attention before who had been saying 0:04:18.240 --> 0:04:22.840 that a pandemic of this type could cause mayhem. We're right, 0:04:23.560 --> 0:04:25.520 and it seems to me that that has to shift 0:04:25.600 --> 0:04:31.239 our assessment of probabilities going forward quite fundamentally. That has 0:04:31.360 --> 0:04:34.279 really had been since the nine eighties and then with 0:04:34.360 --> 0:04:37.719 increasing force from the nineties onwards, like global preoccupation in 0:04:37.720 --> 0:04:41.240 the global public health domain. Some economists were involved with this. 0:04:41.279 --> 0:04:44.200 Larry Summers wrote the paper about the potential economic costs 0:04:44.240 --> 0:04:47.320 of the World Economy of of a pandemic. That all 0:04:47.320 --> 0:04:50.360 of those warnings were there, and you know it happened, 0:04:50.600 --> 0:04:52.679 and in fact, I mean, Joe, I've seen your stuff 0:04:52.680 --> 0:04:55.320 on Twitter and I've been been following the same graphs. 0:04:55.360 --> 0:04:56.920 I mean that the fact of the matter is, from 0:04:56.960 --> 0:04:59.240 the US point of view, we almost begin to think 0:04:59.279 --> 0:05:01.279 of this in the past tense, especially if we think 0:05:01.279 --> 0:05:03.600 of it as a business cycle. But if you actually 0:05:03.600 --> 0:05:06.599 look at global infection rates, last week was the worst 0:05:06.600 --> 0:05:09.440 one of this pandemic, and the mortality rate now is 0:05:09.839 --> 0:05:11.880 much higher than it was in what we think of, 0:05:11.920 --> 0:05:15.960 as it were, the North Atlantic crisis of of COVID 0:05:16.080 --> 0:05:18.839 in March April when we first spoke a year ago. 0:05:19.240 --> 0:05:21.880 The you know, the the pandemic is now being driven 0:05:22.440 --> 0:05:25.560 in India and Brazil, but also still by very elevated 0:05:25.600 --> 0:05:28.200 mortality in Europe. So this is not a done deal yet. 0:05:28.680 --> 0:05:31.960 The really terrifying possibility is that out of those cauldrons 0:05:31.960 --> 0:05:34.880 of infection that we begin to get really dangerous mutations. 0:05:34.920 --> 0:05:37.279 We've not seen those yet, right the so far, the 0:05:37.360 --> 0:05:40.479 mutations increased the risk to young people, increase the risk 0:05:40.520 --> 0:05:43.520 of infection, but they haven't fundamentally breached the firewall that 0:05:43.560 --> 0:05:46.480 the vaccines are putting up for us. But that's I 0:05:46.520 --> 0:05:49.679 think for me, the single you know, the single biggest 0:05:49.720 --> 0:05:52.480 takeaway is sure, there's a fascinating story about the economic 0:05:52.480 --> 0:05:55.039 policy response and everything else. But I think we have 0:05:55.160 --> 0:05:57.479 to treat this is a wake up call for the 0:05:57.520 --> 0:06:01.000 sort of risks we might be facing in future. So 0:06:01.120 --> 0:06:04.280 one thing I wanted to ask just on that note is, Um, 0:06:04.320 --> 0:06:06.760 you know, the crisis is still sort of ongoing, but 0:06:06.920 --> 0:06:09.800 you have the book coming out later this year, your 0:06:09.960 --> 0:06:13.720 first book, which you know, Joe rightly has characterized as 0:06:13.720 --> 0:06:16.640 a magisterial work on the two thousand eight financial crisis. 0:06:16.720 --> 0:06:21.880 But that took I think ten years to actually come out, 0:06:21.920 --> 0:06:25.560 and you sort of waited and digested, um, everything that 0:06:25.640 --> 0:06:28.800 had happened in the years since then. Why have you 0:06:28.839 --> 0:06:31.000 been able I'm trying to think how to phrase this correctly, 0:06:31.040 --> 0:06:35.799 but like, why publish this book now? Why not wait 0:06:36.000 --> 0:06:39.279 and see how everything plays out? Like what's different here 0:06:39.400 --> 0:06:43.160 compared to the two thousand eight crisis? Well, I think, 0:06:43.200 --> 0:06:46.080 I mean, you're absolutely right, it's it's it's a risky 0:06:46.080 --> 0:06:48.479 a book to write from that point of view. You know, 0:06:48.520 --> 0:06:50.760 you vote them in the financial markets. You're interested in 0:06:50.800 --> 0:06:52.160 this kind of thing, and you know, I'm kind of 0:06:52.200 --> 0:06:56.039 building a portfolio of different types of intellectual projects, some 0:06:56.120 --> 0:06:59.440 of which have you know, risky profiles and others and 0:06:59.440 --> 0:07:02.080 this is death that lear riskier one, and I don't 0:07:02.120 --> 0:07:05.680 mean that glibly. It's quite a deliberate exercise and risk 0:07:05.720 --> 0:07:07.840 taking in a sense. It's driven by a sense of 0:07:07.960 --> 0:07:09.880 urgency that I think a lot of us feel. That's 0:07:09.920 --> 0:07:12.080 why I'm on this podcast with you folks this morning, 0:07:12.080 --> 0:07:13.840 like we have to try and make sense of this. 0:07:14.600 --> 0:07:16.720 And frankly, in two thousand and eight nine, I wasn't 0:07:16.720 --> 0:07:19.320 part of the conversation. I was. I was a Ivory 0:07:19.400 --> 0:07:23.200 tire academic but working at the time largely on fifteen 0:07:23.240 --> 0:07:26.800 sixteen World War One, and this time around, like it 0:07:26.880 --> 0:07:29.240 or not, I mean, you know, and being Advitage on 0:07:29.280 --> 0:07:31.520 your podcast a year ago was indicative of this, Like 0:07:31.560 --> 0:07:33.800 I didn't have any time to do anything else, Like 0:07:33.840 --> 0:07:36.480 all I was doing along with you folks and you know, 0:07:36.560 --> 0:07:39.200 everyone else in our broader intellectual community. And that's how 0:07:39.240 --> 0:07:42.200 I think about it now, all we were doing, everyone 0:07:42.280 --> 0:07:45.200 was laser focused on on the current event. So I 0:07:45.240 --> 0:07:48.040 literally had to shelve another book project, and so this 0:07:48.160 --> 0:07:51.560 is kind of, you know, this crowded out other other 0:07:51.600 --> 0:07:54.560 activities I was engaged in at the time. And I 0:07:54.560 --> 0:07:56.800 think another thing that's happened is I think maybe we've 0:07:56.880 --> 0:07:59.280 learned something. I mean, part of the lesson you know, 0:07:59.360 --> 0:08:01.520 for me of the twenties after all that some of 0:08:01.560 --> 0:08:03.960 the learning that we did out of two thousand and 0:08:04.040 --> 0:08:07.480 eight nine has come back to benefit us, right, I mean, 0:08:07.560 --> 0:08:09.720 some of the things were actually a bit more transparent 0:08:09.840 --> 0:08:12.120 this time than they were the last time around. We 0:08:12.120 --> 0:08:15.120 we perhaps didn't quite foresee the tremors in the treasury 0:08:15.160 --> 0:08:18.560 market in March, but you know, once they began to happen, 0:08:18.640 --> 0:08:21.640 folks really did have some of the analytical tools necessary 0:08:21.680 --> 0:08:24.560 to grasp that immediately. More or less, and as you 0:08:24.600 --> 0:08:27.840 were saying in your intro, you know, the FED snapped interaction, 0:08:27.920 --> 0:08:29.680 and that's in part because we in fact did have 0:08:29.720 --> 0:08:32.160 a bit of a playbook. So in a sense, part 0:08:32.200 --> 0:08:34.400 of the wager of writing this book is to say, well, 0:08:34.400 --> 0:08:36.800 how does the playbook of OA O nine extent and 0:08:36.840 --> 0:08:39.599 to that extent, as it were, the intellectual overhead is 0:08:39.679 --> 0:08:42.440 less because we've done some of that analytical work. It 0:08:42.520 --> 0:08:45.120 may turn out five ten years from now that new 0:08:45.160 --> 0:08:47.760 perspectives open up. They would be surprising if they didn't. 0:08:48.280 --> 0:08:50.400 It's definitely a wager, but that that's that's what it 0:08:50.400 --> 0:08:52.000 consists of. For me, Like you know, I didn't really 0:08:52.000 --> 0:08:53.839 have much choice because this is what I've been doing, 0:08:54.440 --> 0:08:56.760 and and be it seems to me that we actually 0:08:56.800 --> 0:09:00.240 have kind of collectively moved the ball on how we 0:09:00.360 --> 0:09:03.080 understand macro financial risk. And this is basically a macro 0:09:03.160 --> 0:09:07.280 financial book again, all macro finance plus g policy plus politics, 0:09:07.480 --> 0:09:09.400 which is a train we've really a lot of folks 0:09:09.440 --> 0:09:11.959 have been mapping. Right. Well, you know, this actually brings 0:09:12.000 --> 0:09:15.600 me to a sort of broader question about your particular 0:09:16.160 --> 0:09:19.400 approach to combining the study of history with the study 0:09:19.400 --> 0:09:22.480 of economics with also real time. People are like kind 0:09:22.480 --> 0:09:25.600 of amazed by your output. I mean, you had this 0:09:25.840 --> 0:09:31.200 huge book in but previously you had been studying history 0:09:31.240 --> 0:09:34.959 for the early nine hundreds. Meanwhile, you have this book 0:09:35.280 --> 0:09:38.160 that's gonna come out in a few months. You have 0:09:38.480 --> 0:09:42.040 a sub stack newsletter where you're like take on current events, 0:09:42.040 --> 0:09:43.800 and you have all kinds of charts. It's much more 0:09:43.840 --> 0:09:46.480 writing than most people can do in a week. You 0:09:46.559 --> 0:09:50.280 wrote a recent London review of book Story, essentially cataloging 0:09:50.280 --> 0:09:55.760 the intellectual arc of Paul Krugman's career. Like it's really impressive, 0:09:55.920 --> 0:09:58.760 Like how much work you're you managed to get done 0:09:59.080 --> 0:10:01.440 on quite a range of things. How do you sort 0:10:01.440 --> 0:10:05.000 of generally like approach like what I guess the autom 0:10:05.120 --> 0:10:08.520 two project, what do you see as your sort of 0:10:08.679 --> 0:10:11.560 lend that then sort of refracts into all of these 0:10:11.920 --> 0:10:15.280 the spectrum of output. Well, thank you. I think I'm 0:10:15.320 --> 0:10:17.960 producing at the pace more like that of a journalist currently. 0:10:18.520 --> 0:10:21.040 I have huge admiration for you know, folks in the 0:10:21.080 --> 0:10:23.360 media who you know, have to have to crunch you 0:10:23.360 --> 0:10:26.320 know the what we all know, the names you too 0:10:26.360 --> 0:10:28.360 in particular, but you know, all the all the people 0:10:28.400 --> 0:10:30.520 that we read on a daily basis, we're all involved 0:10:30.559 --> 0:10:33.880 in this real time effort to to try and make 0:10:33.960 --> 0:10:36.000 sense of things. What I guess I bring to the 0:10:36.040 --> 0:10:38.520 party in the sense is, you know, in a sense 0:10:38.679 --> 0:10:42.120 of a drama. I think that's something that I've consistently 0:10:42.120 --> 0:10:45.200 tried to do, is to inject not in the sense 0:10:45.240 --> 0:10:47.920 that we simply take lessons from history in that naive 0:10:48.000 --> 0:10:50.640 way of looking back to previous periods to say, how 0:10:50.800 --> 0:10:53.840 is the presence similar. It's more in a sense the 0:10:53.880 --> 0:10:56.959 approach that says, look, let's take the current realities as 0:10:57.000 --> 0:11:00.640 seriously as we do nineteen fourteen, the record World War 0:11:00.679 --> 0:11:03.240 one or nine, or the dramas of World War Two. 0:11:03.280 --> 0:11:07.400 Let's try and figure say the global lockdown or the 0:11:07.400 --> 0:11:09.920 global shotdown as I prefer to call it, in March April, 0:11:10.000 --> 0:11:13.280 as an epic event, like the outbreak of a war. 0:11:13.360 --> 0:11:16.520 It was something that, after all, affected literally practically everyone 0:11:16.559 --> 0:11:19.320 on the entire planet. And that's a novel experience. And 0:11:19.360 --> 0:11:21.160 if you as a historian, it seems to me, don't 0:11:21.240 --> 0:11:23.320 if that doesn't get your juices going, it's hard to 0:11:23.640 --> 0:11:26.080 see what would, right, I mean, And it's there in 0:11:26.160 --> 0:11:28.079 front of us, and I happen to have ended up 0:11:28.600 --> 0:11:31.679 networked in with some of the smart folks who are 0:11:31.720 --> 0:11:35.080 kind of doing immediate, real time at the cold face 0:11:35.160 --> 0:11:38.240 type analysis. I mean, I'm in that kind of meta space, right, 0:11:38.240 --> 0:11:41.559 because I'm not and not somebody in either a government 0:11:41.600 --> 0:11:44.640 department or a you know, a data hub like Bloomberg 0:11:44.720 --> 0:11:48.040 or EXAMTI where people are actually crunching the data in 0:11:48.080 --> 0:11:50.760 real time. So I guess the role is that of 0:11:50.800 --> 0:11:55.880 a of a kind of framing analysis. And their history 0:11:55.880 --> 0:11:57.959 really does help. I mean, I don't think it's very 0:11:57.960 --> 0:12:00.640 helpful to go back deep into history to look for analogies, 0:12:00.679 --> 0:12:03.880 but I think if you want to understand, say Krugman's trajectory, 0:12:03.960 --> 0:12:06.600 or more generally the trajectory of macro economics. It really 0:12:06.640 --> 0:12:08.880 helps to go back to n seventies m I t 0:12:09.160 --> 0:12:12.000 to understand the kind of context that macro economics came 0:12:12.040 --> 0:12:15.360 out of, and then, as it were, the story since 0:12:15.400 --> 0:12:18.040 you know, I've been lecturing on global economic history for 0:12:18.200 --> 0:12:21.720 decades now, then the pieces fall into place quite smoothly 0:12:21.760 --> 0:12:23.880 in a way, because you know, if you if you're 0:12:23.880 --> 0:12:26.360 steeped in the works of Barry Iching Green or somebody 0:12:26.440 --> 0:12:29.439 like that, then you have take a pre shaped, a 0:12:29.559 --> 0:12:31.720 preformed It's like a model. You know. I like Krugman 0:12:31.800 --> 0:12:34.000 in part because he's a to me. You know, he's 0:12:34.040 --> 0:12:35.959 the sort of macro economist I get. I had a 0:12:36.040 --> 0:12:38.600 lot of macro as an undergraduate, and his I s 0:12:38.800 --> 0:12:42.440 LM simple building block kind of models. You know, I 0:12:42.480 --> 0:12:44.240 can wrap my head around, and in a sense, what 0:12:44.280 --> 0:12:47.040 I'm trying to build as almost the historical analogy to that. 0:12:47.120 --> 0:12:49.880 It's not going to be a perfect and totally subtle description, 0:12:50.360 --> 0:12:51.880 but in a sense, what you're trying to do is 0:12:51.920 --> 0:12:54.960 get those two basic curves on the on the map right, 0:12:55.000 --> 0:12:58.120 and the basic parameters which determine those and move your 0:12:58.160 --> 0:13:00.560 way around them. The try Lemma models that people use 0:13:00.600 --> 0:13:03.319 in international political economy are super helpful for that kind 0:13:03.320 --> 0:13:05.880 of thing too. So that's the that's the kind of 0:13:06.040 --> 0:13:10.319 m O. So shall we talk about the past twelve 0:13:10.360 --> 0:13:14.040 months then? I remember when you came on in April. 0:13:14.840 --> 0:13:19.160 I think you characterize this as a sudden stop in 0:13:19.400 --> 0:13:22.959 the biggest part of the economy, at least in the US, 0:13:23.040 --> 0:13:28.320 and that services. Given that big stop, how were you 0:13:28.360 --> 0:13:31.720 thinking this would actually play out like in April? What 0:13:31.840 --> 0:13:35.880 was your blueprint for how this would play out in 0:13:35.920 --> 0:13:39.560 the wider economy, and how did that contrast with the 0:13:39.600 --> 0:13:43.120 actual events? I don't think, I mean, I can't honestly 0:13:43.160 --> 0:13:45.559 say that I had a very clear idea. I mean 0:13:45.640 --> 0:13:49.360 I had visions, I guess, of downward multipliers spiraling out 0:13:49.400 --> 0:13:52.720 from the service sector. Living on Broadway the way that 0:13:52.760 --> 0:13:54.839 we do, we could see that, you know, just the 0:13:55.520 --> 0:13:59.080 slaughter of small businesses going on all around us. My 0:13:59.080 --> 0:14:01.600 my wife is in the travel business, and we felt 0:14:01.600 --> 0:14:05.400 the shock directly through, you know, her global network of 0:14:05.440 --> 0:14:08.600 people who are suddenly penniless. And I could see the 0:14:08.640 --> 0:14:12.160 way that kind of multiplier effect would work its way out, 0:14:12.840 --> 0:14:15.600 and what we didn't reckon with I guess, and this 0:14:15.720 --> 0:14:18.360 is you know, one of the shocks of twenty is 0:14:18.440 --> 0:14:22.960 the capaciousness of fiscal policy support that it might be 0:14:23.000 --> 0:14:26.800 possible to roll out. Now that doesn't you know, that 0:14:26.920 --> 0:14:30.720 doesn't deal with the more sexual problems which are still 0:14:30.760 --> 0:14:33.320 affecting large slices of the U. S economy. It's important 0:14:33.320 --> 0:14:36.000 to recognize that right that we're you know, maybe somewhere 0:14:36.000 --> 0:14:37.960 between eight and ten million jobs down and where we 0:14:38.000 --> 0:14:42.080 ought to be um but we didn't anticipate I think 0:14:42.120 --> 0:14:44.640 the scale of that of that support and its effects, 0:14:44.640 --> 0:14:48.000 because again it's complicated. It's not a classic Canesian, you know, 0:14:48.120 --> 0:14:50.600 stimulus story, because we know that folks haven't gone out 0:14:50.640 --> 0:14:53.680 and spent the money because in part his main function 0:14:53.720 --> 0:14:56.440 really was to provide a form of security to households 0:14:56.440 --> 0:14:58.760 in the sense that they had some savings with out 0:14:58.760 --> 0:15:00.320 of which they knew they were going to be able 0:15:00.360 --> 0:15:03.240 to meet essential bills. So I think that's one of 0:15:03.280 --> 0:15:06.760 the elements that we that I didn't anticipate, nor did 0:15:06.800 --> 0:15:09.400 I anticipate on the other side of the equation, just 0:15:09.640 --> 0:15:13.920 the gigantic wealth affect story that we would get through 0:15:14.200 --> 0:15:18.440 the impact of the Central Bank federal reserve measures in 0:15:18.640 --> 0:15:22.280 financial markets and inequity markets in particular, UM, so that 0:15:22.320 --> 0:15:24.000 you know, we come out of the year with those 0:15:24.080 --> 0:15:28.080 American households fortunate enough to have large portfolios of financial assets, 0:15:28.520 --> 0:15:31.560 what twelve trillion dollars up on the year, not just 0:15:31.640 --> 0:15:36.640 relative to the March trough. So those weren't developments which 0:15:37.160 --> 0:15:40.160 I anticipated. I'm not saying that you couldn't have done 0:15:40.240 --> 0:15:43.640 the kind of basic calculus which would have given you know, 0:15:43.680 --> 0:15:45.840 which have led you to that kind of a scenario, 0:15:45.960 --> 0:15:50.080 but it seemed improbable um in March. And after all, 0:15:50.120 --> 0:15:53.400 we did live through a kind of nerve biting period 0:15:53.880 --> 0:15:56.400 in US. And I'm not even talking about the politics, 0:15:56.440 --> 0:16:00.320 but just around the stimulus after that huge fiscal obviously 0:16:00.360 --> 0:16:02.480 pushed in March, which you highlighted in the intro, which 0:16:02.520 --> 0:16:05.120 was a surprise in its own right. We did then, 0:16:05.160 --> 0:16:09.320 after all, go into full on gridlock. And it's worth remembering. 0:16:09.360 --> 0:16:12.040 I think how nervous folks felt in the last couple 0:16:12.040 --> 0:16:14.520 of weeks of December, and you know how nervous in 0:16:14.520 --> 0:16:19.840 particular low income Americans, precarious families that were desperately waiting 0:16:19.840 --> 0:16:22.760 to see whether you know, the protection of tenants would 0:16:22.760 --> 0:16:25.680 be extended and so on. You know, as recently as that, 0:16:25.760 --> 0:16:28.520 there was still a huge sense of uncertainty about the 0:16:28.560 --> 0:16:31.120 possibility of the amount and political system reacting to the 0:16:31.160 --> 0:16:49.000 social crisis in this country. I will be the first 0:16:49.040 --> 0:16:52.720 to admit that nothing I anticipated about this cress came 0:16:52.800 --> 0:16:55.320 right and I got everything wrong. But one thing that 0:16:55.400 --> 0:16:58.240 I remember in particular that I was wrong about thinking 0:16:58.240 --> 0:17:01.960 about to the spring of last year was that kind 0:17:02.000 --> 0:17:05.119 of like, you know, the US was still doing a 0:17:05.200 --> 0:17:09.119 horrendous job seemingly on the testing front by this point, 0:17:09.240 --> 0:17:12.040 didn't seem like there was much consensus on you know, 0:17:12.119 --> 0:17:16.679 sort of lockdowns or mitigation strategies. Meanwhile, the Europeans, uh, 0:17:16.760 --> 0:17:19.159 you know, Germany, but most of Europe seemed to be 0:17:19.160 --> 0:17:23.639 doing very well with suppression, very well with mitigation. And 0:17:23.680 --> 0:17:25.359 so my thought at the time I was like, Okay, 0:17:25.440 --> 0:17:27.679 US as a mess, and Europe is going to suppress this, 0:17:28.000 --> 0:17:30.640 and not only that, they're going to finally like turn 0:17:30.720 --> 0:17:33.399 on the fiscal levers in a way that um we 0:17:33.440 --> 0:17:35.800 haven't seen and Europe is really going to come out 0:17:35.800 --> 0:17:38.200 of this out performing. And I don't even know if 0:17:38.240 --> 0:17:42.719 like comparing different entities like this is useful, but it 0:17:42.760 --> 0:17:45.719 hasn't been like this sort of like clear, Oh, Europe 0:17:45.760 --> 0:17:48.160 shows the way that I kind of might have expected 0:17:48.200 --> 0:17:50.399 around this time last year. Yeah, I mean, I think 0:17:50.440 --> 0:17:52.320 you're completely right. I mean I did. I have the 0:17:52.320 --> 0:17:54.240 benefit of having spent a last part of my life 0:17:54.280 --> 0:17:56.440 in Germany, so on that basis, I have to say 0:17:56.480 --> 0:18:00.680 I was always skeptical about that, that first Way success story, 0:18:00.720 --> 0:18:03.960 because I've seen it off of local government administration in Germany. 0:18:04.000 --> 0:18:06.439 Not to buy that, not to have bought it at 0:18:06.480 --> 0:18:09.480 the time. So I'm not surprised. And it's a grim 0:18:09.480 --> 0:18:12.399 reality that the mortality in Europe is now. It is 0:18:12.400 --> 0:18:15.320 now higher than it was at its peak in March April, 0:18:15.680 --> 0:18:17.359 and it's a disaster, and it's really a kind of 0:18:17.400 --> 0:18:20.080 alternate reality story. If you're if you're in regular contact 0:18:20.119 --> 0:18:22.720 with colleagues and friends in Europe, they are living they're 0:18:22.720 --> 0:18:25.200 still living the lockdown, you know, chaos that we were 0:18:25.240 --> 0:18:27.960 in the US in the spring. I agree that there's 0:18:27.960 --> 0:18:31.280 been a real, real reversal of fortunes there. And if 0:18:31.320 --> 0:18:33.720 you speak to folks around the euro Group right now, 0:18:33.840 --> 0:18:36.640 they are acutely away of the way that the narrative 0:18:36.680 --> 0:18:39.760 has shifted, right they they thought, you know, first of all, 0:18:39.800 --> 0:18:41.399 it looked as though Europe was going to fail on 0:18:41.440 --> 0:18:43.480 the fiscal and monetary side. We had that you know, 0:18:43.600 --> 0:18:47.000 March twelfth gaff by Christine Regard parenting the old German 0:18:47.040 --> 0:18:49.439 line about spreads, and then all of a sudden lurching 0:18:49.520 --> 0:18:53.520 into action. Then did Duly Deal. Then you know, Nerve 0:18:53.640 --> 0:18:55.640 acting months when it wasn't obvious that they could get 0:18:55.640 --> 0:18:58.119 it done. And then this extraordinary package deal they did 0:18:58.160 --> 0:19:01.080 in December with the East Europeans in Poland and Hungary 0:19:01.080 --> 0:19:03.040 and getting rule of law provisions in there. I mean, 0:19:03.040 --> 0:19:06.479 it really looked like the sort of quintessential it's how 0:19:06.560 --> 0:19:08.520 you know, kind of European deal. It's a bit like 0:19:08.520 --> 0:19:11.000 a you know, a marvelous piece of Italian sports car 0:19:11.040 --> 0:19:13.199 engineering or something. And then it just turned out to 0:19:13.200 --> 0:19:15.760 be undersized. It's not big enough, it's too slow, it's 0:19:15.760 --> 0:19:19.000 too complicated, and you get whooked by you know, a 0:19:19.080 --> 0:19:21.960 muscle car from the US piloted by Joe Biden. I mean, 0:19:22.000 --> 0:19:26.320 it's it's it's pretty it's pretty confusing for the Europeans 0:19:26.440 --> 0:19:29.120 right now. Um, and then the vaccine story on top 0:19:29.160 --> 0:19:31.600 of that, which which which they've managed to turn into 0:19:31.640 --> 0:19:35.600 a disaster. Um. So yeah, in terms of the transatlantic balance, 0:19:35.680 --> 0:19:39.359 it's been a real roller coaster whiplash, and I think 0:19:39.480 --> 0:19:42.239 the awareness of that in Europe is quite intense. If 0:19:42.280 --> 0:19:45.080 you speak to the decision makers over there, there is 0:19:45.119 --> 0:19:48.840 a real sense that they don't understand quite how they 0:19:48.880 --> 0:19:51.480 lost the plot and how they've ended up looking like, 0:19:51.760 --> 0:19:53.600 you know, it looks like a revender two thousand to 0:19:53.680 --> 0:19:56.080 day after all, in the sense that the US pulled 0:19:56.119 --> 0:19:58.239 out of that. As you know, as many complaints as 0:19:58.280 --> 0:20:00.720 we may have about the slow recover from two thousands 0:20:00.720 --> 0:20:02.480 and eight nine in the US, at least it was 0:20:02.560 --> 0:20:06.000 all going one way at least through the fifteen sixteen 0:20:06.040 --> 0:20:07.960 and that wasn't true in Europe, of course, and I 0:20:07.960 --> 0:20:09.760 think they fear that they're go and going to end 0:20:09.840 --> 0:20:13.720 up there again. So just on that note, Adam, what 0:20:13.800 --> 0:20:19.120 do you think accounts for the US's ability to get 0:20:19.160 --> 0:20:22.000 its act together when it comes to fiscal stimulus? And 0:20:22.040 --> 0:20:24.960 I mean we've already talked about how it wasn't necessarily 0:20:25.320 --> 0:20:28.639 a perfect execution and there was a lot of uncertainty 0:20:28.720 --> 0:20:30.760 over whether they would get it done or not, but 0:20:30.840 --> 0:20:33.760 in the end they did. So why in your opinion 0:20:34.480 --> 0:20:37.240 was that able to come together. I think it's a 0:20:37.320 --> 0:20:41.399 story of several different phases that the continuous through line 0:20:42.080 --> 0:20:44.439 is that America has to act right. A lot of 0:20:44.440 --> 0:20:46.480 this is forced action, and this is the comeback you'll 0:20:46.520 --> 0:20:48.919 get from any European you talked to, Like they've got 0:20:48.960 --> 0:20:53.479 automatic stabilizers, they have sophisticated labor market institutions, so they 0:20:53.520 --> 0:20:56.879 didn't see the surgeon unemployment. The United States did, and 0:20:56.920 --> 0:20:59.680 that was clearly critical in March and driving it. I 0:20:59.680 --> 0:21:02.439 mean those terrifying Thursday mornings when we would get that 0:21:02.520 --> 0:21:05.480 hit of data at eight thirty with you know, six 0:21:05.520 --> 0:21:07.600 million Americans losing their jobs in a week. I mean, 0:21:07.600 --> 0:21:10.359