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Paul Krugman on Challenging Zombie Ideas · Masters in Business

• 0:02
  Speaker 1: This is Master's in Business with Barry Ridholts on Boomberg Radio.
• 0:07
  Speaker 1: This week on the podcast, I have an extra special guest.
• 0:10
  Speaker 1: His name is Paul Krugman, and you probably know him
• 0:14
  Speaker 1: from his ubiquitous New York Times columns. UH. If you
• 0:17
  Speaker 1: don't know him from that, you must know him from
• 0:20
  Speaker 1: from television, from all of his books, including his textbooks.
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  Speaker 1: He was the two thousand and eight winner of the
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  Speaker 1: Nobel Prize as well as just too many honorifics to list.
• 0:33
  Speaker 1: If you are remotely interested in any of the following economics, UH,
• 0:40
  Speaker 1: income inequality, climate change, the history of economic development and thought,
• 0:47
  Speaker 1: how public policy affects the population, UM, healthcare law, climate change,
• 0:54
  Speaker 1: will go down, go down the list. We just walk
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  Speaker 1: out on everything and it's just been absolutely fascinating conversation. So,
• 1:02
  Speaker 1: with no further ado, my m IB interview with Paul Krugman.
• 1:09
  Speaker 1: This is Master's in Business with Barry Ridholtz on Boomberg Radio.
• 1:15
  Speaker 1: My extra special guest today is Paul Krugman. He is
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  Speaker 1: the winner of the two thousand and eight Nobel Memorial
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  Speaker 1: Prize for his contributions UH to new trade theory and
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  Speaker 1: new economic geography. He is a Distinguished Professor at the
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  Speaker 1: Quney Graduate Center of the City of New York. He
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  Speaker 1: spent much of his career teaching at M I T
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  Speaker 1: and Princeton, where he focused on economics. He has either
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  Speaker 1: authored or edited twenty seven books, published over two hundred
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  Speaker 1: scholarly articles. Most recently, his book Arguing with Zombies, Economics, Politics,
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  Speaker 1: and a Fight for a Better Future just came out.
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  Speaker 1: He is the second most cited author on the College
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  Speaker 1: syllabi for economics, and is perhaps best known as a
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  Speaker 1: columnist for The New York Times. Paul Krugman, Welcome back
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  Speaker 1: to Bloomberg. Hi there, it's good to see you again.
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  Speaker 1: Let's jump right into this. So I recall you telling
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  Speaker 1: a story that you were a science fiction geek as
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  Speaker 1: a kid. How did Isaac Asimov's Foundation trilogy lead you
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  Speaker 1: to economics? Isaac Asimov wrote this, you know these books,
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  Speaker 1: uh thereabouts, which are you know? It's the Galactic Empire
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  Speaker 1: and people use blasters and have spaceships. But actually the
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  Speaker 1: science fiction e part is the least of it. It's
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  Speaker 1: social science fiction. The core of the story is there's
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  Speaker 1: this group of mathematical social scientists, the Psychohistorians, who have
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  Speaker 1: figured out that galactic civilization is falling and have discovered
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  Speaker 1: that if they intervene in just the right way, they
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  Speaker 1: can limit the period of barbarism. So it's basically social
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  Speaker 1: scientists save the universe. I want to be one of
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  Speaker 1: those guys. Economics was as close as I could get.
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  Speaker 1: That's pretty amusing. People may not know that you are
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  Speaker 1: an economics textbook author. You and your wife wrote what
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  Speaker 1: is today the second most popular economics textbook in colleges today.
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  Speaker 1: Who who's the lead? Is that? Mank You? Ah? Yeah,
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  Speaker 1: I'm afraid it's Greg mank You. So whatever led you
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  Speaker 1: to write a textbook that sounds like a lot of work? Actually? Yeah?
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  Speaker 1: So the first thing about it is that nobody writes
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  Speaker 1: one of the those principles books except out of ignorance
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  Speaker 1: of how much work it's going to involve. The actual
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  Speaker 1: the labor that's involved in producing, especially the first edition,
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  Speaker 1: but even the revisions is enormous. Partly it's a it's
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  Speaker 1: a reasonably honest way to make a living. Since it
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  Speaker 1: is my book, teaching is not well, it's supplemental. So
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  Speaker 1: since my wife is my co author, our in house
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  Speaker 1: name for the book is Economics for one k um.
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  Speaker 1: But it was also we thought that we could have
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  Speaker 1: a different kind of textbook that people. Most students come
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  Speaker 1: thinking economicis is this totally dry subject, and you know,
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  Speaker 1: some of it is, I've got to admit that, but
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  Speaker 1: there's stories. So we thought we could try to write
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  Speaker 1: a textbook which was as much as possible story driven.
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  Speaker 1: It was about real world things, and then we say,
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  Speaker 1: here's how economics helps me makes sense of these things.
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  Speaker 1: And so we wrote a textbook that was different and
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  Speaker 1: a lot of people like it. And you were you
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  Speaker 1: were still doing the revisions on the textbook while you
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  Speaker 1: were in Stockholm for the not that that edition, that
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  Speaker 1: was second edition, and the financial crisis broke as we
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  Speaker 1: were going through pages, so we already were in galleys
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  Speaker 1: and suddenly nothing in the money in Banking chapter was
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  Speaker 1: true anymore, and so we were frantically working to revise
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  Speaker 1: that that chapter in pages. So every replacement passage had
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  Speaker 1: to exactly physically fill the space of the stuff it replaced.
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  Speaker 1: So yeah, we uh, I had a lot of stuff
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  Speaker 1: I had to do in Stockholm. Robin spent a large
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  Speaker 1: part of the time on the floor of our hotel room,
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  Speaker 1: crawling from one set of paper as to another doing
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  Speaker 1: the revisions that was insane. You had written, or maybe
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  Speaker 1: I read it in an interview about a decade ago
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  Speaker 1: that at the top of the dot com bubble you said, Gee,
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  Speaker 1: the stock market doesn't make any more sense. I'm going
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  Speaker 1: to pull out of equities. It was a was that true?
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  Speaker 1: Would be? How did you that was true? Then we
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  Speaker 1: have in fact gotten back in some Still, I think
• 5:26
  Speaker 1: probably our portfolio is less equity heavy than than probably
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  Speaker 1: the the average. But well, twenty years ago you were
• 5:33
  Speaker 1: what early fifties, lates forties. I was, No, twenty years ago,
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  Speaker 1: I was late forties, late forties, So you should have
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  Speaker 1: equities then and now less equities. Yeah, yeah, So I
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  Speaker 1: mean I don't claim to be a great investor. In fact,
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  Speaker 1: Robbin's got the better head for detail, which is important.
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  Speaker 1: So we uh uh, we own a lot of you know,
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  Speaker 1: selective real estate, not not things where we think we
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  Speaker 1: know something. Okay, Well, real estate goes up over time
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  Speaker 1: as well. So eight if when you say you've partially
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  Speaker 1: gotten back in, does that mean your some stocks, some bond,
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  Speaker 1: some real estate. So you have a diverse portfolio that
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  Speaker 1: makes a whole lot of sense. There's another issue I
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  Speaker 1: have to ask you about, which is that of media bias. Um.
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  Speaker 1: Lots of people these days have accused the media of
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  Speaker 1: being fake news or biased or whatever. You take a
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  Speaker 1: decidedly different perspective on bias. Tell us a little bit
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  Speaker 1: about that. Yeah, the biggest so by and large, the
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  Speaker 1: media get facts right. Uh. They formal me. I mean
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  Speaker 1: that's not obviously true of you know, Breitbart or something
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  Speaker 1: like that, but they But the New York Times gets
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  Speaker 1: its facts right. The what it doesn't do very well
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  Speaker 1: is it it doesn't know how to handle things where
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  Speaker 1: there really aren't two sized to a debate when when
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  Speaker 1: there's a One of the very first columns I wrote
• 7:01
  Speaker 1: back during the two thousand election said that if if
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  Speaker 1: Bush had had said that the Earth was flat, the
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  Speaker 1: headline would probably read views differ on shape of the planet. Right.
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  Speaker 1: The media are really terrible. And that's very hard to
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  Speaker 1: That's a real problem when you have a not just
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  Speaker 1: a highly polarized political environment, but an asymmetrically polarized political
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  Speaker 1: environment where one side of the debate is peddling zombie
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  Speaker 1: lies uh and the other is is not uh. And
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  Speaker 1: it's so it's very there's a real failure I think
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  Speaker 1: to inform. There's a unwillingness to I mean, when I
• 7:39
  Speaker 1: started out, I was literally forbidden to use the word
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  Speaker 1: lie in my columns, and that's no longer true. But
• 7:45
  Speaker 1: even so, there's a tremendous bias towards even handedness, even
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  Speaker 1: when the hands are not remotely even so you get
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  Speaker 1: this false equivalence where both sides are trade equally. The
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  Speaker 1: The other thing that you have referenced as a form
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  Speaker 1: of bias that i'm a has been amused by is
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  Speaker 1: the concept of quote very serious people. That's right, what
• 8:05
  Speaker 1: what are the very serious people? So very serious people?
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  Speaker 1: The phrase actually a lot of it comes from the
• 8:10
  Speaker 1: build up to the Iraq War, when all the serious
• 8:13
  Speaker 1: people thought it made that this was a good idea,
• 8:15
  Speaker 1: which it wasn't obviously, um, but very serious people are
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  Speaker 1: people who buy into what is a conventional wisdom of
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  Speaker 1: the time, something that important people say and everybody thinks
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  Speaker 1: it's serious because all of the other serious people are
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  Speaker 1: saying it, and they will nod their head and so
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  Speaker 1: like you know, the US debt levels are major threats,
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  Speaker 1: even though it's not really true or the um we
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  Speaker 1: have a real problem of a skills gap in the workforce.
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  Speaker 1: And so these are things that so I stole it.
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  Speaker 1: I think I stole it from the blogger at us.
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  Speaker 1: But it really works, these things that And that's, by
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  Speaker 1: the way, where the media drops it's even handled this
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  Speaker 1: on this So a lot of reporting on debt it
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  Speaker 1: was uncritically Bowls and Simpson are great national heroes. Uh
• 9:05
  Speaker 1: so it's yeah, I remember that, but the but the whole.
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  Speaker 1: So it's funny that the one place where the news
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  Speaker 1: media really dropped the false equivalence and started saying one
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  Speaker 1: side is right is in fact where that side happens
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  Speaker 1: to be wrong. But they're very impressed by titles and
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  Speaker 1: by positions and by some academic credentials. And if you're
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  Speaker 1: the head of a think tank, they think you're actually
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  Speaker 1: thinking when really you're not thinking. Well they yeah, they
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  Speaker 1: are impressed by think tanks, which is really a bad
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  Speaker 1: idea because uh, there a think tanks, and then there
• 9:38
  Speaker 1: are think tanks, and a lot of the thing tanks
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  Speaker 1: don't actually think. Uh they're very impressed by uh, rich people,
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  Speaker 1: powerful people. So if you're you know, if Jamie Diamond
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  Speaker 1: says we have a skills gap, that must be serious,
• 9:51
  Speaker 1: whereas Jamie Diamond is no doubt a great business person,
• 9:54
  Speaker 1: but he doesn't know anything about macroeconomics, so it's a
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  Speaker 1: really it is a real problem the U on many issues,
• 10:04
  Speaker 1: going to important people is absolutely the worst place to
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  Speaker 1: get information because there are people who have a stake
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  Speaker 1: in a particular point of view and or or they're
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  Speaker 1: too busy to actually think hard. So it is a
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  Speaker 1: you know, that's those are the places. Now it's gotten better,
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  Speaker 1: I have to say, the The Times um now has
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  Speaker 1: several people writing who actually do understand some economics, don't
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  Speaker 1: uncritically accept stuff. We've got a hold section the Upshot,
• 10:30
  Speaker 1: which tends to be analytical pieces from multiple disciplines. So
• 10:33
  Speaker 1: it's better than it was, but still, uh so, those
• 10:37
  Speaker 1: are the biases. It's not liberal bias, it's not even
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  Speaker 1: actually conservative bios So there does very serious people tend
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  Speaker 1: to be somewhat right of center, but it's it's mostly
• 10:47
  Speaker 1: it's it's seriousness and even handedness on things which are
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  Speaker 1: in fact not serious and in fact where you shouldn't
• 10:53
  Speaker 1: be treating equally both sides equally. Let's talk a little
• 10:56
  Speaker 1: bit about free trade, which is what you won your
• 10:59
  Speaker 1: Nobel for free trade has been the cornerstone of US
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  Speaker 1: economic policy. Why has it gotten such a bad reputation
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  Speaker 1: amongst some economists and a lot of people in this administration.
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  Speaker 1: Economists love free trade for some good reasons and some
• 11:17
  Speaker 1: not so good reasons. We love free trade because, in fact,
• 11:20
  Speaker 1: there's a lot to be said for it. It's particularly
• 11:23
  Speaker 1: important really for smaller, poorer countries. Try and think about
• 11:26
  Speaker 1: what would happen to Bangladesh without the ability to export
• 11:29
  Speaker 1: clothing would probably literally be starting to death. So trade
• 11:34
  Speaker 1: open markets doesn't have to be precisely free trade, but
• 11:36
  Speaker 1: open markets are really important for a lot of the world.
• 11:39
  Speaker 1: It's always been the case that if you did it right,
• 11:42
  Speaker 1: you understood that while free trade generally makes all countries richer, uh,
• 11:49
  Speaker 1: it doesn't make everybody within the country's richer. Has effects,
• 11:53
  Speaker 1: possibly strong effects on the distribution of income. Now, we
• 11:57
  Speaker 1: tried to quantify that a little bit, and then no
• 11:59
  Speaker 1: question that it's it's a growing world. Trade has been
• 12:03
  Speaker 1: some a source nowhere near the dominant source, but a
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  Speaker 1: source of rising inequality within the US. Um What we
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  Speaker 1: really missed and which has been where a lot of
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  Speaker 1: the academic research has gotten We missed how concentrated the
• 12:18
  Speaker 1: negative effects are. Right, So you take a look and
• 12:22
  Speaker 1: you say, look, okay, we're importing a lot of stuff
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  Speaker 1: from China we didn't used to import. One of the
• 12:26
  Speaker 1: things is furniture, So we're importing lots of furniture from China.
• 12:30
  Speaker 1: Clothing boys. I like furniture as a particular example, because
• 12:34
  Speaker 1: if you ask, all right, how many jobs were displaced
• 12:37
  Speaker 1: by Chinese imports of Chinese furniture answers, Maybe it might
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  Speaker 1: is more, probably more than the duh, maybe even two
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  Speaker 1: hundred thousand, But you know, the other jobs were created
• 12:48
  Speaker 1: lower price to consumers. How big a deal is that? Well,
• 12:52
  Speaker 1: if you happen to be in Hickory, North Carolina, which
• 12:55
  Speaker 1: is a city that is built entirely around the furniture industry,
• 12:59
  Speaker 1: all of a sudden, for that community, it's a devastating impassion.
• 13:03
  Speaker 1: So we missed the extent to which the U. S
• 13:05
  Speaker 1: economy is gigantic, and it's churning all the time. A
• 13:09
  Speaker 1: million and a half people are fired every month. So
• 13:11
  Speaker 1: you say, how much difference Canada's trade make? Well, the
• 13:14
  Speaker 1: trouble is that the impacts of trade have tended to
• 13:17
  Speaker 1: fall quite heavily on specific communities, and I may Apa,
• 13:20
  Speaker 1: I didn't see that, and it really took a very
• 13:24
  Speaker 1: good paper, you know, published in in in twenty I think,
• 13:30
  Speaker 1: on the China shock um that, among other things, written
• 13:34
  Speaker 1: by one of my students, uh and to to point
• 13:37
  Speaker 1: out how much we were missing that effect. So lots
• 13:40
  Speaker 1: of um countries have an industrial policy. Shouldn't there be
• 13:44
  Speaker 1: some sort of Hey, if you're in West Virginia coal country,
• 13:48
  Speaker 1: or in North Carolina furniture country, or in the broad
• 13:52
  Speaker 1: loom and fabric areas that are specifics to certain states.
• 13:57
  Speaker 1: When it's apparent that a region is getting estimated because
• 14:00
  Speaker 1: the global trade advantages where essentially global labor arbitrage and
• 14:06
  Speaker 1: and some of the improved technologies that become specific to
• 14:11
  Speaker 1: elsewhere in the world, why don't we do a retrain,
• 14:15
  Speaker 1: re educate, give people new skills so they can compete
• 14:19
  Speaker 1: even if it's no longer in coal or furniture. Well,
• 14:22
  Speaker 1: we try, and actually we've had trade adjustment assistance at
• 14:27
  Speaker 1: various points in our history. It's never been tremendously successful.
• 14:30
  Speaker 1: And by the way, trade is not unique. You know,
• 14:32
  Speaker 1: technology does it? Does it? If you actually want to
• 14:34
  Speaker 1: ask what happened to West Virginia. International trade, it turns out,
• 14:37
  Speaker 1: is not an important thing for West Virginia. It's changes
• 14:40
  Speaker 1: in the technology wracking, fracking, and even before fracking, it
• 14:44
  Speaker 1: was mountain top removal. So all of a sudden, instead
• 14:46
  Speaker 1: of employing thousands of workers to mind coal, you just
• 14:49
  Speaker 1: blow the tops off mountains and use some So um,
• 14:53
  Speaker 1: now you can't have a policy too, or it's it's
• 14:56
  Speaker 1: hard to have a policy to deal with every shock.
• 14:58
  Speaker 1: What you really wanted to straw long safety net so
• 15:01
  Speaker 1: that at least some basics are supplies, so at least
• 15:04
  Speaker 1: people are the resources, among other things, the resources to
• 15:07
  Speaker 1: move or seek different jobs. Whatever. The little secretive American
• 15:15
  Speaker 1: policy is that we actually have a lot of that.
• 15:18
  Speaker 1: We actually have because the major social programs Social Security, Medicare,
• 15:23
  Speaker 1: Medicaid are paid for at the federal level, mostly because
• 15:28
  Speaker 1: the tax system is uh, at least the federal tax
• 15:32
  Speaker 1: system is fairly progressive, we actually end up providing a
• 15:35
  Speaker 1: lot of de facto aid to distressed regions. And you
• 15:40
  Speaker 1: take Kentucky, it's receiving net aid from the federal government
• 15:43
  Speaker 1: to the tune of about GDP. So you know, we
• 15:47
  Speaker 1: don't we actually do do a lot. Now that doesn't
• 15:49
  Speaker 1: it's not clear that we have anything that can We
• 15:52
  Speaker 1: can replace a fair bit of the income that's lost.
• 15:54
  Speaker 1: We can't replace the dignity, and but it's not clear
• 15:57
  Speaker 1: that anyone knows how to do that. Another thing that's
• 16:00
  Speaker 1: kind of interesting that you've written, quote international trade and
• 16:03
  Speaker 1: trade policy aren't nearly as important as people think they are.
• 16:07
  Speaker 1: People love to go on about international trade because a
• 16:10
  Speaker 1: variety of reasons, but among other things, it sounds important.
• 16:13
  Speaker 1: It's international, it's global. Uh. My parents wants gave me
• 16:16
  Speaker 1: a sweatshirt that said global Schmobile on it. I said
• 16:19
  Speaker 1: what and they said, every time you go off to
• 16:20
  Speaker 1: a conference, we ask you what it's about, you say
• 16:22
  Speaker 1: global schmobile. You know, people love to talk global and
• 16:26
  Speaker 1: u which means that we exaggerate, you know, compare we
• 16:30
  Speaker 1: we spent about the same share of our income on
• 16:32
  Speaker 1: imports and on healthcare as a nation. Uh. Trade, even
• 16:37
  Speaker 1: after even with the Trump tariffs, trade is sort of
• 16:40
  Speaker 1: only it's mostly actually pretty clean. Healthcare is a howling mess.
• 16:44
  Speaker 1: So health care policy is much much more important than
• 16:46
  Speaker 1: trade policy. And but that's not reflected. And the way
• 16:49
  Speaker 1: we talk about the world so so let's talk about
• 16:52
  Speaker 1: changes to some of the trade policy we had. I
• 16:55
  Speaker 1: recall Ross Perow talking about the great sucking sound that
• 16:59
  Speaker 1: NAFTA is going to create, pulling all those jobs south
• 17:02
  Speaker 1: of the border. Trump effectively ran on that. And now
• 17:07
  Speaker 1: we've tossed the side NAFTA with U s m c A.
• 17:11
  Speaker 1: We're all so much better now, aren't we. Right? So
• 17:13
  Speaker 1: I have people I know have been calling the U
• 17:15
  Speaker 1: s m c A the village people who agree. Uh. Um,
• 17:18
  Speaker 1: And it's a U s m c A is basically
• 17:21
  Speaker 1: NAFTA with Trump's name stuck on it. Um. Is it
• 17:23
  Speaker 1: not all that different than what it's of. It is
• 17:27
  Speaker 1: just the same thing as before, and there's a few
• 17:29
  Speaker 1: other things. The one place where there's some significant differences
• 17:33
  Speaker 1: it actually gives a little bit more protection clout to
• 17:37
  Speaker 1: labor unions, which is why Democrats voted for it in
• 17:40
  Speaker 1: the US. In the US really uh in Mexico to
• 17:43
  Speaker 1: but it's it was kind of a pro labor union
• 17:46
  Speaker 1: change in policy. Not big deal, but enough so that
• 17:49
  Speaker 1: Richard Trumka of the A F L c I O said,
• 17:51
  Speaker 1: you know, vote for this, and and the Democratic Caucus
• 17:55
  Speaker 1: voted it through um because there was something in it
• 17:58
  Speaker 1: for organized labor, which I'm sure was not. I'm not
• 18:01
  Speaker 1: sure whether that was, you know, over Trump kicking and screaming,
• 18:04
  Speaker 1: or whether he just didn't even know that he'd done that.
• 18:06
  Speaker 1: But anyway, that's quite the policy wonk, right, so I
• 18:10
  Speaker 1: think that he knows unlike everybody else in Kansas cities
• 18:13
  Speaker 1: in Kansas. But the post super Bowl congratulations that was
• 18:18
  Speaker 1: pretty so A few people pointed out, um that it's
• 18:22
  Speaker 1: actually in Missouri. Yeah, well, kind of people in Missouri
• 18:26
  Speaker 1: kind of noticed that. Let's talk a little bit about
• 18:30
  Speaker 1: your book, which I found quite intriguing, filled with all
• 18:34
  Speaker 1: sorts of fascinating topics. Let's begin with a great financial crisis.
• 18:38
  Speaker 1: You had some very prescient columns in O. Five and
• 18:43
  Speaker 1: oh seven, running out of bubbles, that hissing sound coming
• 18:47
  Speaker 1: out of real estate and innovating our way to financial crisis,
• 18:51
  Speaker 1: all of these pre date two thousand and eight. What
• 18:55
  Speaker 1: were you looking at that gave you such a clear
• 18:58
  Speaker 1: view of the financial crisis? That was it was just
• 19:01
  Speaker 1: clear that on the normal metrics, things like the prices
• 19:06
  Speaker 1: to rents, uh, the housing had gone way out of sight.
• 19:11
  Speaker 1: And he just said, is there there are a good
• 19:14
  Speaker 1: reason for this, and then you if you were there
• 19:17
  Speaker 1: were the kind of a tell's tale informal signs, you know,
• 19:21
  Speaker 1: if if um the dot com bubble, I thought I
• 19:24
  Speaker 1: had an inkling that things were gonna be bad when
• 19:26
  Speaker 1: I realized that and when you when when you went
• 19:28
  Speaker 1: into a bar, they tended to have CNBC on in
• 19:32
  Speaker 1: the bar instead of sports. And then I have a
• 19:35
  Speaker 1: very vivid recollection of that era where where stocks became
• 19:39
  Speaker 1: the national pastime, right and then so if you go
• 19:41
  Speaker 1: back to around two thousand five, it was shows like
• 19:44
  Speaker 1: Flipped This House, so it was the same kind of
• 19:46
  Speaker 1: feel to it. So it just looked way out of whack.
• 19:49
  Speaker 1: And I had an inkling, but only a partial inkling,
• 19:52
  Speaker 1: that the financial sector was out of control, that that
• 19:55
  Speaker 1: we didn't know what we were doing, that things had
• 19:57
  Speaker 1: gotten complicated. Was only when the crisis was in full
• 20:00
  Speaker 1: swing that it became clear that we were in much
• 20:04
  Speaker 1: worse shape than I'd realized, that that more than half
• 20:06
  Speaker 1: of the banking sector was was things that weren't called
• 20:09
  Speaker 1: banks and therefore weren't regulated like banks. And then so
• 20:12
  Speaker 1: shadow banking was was a huge vulnerability. But that was
• 20:15
  Speaker 1: one of the few times when it's it really seemed
• 20:17
  Speaker 1: obvious that something was majorly out of whack and that
• 20:20
  Speaker 1: something bad was gonna happen. So let's fast forward a
• 20:22
  Speaker 1: couple of years. During the second Bush term, you had
• 20:26
  Speaker 1: been staunchly opposed to privatizing Social Security, and you wrote, quote,
• 20:31
  Speaker 1: an amazing thing happened for the first time since I
• 20:34
  Speaker 1: became a New York Times columnist in two thousand, my
• 20:37
  Speaker 1: side of a policy debate. Actually one, how is that
• 20:41
  Speaker 1: possible that you know, for ten years you're not winning
• 20:44
  Speaker 1: any debates despite making pretty good arguments. Well if if
• 20:49
  Speaker 1: good arguments one, and the world would be a very
• 20:52
  Speaker 1: different place from the way it is. And uh, look,
• 20:54
  Speaker 1: I I started writing during the two thousand election, and
• 20:57
  Speaker 1: the Times, yes, because you have been publishing it's slate
• 21:00
  Speaker 1: for a good couple of years. Yeah, unfortunate as well.
• 21:02
  Speaker 1: So but for right for the Times, I've only got
• 21:06
  Speaker 1: really political during the two thousand election because it was
• 21:08
  Speaker 1: obvious to me that then candidate George W. Bush was
• 21:11
  Speaker 1: lying through his teeth about his policies. Um. But the
• 21:16
  Speaker 1: uh so it was our period of Republican ascendency, and
• 21:20
  Speaker 1: the Republican Party uh already then, although not as much now.
• 21:26
  Speaker 1: Was dominated by zombie ideas, by beliefs and the magical
• 21:29
  Speaker 1: power of tax cuts and so on. So I was
• 21:31
  Speaker 1: on the losing side of most of the political stuff,
• 21:34
  Speaker 1: and it was you tell me, you don't believe the
• 21:37
  Speaker 1: laugh of curve is a real Oh. I believe that
• 21:40
  Speaker 1: there is a laugh of curve, and there is a
• 21:42
  Speaker 1: some tax rate beyond which you actually lose revenue. But
• 21:46
  Speaker 1: I suspect that that tax rate is on the order
• 21:49
  Speaker 1: of or, and I suspect I actually estimated the laugh
• 21:52
  Speaker 1: of curve is not relevant for the U. S. Economy.
• 21:55
  Speaker 1: And yeah, So between the fact that you have a
• 22:00
  Speaker 1: very powerful right wing which has is committed to things
• 22:04
  Speaker 1: that are not true, and the fact that the very
• 22:06
  Speaker 1: serious people tend to go for things that are serious
• 22:09
  Speaker 1: but not actually serious. So let's talk about a very
• 22:12
  Speaker 1: serious person that you seem to have a constant um
• 22:16
  Speaker 1: ongoing argument with, Paul Ryan. You you have a section
• 22:20
  Speaker 1: called fiscal phonies. You specifically point out, Paul Ryan, I
• 22:25
  Speaker 1: have a problem with the group I call the UH
• 22:28
  Speaker 1: deficit chicken hawks. They're chicken hawks, They're they're big deficit
• 22:32
  Speaker 1: hawks as long as they're out of power. Once they
• 22:34
  Speaker 1: get into power, suddenly the deficit doesn't matter. What's your
• 22:37
  Speaker 1: beef with Paul Ryan? Well, I wasn't really with him.
• 22:40
  Speaker 1: I mean fact, I'm not a uh you know me personally,
• 22:44
  Speaker 1: I'm not I'm not a person that's particularly into grudges,
• 22:48
  Speaker 1: personal feuds whatever. I don't uh, But Paul Ryan was
• 22:52
  Speaker 1: as symboled both of where the Republican Party has gone,
• 22:55
  Speaker 1: but also of what's wrong with with me? Your coverage,
• 22:57
  Speaker 1: I mean, the the the media equivalence required that there
• 23:03
  Speaker 1: be serious, honest conservatives, the people who are really earnest
• 23:07
  Speaker 1: had interesting ideas. So there was a role that someone
• 23:10
  Speaker 1: had to feel except there actually is nobody like that.
• 23:12
  Speaker 1: So they promoted Paul Ryan into that role because he
• 23:17
  Speaker 1: pretended to be that kind of person, not actually very
• 23:19
  Speaker 1: good imitation. It was pretty obvious if you took even
• 23:21
  Speaker 1: a few minutes reading his stuff that he was a phony.
• 23:24
  Speaker 1: But that wasn't what people wanted to hear. So I
• 23:27
  Speaker 1: was out there, you know, years ahead of of almost
• 23:30
  Speaker 1: anybody else, saying, Hey, this guy that you're claiming it
• 23:33
  Speaker 1: to be the you know, the the intellectual leader of
• 23:36
  Speaker 1: the Republican Party is a flat out phony and an
• 23:38
  Speaker 1: obvious one, and actually a pretty clumsy one. So uh,
• 23:42
  Speaker 1: I returned to him as as an example both of
• 23:45
  Speaker 1: where the GOP has gone and how the media can
• 23:48
  Speaker 1: go wrong. So you said, uh, I know you personally,
• 23:52
  Speaker 1: and I want to put a little color on that.
• 23:55
  Speaker 1: I probably know you pretty well for is it a decade?
• 23:58
  Speaker 1: Probably it was before of the financial crisis that more
• 24:02
  Speaker 1: than a decade, So it's more than a decade. But
• 24:04
  Speaker 1: the thing that I find fascinating about you, and full disclosure,
• 24:08
  Speaker 1: we have these monthly salons, we go to dinner. I
• 24:10
  Speaker 1: see you pretty regularly. I think that something I wrote
• 24:14
  Speaker 1: was the subject of your very first blog post and
• 24:17
  Speaker 1: conscious of a liberal you'd since backfield. So it's hard
• 24:20
  Speaker 1: to judge, but I recall seeing that in posting and saying, oh, look,
• 24:25
  Speaker 1: Paul Krugman is a blogging Um. I'm fascinated by your
• 24:30
  Speaker 1: public persona and how what people think of you because
• 24:33
  Speaker 1: of your columns is nothing like what you're like in
• 24:37
  Speaker 1: the real world. You're a very different person in the
• 24:40
  Speaker 1: real world in reality. Then I think what people see
• 24:44
  Speaker 1: in terms of your columns. Yeah, I'm a pussycat. I mean,
• 24:47
  Speaker 1: I'm I'm quiet, shy, uh, not at all, you know,
• 24:54
  Speaker 1: I'm not a very angry person or any of those,
• 24:56
  Speaker 1: not at all. You're You're optimistic, your upbeat, you're funny.
• 24:59
  Speaker 1: People don't realize you have a sense of humor. Um
• 25:02
  Speaker 1: sometimes a sharp sense of humor. But still, I don't
• 25:05
  Speaker 1: know if I would use the phrase happy, go lucky,
• 25:07
  Speaker 1: but you're pretty easy going, happy person. Yeah. It's not
• 25:11
  Speaker 1: your image. Yeah, because people look and say, well, those
• 25:14
  Speaker 1: are tough columns. Yeah, but I'm not angry. I'm just realistic.
• 25:20
  Speaker 1: I mean sometimes I'm angry. But that's a but it's
• 25:22
  Speaker 1: it's it's a it's a policy anger, it's a it's
• 25:26
  Speaker 1: about uh, about about how we how we handle the
• 25:30
  Speaker 1: world person to person, I'm you know, mild mannered to
• 25:35
  Speaker 1: Clark Kent or something. Okay, that's that's that's pretty fair
• 25:38
  Speaker 1: collect Kent. And And one of the things that I
• 25:41
  Speaker 1: find fascinating is that you're much more right than wrong.
• 25:46
  Speaker 1: I don't mean right versus left, but on a lot
• 25:49
  Speaker 1: of things you've discussed broad policy issues, the result of
• 25:53
  Speaker 1: certain things, You've been pretty dead on on everything. On
• 25:57
  Speaker 1: the rare occasions where you get something wrong, people like
• 26:02
  Speaker 1: jump on it and beat on it. But I always
• 26:05
  Speaker 1: want to say, hey, that's the exception that proves the
• 26:07
  Speaker 1: rule if you have to. My favorite example is, you know,
• 26:11
  Speaker 1: if Trump gets elected, we're gonna have a recession or
• 26:13
  Speaker 1: the market's gonna crash or something like that. People pound
• 26:16
  Speaker 1: that beat that drum constantly, and I always say, what
• 26:19
  Speaker 1: else has he gotten wrong? It's hard to find broad
• 26:22
  Speaker 1: pronouncements that are widely apptable that you weren't. And I
• 26:27
  Speaker 1: retracted that called three days later, they don't. No one
• 26:30
  Speaker 1: wants to talk about that. Yeah. I protracted that call
• 26:32
  Speaker 1: and said that that Trump was going to run bigger death,
• 26:34
  Speaker 1: that that was probably going to provide some some stimulus,
• 26:37
  Speaker 1: and he has and it has so well. But that
• 26:41
  Speaker 1: but that's you know, that's part of um. Why do
• 26:44
  Speaker 1: zombie ideas persist? Well, because there's a network, there's a
• 26:47
  Speaker 1: there's money behind it. I mean it used to be
• 26:49
  Speaker 1: a guy at National Review whose full time job was
• 26:52
  Speaker 1: basically the stalk me. You know too. He wrote more
• 26:55
  Speaker 1: blog posts attacking my columns than I wrote columns. And
• 26:59
  Speaker 1: so there's a whole industry. They go after lots of people,
• 27:03
  Speaker 1: but it's a but I seem to be a particular favorite.
• 27:05
  Speaker 1: And so yeah, there there's that means. That means because
• 27:09
  Speaker 1: you're effective. Well it's yeah, it's a bit of a compliment.
• 27:11
  Speaker 1: And you know, in terms of getting now, if you
• 27:13
  Speaker 1: never make a mistake, if you never get something wrong,
• 27:16
  Speaker 1: then you're not taking enough risks. So but but of course,
• 27:19
  Speaker 1: if you're in a position like mine, where there are
• 27:22
  Speaker 1: people you know, I'm probably I'm I am paranoid, but
• 27:25
  Speaker 1: there are in fact also people out to get me.
• 27:27
  Speaker 1: Just that's the old old line. Just because your paranoid
• 27:30
  Speaker 1: doesn't mean they're not some there are, there are well
• 27:32
  Speaker 1: financed people out to get me. And by the way,
• 27:35
  Speaker 1: that might be Philip K. Dick, although I could be wrong,
• 27:38
  Speaker 1: since I know you're a sci fi buff. I don't know.
• 27:41
  Speaker 1: I don't remember whether he used that. But anyway, um
• 27:44
  Speaker 1: and sure, uh so, uh yeah, I think if you
• 27:48
  Speaker 1: take it as a whole. In fact, look the the
• 27:51
  Speaker 1: five years or so after the financial crisis, we're in
• 27:54
  Speaker 1: a peculiar way. They were glory days because the models worked.
• 27:57
  Speaker 1: You know, people like me who had an update and
• 28:00
  Speaker 1: modernized but still fundamentally Kenzie and approach to things made
• 28:04
  Speaker 1: predictions about what would happen to interest rates, to inflation,
• 28:07
  Speaker 1: what the effects of austerity policies would be that all
• 28:09
  Speaker 1: came out right and all the very serious people who
• 28:13
  Speaker 1: said something different turned out to be wrong. So hyper
• 28:15
  Speaker 1: inflation didn't happen, Austerity would bring us out of the
• 28:20
  Speaker 1: Our economic doll drums, especially in the UK didn't work. Um, basically,
• 28:26
  Speaker 1: keenes knew what he was talking about. I mean, you
• 28:29
  Speaker 1: Kansians came in thinking that the multiplier the the impact
• 28:34
  Speaker 1: on GDP about one dollar cutting government spending would be
• 28:37
  Speaker 1: around one point five. And after we had five years
• 28:41
  Speaker 1: or so of hard evidence, it turns out that the
• 28:43
  Speaker 1: multiplayer is one point five. I mean, it wasn't just
• 28:46
  Speaker 1: the quality, even even the quantitative stuff was dead on.
• 28:50
  Speaker 1: Quite fascinating. I want to talk about politics because some
• 28:53
  Speaker 1: of the reviews of this book and other books that
• 28:56
  Speaker 1: you've written have described you as a political animal. But really,
• 29:03
  Speaker 1: if you go back to the early history of Paul Krugman,
• 29:06
  Speaker 1: Newsweek did a profile of you and called you ideologically
• 29:10
  Speaker 1: color blind. I think a lot of people don't know
• 29:13
  Speaker 1: you worked in the Reagan White House. Yeah, that was interest,
• 29:17
  Speaker 1: that was a sub political level. I was the senior
• 29:21
  Speaker 1: international economic staffer at the Council of Economic Advisors. So
• 29:24
  Speaker 1: no Senate approval. No. Yeah, the senior domestic staff Stafford
• 29:29
  Speaker 1: was a guy what was his name, Larry Summers. Don't
• 29:31
  Speaker 1: know what happened to him. Uh So, yeah, that was
• 29:34
  Speaker 1: I mean, it was high level but technical position. And
• 29:38
  Speaker 1: uh um, I mean I was already I was a
• 29:41
  Speaker 1: registered Democrat, as was Larry Um, but willing to work,
• 29:46
  Speaker 1: and my job did not require that I'd be in
• 29:48
  Speaker 1: public defending positions. And of course being at the Reagan administration.
• 29:53
  Speaker 1: Although Marty Feldstein, who was the Chair of the Council
• 29:55
  Speaker 1: and who brought Larry and me down, although he was
• 29:58
  Speaker 1: a Princeton Marty Felds Harvard, although he was a you know,
• 30:03
  Speaker 1: a conservative, Um, he was reasonable and on any internal
• 30:08
  Speaker 1: debate within the Reagan administration, I always was happy to
• 30:13
  Speaker 1: back Marty's side of that debate. So, but it was interesting,
• 30:16
  Speaker 1: I mean it was it was. It was partially I
• 30:18
  Speaker 1: hope I did some good, but it was also a
• 30:20
  Speaker 1: little bit of tourism, got to see government from the inside.
• 30:22
  Speaker 1: So that was a different era in conservatism. They seemed
• 30:25
  Speaker 1: to be a little more um, rational, fact based. Yeah. No,
• 30:31
  Speaker 1: there were a fair number of strange people even in
• 30:33
  Speaker 1: the Reagan administration. I mean some of the people I
• 30:35
  Speaker 1: dealt with me and are dealt with people that economics
• 30:38
  Speaker 1: people at the National Security Council who I who were
• 30:41
  Speaker 1: crazy And I thought, wow, but this is not their
• 30:43
  Speaker 1: real thing. I'm sure the actual security people are better.
• 30:46
  Speaker 1: Then along came Iran Contra, and it turned out, no,
• 30:48
  Speaker 1: they're all crazy. One of the things about where we
• 30:50
  Speaker 1: are now is that each successive Republican president is managing
• 30:53
  Speaker 1: to make his predecessor look good by comparison. So it
• 30:57
  Speaker 1: would certainly looked better. So but it was it was
• 31:00
  Speaker 1: still It was true that that there was a lot
• 31:02
  Speaker 1: more room for rationality then than there is now. So
• 31:06
  Speaker 1: most of your career not a partisan, more of a technocrat.
• 31:10
  Speaker 1: Your role is to provide policymakers with information about what
• 31:14
  Speaker 1: did and didn't work. What changed? How did you flick
• 31:17
  Speaker 1: a switch from being an ideological, color blind technocrat to
• 31:22
  Speaker 1: someone who has been described as a hardcore partisan. Well,
• 31:26
  Speaker 1: two things happened. One is that change jobs. So what
• 31:29
  Speaker 1: you want to write if you're writing working papers and
• 31:33
  Speaker 1: publishing an academic journalism very different from what you want
• 31:35
  Speaker 1: to write if you're writing columns in the New York Times.
• 31:38
  Speaker 1: But also the world changed and a particularly the Republican
• 31:41
  Speaker 1: Party changed. So the Republican Party of the nineteen eighties
• 31:45
  Speaker 1: was still a fairly diverse group. And while there were
• 31:47
  Speaker 1: some voodoo economics types, and we were still in some
• 31:51
  Speaker 1: to some degree in a space where we were having
• 31:53
  Speaker 1: real arguments about real issues. Uh. Today it's a monolithic
• 31:58
  Speaker 1: Uh it's been completely taken over by zombies that have
• 32:00
  Speaker 1: eaten the party's brains. Uh. So, actually, just saying things
• 32:05
  Speaker 1: that are true, it's just saying, you know, I'm not
• 32:08
  Speaker 1: gonna I'm not going to give credence to stuff that's
• 32:11
  Speaker 1: obviously false is a part as an act. And since
• 32:14
  Speaker 1: you're gonna be doing that, you might as well try
• 32:15
  Speaker 1: and make that case in a strong way and not
• 32:18
  Speaker 1: not pretend that you're having a serious argument when you aren't. So,
• 32:23
  Speaker 1: once facts are no longer um indisputable ones, once people
• 32:28
  Speaker 1: can say what they want to believe, how can you
• 32:31
  Speaker 1: have an intelligent debate about economic policy, well across party lines.
• 32:37
  Speaker 1: You can't. Mean, it's just now they're not everything is
• 32:41
  Speaker 1: party politics. You know. If we want to talk about
• 32:43
  Speaker 1: military policy, the federal reserve is still a zone of
• 32:46
  Speaker 1: actual discussion and relatively non politicized, although Trump is trying
• 32:50
  Speaker 1: to put some very uh, strange people on the Federal
• 32:54
  Speaker 1: Reserve Board, right, goldbugs and and all sorts of whack.
• 32:58
  Speaker 1: So that may change, but for now it's it's a
• 33:00
  Speaker 1: place where you're gonna have honest arguments, and of course
• 33:03
  Speaker 1: within the Democratic Party their serious discussion. There's no no
• 33:06
  Speaker 1: question that there were real debates about the shape of
• 33:10
  Speaker 1: stimulus or the TPP or whatever where you were having.
• 33:13
  Speaker 1: But it's true that half the political spectrum is just
• 33:16
  Speaker 1: a complete dead zone for actual debate. So let me
• 33:20
  Speaker 1: switch gears with you and talk about something related to
• 33:23
  Speaker 1: this that you wrote a New York Times Sunday magazine
• 33:27
  Speaker 1: article about, which is how did economists get it so wrong?
• 33:31
  Speaker 1: So let me throw the question back to you. Why
• 33:34
  Speaker 1: did the profession fail to anticipate the Great Financial Crisis? Okay,
• 33:40
  Speaker 1: so that actually at some level we have prediction. Predictions
• 33:45
  Speaker 1: are hard, especially about the future, uh, and failing to
• 33:49
  Speaker 1: see the financial crisis. I think that people should have
• 33:52
  Speaker 1: seen the housing bubble, because that seemed pretty obvious. But
• 33:55
  Speaker 1: that's not the major sin. The major sin was that
• 33:58
  Speaker 1: a substantial number of economists um enthusiastically embraced financial deregulation
• 34:05
  Speaker 1: before the crisis, UM, and at least for the decades
• 34:09
  Speaker 1: before the crisis, going back to UM, the repeal of
• 34:13
  Speaker 1: Glass Stiegel, and much more than that. Wait, wait, even
• 34:16
  Speaker 1: before that, yeah, and and and then post crisis, many
• 34:19
  Speaker 1: of them were extremely critical of fiscal stimulus, even though
• 34:24
  Speaker 1: they should have known better. Um. And what happened there.
• 34:27
  Speaker 1: So this is academic economics, And to a large extent,
• 34:31
  Speaker 1: what happened there was that look there, partly its ideology,
• 34:35
  Speaker 1: it was a kind of conservatism that the economics profession
• 34:39
  Speaker 1: is kind of center right on on average. Um. So
• 34:43
  Speaker 1: there was something political about it, but it was also
• 34:46
  Speaker 1: we have these beautiful models in the bottle of an
• 34:48
  Speaker 1: efficient market. Efficient financial market where asset prices are always right.
• 34:54
  Speaker 1: Is gorgeous. It's esthetically pleasing, it's it's it feels great
• 34:58
  Speaker 1: to to play with it. Um. Happens not to be true,
• 35:02
  Speaker 1: but it's it's a huge lure for the profession. And
• 35:06
  Speaker 1: then uh, after the crisis, it turned out also that
• 35:09
  Speaker 1: the years and years of railing against Kenzie and economics
• 35:13
  Speaker 1: as being too ad Hawkins on that had led to
• 35:16
  Speaker 1: a lot of people just not actually understanding. You know,
• 35:19
  Speaker 1: if we had this. If we had the financial crisis
• 35:22
  Speaker 1: instead of in two thousand eight, we would have had
• 35:25
  Speaker 1: a much better policy response because it was Unfortunately, the
• 35:29
  Speaker 1: evolution of the economics profession UH in the seventies and
• 35:32
  Speaker 1: the eighties and the nineties took us away from understanding
• 35:36
  Speaker 1: what we needed to understand UH in in the aftermath
• 35:39
  Speaker 1: of two thou eight. So, so let's talk about how
• 35:42
  Speaker 1: where you physically were at different schools around the country
• 35:47
  Speaker 1: impact your understanding of that You you describe this in
• 35:51
  Speaker 1: that same column as the difference between salt water and
• 35:55
  Speaker 1: freshwater economists. Yeah, that's love. I love that that. Yeah,
• 35:59
  Speaker 1: it's actually Hole came up with that one. But it's
• 36:01
  Speaker 1: a um. It turns out that the places that kept
• 36:05
  Speaker 1: the memory of Knes alive tended to be places like
• 36:09
  Speaker 1: m I. T And Yale and Princeton, and the places
• 36:13
  Speaker 1: that forgot all about it tended to be places like
• 36:15
  Speaker 1: Chicago and UH Minnesota and Carnegie UH. And so the
• 36:21
  Speaker 1: it just so turns it just so happens the places
• 36:24
  Speaker 1: that that I would say, maintain a fairly realistic view
• 36:27
  Speaker 1: of how macroeconomics works, that we're willing to actually look
• 36:30
  Speaker 1: at the facts and not insist on the perfection of
• 36:32
  Speaker 1: their models. Um tended to be places that were on
• 36:35
  Speaker 1: the coasts of the US as opposed to in the middle.
• 36:37
  Speaker 1: So I'm gonna throw a curve ball at you. Berkeley
• 36:40
  Speaker 1: clearly is a salt water economics thesis. Where do you
• 36:44
  Speaker 1: put Stanford and the Hoover Institute? Oh, the Hoover Institute
• 36:47
  Speaker 1: is a is a peculiar thing within Stanford. It's it's
• 36:50
  Speaker 1: it's an odd thing. It's not actually the uh and
• 36:53
  Speaker 1: and the Stanford is a mix ideologically and Hoover is
• 36:58
  Speaker 1: this independent entity really within it? So uh yeah, so
• 37:02
  Speaker 1: what what can you say? But but no, definitely, I
• 37:05
  Speaker 1: mean the uh you know, Bernankee hired me at Princeton
• 37:08
  Speaker 1: and then actually promptly left for the FED. But still um.
• 37:12
  Speaker 1: But Princeton was a hotbed of people who worried about
• 37:15
  Speaker 1: Japan because we thought that Japan's problems were a possible
• 37:19
  Speaker 1: omen for the rest of us, and that turned out
• 37:21
  Speaker 1: to be exactly right. Can you stick around a bit?
• 37:23
  Speaker 1: I have a ton of questions we can do that.
• 37:25
  Speaker 1: We have been speaking with Paul Krugman, professor at Keuni
• 37:28
  Speaker 1: Graduate Center and author of the book arguing with zombies.
• 37:33
  Speaker 1: If you enjoy this conversation, be sure and come back
• 37:35
  Speaker 1: for the podcast extras, where we keep the tape rolling
• 37:38
  Speaker 1: and continue discussing all things economics. We love your comments,
• 37:43
  Speaker 1: feedback and suggestions right to us at m IB podcast
• 37:47
  Speaker 1: at Bloomberg dot net. Be sure and check out my
• 37:50
  Speaker 1: weekly column on Bloomberg dot com slash Opinion. Follow me
• 37:55
  Speaker 1: on Twitter at Ridholts. I'm Barry Riholts. You're listening to
• 37:58
  Speaker 1: Masters in Business on Bloomberg Radio. Welcome to the podcast, Paul.
• 38:06
  Speaker 1: Thank you so much for doing this. I've been looking
• 38:08
  Speaker 1: forward to discussing your new book, which I have right here,
• 38:12
  Speaker 1: and just talking about um so many other things. How
• 38:16
  Speaker 1: goes the book slog? I know, and I know it's
• 38:19
  Speaker 1: a slog. Yeah, I'm just in the early stages, as
• 38:22
  Speaker 1: we said here. I've just on two events so far. Actually,
• 38:28
  Speaker 1: Samantha b in New York. She's so funny, isn't yeah?
• 38:31
  Speaker 1: And then Marks Andy in Philadelphia who was not quite
• 38:33
  Speaker 1: as funny, but it was also really good. So right,
• 38:35
  Speaker 1: so so sad, Samdy, It's hard not When I did
• 38:39
  Speaker 1: the Daily Show, she was the one who ran that segment,
• 38:43
  Speaker 1: and you just so many takes ruin because she just
• 38:45
  Speaker 1: makes you laugh. You can't not laugh. No, we did.
• 38:48
  Speaker 1: That was fine. Yeah, but you know, I'm I'm not
• 38:52
  Speaker 1: Spring Chicken anymore, so I'm not doing the crazy change
• 38:56
  Speaker 1: cities every coast to coast. So you should do Bill Maher.
• 38:59
  Speaker 1: He would have you on in a hard too far
• 39:01
  Speaker 1: to fly. Yeah, although I'm actually I'm doing London and
• 39:05
  Speaker 1: Madrid because I'm big in Spain. For some very peculiar reason,
• 39:08
  Speaker 1: I'm big in Spain. Aren't you affiliated with London School
• 39:10
  Speaker 1: of Economics? All? Yeah, but it's a it's a very
• 39:13
  Speaker 1: loose thing. But yeah. But but they advertised my books
• 39:16
  Speaker 1: on the side of buses in Spain for some reason.
• 39:18
  Speaker 1: Really yeah, And Spanish language edition came out the same
• 39:21
  Speaker 1: day as the English edition. So so where are you
• 39:23
  Speaker 1: going in Spain? It's all going to be in Madrid.
• 39:25
  Speaker 1: But even so, so we were about two maybe three
• 39:31
  Speaker 1: timers ago. We were in um San Sebastian and it's
• 39:36
  Speaker 1: in deep in the Hinchel lands of Spain and it's
• 39:39
  Speaker 1: just spectacular. I I've spent a fair bit of time
• 39:42
  Speaker 1: in Santiago to Compostela, which is really great. Uh. The climate,
• 39:47
  Speaker 1: it's really weird. The climate feels like whales and it's
• 39:50
  Speaker 1: uh uh and they still take siesta's but it's uh
• 39:53
  Speaker 1: but it's it's really there's a lot of great stuff.
• 39:56
  Speaker 1: But I've been I've been around with a fair bit
• 39:57
  Speaker 1: of Spain. They know how to live there, they know
• 39:59
  Speaker 1: how to kick relax enjoy food and wine there. Really
• 40:03
  Speaker 1: it's a whole different head space. Yeah, Paul, What do
• 40:05
  Speaker 1: you think are the two most important zombies that you
• 40:08
  Speaker 1: discuss in the book? Oh, clearly it's the belief that
• 40:13
  Speaker 1: tax cuts pay for themselves. I thought they do. You're
• 40:17
  Speaker 1: telling me they don't. Didn't the laugh for curve on
• 40:19
  Speaker 1: that Napkins say that you could cut taxes and they
• 40:22
  Speaker 1: pay for themselves. Yeah, it turns out we've had an
• 40:26
  Speaker 1: erroneous napkin and it is has never once happened. So
• 40:29
  Speaker 1: that's the one that in terms of our political life matter,
• 40:32
  Speaker 1: I had no idea. Um. And the other one is
• 40:35
  Speaker 1: climate change denial. It's a hoax. It's a Chinese un
• 40:39
  Speaker 1: that's right. The belief that it's a hoax, or at
• 40:41
  Speaker 1: least that it's not really serious or anyway there's nothing
• 40:43
  Speaker 1: we can do about it. Um. That's you know, as
• 40:47
  Speaker 1: the evidence keeps on piling in and as the consequences
• 40:51
  Speaker 1: start to show the fact that that is still I
• 40:54
  Speaker 1: mean sixty of Republicans and congress our climate deniers. They
• 40:58
  Speaker 1: deny the climate change is happening at all. The only
• 41:01
  Speaker 1: major political party in the world with the majority that
• 41:04
  Speaker 1: believes climate change isn't real. Yeah, although I'm not entirely
• 41:07
  Speaker 1: sure about the current governing party in Australia. But yes, um,
• 41:11
  Speaker 1: but yes, this is and this is really that. Those
• 41:15
  Speaker 1: are those are enough to go on. There are there
• 41:17
  Speaker 1: are other zombies out there, but those are the two
• 41:19
  Speaker 1: really big ones. Those are the big ones. Fascinating, all right.
• 41:22
  Speaker 1: So so let me jump through a couple of questions
• 41:25
  Speaker 1: we missed during the broadcast portion. Um. The two things
• 41:30
  Speaker 1: I didn't get to, um that I felt were important were, Well,
• 41:35
  Speaker 1: let's start with climate change, a well known Chinese hoax, right,
• 41:39
  Speaker 1: climate change created by the Chinese so they could continue
• 41:43
  Speaker 1: to dominate us on the industrial side. You call it
• 41:47
  Speaker 1: quote an existential threat and a priority above health for reform, income, inequality,
• 41:54
  Speaker 1: and financial crisis. That's a big statement, yeah, because if
• 41:57
  Speaker 1: you make the plan an unlivable or large portion of
• 42:00
  Speaker 1: the planet on livable, that I was about to say
• 42:03
  Speaker 1: Trump's everything else, and now that's uh, and it's and
• 42:07
  Speaker 1: that is you know, we're on track to really catastrophic outcomes.
• 42:12
  Speaker 1: It's the climate models have been surprisingly accurate so far,
• 42:18
  Speaker 1: and they there was just a big piece, Um, I
• 42:21
  Speaker 1: don't remember was Bloomberg at the Times about I think
• 42:24
  Speaker 1: it was Bloomberg? Was the nineteen eight forecast turned out
• 42:28
  Speaker 1: to be dead accurate? Yeah? Yeah, So that it's that.
• 42:31
  Speaker 1: This is you know, it's good science, it's real science,
• 42:34
  Speaker 1: and it's scary as hell. And the thing about it
• 42:37
  Speaker 1: also has an issue is it happens to be something
• 42:39
  Speaker 1: we know how to deal with. We a little a
• 42:43
  Speaker 1: mixture of public investment in new technologies plus putting a
• 42:47
  Speaker 1: price on carbon. Uh, it would make an enormous difference.
• 42:52
  Speaker 1: And technology is is our friend here. Renewable technology has
• 42:56
  Speaker 1: made enormous advances. So all the ingredients are in place
• 43:02
  Speaker 1: for solving this existential threat, except that we have the leadership. Well,
• 43:08
  Speaker 1: we we have leadership which is trying to make sure
• 43:10
  Speaker 1: that the catastrophe happens. So what about a technological solution?
• 43:14
  Speaker 1: So if we don't get a change in leadership, and
• 43:17
  Speaker 1: ten years from now we find ourselves with a rising
• 43:21
  Speaker 1: global temperature and rising sea levels. What about seating the
• 43:25
  Speaker 1: clouds or some magic bullet that will make all this
• 43:29
  Speaker 1: go away? Well, you know that's the last resort. I'm
• 43:32
  Speaker 1: not going to rule it out. Uh, but there's enormous
• 43:35
  Speaker 1: problems if you start to think about that, because anything
• 43:38
  Speaker 1: you do that is actually geoengineering is it's going to
• 43:43
  Speaker 1: have very uneven impacts. It's gonna it may stop the
• 43:47
  Speaker 1: planet from cooking, but it will um cause worsening of
• 43:51
  Speaker 1: the climate in some places. It will be very uneven.
• 43:54
  Speaker 1: So if you're upper lower Slabstan and turns out that
• 44:00
  Speaker 1: the United States and the European Union are planning a
• 44:04
  Speaker 1: project of geo engineering that just has as a small
• 44:06
  Speaker 1: side effect is going to turn your country into a desert. Uh,
• 44:10
  Speaker 1: how are we gonna deal with the political fallout of that?
• 44:13
  Speaker 1: That's a it's a I mean, it's better than than
• 44:16
  Speaker 1: than than total doom, but it's really not the route
• 44:19
  Speaker 1: we want to go down. Have you been following the
• 44:21
  Speaker 1: debate about climate change in Australia. It's quite fascinating some
• 44:27
  Speaker 1: of it. And they you know that they're they're deep
• 44:30
  Speaker 1: in denial, at least the elected officials, elected officials are
• 44:33
  Speaker 1: So it's it's a lot like our situation, like Florida. Yeah,
• 44:37
  Speaker 1: it's a it's it's a place which is is really
• 44:41
  Speaker 1: on the as it happens. They have to be right
• 44:43
  Speaker 1: at sort of the leading edge of disaster then that
• 44:47
  Speaker 1: the continent is burning. Um. But they have like us,
• 44:51
  Speaker 1: they have people who have an ideological opposition to any
• 44:55
  Speaker 1: form of government action. They have powerful fossil fuel interests,
• 45:00
  Speaker 1: huge mineral and timber interests that don't want to change.
• 45:04
  Speaker 1: So um. Yeah, to Australia. If you really want to
• 45:08
  Speaker 1: feel depressed, look at Australia, where on the one hand,
• 45:11
  Speaker 1: you can see what the shape of things to come
• 45:13
  Speaker 1: in terms of disaster, and you can also see politically
• 45:17
  Speaker 1: how hard it is to do the right thing. There's
• 45:19
  Speaker 1: a wonderful book called Windfall came out about four years
• 45:23
  Speaker 1: ago that traces the history of investment in climate change
• 45:29
  Speaker 1: and new technology and all these things. And the conclusion
• 45:32
  Speaker 1: of the book is essentially, Areas that are hot are
• 45:36
  Speaker 1: going to get hotter, Areas that are dryer are gonna
• 45:38
  Speaker 1: get drier, Areas that are cold are gonna get colder.
• 45:40
  Speaker 1: Areas that a wet are going to get wetter. And
• 45:43
  Speaker 1: it's not so much that the climate is going to change,
• 45:46
  Speaker 1: as it's just going to be so much more intense everywhere.
• 45:50
  Speaker 1: Desertification is going to continue expanding. Places that suffer coastal
• 45:55
  Speaker 1: flooding are going to be overwrought. It's whatever you have
• 45:58
  Speaker 1: just multiple times. That's simple. But it's but yeah, there's
• 46:02
  Speaker 1: a lot of things. It's not it's not linear. It's
• 46:04
  Speaker 1: not just that every place gets two degrees warmer. It
• 46:07
  Speaker 1: is that a lot of stuff happens in addition to that,
• 46:09
  Speaker 1: and um, yeah, it's it's and it really really uh
• 46:14
  Speaker 1: it's it's quite terrifying and um, um really we fossil
• 46:21
  Speaker 1: I talked in the book about zombie ideas. Fossil fuels
• 46:25
  Speaker 1: is basically a zombie sector. We shouldn't be uh, we
• 46:29
  Speaker 1: should be phasing out fossil fuels entirely, quite quickly, and
• 46:32
  Speaker 1: in fact, we have the technology to do that. So
• 46:35
  Speaker 1: they Uh, if we had any kind of realistic pricing,
• 46:38
  Speaker 1: we wouldn't be we wouldn't be digging coal, we wouldn't
• 46:41
  Speaker 1: be Uh, we might be doing every bit of subsidized
• 46:44
  Speaker 1: this solar is more so at this point and PCT
• 46:47
  Speaker 1: me at the moment, Cole is losing the battle against
• 46:49
  Speaker 1: solar and wind um just on pure cost grounds. And
• 46:53
  Speaker 1: and you have the Trump administration trying desperately to force
• 46:56
  Speaker 1: people to burn coal, and and the electrical electric production facilities,
• 47:02
  Speaker 1: all of all of the big plants that are making electricity,
• 47:06
  Speaker 1: they're all moving to natural gas. It's so much cheaper
• 47:08
  Speaker 1: and cleaner. Well, they're moving to natural gas and to
• 47:10
  Speaker 1: uh and a lot of wind and solar and natural gas.
• 47:13
  Speaker 1: Fracking is one of those things which it uh there,
• 47:17
  Speaker 1: there's a lot of It turns out we're releasing a
• 47:20
  Speaker 1: lot of greenhouse gases because of lacks regulation. But if
• 47:22
  Speaker 1: we did it right, fracking is a good transition technology
• 47:26
  Speaker 1: because hydrocarbons methane has a lot less carbon per btu
• 47:31
  Speaker 1: than coal does, so and it's good for sarge capacity.
• 47:34
  Speaker 1: So you know, we we could in a rational world,
• 47:36
  Speaker 1: we'd be we'd be using a natural gas to provide
• 47:40
  Speaker 1: searge capacity, were using renewables to provide based capacity. Uh
• 47:45
  Speaker 1: some nuclear I'm I'm okay with that. Um, we would
• 47:48
  Speaker 1: be getting it completely out of the coal business. We'd
• 47:50
  Speaker 1: be shifting to electric vehicles, all of it. Fraction of
• 47:54
  Speaker 1: a percent of g d P in terms of what
• 47:56
  Speaker 1: it would actually do to growth, um, but of course
• 47:59
  Speaker 1: not under current management. Interesting. And then the other thing
• 48:03
  Speaker 1: we didn't get to during the broadcast portion that I
• 48:05
  Speaker 1: have to talk about because you've written about it so
• 48:08
  Speaker 1: much and it's such a giant issue, is the income
• 48:14
  Speaker 1: and wealth inequality that's in our our society. And I
• 48:17
  Speaker 1: have to point out that back in you were first
• 48:22
  Speaker 1: writing about this. Yeah, I wasn't the first person to
• 48:25
  Speaker 1: notice it, but it was already obvious. So yeah, piece
• 48:29
  Speaker 1: called the Rich, the Right and the Facts, um, which
• 48:33
  Speaker 1: goes through you know, a lot of the bad arguments
• 48:35
  Speaker 1: that people were making against worrying about rising in comm inequality,
• 48:38
  Speaker 1: all of which all of those arguments, by the way,
• 48:40
  Speaker 1: still being live because there's zombie ideas that won't go away. Um.
• 48:44
  Speaker 1: So yeah, this was now it's gotten substantially worse since then,
• 48:48
  Speaker 1: you know, by by modern standards. Gordon Getko was a piker. Uh.
• 48:53
  Speaker 1: But theh this is definitely um uh and it it
• 49:00
  Speaker 1: colors everything. I mean, the fact that we have a
• 49:02
  Speaker 1: society where a few people have so much money, so
• 49:05
  Speaker 1: much influence, and also where people aren't living in the
• 49:09
  Speaker 1: same universe, so we're socially divided part because we don't
• 49:13
  Speaker 1: live in the at all in the same material universe,
• 49:16
  Speaker 1: which is not the kind of the America I grew
• 49:18
  Speaker 1: up in. Right, So so let's put some some numbers,
• 49:22
  Speaker 1: some flesh on the bone. You wrote quote, CEO is
• 49:25
  Speaker 1: now get paid more than three hundred times as much
• 49:29
  Speaker 1: as the average worker. So how did that come about?
• 49:33
  Speaker 1: How was it formally x or thirty X to now three?
• 49:38
  Speaker 1: Now that's a that's actually quite an interesting story, right,
• 49:42
  Speaker 1: it's um, it's now. CEOs have always pretty much appointed
• 49:49
  Speaker 1: the people who decide how much that they'll be they'll
• 49:51
  Speaker 1: be paid. So in some sense it was always a
• 49:54
  Speaker 1: game where CEO appoints some people who have every incentive
• 49:57
  Speaker 1: to say this guy is great, he needs to be
• 49:59
  Speaker 1: paid ins. But they didn't used to exercise that power
• 50:02
  Speaker 1: to anything like the extent that they do now. Um.
• 50:06
  Speaker 1: What changed? Um, there was big shift in power. Relations
• 50:11
  Speaker 1: used to be that if you have paid an extravagance
• 50:14
  Speaker 1: some uh, your union would kick up, and of course
• 50:17
  Speaker 1: we think the death of private sector unions has meant
• 50:20
  Speaker 1: that that's gone away. Um. It used to be that
• 50:22
  Speaker 1: if you got yourself paid an enormous salary, Uh, the
• 50:26
  Speaker 1: Farawore government would take a lot of it away in
• 50:28
  Speaker 1: higher taxes. So at some level, if there was a
• 50:31
  Speaker 1: question of shall I piss off my entire workforce in
• 50:34
  Speaker 1: order to be able to take home an extra in
• 50:35
  Speaker 1: order to get paid an extra million dollars? Uh, Well,
• 50:39
  Speaker 1: if I'm only gonna be able to take home and
• 50:41
  Speaker 1: fifty thousand of that, I might not want to do it.
• 50:43
  Speaker 1: If I can get take home a much larger share
• 50:45
  Speaker 1: of it than then maybe I will. So that changed.
• 50:48
  Speaker 1: And then just a general set of norms expectations. One
• 50:52
  Speaker 1: thing is clear. It's not because we're that we have
• 50:54
  Speaker 1: better c e O s, right that what's the same
• 50:59
  Speaker 1: pool they're coming from? This? And then and look at
• 51:01
  Speaker 1: how much money disastrous CEOs end up getting in their
• 51:04
  Speaker 1: severance packages. Right, So yeah, that's kind of surprising. It's
• 51:08
  Speaker 1: really that sort of thing used to be if you're
• 51:10
  Speaker 1: really screwed up, they would hit hand you your hat
• 51:12
  Speaker 1: and send you on your way, not with the million
• 51:15
  Speaker 1: dollar exit pack. Yeah anyway, but yeah, so so so
• 51:21
  Speaker 1: this is a real This is one of the key
• 51:23
  Speaker 1: pieces of evidence that says that if you think that
• 51:26
  Speaker 1: technology and globalization explains why we've gotten so unequal. You know,
• 51:31
  Speaker 1: explained to me how that has means that incompeten CEOs
• 51:35
  Speaker 1: get paid as much money as they get paid doesn't.
• 51:37
  Speaker 1: So there's a couple of bullet points that come from that. Um. First,
• 51:41
  Speaker 1: there's a fascinating Planet Money episode on the unintended consequences
• 51:47
  Speaker 1: of some of the employment compensation changes under Clinton Bill Clinton.
• 51:53
  Speaker 1: That was part of a big set of tax changes
• 51:55
  Speaker 1: where they try to cap the dollar payment and allowed
• 51:58
  Speaker 1: payment in stock. How much of that is the source
• 52:03
  Speaker 1: of this giant because when you look at stock composite compensation,
• 52:06
  Speaker 1: it's the lion's share of these giant yeah, um ceo comps. Yeah.
• 52:12
  Speaker 1: And it's a whether that's the result of the of
• 52:17
  Speaker 1: the policies enacted during the Clinton years, I don't know.
• 52:20
  Speaker 1: It's uh, it's certainly as part of the part of
• 52:22
  Speaker 1: the issue. And it um. I mean there was a
• 52:24
  Speaker 1: period when economists, some of them said, you know, good,
• 52:28
  Speaker 1: we should pay people in stock because that gives them
• 52:30
  Speaker 1: an incentive to perform well. But it turns out it
• 52:33
  Speaker 1: doesn't actually work that way, partly because you get the
• 52:36
  Speaker 1: stock options, but they reset the price that the company
• 52:38
  Speaker 1: does badly. Um, but aren't CEO is incentive to do
• 52:42
  Speaker 1: a good job. Because they're the CEOs, you have to
• 52:45
  Speaker 1: incentivize them more. That's that's the point it turns out.
• 52:48
  Speaker 1: You know, back in back in the America, I grew
• 52:50
  Speaker 1: up in again, I'm an all the cards were here.
• 52:52
  Speaker 1: Uh we had think about photos of I always think
• 52:56
  Speaker 1: of photos of of NASA and the all of these
• 53:01
  Speaker 1: guys and uh in short sleeve white shirts, the pocket
• 53:05
  Speaker 1: with the pocket protectors, all of whom are being paid
• 53:08
  Speaker 1: not all that well, none of whom have incentive pay
• 53:13
  Speaker 1: doing incredible things. You know, it wasn't we think of NASA,
• 53:16
  Speaker 1: But the same thing was going on at the great
• 53:17
  Speaker 1: technology companies at the time. So it's not it. It's
• 53:22
  Speaker 1: amazing actually to think that that. I mean, money matters,
• 53:26
  Speaker 1: monetary incentence matter. But people do good work for lots
• 53:29
  Speaker 1: of reasons. And we've we've lost the notion that people
• 53:32
  Speaker 1: might do good work because they take some pride in
• 53:34
  Speaker 1: their work right. Also it's their job not to not
• 53:36
  Speaker 1: to go too far on a limb. So you've described
• 53:40
  Speaker 1: we we're talking about climate change and denial there before
• 53:43
  Speaker 1: you've described um quote, the inequality denial industry that either
• 53:49
  Speaker 1: inequality wasn't rising, or that it didn't matter. Who can legitimately,
• 53:54
  Speaker 1: with the straight face say there hasn't been a giant
• 53:58
  Speaker 1: increase in economic getting. Well, you know, there's a there's
• 54:02
  Speaker 1: a good salary to be made from the ability to
• 54:05
  Speaker 1: say that with a straight face, and that's really what
• 54:07
  Speaker 1: drives it. But yeah, it's it's quite amazing. I mean,
• 54:11
  Speaker 1: the numbers, the official numbers show it. Although we actually
• 54:14
  Speaker 1: have a problem with many of the standard measures because
• 54:17
  Speaker 1: they don't actually keep track of gigantic incomes because that's uh,
• 54:21
  Speaker 1: we didn't think we needed to, but because but now
• 54:24
  Speaker 1: we do. Um but uh yeah, when when there are
• 54:28
  Speaker 1: people out there still trying to claim, uh that inequality
• 54:32
  Speaker 1: hasn't gone up much, and then just say, among other things,
• 54:35
  Speaker 1: just you walk around, look look look, you know, look
• 54:38
  Speaker 1: at look at New York City, look at the um
• 54:41
  Speaker 1: at the way we live now. It's just is not
• 54:43
  Speaker 1: the same middle class country it used to be. And
• 54:46
  Speaker 1: then we do have, uh, you know, we have pretty
• 54:50
  Speaker 1: sophisticated ways of h between tax data surveys and so on,
• 54:55
  Speaker 1: which the that's new. They never used the slice of
• 54:59
  Speaker 1: this fun as they do top one percent, ten percent,
• 55:02
  Speaker 1: half and that's a big change the top point of
• 55:05
  Speaker 1: one percent. Nobody ever thought that was important. How much
• 55:08
  Speaker 1: money could there be up there? But the answer is
• 55:10
  Speaker 1: now a lot? And so yeah, so this is not
• 55:14
  Speaker 1: there shouldn't be any real question about that. But again,
• 55:18
  Speaker 1: it's difficult to get a man to understand something when
• 55:20
  Speaker 1: the salary depends on it's not understanding it. So let's
• 55:22
  Speaker 1: talk about a headline um from a different writer that
• 55:26
  Speaker 1: I had to ask you about because it's so fascinating.
• 55:28
  Speaker 1: Derrick Thompson in the Atlantic the weekend before we tape
• 55:32
  Speaker 1: this had a column quote, this is the headline boomers
• 55:37
  Speaker 1: have socialism? Why not millennials. It's kind of a fascinating take. Well,
• 55:43
  Speaker 1: there is a yeah, I mean, it is a peculiar
• 55:46
  Speaker 1: thing that when people say, oh, America will never stand
• 55:49
  Speaker 1: for government health insurance, every American sixty five and old
• 55:52
  Speaker 1: there has government health insurance. When they say Americans won't
• 55:55
  Speaker 1: stand for wide, large government guarantees of income so security.
• 56:01
  Speaker 1: Uh so we actually do have, in fact, the US
• 56:03
  Speaker 1: welfare state. Uh. It's not that it's smaller than that
• 56:07
  Speaker 1: of other advanced countries, but not that much smaller, because
• 56:10
  Speaker 1: in fact, we do provide healthcare and retirement income to
• 56:15
  Speaker 1: people people vote. It's probably people who vote. But I
• 56:19
  Speaker 1: think the other thing that happened was that, um, you know,
• 56:24
  Speaker 1: I thought, when when Medicare came in, uh uh, why
• 56:30
  Speaker 1: was it possible to go and provide government health insurance
• 56:34
  Speaker 1: to everybody over sixty five? Why didn't people complain that
• 56:37
  Speaker 1: this was taking away private insurance? The answer was that
• 56:39
  Speaker 1: private insurers weren't interested in covering people over sixty five.
• 56:43
  Speaker 1: There was never an expensive Yeah, they're expensive and unpredictably expensive.
• 56:47
  Speaker 1: So the so that you were basically moving into a
• 56:51
  Speaker 1: blank space. Um. And the trouble, the reason that it's
• 56:55
  Speaker 1: not so easy to just have Medicare for all is
• 56:58
  Speaker 1: that people under sixty five, many of them do have
• 57:02
  Speaker 1: private health insurance, which both means that you have a
• 57:05
  Speaker 1: lobby uh interest group, but I think even more important
• 57:09
  Speaker 1: means that you're telling people, you know, we're going to
• 57:12
  Speaker 1: take away the insurance you now have, and we're going
• 57:14
  Speaker 1: to replace it with something different. Trust us, it will
• 57:17
  Speaker 1: be better, probably plus death panels on top of it,
• 57:20
  Speaker 1: plus death panels, and it probably will be better in fact,
• 57:23
  Speaker 1: but that's a that's a really heavy political lift, and
• 57:26
  Speaker 1: it's I mean, if you can start with the Tabla
• 57:29
  Speaker 1: raza Um. I dedicate this book to the Arguing Zombies,
• 57:34
  Speaker 1: to the to the memory of Uva Reinhardt, healthcare economist
• 57:37
  Speaker 1: of Princeton, who helped me a lot. And Uva and
• 57:40
  Speaker 1: and his wife May Chung, they actually put together Taiwan's
• 57:43
  Speaker 1: healthcare system, which is single payer's basically Medicare for all.
• 57:46
  Speaker 1: And how's it working. It's working fine, but the but
• 57:49
  Speaker 1: Uva himself said, look, we're not gonna be able to
• 57:51
  Speaker 1: do that in the United States. We're if you want,
• 57:55
  Speaker 1: if you want to get there, I wouldn't start from here.
• 57:57
  Speaker 1: So we're recording this the day of the Iowa Calucus
• 58:01
  Speaker 1: is of all the Democrats who were running for office,
• 58:04
  Speaker 1: who has the most compelling, workable healthcare proposal of everybody? Oh,
• 58:11
  Speaker 1: that's an interesting question because the I mean, they're all
• 58:17
  Speaker 1: workable proposals. On the technicalities, Medicare for all would work. Uh,
• 58:24
  Speaker 1: Elizabeth Warren has laid out a lot more detail about
• 58:27
  Speaker 1: how it would be paid for than Bernie Sanders has,
• 58:30
  Speaker 1: But something like that would work. UM enhanced massively enhanced Obamacare,
• 58:35
  Speaker 1: which is basically what Joe Biden means, just extended to
• 58:38
  Speaker 1: cover everybody and well extend cover. Yeah, so the subsidies
• 58:42
  Speaker 1: don't cut off, so that we have much reduced code
• 58:46
  Speaker 1: pays and it's just uh that also works. There are
• 58:49
  Speaker 1: countries that have universal health coverage that do it through
• 58:51
  Speaker 1: private insurance companies, like the Netherlands, so that's also workable.
• 58:55
  Speaker 1: So I'm not sure that anyone in terms of of
• 58:59
  Speaker 1: who plan is actually the truth is. I believe that
• 59:03
  Speaker 1: if any Democrat is elected, what we will in fact
• 59:05
  Speaker 1: get is Obamacare two point Oh that Medicare for all
• 59:09
  Speaker 1: ain't gonna happen, uh not not for a few years anyway.
• 59:12
  Speaker 1: And so what we're actually going to get to something
• 59:14
  Speaker 1: that is just a greatly enhanced version of what we
• 59:17
  Speaker 1: we we managed to achieve in which is fine with me, right,
• 59:21
  Speaker 1: and people have come to like Obamacare. In fact, the
• 59:26
  Speaker 1: current administration but for John McCain, would have gotten rid
• 59:29
  Speaker 1: of it. I think that is certainly a factor in
• 59:32
  Speaker 1: the outcome of the midtime was probably the single biggest factor. Um, yeah,
• 59:38
  Speaker 1: that's what most of it's that was largely a healthcare election.
• 59:40
  Speaker 1: One thing that worries me about Medicare for all and
• 59:43
  Speaker 1: all that is it that instead of people talking about
• 59:45
  Speaker 1: the fact that Trump wants to take away what we
• 59:47
  Speaker 1: have achieved, that they're gonna be talking about some you know,
• 59:50
  Speaker 1: radical new proposal. Um. And we need to keep focused
• 59:54
  Speaker 1: because the in fact, if Trump is reelected, there's a
• 59:58
  Speaker 1: very good chance that he will find way to kill
• 1:00:00
  Speaker 1: Obamacare in his second term. Um. So what do you
• 1:00:03
  Speaker 1: think the outcome of November is going to be? I
• 1:00:07
  Speaker 1: personally have no idea, although I will t this up
• 1:00:11
  Speaker 1: by saying, it feels it seems like he had a
• 1:00:16
  Speaker 1: thread and needle quite precisely. And it was a hundred
• 1:00:19
  Speaker 1: and fifty thousand votes across five states that put him
• 1:00:22
  Speaker 1: over the team. Yeah, and as he gained votes or
• 1:00:25
  Speaker 1: lost votes since I don't know that, we really don't know.
• 1:00:28
  Speaker 1: I mean, it was also a media obsession with Hillary's
• 1:00:30
  Speaker 1: emails and all of that. And Trump won in large
• 1:00:33
  Speaker 1: part because nobody thought he could possibly win. He benefited
• 1:00:37
  Speaker 1: enormous things drama from you know, coverage that ignored the
• 1:00:40
  Speaker 1: possibility of his winning. And so it was okay to
• 1:00:43
  Speaker 1: beat up on Hillary because obviously Trump can't win. Uh,
• 1:00:46
  Speaker 1: and that won't happen, I hope this time. But God knows.
• 1:00:50
  Speaker 1: I mean, the economy is unemployment is low, although what
• 1:00:53
  Speaker 1: all of the political scientists say is that what matters
• 1:00:56
  Speaker 1: is how fast is the economy growing, not the level
• 1:00:59
  Speaker 1: but the rate of change in the year before the election.
• 1:01:04
  Speaker 1: And two it's kind of a borderline that's that's more
• 1:01:07
  Speaker 1: or less neutral. So but who knows. I mean, Trump
• 1:01:11
  Speaker 1: has certainly not managed to build mass support his core
• 1:01:17
  Speaker 1: his core group. He's still at whatever that is. And
• 1:01:21
  Speaker 1: it's uh, and but electoral college probably still gives him
• 1:01:26
  Speaker 1: an advantage. Um, well, it looks like he's lost Pennsylvania already,
• 1:01:31
  Speaker 1: we hope. And it looks like he's lost Michigan already
• 1:01:34
  Speaker 1: and possibly Wisconsin. Well, it is interesting that to the
• 1:01:38
  Speaker 1: extent that Trump was making the Trump economy overall, I
• 1:01:42
  Speaker 1: have to admit, it's a low unemployment. It's the Obama
• 1:01:46
  Speaker 1: economy extended out for years. But if it feels pretty,
• 1:01:49
  Speaker 1: you know, it feels good. It feels good. But the
• 1:01:52
  Speaker 1: peculiar thing, the amazing thing, actually is that where Trump's
• 1:01:57
  Speaker 1: economy is bad is precisely where he promised to help.
• 1:02:01
  Speaker 1: So manufacturing bankratsy is a way up manufacturing. We're in
• 1:02:07
  Speaker 1: a manufacturing recession, even as even as we had so
• 1:02:10
  Speaker 1: it's possible that that that that tips the bottle Ohio, Michigan, Wisconsin.
• 1:02:15
  Speaker 1: That so maybe, but then on you know, the third hand, Uh,
• 1:02:23
  Speaker 1: there may be other factors coming in and it's hard.
• 1:02:27
  Speaker 1: I really have no ability to prognosticate on this. Two
• 1:02:31
  Speaker 1: years ago, I would have bet you a million dollars
• 1:02:34
  Speaker 1: that the Senate would not change hands. And following and
• 1:02:39
  Speaker 1: following the arc of all the news that's come out
• 1:02:42
  Speaker 1: this year, I think it's a better than even chance that, um,
• 1:02:47
  Speaker 1: the Democrats take the Senate or at the very least
• 1:02:51
  Speaker 1: it's yeah, I think that. And that wasn't true to you.
• 1:02:53
  Speaker 1: So that's clear, and it's and in some way map
• 1:02:56
  Speaker 1: but challenging. You know, it's only a third of the
• 1:02:58
  Speaker 1: of the seats ruppied. Everybody said, oh two maybe chance,
• 1:03:03
  Speaker 1: it's a real chance. Now that's one of those things
• 1:03:05
  Speaker 1: that we're there's enough, there are enough really weak uh
• 1:03:11
  Speaker 1: Comlican senators and it uh yeah, Arizona, you know there's
• 1:03:15
  Speaker 1: places she was in point she never won anything, that's right,
• 1:03:18
  Speaker 1: and and and his lacking pretty bad. But I try, actually,
• 1:03:21
  Speaker 1: I try not to running against an by the way
• 1:03:23
  Speaker 1: in Arizona, Yeah, I try not to od on this
• 1:03:26
  Speaker 1: stuff too much. It's it's the fact of the matter
• 1:03:28
  Speaker 1: is is that we don't know. But it's the realm
• 1:03:32
  Speaker 1: of possibilities I think do range from Trump victory and
• 1:03:36
  Speaker 1: Republican Senate probably it's still Democratic House, but to uh,
• 1:03:41
  Speaker 1: democratic victory, democratic sweep, and that would be really interesting.
• 1:03:45
  Speaker 1: I mean, it would be give us a chance to
• 1:03:47
  Speaker 1: do you know about only had two years when he
• 1:03:49
  Speaker 1: was actually able to do anything, so did Trump. Yeah,
• 1:03:53
  Speaker 1: and uh so I think if we actually look at it,
• 1:03:56
  Speaker 1: the the possibility of another you know, we're not we're
• 1:04:00
  Speaker 1: not going to get Medicare for all. We're not going
• 1:04:03
  Speaker 1: to get uh the free college, free college. We're not.
• 1:04:07
  Speaker 1: We're uh, we might get a Green New deal, maybe
• 1:04:10
  Speaker 1: not as big as the one that that advocates want,
• 1:04:13
  Speaker 1: but I would definitely be for that. And um but
• 1:04:16
  Speaker 1: on the other hand, we might, uh we may be
• 1:04:19
  Speaker 1: on a slide into becoming in a authoritarian, one party state.
• 1:04:23
  Speaker 1: That's that has happened, and I'm I'm really quite concerned
• 1:04:25
  Speaker 1: that it could happen to us. That that would be
• 1:04:27
  Speaker 1: bad if it happened. So on that cheerful note, because
• 1:04:30
  Speaker 1: I know you are heading out to seth myers. From here,
• 1:04:34
  Speaker 1: let's jump to our favorite question that we ask all
• 1:04:36
  Speaker 1: of our guests. We call this the speed round, um.
• 1:04:39
  Speaker 1: And I'll just plough through these as quickly as I can,
• 1:04:41
  Speaker 1: and we'll we'll send you on your way, starting with
• 1:04:45
  Speaker 1: what are you watching these days? What are you streaming?
• 1:04:47
  Speaker 1: What's your favorite podcast? What are you what are you
• 1:04:49
  Speaker 1: paying attention to? Okay, I actually shouldn't say that. I
• 1:04:53
  Speaker 1: don't really do podcasts okay, very little. I am listening
• 1:04:57
  Speaker 1: when I can to, uh to the uh Prince Peterson
• 1:05:01
  Speaker 1: Institute Trade talks, which is that's professional listening. Um, the
• 1:05:07
  Speaker 1: uh how about watching? What are you watching? Oh crime?
• 1:05:12
  Speaker 1: I have both Amazon Prime in Netflix, and I watch
• 1:05:14
  Speaker 1: all kinds of of stuff, but mostly not uh not
• 1:05:19
  Speaker 1: you know, nerdy stuff. So I'm a huge fan of
• 1:05:21
  Speaker 1: the Expanse. Oh god, I love that, right, so, I think,
• 1:05:26
  Speaker 1: and it makes me almost forgive Jeffs for all the
• 1:05:28
  Speaker 1: other things he's done that he rescued the Expanse and
• 1:05:30
  Speaker 1: his continued this last season has been spectacular fabulous. So
• 1:05:34
  Speaker 1: actually that's something that's social science nerds like as well,
• 1:05:37
  Speaker 1: which is a whole story. And there's another season now
• 1:05:39
  Speaker 1: coming in the future. There's another season coming. There's also
• 1:05:42
  Speaker 1: gonna be uh. I don't know how many people saw this,
• 1:05:45
  Speaker 1: but Altered Carbon, which was Netflix and that was that
• 1:05:49
  Speaker 1: was a great science fiction novel and they turned into
• 1:05:52
  Speaker 1: a great series and they'll be I think we're having
• 1:05:54
  Speaker 1: a second season coming up the next month. So if
• 1:05:57
  Speaker 1: you like Altered Carbon, you should check out Electra Dreams,
• 1:06:00
  Speaker 1: which is loosely based on Philip K. Dick. Haven't watched really,
• 1:06:03
  Speaker 1: it's the first one is spectacular, and they're all separate.
• 1:06:06
  Speaker 1: There's not a contiguous series. They're all standalone, so really
• 1:06:10
  Speaker 1: really interesting. Um, and I watched lots of concerts. That's right,
• 1:06:15
  Speaker 1: you're a music geek. I'm well, it's kind of weird.
• 1:06:18
  Speaker 1: I'm a I'm a sixty six year old want to
• 1:06:19
  Speaker 1: be hipster. Right, I'll watch a lot of indie music performances. Right.
• 1:06:23
  Speaker 1: Have you seen David Burns on Broadway American Utel? No?
• 1:06:27
  Speaker 1: I have, not so amazing. I've seen it twice already.
• 1:06:31
  Speaker 1: It's done in February sixteen, So you better go hurry
• 1:06:33
  Speaker 1: up and see if you're win because you're leaving the
• 1:06:38
  Speaker 1: out of the country. If you're a Talking Heads fan,
• 1:06:40
  Speaker 1: it's amazing. It's really just amazing. Um and did you
• 1:06:45
  Speaker 1: see it's been you mentioned Amazon Prime. The boys haven't
• 1:06:48
  Speaker 1: watched that yet. So it's like the anti Marvel universe,
• 1:06:52
  Speaker 1: like the opposite where where when you when you look
• 1:06:58
  Speaker 1: at the model, they're super Euros are part of a
• 1:07:01
  Speaker 1: corrupt corporation that abuse their power to obtaining government contracts.
• 1:07:06
  Speaker 1: It's just fascinating. I probably should be in because I'm
• 1:07:10
  Speaker 1: the whole superhero thing, by and large leaves me cold.
• 1:07:12
  Speaker 1: So you would, you would totally. So I only recommended
• 1:07:16
  Speaker 1: this series to two people who could not be more different,
• 1:07:21
  Speaker 1: you and Cliff Fastness, and I'm betting both of you
• 1:07:24
  Speaker 1: are gonna love it. Okay, so put that down. Second,
• 1:07:27
  Speaker 1: what's the most important thing we don't know about Paul Krugman? Okay,
• 1:07:31
  Speaker 1: so we have touched on this before. I think the
• 1:07:33
  Speaker 1: most important thing that people don't know is that I
• 1:07:35
  Speaker 1: is that I'm a pussycat and person. That's right, your
• 1:07:38
  Speaker 1: whole public persona, the public persona somehow even though I
• 1:07:41
  Speaker 1: don't think you know, you don't encourage it. I don't
• 1:07:44
  Speaker 1: encourage it. I don't insult, I don't talk about people's
• 1:07:46
  Speaker 1: personal appearance. Uh. I don't. But your writing is barbed
• 1:07:51
  Speaker 1: and effective, and people interpret that as mean and angry. Yeah,
• 1:07:55
  Speaker 1: but I'm not angry and I'm not a I don't
• 1:07:57
  Speaker 1: hold registered. Yeah, you're a mench um. Let's talk about
• 1:08:01
  Speaker 1: your early mentors who influenced the way you look at
• 1:08:03
  Speaker 1: the world of economics. Okay, So I had two great
• 1:08:07
  Speaker 1: economics mentors. First, Bill Nordhouse uh Yale Yale Nobel or
• 1:08:15
  Speaker 1: right although after me, which is kind of weird, but
• 1:08:17
  Speaker 1: Buddy got it. Um And I was his research assistant
• 1:08:20
  Speaker 1: when I was still an undergraduate, and that was tremendous apprenticeship.
• 1:08:24
  Speaker 1: And then a Rudy dorn Bush and M I T
• 1:08:27
  Speaker 1: was a huge influence on me and on the many students,
• 1:08:31
  Speaker 1: So huge influence. Um So those are the two people
• 1:08:37
  Speaker 1: you know whose personal advice mentorship mattered a huge amount.
• 1:08:42
  Speaker 1: What about economists? What economists have influenced how you think
• 1:08:45
  Speaker 1: of the field? Yeah? So the um So, although I
• 1:08:51
  Speaker 1: wasn't an advisor, but Bob solo of M I T
• 1:08:56
  Speaker 1: just I a whole lot of the way I do economics,
• 1:09:01
  Speaker 1: the whole writing style which fills over to my public
• 1:09:04
  Speaker 1: writing as well. It comes a lot from Robert solo,
• 1:09:07
  Speaker 1: who was this great m I t a commist who
• 1:09:09
  Speaker 1: had this tremendous gift for taking complicated issues and turning
• 1:09:13
  Speaker 1: them into simple models that illuminated the world. And I've
• 1:09:17
  Speaker 1: always been in that. And then um not a simple modeler,
• 1:09:22
  Speaker 1: but John Maynard Keynes. I was waiting for you to
• 1:09:24
  Speaker 1: go there it. Maybe you have to actually do economics
• 1:09:30
  Speaker 1: as a as an advocation to appreciate the greatness Kaynes's
• 1:09:35
  Speaker 1: ability to think his way out of the box in
• 1:09:38
  Speaker 1: which economists were trapped at the time and see things differently.
• 1:09:41
  Speaker 1: There's never been anything like it, I would say, not
• 1:09:44
  Speaker 1: even Adam Smith did as much to really just say
• 1:09:47
  Speaker 1: this is the world is not the way you think
• 1:09:50
  Speaker 1: it is, and it's amazing performance, quite fascinating. Let's talk
• 1:09:54
  Speaker 1: about books. What do you like to read for fun?
• 1:09:57
  Speaker 1: What do you read? What do you recommend to people?
• 1:10:00
  Speaker 1: Tell us some of your favorite books. Okay, so I'm
• 1:10:01
  Speaker 1: a geek. Uh so I read a lot of science fiction. Um,
• 1:10:07
  Speaker 1: I anything by Charlie Strauss, who I consider the greatest
• 1:10:12
  Speaker 1: living uh science fictional author. Um and uh the yeah
• 1:10:20
  Speaker 1: s t R O s s um the but but
• 1:10:26
  Speaker 1: lots of there we are actually if you search, you
• 1:10:29
  Speaker 1: can find uh I have met him. The Frocity Archives, Yeah,
• 1:10:35
  Speaker 1: the laundry, the laundry files. Novels are amazing, they are
• 1:10:40
  Speaker 1: they are, the Annihilation Score, yeah. The But he's he's
• 1:10:44
  Speaker 1: incredibly prolific. And I had a memorable evening with him
• 1:10:48
  Speaker 1: and several other science fiction authors who all live in Edinburgh,
• 1:10:51
  Speaker 1: where we talked science fiction and tasted single malt scotches.
• 1:10:55
  Speaker 1: And I describe it as a half memorable evening because
• 1:10:58
  Speaker 1: I only remember the first half. So give us some
• 1:11:01
  Speaker 1: other books that he's interesting, So, I mean and in
• 1:11:04
  Speaker 1: science fiction. Actually, I just recently, for the first time
• 1:11:06
  Speaker 1: in decades reread Done. You know, it's going to be
• 1:11:11
  Speaker 1: a new version coming out, and you know the previous
• 1:11:13
  Speaker 1: ones they've all screwed it up somehow. But let's see,
• 1:11:16
  Speaker 1: because that is actually an incredible book. The other thing
• 1:11:19
  Speaker 1: I do is I read a lot of history, so
• 1:11:22
  Speaker 1: all kinds of stuff, and I just read a a
• 1:11:25
  Speaker 1: long detailed book on the Peninsular War, which is part
• 1:11:30
  Speaker 1: of the Napoleonic Wars, but it's the piece that where
• 1:11:32
  Speaker 1: the the Spaniards and the Portuguese, with help from the
• 1:11:36
  Speaker 1: Duke of Wellington, were fighting the French in Spain, and
• 1:11:39
  Speaker 1: it's uh. And what was great about that was that
• 1:11:43
  Speaker 1: most of the stuff that you read about that in
• 1:11:45
  Speaker 1: English is very Wellington's centered. It's very much about the
• 1:11:49
  Speaker 1: British army. But this one gives you the whole panorama
• 1:11:52
  Speaker 1: which is much vaster and uh, much more brutal. The
• 1:11:56
  Speaker 1: Peninsula War, Peninsular War. So it's it's really from eighteen
• 1:12:00
  Speaker 1: o eight up until eight thirteen there was this uh, extraordinary,
• 1:12:06
  Speaker 1: very grim but but it's fascinating struggle for for control
• 1:12:10
  Speaker 1: of Spain. Give us one more and then I'm gonna
• 1:12:12
  Speaker 1: ask you about one. Okay, so favorite books, UM, got
• 1:12:17
  Speaker 1: so many things, I mean, uh, I'm I mean actually
• 1:12:24
  Speaker 1: it was very much influenced by I haven't not but
• 1:12:30
  Speaker 1: the philosophy of of David Hume inquiry concerning human understanding,
• 1:12:36
  Speaker 1: How skepticism and demanding evidence made a big difference. That
• 1:12:41
  Speaker 1: was actually only the years later that I realized that
• 1:12:43
  Speaker 1: actually he probably was the first modern economist, even before
• 1:12:47
  Speaker 1: Adam Smith. That's really quite fascinating. So back to science fiction. Um,
• 1:12:53
  Speaker 1: two different people who are sci fi geek friends who
• 1:12:56
  Speaker 1: I I have a giant overlap with their taste. There
• 1:12:59
  Speaker 1: was aspect what they like and don't like. When two
• 1:13:03
  Speaker 1: people recommend the book, I go out and get it,
• 1:13:05
  Speaker 1: but I haven't read it yet. Both recommended The Three
• 1:13:08
  Speaker 1: Body Problem. Yeah, have you have you seen? I have
• 1:13:11
  Speaker 1: read it. You read it? What are your thoughts on?
• 1:13:13
  Speaker 1: I mean, I liked it. It's a full trilogy, and
• 1:13:16
  Speaker 1: it's feel full trilogy, and it's kind of weird. I mean,
• 1:13:18
  Speaker 1: it's it's but it's it's Chinese resiction. It's very different
• 1:13:23
  Speaker 1: in field, and it's it's strange. But it's full of
• 1:13:26
  Speaker 1: interesting ideas and even even some character development. You know
• 1:13:30
  Speaker 1: a lot of science fiction, and I have to admit
• 1:13:31
  Speaker 1: that the characters are kind of too dimensional because it's
• 1:13:34
  Speaker 1: a little bit better than that with with this, and
• 1:13:36
  Speaker 1: it's not it's not the best, uh that I with
• 1:13:43
  Speaker 1: stuff I've read. I mean, I think maybe it may
• 1:13:47
  Speaker 1: lose something in translation. I don't know. But you didn't
• 1:13:50
  Speaker 1: read it any original man, not my man. Darine skills
• 1:13:52
  Speaker 1: are a little so that's probably where where it fell
• 1:13:55
  Speaker 1: a little A little short. Speaking of fail um, tell
• 1:13:59
  Speaker 1: us about it time you failed and what you learned
• 1:14:01
  Speaker 1: from the experience. Oh gosh, I mean, there there have
• 1:14:04
  Speaker 1: been multiples but um, I mean, obviously I made a
• 1:14:08
  Speaker 1: bad call about the economy on election en, didn't you
• 1:14:12
  Speaker 1: roll that back pretty quick? Days? But no one wants
• 1:14:16
  Speaker 1: to hear about that. They just want to beat you
• 1:14:18
  Speaker 1: with the original call. But it is a reminder not
• 1:14:20
  Speaker 1: to let not to let you know. And I've done
• 1:14:23
  Speaker 1: some things before. I mean, I was warning about a
• 1:14:27
  Speaker 1: debt crisis during the Bush years and I never happened.
• 1:14:31
  Speaker 1: And I and usually when I make these things, I
• 1:14:35
  Speaker 1: go back and ask myself, was that actually grounded in
• 1:14:38
  Speaker 1: hard thinking? Or was I letting my my desire to
• 1:14:41
  Speaker 1: see bad things happen to bad people influence my judgment?
• 1:14:44
  Speaker 1: That's usually what what do you think Bush was a
• 1:14:47
  Speaker 1: bad person or was he just an amiable dufast in
• 1:14:49
  Speaker 1: over his head. I think he was not a great person,
• 1:14:52
  Speaker 1: and I think that was he a bad person. So
• 1:14:56
  Speaker 1: if you had to pick Cheney, your Bush, Oh, Cheney
• 1:14:58
  Speaker 1: was a bad Okay. So when I look at Bush,
• 1:15:00
  Speaker 1: I look at like, all right, I don't agree with
• 1:15:03
  Speaker 1: most of his decisions, but he seems kind of like
• 1:15:06
  Speaker 1: a goofy well, utterly lacking an empathy for the people
• 1:15:09
  Speaker 1: who are less fortunate than himself. So that's a that's fair,
• 1:15:13
  Speaker 1: you know, so, but not not actively evil in the
• 1:15:16
  Speaker 1: same way that Cheney was, and certainly not in the
• 1:15:18
  Speaker 1: way that the Trump is. All right, so let's um.
• 1:15:22
  Speaker 1: So the value is there? What do you do for fun?
• 1:15:24
  Speaker 1: What do you do when you're not panning New York
• 1:15:27
  Speaker 1: Times columns? Well? Uh, go to as many indie concerts
• 1:15:31
  Speaker 1: as I can manage. Tell us the last couple you saw? Okay,
• 1:15:34
  Speaker 1: last two I saw We're uh. Most recently Raina del
• 1:15:41
  Speaker 1: Sid which is actually it's the it's an indie band.
• 1:15:45
  Speaker 1: It's also a person, but she's the core of it
• 1:15:47
  Speaker 1: from Minneapolis. Sort of folky stuff but really great fun.
• 1:15:55
  Speaker 1: And I saw that at Rockwood Musical, which is a
• 1:15:58
  Speaker 1: standing only venue. Stand there with a beer in your
• 1:16:01
  Speaker 1: hand and your your five feet from the band. So
• 1:16:04
  Speaker 1: that was great. You stood for two hours in front
• 1:16:06
  Speaker 1: of the band. I imagine, you know, as long as
• 1:16:08
  Speaker 1: I can keep on doing it. Uh And then uh um.
• 1:16:12
  Speaker 1: And then one before that was another Larkin Poe, which
• 1:16:17
  Speaker 1: is blues. There are two sisters from Atlanta and they
• 1:16:21
  Speaker 1: have a band for for touring. They have a band
• 1:16:24
  Speaker 1: and their their records are just them plus various pieces
• 1:16:27
  Speaker 1: like a drummer and a guitarist or a a drummer, and
• 1:16:29
  Speaker 1: they add that, but the two of them are are
• 1:16:31
  Speaker 1: both the one one is slide guitar and one is
• 1:16:34
  Speaker 1: is is regular guitar, and and they do h amazing
• 1:16:40
  Speaker 1: harmony vocals and um and that was just they got hot.
• 1:16:44
  Speaker 1: Recently they got nominated for didn't win one, but they
• 1:16:47
  Speaker 1: got nominated for Grammy and they um no. And I
• 1:16:50
  Speaker 1: saw them at Bowery Ballroom, which is uh five fifty
• 1:16:55
  Speaker 1: instead of one hundred fifty standing room. So so so
• 1:16:59
  Speaker 1: these are standing with a beer in your hand concerts.
• 1:17:02
  Speaker 1: That's a tough kid. The last thing I did that
• 1:17:04
  Speaker 1: for was you two with the Garden, and that has
• 1:17:07
  Speaker 1: to be twelve years ago. And I'm younger than you.
• 1:17:10
  Speaker 1: I can't stand for two hours. Well so far, so far,
• 1:17:13
  Speaker 1: so good. I mean, you know, well time with time
• 1:17:15
  Speaker 1: when I can't. And the other thing I do is
• 1:17:16
  Speaker 1: I I do. I do bike trips. Now I have
• 1:17:21
  Speaker 1: actually done by trips, like the full trip with the
• 1:17:23
  Speaker 1: Chase fin and there there's more for you and saying
• 1:17:28
  Speaker 1: go two hours this direction, and there's a pace vehicle
• 1:17:31
  Speaker 1: in your following, well not pace vehicle, there's a van
• 1:17:34
  Speaker 1: that pops up with with bottles of cold water every
• 1:17:36
  Speaker 1: once in a while and and takes your bags to
• 1:17:38
  Speaker 1: the next hotel. And so I've been doing lately. I've
• 1:17:41
  Speaker 1: been doing two of those years. So so you're biking
• 1:17:44
  Speaker 1: for seven days effectively. Yeah, we're Actually it's the next one,
• 1:17:48
  Speaker 1: which is in Portugal, is gonna be ten days. And
• 1:17:49
  Speaker 1: your wife does this happily with um. She actually has
• 1:17:53
  Speaker 1: the last couple. She's gone and done other things and
• 1:17:56
  Speaker 1: met me at the end. But I have some buddies,
• 1:18:00
  Speaker 1: all of them, you know, sort of my age, who
• 1:18:02
  Speaker 1: are all of us, you know, still saying hey, we
• 1:18:04
  Speaker 1: can still do this, let's do it, and you can
• 1:18:06
  Speaker 1: do that pretty easily in Europe. They're they're built for
• 1:18:08
  Speaker 1: that more than we are. Yeah, you want to go
• 1:18:10
  Speaker 1: village to village, although I've done I've done them in
• 1:18:13
  Speaker 1: Vermont and Donmond, Quebec done you know. So, But it's
• 1:18:17
  Speaker 1: a it's a it's a great way to get out
• 1:18:19
  Speaker 1: of your head right, instead of instead of worrying about
• 1:18:22
  Speaker 1: the fate of the economy or the faith of the
• 1:18:24
  Speaker 1: thing that it's it's just can I actually get up
• 1:18:26
  Speaker 1: that hill? Right? Changes your focus. So so speaking about
• 1:18:31
  Speaker 1: worrying and being pessimistic or not. What are you most
• 1:18:34
  Speaker 1: optimistic about these days? And what are you most pessimistic? Well,
• 1:18:41
  Speaker 1: I'll start with the pessimism. I think. I think there's
• 1:18:43
  Speaker 1: basically an even chance that we're going we're going to
• 1:18:46
  Speaker 1: lose our democracy. You know, that's even if we get
• 1:18:51
  Speaker 1: past Trump. The forces of have been unleashed and that yeah,
• 1:18:57
  Speaker 1: I mean I I for complicated reasons. I tracked the
• 1:19:00
  Speaker 1: collapse of democracy in Hungary pretty closely, and and you
• 1:19:04
  Speaker 1: can easily see. I mean, I if Trump was as
• 1:19:06
  Speaker 1: smart as Victor Orbon, we'd have lost it already. And
• 1:19:08
  Speaker 1: so this is this is what really scares me most. Uh,
• 1:19:13
  Speaker 1: there's my pessimism, my optimism. Um, you know, the Americans
• 1:19:22
  Speaker 1: are just incredibly more open minded than they were as
• 1:19:25
  Speaker 1: partly young people. It's not just young people. I mean
• 1:19:28
  Speaker 1: when I think back to what the country was like
• 1:19:33
  Speaker 1: in in the early nineteen eighties, I mean, and you
• 1:19:36
  Speaker 1: can you can see it both. You can see it
• 1:19:38
  Speaker 1: in in polling, but other things too. I mean we
• 1:19:41
  Speaker 1: I um, as an adult working economist, I lived in
• 1:19:44
  Speaker 1: a country where only a third of white people thought
• 1:19:47
  Speaker 1: interracial marriages were okay, a country where. I mean, as
• 1:19:52
  Speaker 1: recently as two thousand four, gay marriage was a major
• 1:19:56
  Speaker 1: election losing issue. We're just we had a close mindedness
• 1:20:00
  Speaker 1: and prejudice level, and we've gotten vastly more tolerant, and
• 1:20:06
  Speaker 1: that's that's gotta be a good thing. So the pushback
• 1:20:09
  Speaker 1: to that is hasn't the current administration revealed I'm not
• 1:20:15
  Speaker 1: saying they are this. I'm saying Trump has revealed there's
• 1:20:19
  Speaker 1: still big streaks of anti semitism, racism, misogyny, much more
• 1:20:24
  Speaker 1: in the United States than a naive, upper middle class
• 1:20:29
  Speaker 1: white guy like myself would have guessed. No one is
• 1:20:33
  Speaker 1: anti Semitic. To me, how could it exist in the country.
• 1:20:36
  Speaker 1: You don't get my mail, Oh I I get I
• 1:20:38
  Speaker 1: used to get the blog comments. You and I have
• 1:20:40
  Speaker 1: had conversations about how horrific some of the comments used
• 1:20:43
  Speaker 1: to be, and I just, you know, I just chucked
• 1:20:46
  Speaker 1: it up to hey, people are getting killed in the
• 1:20:48
  Speaker 1: financial crisis. No one wants to read me yammering about it,
• 1:20:52
  Speaker 1: but they do, And then they would make a really
• 1:20:54
  Speaker 1: obnoxious comment that said I didn't think that that was
• 1:20:59
  Speaker 1: I didn't never repulated that to the rest of American society.
• 1:21:03
  Speaker 1: I think that but that stuff is always there, and
• 1:21:05
  Speaker 1: that's what you think of it as a streak is
• 1:21:07
  Speaker 1: like you know, a couple of outsider cranks. No, it's
• 1:21:10
  Speaker 1: it's it kind of feels like it's a little more
• 1:21:13
  Speaker 1: expansive than it was. I actually wrote something it's not
• 1:21:16
  Speaker 1: it's not in arguing with zombies, but I wrote something,
• 1:21:19
  Speaker 1: uh early two thousand's about about actually about France, where
• 1:21:26
  Speaker 1: at the National Front had gotten a lot of votes
• 1:21:29
  Speaker 1: in an election and saying that there that there are
• 1:21:32
  Speaker 1: angry people, that there's something like a quarter of the population,
• 1:21:35
  Speaker 1: and every advanced country who are who are all of
• 1:21:38
  Speaker 1: these things? And that doesn't go away the idea that
• 1:21:40
  Speaker 1: we're every disenfranchise frustrated and will express it in kicking
• 1:21:45
  Speaker 1: the cat in any way they can. Yeah, and does
• 1:21:47
  Speaker 1: anybody uh? And as it's always the usual things, it's
• 1:21:50
  Speaker 1: always about brown people, it's always um. I don't know
• 1:21:53
  Speaker 1: if anybody listens to Tom Lear or anymore, but he
• 1:21:56
  Speaker 1: had a great satirical song from nineteen one about uh
• 1:22:00
  Speaker 1: that that choruses the Protestants hate the Catholics, and the
• 1:22:03
  Speaker 1: Catholics hate the Protestants, and they hate the Muslims and
• 1:22:05
  Speaker 1: everybody hates the Jews, and uh, and that's uh, so
• 1:22:08
  Speaker 1: that's always there. But the point is that there was
• 1:22:11
  Speaker 1: a sort of assumption that that majority, the majority of
• 1:22:15
  Speaker 1: the population was like that, which was probably true in
• 1:22:18
  Speaker 1: the in the fifties, and it's not. Uh, it's a
• 1:22:22
  Speaker 1: lot better now. So just just as economics advances one
• 1:22:27
  Speaker 1: funeral at a time, does the enlightenment of America advanced
• 1:22:31
  Speaker 1: one generation at a time? Is that what's going on? Well? Some,
• 1:22:35
  Speaker 1: I mean you although there are plenty of you know,
• 1:22:38
  Speaker 1: there are plenty of horrible young people and plenty of
• 1:22:43
  Speaker 1: pretty decent older people, so it's not that straightforward, but
• 1:22:46
  Speaker 1: it's uh. I think it is true that that the younger,
• 1:22:50
  Speaker 1: younger generations are more tolerant than older generations. And um.
• 1:22:54
  Speaker 1: On the other hand, you know, I grew up in
• 1:22:55
  Speaker 1: the sixties and I did watch lots of age of
• 1:22:58
  Speaker 1: aquarious people to and into a Wall Street traders, So uh,
• 1:23:02
  Speaker 1: that's not always the case that people. Right, what's the
• 1:23:06
  Speaker 1: old joke, You're you're heartless if you're not a socialist
• 1:23:09
  Speaker 1: when you're young and a capitalist when you're older. No, anyone,
• 1:23:13
  Speaker 1: anyone who's who is not a socialist under thirty has
• 1:23:16
  Speaker 1: no heart. Anyone who's still a socialist after thirty has
• 1:23:18
  Speaker 1: no head. There was the old line that that's a
• 1:23:20
  Speaker 1: great joke. So we're down to our last two UM questions.
• 1:23:25
  Speaker 1: Speaking of young people, what sort of advice would you
• 1:23:27
  Speaker 1: give a college graduate or millennial who was interested in
• 1:23:32
  Speaker 1: exploring a career in economics? Okay, UM, so you know,
• 1:23:37
  Speaker 1: first of all, do get the education? UM? And does
• 1:23:40
  Speaker 1: that mean doctorate or how far do you go? It
• 1:23:43
  Speaker 1: depends on what you want to do, but you want
• 1:23:45
  Speaker 1: to you're gonna need some kind of graduate degree to
• 1:23:47
  Speaker 1: get on trade into stuff. A master's in some cases
• 1:23:50
  Speaker 1: as good enough, but the UM. But you do need
• 1:23:53
  Speaker 1: some certification. UM. You know. The thing I can say
• 1:23:57
  Speaker 1: is um, yeah it uh, it's you do do figure
• 1:24:05
  Speaker 1: out what you're good at and and something that interests
• 1:24:08
  Speaker 1: you but not necessarily of cosmic importance. Figure out something
• 1:24:12
  Speaker 1: that's really good and that that that you do well,
• 1:24:15
  Speaker 1: and get that as a kind of a baseline. You
• 1:24:19
  Speaker 1: can you can branch out, you can start to do
• 1:24:21
  Speaker 1: stuff like writing newspaper columns or so on later on,
• 1:24:23
  Speaker 1: but you do want to get that baseline. In fact,
• 1:24:27
  Speaker 1: your contribution to society, by and large basically the answer
• 1:24:30
  Speaker 1: don't try to be me uh uh not yet uh
• 1:24:34
  Speaker 1: and uh the U I quote in arguing with zombies.
• 1:24:38
  Speaker 1: I quote there was an essay by Riemon Chandler on
• 1:24:40
  Speaker 1: writing I'm writing books, and he said, you know that
• 1:24:43
  Speaker 1: there have been some very dull books written about God
• 1:24:45
  Speaker 1: and some very fine books written about making a living
• 1:24:49
  Speaker 1: while staying fairly honest. So focus on where you can
• 1:24:52
  Speaker 1: actually add. I like that. And our final question, what
• 1:24:55
  Speaker 1: do you know about the world of economics today that
• 1:24:59
  Speaker 1: you wish you knew thirty or forty years ago when
• 1:25:01
  Speaker 1: you were first ramping up your career. Oh? Actually, see,
• 1:25:06
  Speaker 1: the thing is my career has been uh that the
• 1:25:13
  Speaker 1: the angels were smiling on me. I've had an optimal career.
• 1:25:16
  Speaker 1: There never been anything that everything who broke the right
• 1:25:20
  Speaker 1: way for me in ways that that's just uh, I
• 1:25:23
  Speaker 1: had no right to to to expect. So it's not
• 1:25:27
  Speaker 1: that um what I There is now a major uh
• 1:25:34
  Speaker 1: sort of scandal has pretty much come up in economics
• 1:25:38
  Speaker 1: where we're realizing just how strong the misogyny within the
• 1:25:42
  Speaker 1: profession has been, just how badly um people, how badly
• 1:25:47
  Speaker 1: women have been treated, you know, not Harvey Weinstein level.
• 1:25:50
  Speaker 1: But but lots of of discrimination is just in terms
• 1:25:55
  Speaker 1: of hiring or publishing or everything publishing, the way that
• 1:25:59
  Speaker 1: they're treated and am in ours. And of course then
• 1:26:01
  Speaker 1: the thanks to uh we have you know, anonymous social media.
• 1:26:05
  Speaker 1: We know the way that that some male economists talk
• 1:26:08
  Speaker 1: about their female colleagues. Um. And I was oblivious. I
• 1:26:14
  Speaker 1: you know, maybe had some sense, but I didn't realize.
• 1:26:16
  Speaker 1: I don't think I was ever doing it, but I
• 1:26:18
  Speaker 1: wasn't um campaigning to to say let's stop this. So
• 1:26:23
  Speaker 1: I I really wish that I had been more aware.
• 1:26:27
  Speaker 1: I was sitting there comfortably, you know, and it's super
• 1:26:30
  Speaker 1: comfortable environment. And mean I was I had all the
• 1:26:33
  Speaker 1: qualifications at the right school. I was white, that was male.
• 1:26:36
  Speaker 1: I was Jewish, which actually and economics in my generation
• 1:26:39
  Speaker 1: was sort of normal. Uh and um, And had no
• 1:26:42
  Speaker 1: idea what a lot of people were going through. Um
• 1:26:47
  Speaker 1: And so I regret if I had, if I had
• 1:26:50
  Speaker 1: had a better sense of what was really going on,
• 1:26:53
  Speaker 1: maybe I could have contributed a little bit to making
• 1:26:56
  Speaker 1: it better interesting observation along those lines. Paul, thank you
• 1:27:00
  Speaker 1: so much for being so generous with your time. We
• 1:27:03
  Speaker 1: have been speaking with Paul Krugman professor at Cuney Graduate School,
• 1:27:08
  Speaker 1: as well as the author, most recently of Arguing with Zombies.
• 1:27:13
  Speaker 1: If you enjoy this conversation, well be sure and look
• 1:27:16
  Speaker 1: Up an Inch or Down an Inch on Apple iTunes
• 1:27:18
  Speaker 1: and you can see any of the three hundred plus
• 1:27:21
  Speaker 1: conversations we've had over the past five plus years. We
• 1:27:26
  Speaker 1: love your comments, feedback and suggestions right to us at
• 1:27:30
  Speaker 1: m IB podcast at Bloomberg dot net. Give us a
• 1:27:32
  Speaker 1: review on Apple iTunes. Check out my daily reads on
• 1:27:37
  Speaker 1: rid Halts dot com, my weekly column on Bloomberg dot com.
• 1:27:42
  Speaker 1: Follow me on Twitter at rit Halts. I would be
• 1:27:45
  Speaker 1: remiss if I did not thank the Cracks staff that
• 1:27:48
  Speaker 1: helps put together these conversations each week. Sam Chivraj is
• 1:27:53
  Speaker 1: my producer. Michael Batnick is my head of research. I'm
• 1:27:58
  Speaker 1: Barry rit Halts. You've been listen sending some Masters in
• 1:28:01
  Speaker 1: Business on Bloomberg Radio.