Latest / Pod Save America / Why is Big Business Caving to Trump? (with Andrew Ross Sorkin)

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Why is Big Business Caving to Trump? (with Andrew Ross Sorkin) · Pod Save America

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  Speaker 1: actually want. Hey, everybody. Welcome to Pod Save America. I'm
• 1:23
  Speaker 1: John Lovett. I just sat down with Andrew Ross Sorkin.
• 1:26
  Speaker 1: He is a CNBC host, New York Times columnist. He
• 1:29
  Speaker 1: also has a new book that's actually really great called
• 1:33
  Speaker 1: 1929 about the stock market crash and Great Depression and
• 1:36
  Speaker 1: a lot of really fascinating and relevant stories from that era.
• 1:39
  Speaker 1: We talked about business leaders bending the knee to Trump.
• 1:42
  Speaker 1: We talked about bubbles and tariffs and and the morality
• 1:46
  Speaker 1: of capitalism. We talked about the business community's response to
• 1:50
  Speaker 1: Zoran Mamdani. It was a great conversation, and he's somebody
• 1:55
  Speaker 1: that is often talking directly with business leaders, with a
• 2:00
  Speaker 1: lot of really influential voices, and has a really great
• 2:02
  Speaker 1: perspective on it. Here it is. Andrew, first of all,
• 2:11
  Speaker 1: welcome to Pod Save America. Good to see you.
• 2:13
  Speaker 2: So great to see you. This is so exciting for me.
• 2:15
  Speaker 1: I'll take you a little bit behind the scenes, which
• 2:18
  Speaker 1: is I was excited to talk to you and I
• 2:21
  Speaker 1: was excited about the book, but then you have to
• 2:23
  Speaker 1: read the book. And to be honest, I was like, ah, fuck,
• 2:26
  Speaker 1: that's soon. I got to read this book. I really
• 2:29
  Speaker 1: got sucked into it. It's a really good book.
• 2:31
  Speaker 2: Thank you. Thank you.
• 2:32
  Speaker 1: So I want to talk about five things. I want
• 2:34
  Speaker 1: to talk about bubbles. I want to talk about presidential power.
• 2:36
  Speaker 1: I want to talk about tariffs, national mood. I don't
• 2:39
  Speaker 1: talk about the morality of capitalism, capitalism, socialism. Sure. So
• 2:46
  Speaker 1: let's start with bubbles. It's the 1920s. People are seeing
• 2:49
  Speaker 1: this boom and they're nervous about it. There had been
• 2:52
  Speaker 1: a bubble and burst in living memory, right? In the 1890s,
• 2:56
  Speaker 1: there had been a big speculative crash. A lot of
• 2:59
  Speaker 1: people are around that remembered it. Before the crash, can
• 3:02
  Speaker 1: you talk about what some of the Cassandras were saying,
• 3:06
  Speaker 1: including people like Carter Glass?
• 3:09
  Speaker 2: So look, in the 1920s, and I don't know if
• 3:12
  Speaker 2: people appreciated this, This was, I would even argue, the
• 3:14
  Speaker 2: first time that people really were playing the market, like
• 3:17
  Speaker 2: that the ordinary person was doing this because it was
• 3:20
  Speaker 2: the first time that, frankly, the banks, I don't want
• 3:23
  Speaker 2: to say the banks sucked them in, but the banks
• 3:24
  Speaker 2: were basically lending people extraordinary amounts of money to go
• 3:28
  Speaker 2: and make your bet. And brokerages are appearing on the
• 3:31
  Speaker 2: corners of streets like Starbucks, and you could just go
• 3:34
  Speaker 2: walk in and do this. And so you have this
• 3:38
  Speaker 2: period of time where everybody's watching the market go up
• 3:41
  Speaker 2: and they're all thinking- you know, if so-and-so is making
• 3:43
  Speaker 2: all this money, I should be making the money too.
• 3:45
  Speaker 2: It's all this sort of psychology of, I don't want
• 3:48
  Speaker 2: to lose out. The train's leaving the station. I got
• 3:51
  Speaker 2: to get on the train. And yet the big Cassandra
• 3:54
  Speaker 2: in the room was a guy named Carter Glass. Carter
• 3:57
  Speaker 2: Glass was a Senator in Virginia. He was like the
• 4:00
  Speaker 2: Elizabeth Warren of his time. He was frankly a racist
• 4:05
  Speaker 2: Elizabeth Warren.
• 4:06
  Speaker 1: Arden segregationist.
• 4:07
  Speaker 2: Arden segregationist. But he was screaming from the rooftops, about
• 4:11
  Speaker 2: how he believed that Wall Street, in particular, a guy
• 4:15
  Speaker 2: named Charlie Mitchell, he used to call it Mitchellism, and
• 4:17
  Speaker 2: Charlie Mitchell ran a bank called National City to ultimately
• 4:20
  Speaker 2: become Citigroup, was upending America because of all of this
• 4:25
  Speaker 2: speculation and lending that they were doing that was inciting
• 4:30
  Speaker 2: just a violent upward trend in the stock market that
• 4:33
  Speaker 2: he said was going to go wrong.
• 4:35
  Speaker 1: So, as you just said, brokerages were opening up everywhere.
• 4:39
  Speaker 1: This is not an exaggeration. They were literally opening up
• 4:42
  Speaker 1: in like hotel lobbies.
• 4:44
  Speaker 2: And you've been to the Plaza Hotel in New York?
• 4:45
  Speaker 1: Okay.
• 4:45
  Speaker 2: So there's that, the famous Oak Room. The Oak Room,
• 4:49
  Speaker 2: because of prohibition had been shut down and EF Hutton
• 4:52
  Speaker 2: had opened up inside the Oak Room. But yeah, you
• 4:54
  Speaker 2: would be getting, people would be getting tips literally from
• 4:56
  Speaker 2: the doormen and the elevator men, you know, wherever you
• 5:00
  Speaker 2: went and you would just go in and place your
• 5:02
  Speaker 2: bet as if it was like a normal thing to do.
• 5:04
  Speaker 1: And so like some of this is seen as a
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  Speaker 1: moral good in the moment. Like this is the democratization
• 5:08
  Speaker 1: of finance, right? Like the Wall Street is no longer
• 5:12
  Speaker 1: just for the super rich and the well-connected. We're building
• 5:16
  Speaker 1: a world market available to the JP Morgans, but also
• 5:20
  Speaker 1: to Groucho Marx, right? Like everybody can get in on that.
• 5:23
  Speaker 2: And Groucho Marx is playing it.
• 5:24
  Speaker 1: Yeah. Yeah.
• 5:25
  Speaker 2: And by the way, ended up having a mortgage as
• 5:26
  Speaker 2: home when all was said and done.
• 5:29
  Speaker 1: Now, you obviously draw parallels to what's happening now, not
• 5:31
  Speaker 1: just with crypto. but with companies making trading more available
• 5:36
  Speaker 1: to ordinary investors and the Trump administration trying to lower
• 5:41
  Speaker 1: some of the guardrails, including guardrails from after the depression,
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  Speaker 1: that try to protect people from irrational exuberance. Can you
• 5:50
  Speaker 1: talk about those parallels and why they make you nervous?
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  Speaker 2: Okay, so first of all, let's take one step back,
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  Speaker 2: which is speculation we all think is, I don't want
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  Speaker 2: to say we all, but a lot of people use
• 6:01
  Speaker 2: as a dirty word. You don't want speculations. But there
• 6:03
  Speaker 2: is part of me, especially actually after writing this, that
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  Speaker 2: thinks that speculation is almost like the twin of innovation.
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  Speaker 2: You do need a little speculation in the system. You
• 6:14
  Speaker 2: don't want no speculation in the system. And I only
• 6:17
  Speaker 2: say that because if you think about the great technological
• 6:20
  Speaker 2: advances of our time, the first people to invest in
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  Speaker 2: Tesla years ago, when it seemed like an absurd and
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  Speaker 2: crazy idea, effectively were speculating. So I'm not here to
• 6:31
  Speaker 2: say that speculation unto itself is a bad thing. In fact,
• 6:34
  Speaker 2: I would argue you need a little bit of it,
• 6:36
  Speaker 2: but I think you need to do it in a
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  Speaker 2: way where it's not toxic. And what was happening in
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  Speaker 2: the 20s is there was a toxicity to how this
• 6:43
  Speaker 2: was all being run, which is to say that there
• 6:46
  Speaker 2: were no rules, no guardrails. And what's happening today is
• 6:50
  Speaker 2: that we are taking the guardrails away. So I think
• 6:53
  Speaker 2: it's probably a good thing for the American public to
• 6:55
  Speaker 2: have access and to be able to invest. You just
• 6:57
  Speaker 2: need to do it with transparency. without the leverage, without
• 7:01
  Speaker 2: the manipulation efforts and the charlatans and the frauds that
• 7:04
  Speaker 2: invariably emerge every single time we have one of these booms.
• 7:08
  Speaker 2: And I would say right now, you look at what's
• 7:10
  Speaker 2: happening in crypto, and yes, there are frauds and charlatans everywhere.
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  Speaker 2: There was this thing called a SPAC boom, a blank
• 7:17
  Speaker 2: check boom, just a couple of years ago. Everybody said,
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  Speaker 2: oh my goodness, I can get access to the lottery
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  Speaker 2: ticket early. This is amazing. And invariably, most of those
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  Speaker 2: investments went bad. And so every time we have one
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  Speaker 2: of these sort of like innovative moments, if you will,
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  Speaker 2: I think you just need to really be super careful.
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  Speaker 1: So the Biden administration was aware of this and was
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  Speaker 1: thinking about how do we regulate cryptocurrency to protect people
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  Speaker 1: and to protect the broader economy from the same kind
• 7:50
  Speaker 1: of boom and bust and hyper speculation that happened in
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  Speaker 1: the 1920s. Trump... at first is extremely skeptical of crypto,
• 8:01
  Speaker 1: doesn't get it, starts to discover there's something in it
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  Speaker 1: for him personally. Next thing we know, the SEC becomes
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  Speaker 1: sort of captured by crypto and he's selling it himself.
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  Speaker 1: How much does that look like what was happening in
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  Speaker 1: the 20s? And how vulnerable are those of us who
• 8:23
  Speaker 1: are staying out of cryptocurrency to its impact's if there's
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  Speaker 1: a crash of some kind.
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  Speaker 2: Okay, two-part, almost three-part question. First of all, I would
• 8:34
  Speaker 2: argue that Trump's flip on crypto was almost 100% related
• 8:41
  Speaker 2: to the fact that the entire crypto community decided to
• 8:45
  Speaker 2: effectively back his campaign and buy him. That's what happened.
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  Speaker 2: I mean, let's just call a spade a spade. This
• 8:51
  Speaker 2: was a demonstrable effort by the crypto world to say, look,
• 8:56
  Speaker 2: if we can get on this guy's good side, he
• 8:59
  Speaker 2: will get on our good side. And it's as transactional
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  Speaker 2: as anything else. That's putting aside, that's even before you
• 9:04
  Speaker 2: get to issues around his family and getting involved in
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  Speaker 2: crypto and all of those things. Interestingly, you know, I
• 9:11
  Speaker 2: had a conversation with Eric Trump, this is a couple
• 9:15
  Speaker 2: of weeks ago, I think about this. One of the
• 9:18
  Speaker 2: reasons that they got engaged in crypto or were interested
• 9:21
  Speaker 2: in crypto beyond the money-making opportunity was because they thought,
• 9:26
  Speaker 2: and they were probably not wrong, that they were being,
• 9:29
  Speaker 2: quote unquote, debanked, if you will, after the election in
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  Speaker 2: 2020 and January 6th. Now, I would argue they were
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  Speaker 2: being debanked because the banking system has rules and regulations
• 9:42
  Speaker 2: about customers, and they were looking at what happened after
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  Speaker 2: January 6th and all the investigations and trials and everything
• 9:49
  Speaker 2: else going on and said, maybe we're not supposed to
• 9:51
  Speaker 2: do business with this individual in this moment. But as
• 9:54
  Speaker 2: a result of that, they then- go hard on crypto
• 9:58
  Speaker 2: because that was where they could effectively bank their money.
• 10:02
  Speaker 1: And so then, uh, uh, Trump comes in, he calls
• 10:07
  Speaker 1: off an investigation, uh, into one of, uh, uh, his
• 10:10
  Speaker 1: key backers and, and that's sort of entwined in, on
• 10:13
  Speaker 1: these businesses. What are they doing right now to, uh,
• 10:20
  Speaker 1: lower the kind of guardrails that we had put in
• 10:22
  Speaker 1: place after the depression, both on cryptocurrency, but also in
• 10:26
  Speaker 1: the broader market.
• 10:27
  Speaker 2: So there's a whole move afoot in the Genius Act,
• 10:31
  Speaker 2: effectively to allow crypto, venture capital investments, private equity investments,
• 10:37
  Speaker 2: what's now called private credit investments, to go inside of
• 10:40
  Speaker 2: your 401k plan and your retirement plan. It's effectively going
• 10:44
  Speaker 2: to give everybody access to invest in this whole world
• 10:48
  Speaker 2: that's historically lived in the shadows. And by the way,
• 10:51
  Speaker 2: this world will partially still live in the shadows insofar
• 10:54
  Speaker 2: as if you're not a publicly traded company, you don't
• 10:57
  Speaker 2: have to disclose your numbers every quarter or every year.
• 11:01
  Speaker 2: And that's when I would argue to you the charlatans
• 11:06
  Speaker 2: and the frauds emerge. In those worlds, the valuations are
• 11:10
  Speaker 2: effectively made up. If you know about the venture capital world,
• 11:14
  Speaker 2: basically a bunch of investors decide, okay, this is what
• 11:17
  Speaker 2: it's worth today. And they'll just tell you, this is
• 11:19
  Speaker 2: what it's worth today. But there's no independent auditor that's
• 11:21
  Speaker 2: going to tell you that. But if there are $ 12
• 11:24
  Speaker 2: trillion potentially of retirement funds that could ultimately get touched
• 11:28
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  Speaker 1: So the markets are crashing. Herbert Hoover is in the
• 13:32
  Speaker 1: White House, considers himself to be a man of action,
• 13:36
  Speaker 1: as you say. He's trying to manage this crisis. But
• 13:41
  Speaker 1: then there's this really interesting... dynamic after Roosevelt is elected,
• 13:47
  Speaker 1: but before he is sworn in. Hoover seemed to think
• 13:52
  Speaker 1: there needed to be some kind of bank holiday, but
• 13:55
  Speaker 1: didn't want to declare it. And stepping back, it seems
• 14:00
  Speaker 1: in the book that there's two reasons. One is around
• 14:05
  Speaker 1: exercising presidential power and whether or not he had the power.
• 14:08
  Speaker 1: The other is almost like a spiritual aversion to admitting
• 14:12
  Speaker 1: that there was a crisis. So there's this moment in
• 14:16
  Speaker 1: the book where Hoover calls Roosevelt at 1130 p.m. just
• 14:21
  Speaker 1: before he's going to be inaugurated. Can you talk about
• 14:24
  Speaker 1: that conversation? Why was Hoover calling him? And what did
• 14:29
  Speaker 1: Roosevelt take from it? So this is sort of.
• 14:33
  Speaker 2: To me, one of the most fascinating conversations maybe in
• 14:36
  Speaker 2: presidential history, which is literally right, as you described, right
• 14:40
  Speaker 2: before the inauguration. And by the way, these guys were
• 14:43
  Speaker 2: not really talking to each other. And I should say
• 14:45
  Speaker 2: that this phone call was preceded by a letter that
• 14:49
  Speaker 2: Hoover had secretly written to Roosevelt, begging him to come
• 14:53
  Speaker 2: out in favor of the idea of what they called
• 14:56
  Speaker 2: a bank holiday, basically shutting down the banks for a
• 14:58
  Speaker 2: day or two or three or four so that they
• 15:01
  Speaker 2: could try to get a handle on the situation. And
• 15:04
  Speaker 2: this goes to sort of reputation, ego, and everything else,
• 15:07
  Speaker 2: which is that I think Hoover desperately wanted this to
• 15:10
  Speaker 2: happen because he wanted some credit for it. He didn't
• 15:13
  Speaker 2: want to go down as the president who left the
• 15:16
  Speaker 2: system in this sort of state of failure. And on
• 15:19
  Speaker 2: the other side, you had Roosevelt who desperately wanted to
• 15:23
  Speaker 2: be able to start with a clean slate and didn't
• 15:26
  Speaker 2: want to be credited with having done anything in cahoots
• 15:30
  Speaker 2: with Hoover and wanted to be able to sort of
• 15:32
  Speaker 2: start anew. And so you had this sort of unique
• 15:35
  Speaker 2: clash where Hoover's begging him to at least come out
• 15:39
  Speaker 2: and support something like this. And he's saying, no, no, no, no, no.
• 15:43
  Speaker 2: And he would tell him he's not really doing it.
• 15:45
  Speaker 2: But Hoover knew that the second he got into the
• 15:48
  Speaker 2: White House, that Roosevelt would go off and do exactly
• 15:52
  Speaker 2: what Hoover should have done effectively. And he would get
• 15:57
  Speaker 2: the credit for it. And he does.
• 15:58
  Speaker 1: So what is going on here? So there's a run
• 16:01
  Speaker 1: on the banks.
• 16:01
  Speaker 2: Yes.
• 16:02
  Speaker 1: The economy is in a free fall. Hoover is president.
• 16:07
  Speaker 1: He's a smart guy.
• 16:09
  Speaker 2: Not a dumb man.
• 16:10
  Speaker 1: He is smart. He was worried about the speculation all
• 16:14
  Speaker 1: through the 20s. He didn't seem to have paid enough
• 16:17
  Speaker 1: attention to it, but he is very concerned about it,
• 16:19
  Speaker 1: concerned about the possibility of it all going bust. Why
• 16:24
  Speaker 1: doesn't he just declare the bank holiday that he believes
• 16:27
  Speaker 1: is necessary? Why would he ask his successor to do
• 16:32
  Speaker 1: it in advance?
• 16:33
  Speaker 2: I think in part because he had made a pivotal
• 16:36
  Speaker 2: mistake which is he had told the country over and
• 16:39
  Speaker 2: over and over again that this was somehow some kind
• 16:41
  Speaker 2: of psychological problem, that this was not actually an economic problem,
• 16:45
  Speaker 2: that this was like a problem in your mind, that
• 16:49
  Speaker 2: somehow what you were seeing was not what you were seeing.
• 16:52
  Speaker 2: And by the way, people didn't believe that because they
• 16:55
  Speaker 2: could see what they could see. And I think he
• 16:58
  Speaker 2: didn't want to give in to the fact that his
• 17:03
  Speaker 2: biggest mistake was not taking this on in a more
• 17:06
  Speaker 2: meaningful way earlier. You know, there was just so many,
• 17:08
  Speaker 2: there was a series of mistakes that were made after
• 17:11
  Speaker 2: the crash that really led to the great depression. I
• 17:14
  Speaker 2: think of the crash as almost just the first domino
• 17:17
  Speaker 2: in a whole bunch of things that he did. You know,
• 17:20
  Speaker 2: one of the things he tried to do was raise
• 17:22
  Speaker 2: taxes at a time when, you know, the economy was,
• 17:26
  Speaker 2: was flailing. That was a wild idea. The other thing
• 17:30
  Speaker 2: that he did was he decides, by the way, like
• 17:32
  Speaker 2: now to, you know, put tariffs on, the Smoot-Hawley tariffs, 1930.
• 17:39
  Speaker 2: He had pledged to do that during his presidential campaign
• 17:41
  Speaker 2: in 1928, trying to get farmers to vote for him.
• 17:45
  Speaker 2: And he said, my goodness, I need to make good
• 17:48
  Speaker 2: on my pledge. Meanwhile, every economist in America is writing
• 17:51
  Speaker 2: him open letters, by the way, the same way they're
• 17:53
  Speaker 2: writing letters to Trump, saying, I beg you, I beg you,
• 17:56
  Speaker 2: don't do this. The CEOs were going down to the
• 17:58
  Speaker 2: Oval Office, getting on their knees, saying, please don't do this.
• 18:01
  Speaker 2: And of course, he does it. And what happens? 12
• 18:04
  Speaker 2: months later, global trade is down by 60%. By the way, meantime,
• 18:08
  Speaker 2: you have the Federal Reserve sitting on their hands the
• 18:11
  Speaker 2: entire time. They're not flooding the system with money because
• 18:13
  Speaker 2: they are worried about the politics of the moment too,
• 18:17
  Speaker 2: which I think also, by the way, interestingly relates to
• 18:19
  Speaker 2: now when we talk about the independence of the Fed
• 18:21
  Speaker 2: and all of these things. So there was sort of
• 18:22
  Speaker 2: this series of dominoes. And I think at the point
• 18:26
  Speaker 2: that we're now talking about where Hoover is talking to
• 18:30
  Speaker 2: Roosevelt about the banks, he would have to capitulate. He
• 18:33
  Speaker 2: would have to almost admit that he didn't do the
• 18:36
  Speaker 2: right things before. And so he was trying to put
• 18:38
  Speaker 2: it on Roosevelt and Roosevelt was trying to put it
• 18:40
  Speaker 2: on him.
• 18:41
  Speaker 1: Meanwhile, Carter Glass, who is, as we discussed, against all
• 18:48
  Speaker 1: this Wall Street speculation, he tells Roosevelt, I think the
• 18:51
  Speaker 1: president of the United States had no more valid authority
• 18:53
  Speaker 1: to close or open a bank in the United States
• 18:56
  Speaker 1: than had my stable boy. He just doesn't believe the
• 18:58
  Speaker 1: authority is there. Hoover, in that letter you mentioned, tells him, actually,
• 19:03
  Speaker 1: I think you do have the authority, which is buried
• 19:06
  Speaker 1: in an old dusty statute called the Trading with the
• 19:09
  Speaker 1: Enemy Act. Hey, we have this old law in the
• 19:12
  Speaker 1: books that you can go and grab and use to
• 19:15
  Speaker 1: do this thing for which it had never been.
• 19:17
  Speaker 2: Are you seeing parallels today?
• 19:19
  Speaker 1: So sometimes you will see, and it is not the first, second, third,
• 19:24
  Speaker 1: or fourth defense of Trump, but it's in there. kind
• 19:28
  Speaker 1: of a more intellectual one, which is that all these
• 19:31
  Speaker 1: liberals that say Donald Trump is a tyrant, that he's
• 19:33
  Speaker 1: an authoritarian, FDR comes in, fundamentally changes the role of president,
• 19:40
  Speaker 1: takes authority that few believed or imagined a president ever having,
• 19:45
  Speaker 1: bullies the court, expands the welfare state, changes the government,
• 19:49
  Speaker 1: builds a bureaucracy, And he's one of the libs. He's
• 19:51
  Speaker 1: one of our top three.
• 19:53
  Speaker 2: Right. He's on Mount Rushmore of Pod Save America here.
• 19:59
  Speaker 1: Sure. Is there some truth to the idea that what
• 20:04
  Speaker 1: Roosevelt planned to do was basically decide the presidency was
• 20:08
  Speaker 1: far more powerful than in a way that was kind
• 20:11
  Speaker 1: of lawless. But because it was now in history in
• 20:14
  Speaker 1: service of getting us out of the Great Depression, we
• 20:18
  Speaker 1: look on it fondly in a way that's actually ignorant
• 20:21
  Speaker 1: of its dangers.
• 20:22
  Speaker 2: So I don't know if there was ever like a
• 20:24
  Speaker 2: project 1932 or 1933, but yes, I think there might
• 20:29
  Speaker 2: have been some kind of project behind the scenes, if
• 20:32
  Speaker 2: you will, to think through what were the levers that
• 20:37
  Speaker 2: a president could pull that maybe hadn't been pulled before.
• 20:41
  Speaker 2: And you're right. History has looked quite fondly on the
• 20:45
  Speaker 2: powers that he ultimately took, but they look fondly upon them,
• 20:49
  Speaker 2: I think, because they worked. There was an effectiveness about him.
• 20:54
  Speaker 2: And I would also argue that it didn't seem... Now,
• 20:58
  Speaker 2: at the time, if you go back, some people thought
• 21:00
  Speaker 2: it was a power grab, but it didn't seem like
• 21:03
  Speaker 2: it was a capricious power grab for... The purposes of
• 21:08
  Speaker 2: their own power, however, was communicated to the public. It
• 21:13
  Speaker 2: was communicated in a way that I think the public
• 21:16
  Speaker 2: did believe that he was doing this at their behest
• 21:20
  Speaker 2: for them, not for him. And it's an interesting sort
• 21:23
  Speaker 2: of distinction to make. And maybe it's a distinction without
• 21:28
  Speaker 2: a difference. I don't know. I'm curious what you think.
• 21:30
  Speaker 1: I know. I think it's a distinction that really matters.
• 21:32
  Speaker 1: You know, he talks about it in the 1932 convention
• 21:34
  Speaker 1: speech that there was this concentration of economic power and
• 21:38
  Speaker 1: we were in just an unprecedented crisis that demanded a response.
• 21:42
  Speaker 1: It was, I do think, ultimately, it was necessary and
• 21:46
  Speaker 1: patriotic and not for his own enrichment. Also, it was
• 21:50
  Speaker 1: not done in concert with putting troops on American streets
• 21:55
  Speaker 1: and crackdowns. I remember when President Obama used the most
• 22:01
  Speaker 1: delicate of language to criticize Wall Street, and he got
• 22:04
  Speaker 1: a lot of shit for it.
• 22:05
  Speaker 2: Yes, I remember it super well.
• 22:08
  Speaker 1: But Roosevelt is talking about the money changers in the temple,
• 22:11
  Speaker 1: but he doesn't villainize vast numbers of Americans. I think
• 22:15
  Speaker 1: part of what matters is that there was a respect
• 22:18
  Speaker 1: and integrity in the use of power and the understanding
• 22:22
  Speaker 1: that it was serious and therefore required a certain amount
• 22:26
  Speaker 1: of forbearance in how you treat people and how you
• 22:29
  Speaker 1: talk about.
• 22:30
  Speaker 2: Well, so the other thing that I found fascinating about Roosevelt,
• 22:33
  Speaker 2: also Hoover to some degree, but given Roosevelt's public commentary
• 22:37
  Speaker 2: about bankers and about wealth, and he doesn't get really
• 22:41
  Speaker 2: into a sort of larger question about capitalism, I think
• 22:44
  Speaker 2: the way we are discussing those questions today, but he
• 22:49
  Speaker 2: did have a relationship with all of these business leaders.
• 22:51
  Speaker 2: I mean, these business leaders in an almost Trumpian way
• 22:55
  Speaker 2: were making these pilgrimages to the White House to sit
• 22:58
  Speaker 2: in the Oval Office and to plead their case to him.
• 23:03
  Speaker 2: And he had a somewhat, it seemed like, friendly relationship
• 23:10
  Speaker 2: with the leaders of these institutions. I will say one thing, though,
• 23:14
  Speaker 2: about all of these bankers and wealthy individuals in the
• 23:18
  Speaker 2: 20s and even now. And by the way, back in
• 23:20
  Speaker 2: the 20s, not inflation adjusted, for real. There were two billionaires.
• 23:24
  Speaker 2: And people were making tens of millions of dollars. There
• 23:28
  Speaker 2: was a magazine article called Our Second Billionaire, which was
• 23:31
  Speaker 2: Henry Ford, 1929. One of the great lessons, at least
• 23:35
  Speaker 2: for me, that I've learned just, I think, in reporting
• 23:38
  Speaker 2: all of these years and even just reporting on the
• 23:40
  Speaker 2: current milieu of billionaires in America is doesn't matter how
• 23:45
  Speaker 2: much money you have in your bank account or what
• 23:48
  Speaker 2: title you have on your business card. It is not
• 23:53
  Speaker 2: emotional armor. It just isn't. And I think that the public,
• 23:58
  Speaker 2: including myself, often think, well, they've got so much money,
• 24:03
  Speaker 2: what do they have to worry about? Someone writes a
• 24:06
  Speaker 2: nasty article about them or the president goes after them
• 24:10
  Speaker 2: on television. What do they care? They can just, you know,
• 24:14
  Speaker 2: go back to their yacht and they don't have to worry.
• 24:18
  Speaker 2: And I think there's truth to it in the sort
• 24:20
  Speaker 2: of financial sense, right? It's not that they have to,
• 24:22
  Speaker 2: they're losing their home and are now out on the streets,
• 24:27
  Speaker 2: but it's almost like anti-armor because like, you know, I
• 24:32
  Speaker 2: don't know if you read Us Magazine occasionally, but there's
• 24:34
  Speaker 2: the page, this is us, they're just like us. Like emotionally,
• 24:39
  Speaker 2: they're just like us. Well, and there's something about it.
• 24:43
  Speaker 1: Well, I think there's two things. I think one, I
• 24:45
  Speaker 1: think something happens when people catch the car, whether they've
• 24:52
  Speaker 1: inherited or made it, they have all this money and
• 24:54
  Speaker 1: they know that because they have all this money, they're
• 24:57
  Speaker 1: supposed to be in better shape, not just financially, but emotionally.
• 25:01
  Speaker 1: And they look around, it's like, how am I so
• 25:04
  Speaker 1: rich and so mad? What the fuck is happening? It's
• 25:06
  Speaker 1: almost like If I'm this mad and I'm this rich,
• 25:09
  Speaker 1: I'm really getting fucked. Something's really gone wrong here. So
• 25:12
  Speaker 1: that's one part of it. The other is I noticed
• 25:14
  Speaker 1: this in life. I think it's true in ways large
• 25:18
  Speaker 1: and small. If you're arguing about money, you're arguing about
• 25:20
  Speaker 1: something else. And a lot of times when you're arguing
• 25:22
  Speaker 1: about something else, you're really arguing about money. And so
• 25:26
  Speaker 1: very interesting insight.
• 25:27
  Speaker 2: Sure.
• 25:29
  Speaker 1: I think sometimes that money can be a stand in
• 25:31
  Speaker 1: for value. How valued am I?
• 25:33
  Speaker 4: Right.
• 25:33
  Speaker 1: That's certainly true in life. So an attack on them
• 25:36
  Speaker 1: as taxpayers and not paying enough is an attack on
• 25:39
  Speaker 1: them as people, right? So I think that's part of it.
• 25:54
  Speaker 1: Pod Save America brought to you by Sundaes. When it
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  Speaker 1: use code crooked at checkout. I want to talk, well,
• 27:27
  Speaker 1: let's go to mood because I think you're getting at this,
• 27:28
  Speaker 1: which is, you know, you talked about business leaders coming
• 27:31
  Speaker 1: in to see Roosevelt. That had begun under Hoover. He
• 27:34
  Speaker 1: invites business leaders to the White House. And after the meeting,
• 27:37
  Speaker 1: the head of Con Ed, Consolidated Edison at the time,
• 27:40
  Speaker 1: tells someone, I was never so confused in my life.
• 27:44
  Speaker 1: Hoover believes that this is just an emotional thing, that
• 27:47
  Speaker 1: America's having a psychological issue, basically. We're having like a
• 27:50
  Speaker 1: mental break. And really people just need to be buoyed.
• 27:52
  Speaker 1: But He's the exact worst, even if that were the case,
• 27:56
  Speaker 1: which it wasn't. He's the exact wrong person to do it.
• 28:00
  Speaker 1: He's a terrible communicator. Can you talk about both sides
• 28:03
  Speaker 1: of this, right? Like on the one hand, no, this
• 28:06
  Speaker 1: isn't just a mood. There's a huge crisis unfolding that's
• 28:12
  Speaker 1: based in hard numbers. And then if it were a mood,
• 28:15
  Speaker 1: why he was so bad at persuading people or talking
• 28:19
  Speaker 1: to people about what was happening.
• 28:21
  Speaker 2: I'll take the second part first. He was a terrible orator.
• 28:23
  Speaker 2: I mean, ultimately, that's the truth. Whatever you think the
• 28:27
  Speaker 2: it factor is in politics, he did not have it.
• 28:31
  Speaker 2: In that regard, it's sort of surprising that he won
• 28:33
  Speaker 2: the election at all. I think his ability to stir
• 28:37
  Speaker 2: the public the way some of the great presidents who
• 28:41
  Speaker 2: have been great orators have was just not a talent
• 28:45
  Speaker 2: that was in his talent drawer. It was not something
• 28:49
  Speaker 2: he had. So I think his ability to, but the
• 28:54
  Speaker 2: other sort of psychological piece of this, and you can
• 28:57
  Speaker 2: even think about it in the most recent decade, even now, actually. So,
• 29:03
  Speaker 2: you know, we had a whole period of time in
• 29:06
  Speaker 2: our country where there was remarkable inflation going on. And
• 29:09
  Speaker 2: President Biden used to tell everybody, like, there isn't inflation.
• 29:13
  Speaker 2: It's fine. I mean, Biden tried to do a little
• 29:16
  Speaker 2: bit of what Hoover was doing. And the people were
• 29:20
  Speaker 2: on TikTok saying, That's not true. Have you seen the
• 29:23
  Speaker 2: price of eggs? I don't understand what you're trying to
• 29:26
  Speaker 2: tell me. By the way, I would say the same
• 29:28
  Speaker 2: thing is happening now with Trump.
• 29:29
  Speaker 1: Yeah.
• 29:30
  Speaker 2: Which is Trump is out there saying the economy is great.
• 29:33
  Speaker 2: And yet if you look at some of the polls
• 29:35
  Speaker 2: and you definitely look at some of the economic data,
• 29:37
  Speaker 2: there's weakness there.
• 29:38
  Speaker 1: That's real. It's not some. of them. I mean, the people,
• 29:41
  Speaker 1: people are furious that he's not paying attention to the
• 29:44
  Speaker 1: rising to prices. People feel like he hasn't fundamentally addressed
• 29:47
  Speaker 1: the main reason he was able to get in a
• 29:50
  Speaker 1: second time.
• 29:51
  Speaker 2: Oh, I don't disagree with you. I'm just wondering. I'm
• 29:54
  Speaker 2: very curious. They actually did some real polls. I've seen
• 29:58
  Speaker 2: only a couple of polls on this where people really
• 30:00
  Speaker 2: talk about how they feel about the economy today and
• 30:02
  Speaker 2: for reasons that I think are inexplicable. So I look
• 30:05
  Speaker 2: at the economic data and what's going on with inflation,
• 30:08
  Speaker 2: and I would say there's some underlying weakness, at least
• 30:11
  Speaker 2: for large pockets of the country. And you would think
• 30:14
  Speaker 2: that they would be on TikTok screaming the way they
• 30:16
  Speaker 2: were screaming a couple of years ago in the last administration.
• 30:20
  Speaker 2: And I think there's some screaming going on, but I
• 30:22
  Speaker 2: don't think there's nearly the same kind of screaming. And
• 30:25
  Speaker 2: I wonder why that is.
• 30:26
  Speaker 1: Yeah. To the point about Biden and Hoover, there's a
• 30:31
  Speaker 1: point in the book where you talk about Hoover struggling
• 30:35
  Speaker 1: to communicate, in part because he's constitutionally gloomy, just a
• 30:38
  Speaker 1: gloomy guy. And I just think about Biden trying to
• 30:42
  Speaker 1: reassure the country, but his tone, certainly by the end,
• 30:45
  Speaker 1: had become, when comprehensible, so defensive and so small. The
• 30:51
  Speaker 1: parallel that I drew is, you know, Hoover is this
• 30:54
  Speaker 1: person that sees himself as someone perfectly suited to understand
• 30:57
  Speaker 1: and manage a crisis, far more so than Roosevelt, who
• 31:00
  Speaker 1: knew far less about the economy. And yet the country
• 31:05
  Speaker 1: came to view Hoover as someone completely untrustworthy and put
• 31:08
  Speaker 1: all their faith and belief in Roosevelt, believed he was
• 31:11
  Speaker 1: the guy to solve it, even though he really had
• 31:13
  Speaker 1: a pretty superficial understanding. It was really going by gut.
• 31:17
  Speaker 1: And I think the parallels there are pretty obvious now.
• 31:20
  Speaker 2: Very obvious. And I'm so glad that you made the parallels.
• 31:24
  Speaker 2: It's funny, when I was writing the book, I used
• 31:25
  Speaker 2: to have these big debates with my editor about whether
• 31:27
  Speaker 2: we should actually make the connection for the reader. So
• 31:30
  Speaker 2: when you read the book, you're hopefully inside this narrative
• 31:33
  Speaker 2: and just listening or reading this almost tale of what happened.
• 31:38
  Speaker 2: But as you're doing that, and I'm not trying to
• 31:40
  Speaker 2: lead you to a place, but I imagine that there
• 31:42
  Speaker 2: are readers who are going to go, oh, well, that's
• 31:45
  Speaker 2: like this, and that's like this, and that's like this.
• 31:47
  Speaker 2: And That guy's like Elizabeth Warren and that guy is
• 31:49
  Speaker 2: like a little bit like Elon Musk.
• 31:50
  Speaker 1: And so, yes, it's a it's I'm glad you didn't.
• 31:54
  Speaker 1: We live in an era where people are afraid of
• 31:56
  Speaker 1: subtext and they don't trust their audience to just make
• 31:59
  Speaker 1: their own conclusions. But great stories. You don't answer the question.
• 32:03
  Speaker 1: You leave people with a question. One would think that's
• 32:05
  Speaker 1: at least how it used to be. But now you
• 32:07
  Speaker 1: go into now this is this is for another conversation.
• 32:09
  Speaker 1: But you'll like the number of movies where at about
• 32:11
  Speaker 1: two thirds of the way and some character looks at
• 32:13
  Speaker 1: the audience and says, here's the thesis of this film.
• 32:15
  Speaker 1: It's like out of control. It's out of control.
• 32:19
  Speaker 2: I love you for saying that.
• 32:20
  Speaker 1: Let's talk about tariffs. Stock market right now, especially responsive
• 32:25
  Speaker 1: to Trump's push and pull with China. We saw last
• 32:27
  Speaker 1: week he threatens new tariffs on China. The Dow plunges
• 32:29
  Speaker 1: 900 points, then bounces back the next Monday because he
• 32:32
  Speaker 1: basically has a softer energy about it. Lots of vibes-based
• 32:37
  Speaker 1: market movements these days. Does that make you nervous? I
• 32:42
  Speaker 1: want to talk about tariffs as a policy, but just
• 32:44
  Speaker 1: in the way the markets have reacted to... global tariffs
• 32:52
  Speaker 1: that we haven't seen since the depression. Have you been
• 32:55
  Speaker 1: surprised by the lack of reaction? What's your take?
• 32:59
  Speaker 2: I'm no longer surprised because one of the things that
• 33:02
  Speaker 2: I've decided I've learned is that the investor class, whatever
• 33:05
  Speaker 2: that even means anymore, is a group of people who
• 33:09
  Speaker 2: are effectively professional optimists. And the truth is that actually,
• 33:15
  Speaker 2: if you look over time, being a professional optimist or
• 33:20
  Speaker 2: being predisposed to being optimistic has actually been the right choice.
• 33:24
  Speaker 2: So I remember years ago, you'd hear about a war
• 33:27
  Speaker 2: breaking out in the Middle East or something, and the
• 33:28
  Speaker 2: market would falter and fall to pieces. And the truth
• 33:32
  Speaker 2: was that if you had bought when that happened, you
• 33:35
  Speaker 2: would have made a small fortune. And I think over time,
• 33:37
  Speaker 2: people have seen that most of the time, it works out.
• 33:41
  Speaker 2: The problem is some of the time, it doesn't. But
• 33:44
  Speaker 2: as a result, I think there's always this predisposition towards
• 33:49
  Speaker 2: there's going to be some semblance of rationality to what
• 33:53
  Speaker 2: will ultimately happen. And so you have President Trump out
• 33:57
  Speaker 2: there making some grand claim about the tariffs. The market
• 34:01
  Speaker 2: freaks out because they're like, should I believe him? Am
• 34:04
  Speaker 2: I supposed to actually listen to his words? Or am
• 34:06
  Speaker 2: I not? I mean, this goes... But this happens every day.
• 34:09
  Speaker 2: And so.
• 34:13
  Speaker 2: Then you have this this sort of back and forth
• 34:15
  Speaker 2: with with China. I'm of the view that ultimately, I
• 34:17
  Speaker 2: don't know if it's the taco trade or whatever they
• 34:20
  Speaker 2: call it these days, which is Trump always chickens out.
• 34:24
  Speaker 1: Yeah.
• 34:25
  Speaker 2: Ultimately, I think he's trying to push it as far
• 34:28
  Speaker 2: as he can push it. But the truth and maybe
• 34:30
  Speaker 2: it's the only governor thus far, actually, on this presidency
• 34:34
  Speaker 2: has actually been the markets, weirdly enough.
• 34:36
  Speaker 1: Right.
• 34:37
  Speaker 2: So when he announced the tariffs back in April, the
• 34:40
  Speaker 2: sort of big shooting the moon plan. The bond market
• 34:43
  Speaker 2: went crazy and he softened his stance. You know, here
• 34:46
  Speaker 2: we are again. He's trying to figure out what to
• 34:48
  Speaker 2: do with China. He softens his stance. And they're the
• 34:52
  Speaker 2: only people he seems to be willing to listen to.
• 34:55
  Speaker 1: So he does seem responsive to it. And yet, not
• 35:01
  Speaker 1: so responsive as to have a comprehensible policy. You know,
• 35:05
  Speaker 1: you have Besant, Scott Besant, Treasury Secretary, talking about how
• 35:08
  Speaker 1: we need to rally Europe and our other economic allies.
• 35:12
  Speaker 1: partners to unite against China. But how is that supposed
• 35:17
  Speaker 1: to work when you spent the last nine months jerking
• 35:20
  Speaker 1: everybody around? It all seems idiotic, incomprehensible. Is there anything
• 35:30
  Speaker 1: beneath the surface that makes logic of it?
• 35:33
  Speaker 2: The through line in my reporting about Trump is simply leverage.
• 35:38
  Speaker 2: It's how can he get leverage over somebody else? It's
• 35:42
  Speaker 2: not about– and the relationship is always going to be transactional.
• 35:46
  Speaker 2: He would argue to you, I think, if we were
• 35:48
  Speaker 2: sitting at this table with the president, that all of
• 35:51
  Speaker 2: these quote-unquote relationships, these friendships, these special relationships we've had
• 35:55
  Speaker 2: with European countries was never really a relationship at all.
• 35:59
  Speaker 2: He would say we were actually paying them all off
• 36:01
  Speaker 2: to be our friends, frankly, and that that was our
• 36:04
  Speaker 2: leverage if we had any leverage with them. And I
• 36:07
  Speaker 2: think now he's saying we have leverage in a different way,
• 36:10
  Speaker 2: which is that we're basically going to tariff them. My
• 36:13
  Speaker 2: only point is that I think what he's looking at
• 36:17
  Speaker 2: are the numbers, not that anybody's doing anything in a
• 36:21
  Speaker 2: kumbaya way for the United States, nor that the United
• 36:23
  Speaker 2: States should be doing kumbaya way things for them. And
• 36:28
  Speaker 2: we will see whether we really have leverage or not.
• 36:31
  Speaker 2: And I think that is the ultimate question. And I
• 36:33
  Speaker 2: do not think we know. And I will say when
• 36:35
  Speaker 2: it comes to China, I think ultimately it's going to
• 36:38
  Speaker 2: be very hard for us to have demonstrable leverage with them,
• 36:40
  Speaker 2: given their size and their scale. And the fact that
• 36:43
  Speaker 2: I think President Xi is just watching this whole thing.
• 36:47
  Speaker 2: And I imagine laughing to some degree because he sees
• 36:50
  Speaker 2: the president come out and announce some crazy tariff number.
• 36:55
  Speaker 2: And then the market goes crazy. And what happens? He
• 37:00
  Speaker 2: steps down, steps away from it.
• 37:01
  Speaker 1: So but then is it leverage towards what? end right
• 37:05
  Speaker 1: like if you really want it like there's no coherence
• 37:09
  Speaker 1: to what he's doing right because.
• 37:10
  Speaker 2: Leverage towards control leverage and look look at what's going
• 37:14
  Speaker 2: on with the universities in America look what's going on
• 37:16
  Speaker 2: with the law firms going on in America look what's
• 37:18
  Speaker 2: happening with the companies it's all there's leverage leverage over
• 37:23
  Speaker 2: somebody else power over them so that when you need
• 37:26
  Speaker 2: to ask for something there the answer is yes that
• 37:32
  Speaker 2: is basically what I think is going on.
• 37:34
  Speaker 1: Here And that's what the tariffs over Europe does. It
• 37:37
  Speaker 1: gives him leverage to potentially, what, remove them so they'll
• 37:40
  Speaker 1: work on China.
• 37:42
  Speaker 2: Yes, I would also say they can become, and I'm
• 37:45
  Speaker 2: not arguing that this is a good strategy.
• 37:47
  Speaker 1: No, I don't think anyone thinks you are.
• 37:49
  Speaker 2: Just to be clear. This whole thing becomes a chess piece.
• 37:53
  Speaker 2: They're all chess pieces on a board. And I think
• 37:57
  Speaker 2: he thinks to himself, I now have a chess piece
• 38:00
  Speaker 2: over X. They are paying this tariff now. I'm collecting
• 38:06
  Speaker 2: money from them one way. At some point, if I
• 38:08
  Speaker 2: need them in some other way, maybe I can lower
• 38:10
  Speaker 2: the tariff. By the way, maybe I can raise the
• 38:12
  Speaker 2: tariff on them.
• 38:13
  Speaker 1: Right.
• 38:14
  Speaker 2: And the whole thing is just a sort of grand
• 38:17
  Speaker 2: leverage negotiation.
• 38:20
  Speaker 1: Yeah. All of which could be true without first putting
• 38:24
  Speaker 1: them on. Anyway, done by the kind of group of fucking... goons. So, uh,
• 38:31
  Speaker 1: you brought up the way he's sort of using leverage
• 38:33
  Speaker 1: over corporations. And I want to talk about this. I
• 38:36
  Speaker 1: want to start with Charles Mitchell, uh, because I think
• 38:41
  Speaker 1: it's relevant. So you mentioned this earlier. So, uh, Carter glass, this, this, uh, uh,
• 38:48
  Speaker 1: anti wall street segregationist, Charles Mitchell is one of his
• 38:51
  Speaker 1: sort of chief enemies. Charles Mitchell leads city bank. Uh, he, uh,
• 38:57
  Speaker 1: is the kind of chief villain of this congressional inquiry
• 39:01
  Speaker 1: that ultimately leads to charges. Yes. He is charged for
• 39:05
  Speaker 1: tax fraud. Yes. He goes to trial. What happens?
• 39:09
  Speaker 2: We're going to give away the end of the whole story.
• 39:10
  Speaker 1: Oh, so he goes to trial and you won't believe
• 39:12
  Speaker 1: what happens.
• 39:13
  Speaker 2: Yeah.
• 39:13
  Speaker 1: I don't think of it. I mean, I guess I
• 39:15
  Speaker 1: don't think it's a spoiler. I mean, I guess it's history.
• 39:17
  Speaker 1: You can't really spoil history.
• 39:18
  Speaker 2: You can't really spoil history. So Charles Mitchell effectively gets
• 39:22
  Speaker 2: indicted for tax evasion. By the way, That case brought
• 39:26
  Speaker 2: against him by Roosevelt, effectively signed off by Roosevelt. who
• 39:31
  Speaker 2: had a chip on his shoulder about Mitchell. And that
• 39:33
  Speaker 2: was part of the politics, too. So this gets back
• 39:36
  Speaker 2: to the strange parallels in life, Democrats and Republicans, for
• 39:40
  Speaker 2: better or worse. And he goes to trial. Everybody expects
• 39:44
  Speaker 2: that he's going to be convicted. Everybody thinks he's going
• 39:47
  Speaker 2: to be convicted. He had, by the way, engaged in
• 39:50
  Speaker 2: what was demonstrably a sham tax transaction with his wife.
• 39:55
  Speaker 2: And you get into, I mean, you really get to
• 39:57
  Speaker 2: see what was going on in the moment when he's
• 39:59
  Speaker 2: literally in the room with his wife, you know, planning
• 40:02
  Speaker 2: this whole tax strategy out. And the jury comes back
• 40:09
  Speaker 2: and finds him not guilty. And this goes to exactly
• 40:14
  Speaker 2: maybe what people thought about after the financial crisis of 2008,
• 40:17
  Speaker 2: nobody really went to jail. And when people discuss this
• 40:22
  Speaker 2: with the jurors, when you read all of the sort
• 40:25
  Speaker 2: of articles and opinion pieces about this at the time,
• 40:28
  Speaker 2: the view was that he did basically what everybody else
• 40:32
  Speaker 2: just would have done. And they did not consider that
• 40:37
  Speaker 2: to be criminal. Interestingly, he had done it with the
• 40:40
  Speaker 2: blessing of his lawyer, which was also sort of, from
• 40:43
  Speaker 2: a legal perspective, a very sort of interesting defense, which
• 40:46
  Speaker 2: was that he went to the lawyer, got the lawyer
• 40:48
  Speaker 2: to bless it, and there it is.
• 40:51
  Speaker 1: Well, what's interesting about that is, as you make this
• 40:54
  Speaker 1: point in the book, I'm going to paraphrase, but something
• 40:56
  Speaker 1: to the effect of there are criminals and there are frauds,
• 40:59
  Speaker 1: and that's a big part of this. And in any
• 41:01
  Speaker 1: kind of moment of a bubble, there are people that
• 41:03
  Speaker 1: will take advantage. People are much more careful when times
• 41:07
  Speaker 1: are tight. Mm-hmm. But you make this point that a
• 41:10
  Speaker 1: lot of these people did what anyone would have done.
• 41:13
  Speaker 1: And you've gotten some shit for saying that, by the way. Yes,
• 41:14
  Speaker 1: I have. That people are like, oh, you're apologizing for
• 41:17
  Speaker 1: these people. But I actually want to take it at
• 41:18
  Speaker 1: face value because how sad it is that this is
• 41:22
  Speaker 1: what people would have done under these circumstances and in
• 41:25
  Speaker 1: this moment. You know, Carter Glass is in some sense vindicated.
• 41:30
  Speaker 1: He then writes at great kind of pain to his
• 41:36
  Speaker 1: own health. what becomes Glass-Steagall, Roosevelt signs it. It is
• 41:40
  Speaker 1: seen as a bulwark against the excesses of the Depression.
• 41:45
  Speaker 1: But even that was a corrupted process. Completely corrupted process.
• 41:48
  Speaker 1: By the way, that was a great lesson for me.
• 41:49
  Speaker 4: Which I didn't know.
• 41:50
  Speaker 1: I didn't know. I didn't know that.
• 41:51
  Speaker 2: So that was, by the way, one of the great
• 41:52
  Speaker 2: surprises for me as I was going through the letters
• 41:55
  Speaker 2: and archives of this period, which was, I think we
• 41:59
  Speaker 2: all have this impression that this great Bill Glass-Steagall, which
• 42:03
  Speaker 2: broke up the banks, was sort of driven by Carter
• 42:07
  Speaker 2: Glass and this idea that the bank should be broken
• 42:11
  Speaker 2: up and this was to make the system safer.
• 42:13
  Speaker 1: So that basically, that speculation was over here and vanilla
• 42:17
  Speaker 1: savings was over here. Correct.
• 42:18
  Speaker 2: You were dividing the casino from the actual bank. But
• 42:22
  Speaker 2: the truth was that this entire process had been corrupted.
• 42:27
  Speaker 2: And the only reason I would argue this bill even
• 42:30
  Speaker 2: came about was because the Rockefeller family which effectively owned
• 42:35
  Speaker 2: a big chunk of Chase, which was a major competitor
• 42:39
  Speaker 2: to Citigroup, wanted to break up Citigroup, but also more importantly,
• 42:44
  Speaker 2: wanted to break up J.P. Morgan and that the Rockefeller
• 42:48
  Speaker 2: family had it out for J.P. Morgan. And as a result,
• 42:52
  Speaker 2: they went to Roosevelt, who, by the way, wasn't so
• 42:55
  Speaker 2: excited originally about passing this bill. This bill had been
• 42:59
  Speaker 2: sitting around for a while and he was slow walking
• 43:02
  Speaker 2: Carter Glass in so many different ways. By the way, interestingly,
• 43:06
  Speaker 2: Roosevelt was not really for the FDIC, which was also
• 43:10
  Speaker 2: a piece of this bill, effectively insuring bank deposits. Roosevelt
• 43:15
  Speaker 2: originally wasn't even for that either, but there was a
• 43:16
  Speaker 2: whole bunch of sort of efforts afoot to put all
• 43:22
  Speaker 2: of these pieces in place to the point where I
• 43:25
  Speaker 2: found a letter that Carter Glass had written that actually
• 43:28
  Speaker 2: walked through the whole thing where he was basically complaining
• 43:31
  Speaker 2: that the bill wasn't really his and had been effectively
• 43:34
  Speaker 2: taken over by the bankers. And there's a section of
• 43:37
  Speaker 2: the bill that was physically written by the son-in-law of Rockefeller.
• 43:46
  Speaker 1: The Jared Kushner of the day.
• 43:56
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• 45:13
  Speaker 1: There's a quote from Hoover's Treasury Secretary, Andrew Mellon, in 1929.
• 45:17
  Speaker 1: The quote is, Liquidate labor, liquidate stocks, liquidate the farmers,
• 45:23
  Speaker 1: liquidate real estate. It will purge the rottenness out of
• 45:25
  Speaker 1: the system. High cost of living and high living will
• 45:28
  Speaker 1: come down. People will work harder, live a more moral life.
• 45:32
  Speaker 1: Values will be adjusted and enterprising people will pick up
• 45:35
  Speaker 1: the wrecks from less competent people. Hoover. He's telling that
• 45:38
  Speaker 1: to Hoover in 1929. There's a little bit of resonance
• 45:41
  Speaker 1: in the way some of the... It's like.
• 45:45
  Speaker 2: A tea party speech.
• 45:46
  Speaker 1: It's a tea party speech. It's also a MAGA... industrial policy.
• 45:51
  Speaker 1: We've got to get back to making things. We've got
• 45:53
  Speaker 1: to get back to using our hands. Carter Glass and
• 45:56
  Speaker 1: the people that were against Wall Street speculation, they are
• 45:59
  Speaker 1: ultimately vindicated because of what happens. But they weren't just
• 46:03
  Speaker 1: predicting the future. They had a moral problem with what
• 46:06
  Speaker 1: was happening in the economy. Clearly, someone like Andrew Mellon,
• 46:10
  Speaker 1: pretty callous about what would happen to farmers who don't,
• 46:13
  Speaker 1: you know, they are people. They don't liquidate as well as, say,
• 46:17
  Speaker 1: dollars do. But there's clearly something about the way the
• 46:21
  Speaker 1: American dream had changed in this era that made people uncomfortable.
• 46:25
  Speaker 1: Can you talk about that?
• 46:26
  Speaker 2: Well, you know, first of all, Andrew Mellon was a
• 46:29
  Speaker 2: capitalist with a capital C in just every way. You know,
• 46:31
  Speaker 2: if you had great success, God bless you. If you
• 46:34
  Speaker 2: had great failure, God bless you. He did not, he
• 46:36
  Speaker 2: wasn't there to pick up the pieces in any way,
• 46:39
  Speaker 2: shape or form. I would argue, by the way, the
• 46:41
  Speaker 2: American dream shifted in the 1920s. I actually think that
• 46:45
  Speaker 2: the dream that shifted in the 1920s For better or worse,
• 46:47
  Speaker 2: it's the dream that exists today in America here today,
• 46:50
  Speaker 2: and I would argue on TikTok and everywhere else, which is,
• 46:53
  Speaker 2: I think prior to 1920, it really was more of
• 46:56
  Speaker 2: a Horatio Alger kind of story that people were pursuing.
• 47:00
  Speaker 2: And I think in the 20s, in part because of
• 47:02
  Speaker 2: the stock market and everything else and industrialization and going
• 47:05
  Speaker 2: to big cities and everything else with the sort of
• 47:07
  Speaker 2: elites that they saw, it became about the lottery ticket.
• 47:11
  Speaker 2: It became about, I don't know about a get-rich-quick scheme,
• 47:14
  Speaker 2: but it became about getting rich and Getting super– it
• 47:18
  Speaker 2: wasn't just about having a better life than your parents.
• 47:22
  Speaker 2: It was about something else. It was about sort of
• 47:24
  Speaker 2: reaching for the stars in this other way. And that
• 47:26
  Speaker 2: was partially, by the way, a function of the media.
• 47:29
  Speaker 2: This is the first time big magazines were all of
• 47:31
  Speaker 2: a sudden putting CEOs on the cover of these magazines.
• 47:34
  Speaker 2: They used to have Babe Ruth and Charles Lindbergh on
• 47:37
  Speaker 2: the cover. Now, Charlie Mitchell is on the cover of
• 47:40
  Speaker 2: these magazines. And so I think that we, as a culture,
• 47:44
  Speaker 2: almost turn these people into heroes. And here we are
• 47:47
  Speaker 2: close to 100 years later and you're seeing it almost
• 47:51
  Speaker 2: in the exact same way.
• 47:52
  Speaker 1: Yeah, so just for people, so Horatio Alger stories, just
• 47:54
  Speaker 1: for people, these were stories about kind of hardscrabble, people
• 47:59
  Speaker 1: from hardscrabble roots working their way up, not to like
• 48:02
  Speaker 1: supreme wealth, but to like a classic home life, like
• 48:07
  Speaker 1: a good family life and providing for their family, like
• 48:10
  Speaker 1: a middle-class life. And then all of a sudden there's
• 48:12
  Speaker 1: the possibility that everybody can get rich. And I was
• 48:15
  Speaker 1: thinking about that And what I would say the American
• 48:20
  Speaker 1: dream is right now, and in some sense, you're right.
• 48:23
  Speaker 1: It remains this idea of like, oh, you can get rich.
• 48:26
  Speaker 1: But the truth is, I don't know that I would
• 48:27
  Speaker 1: say I've heard anybody really tell me what it is
• 48:30
  Speaker 1: in quite some time, right? People articulate the old version,
• 48:34
  Speaker 1: but there's something kind of sad about this moment right now,
• 48:37
  Speaker 1: which is, I don't know that people believe they'll get rich.
• 48:42
  Speaker 1: I don't know what people think about it, but I
• 48:44
  Speaker 1: feel like there's an optimism that existed in the bubble. Right.
• 48:47
  Speaker 1: that I don't know that we have right now.
• 48:48
  Speaker 2: Well, it's interesting because I think the modern conversation about
• 48:53
  Speaker 2: the American dream today often is actually not probably look
• 48:57
  Speaker 2: back 100 years. It's probably look back to the 50s.
• 48:59
  Speaker 2: People would call it what I describe as the leave
• 49:01
  Speaker 2: it to beaver American dream. That was a very white dream,
• 49:04
  Speaker 2: but it meant that you could buy a house, you'd
• 49:07
  Speaker 2: have two kids, a dog, and everything would kind of
• 49:10
  Speaker 2: just work out. And by the way, this was a
• 49:13
  Speaker 2: period where unionization was a huge part of the economy.
• 49:18
  Speaker 2: We were protecting labor. in a remarkable way. And I
• 49:21
  Speaker 2: think people look back now at that period fondly. But
• 49:26
  Speaker 2: I also think today, again, in this sort of social
• 49:29
  Speaker 2: media driven universe, you know, everybody wants to be Mr. Beast.
• 49:34
  Speaker 2: They all want to be you, John. I mean, they
• 49:35
  Speaker 2: all want to.
• 49:36
  Speaker 1: I don't think so. I don't think that can be right.
• 49:39
  Speaker 1: I don't think I make this look good. I don't
• 49:42
  Speaker 1: think I make this look good. Well, you know, it's
• 49:44
  Speaker 1: funny because I was thinking about sort of the post-World
• 49:47
  Speaker 1: War II era that follows, you know, the Depression leads
• 49:50
  Speaker 1: into the New Deal and into the World War II
• 49:54
  Speaker 1: and the way that changed the economy. And you had
• 49:58
  Speaker 1: far higher taxes. You had far more egalitarian economic growth.
• 50:02
  Speaker 1: It was a heyday for union jobs. In some sense...
• 50:08
  Speaker 1: high costs of living and high living did come down.
• 50:12
  Speaker 1: In some sense, people did live, well, at least a
• 50:15
  Speaker 1: more moral life, the version of the American dream that
• 50:17
  Speaker 1: people had aspired to before seemed to, in some sense, return.
• 50:21
  Speaker 1: Values did adjust. There was a different value set in that.
• 50:25
  Speaker 1: We didn't live up to it, and a lot of
• 50:26
  Speaker 1: people were kept outside of it, to be clear, but
• 50:29
  Speaker 1: it wasn't high-flying. It was a more righteous version of America.
• 50:33
  Speaker 1: There was some truth to the idea that there was
• 50:36
  Speaker 1: a version of American capitalism without the high flying.
• 50:42
  Speaker 2: I have a very unpopular explanation for why that was
• 50:44
  Speaker 2: the case.
• 50:45
  Speaker 1: All right, let's hear it.
• 50:46
  Speaker 2: And Paul Krugman disagrees with me vehemently about this. So just,
• 50:49
  Speaker 2: I want to, I want to posit that so you
• 50:50
  Speaker 2: can throw your tomatoes if you like. I worry, or
• 50:54
  Speaker 2: I'm concerned that this sort of 1950s to call it
• 50:58
  Speaker 2: 1980 period where we had this, this sort of utopia
• 51:02
  Speaker 2: that we think about. I don't know if it's really
• 51:04
  Speaker 2: utopia because there was all sorts of, civil unrest and
• 51:07
  Speaker 2: other things that took place during that period too. But
• 51:11
  Speaker 2: it was also a function of the fact that the U.S.
• 51:14
  Speaker 2: was a monopoly power in the world during that period
• 51:18
  Speaker 2: and was able to effectively charge monopoly rents. So effectively
• 51:21
  Speaker 2: the rest of the world after World War II was
• 51:23
  Speaker 2: out of business. We were not competing with anybody. We
• 51:27
  Speaker 2: were it. We were the entire game. And so we
• 51:30
  Speaker 2: could charge remarkable amounts of money. There was no competition.
• 51:34
  Speaker 2: And so because this sort of period was taking place,
• 51:38
  Speaker 2: you could charge an extraordinary amount of money. You could afford,
• 51:41
  Speaker 2: if you will, to pay labor what I think we
• 51:46
  Speaker 2: all hope that labor deserves. But it was partially because
• 51:50
  Speaker 2: there was not a competitor. In 1980, when you start
• 51:55
  Speaker 2: to see how wages stagnated in America starting in late 70s,
• 51:58
  Speaker 2: early 80s, and you go and you look, all of
• 52:01
  Speaker 2: a sudden, Germany's back. Japan's back. Everybody's now competing against America.
• 52:06
  Speaker 2: And by the way, that competition is forcing the cost
• 52:10
  Speaker 2: of labor down. It's forcing the cost of everything to
• 52:13
  Speaker 2: go down. And that's what to some degree, I would argue,
• 52:17
  Speaker 2: breaks the unions or at least makes it much harder from,
• 52:20
  Speaker 2: this goes back to capitalism and socialism, but from a
• 52:23
  Speaker 2: capitalistic perspective to compete when you're effectively competing against competitors
• 52:28
  Speaker 2: that have much lower costs. And by the way, we're
• 52:31
  Speaker 2: seeing this now in terms of why the president wants
• 52:33
  Speaker 2: to implement tariffs because he's looking and saying to himself, Look,
• 52:36
  Speaker 2: BYD in China, if we let BYD in China sell
• 52:39
  Speaker 2: cars into America today, we would have no car industry.
• 52:42
  Speaker 2: We just wouldn't because the cars are better made and
• 52:46
  Speaker 2: cost less.
• 52:48
  Speaker 1: You should take that fucking– that is not true. Don't
• 52:52
  Speaker 1: say that here. These are forts. These are American– how
• 52:57
  Speaker 1: dare you? They are not better. Yeah, my car squeaks
• 53:03
  Speaker 1: a little. Sorry, go on.
• 53:08
  Speaker 2: This is like total deadpan. And for a moment, he
• 53:10
  Speaker 2: had me. I'm just saying, you know, whether you want
• 53:14
  Speaker 2: to listen to Elon Musk or not, he's always said,
• 53:16
  Speaker 2: if you do not have these tariffs, that the American
• 53:19
  Speaker 2: car market would be in trouble. And I think there's
• 53:22
  Speaker 2: truth to that. There's truth to that. And we actually,
• 53:24
  Speaker 2: as a country, have to decide, do we want an
• 53:27
  Speaker 2: automobile industry? I mean, I think these are real questions.
• 53:29
  Speaker 2: And then the question is, if you want an automobile industry,
• 53:31
  Speaker 2: how do you get it?
• 53:32
  Speaker 1: Right?
• 53:33
  Speaker 2: I mean, are tariffs going to help us? I mean,
• 53:36
  Speaker 2: right now, the way the tariffs are structured, I think
• 53:37
  Speaker 2: it's going to become very complicated. But I will say,
• 53:39
  Speaker 2: I talked to a CEO of a big US carmaker,
• 53:42
  Speaker 2: and there are not a lot of them, so you
• 53:43
  Speaker 2: can make your guess about who this is. And they said, look,
• 53:46
  Speaker 2: in 10 years from now, given all of the tariffs
• 53:48
  Speaker 2: and everything else, most Americans are going to spend more
• 53:51
  Speaker 2: for less quality cars than much of the rest of
• 53:55
  Speaker 2: the world is likely to get. And maybe we should
• 53:58
  Speaker 2: be cool with that. Maybe we shouldn't. I don't know.
• 54:00
  Speaker 2: But I think about this stuff.
• 54:02
  Speaker 1: Along with globalization, you also had a shift towards regressive taxation.
• 54:08
  Speaker 1: You had deregulation. You had a whole host of ways
• 54:10
  Speaker 1: in which every policy seemed to be designed to make
• 54:12
  Speaker 1: matters worse for the middle class.
• 54:14
  Speaker 2: And I agree. By the way, that part I agree
• 54:16
  Speaker 2: with you 100% on too.
• 54:17
  Speaker 1: Just thinking ahead of the comments.
• 54:19
  Speaker 2: In the head of the comments.
• 54:20
  Speaker 1: So let's talk. You talked about what CEOs are saying.
• 54:23
  Speaker 1: Let's talk about what the CEOs are doing here. Because
• 54:26
  Speaker 1: this gets into sort of the moment and sort of
• 54:28
  Speaker 1: the moment. The morals of this version of capitalism we
• 54:32
  Speaker 1: have right now, Tim Cook, smart guy, gay guy, not central,
• 54:41
  Speaker 1: but it's a fact. He's marching down to the White House,
• 54:45
  Speaker 1: bringing a bauble for Donald Trump.
• 54:46
  Speaker 2: That sucks.
• 54:47
  Speaker 1: That's got to suck. He's got to hate doing that.
• 54:50
  Speaker 1: Why is he doing that? What's the logic? How does
• 54:52
  Speaker 1: he defend to himself why you would go down there
• 54:56
  Speaker 1: and kiss the ring and end up standing between Donald
• 54:58
  Speaker 1: Trump and J.D. Vance and Well, I don't even remember
• 55:01
  Speaker 1: now what it was, but it was some, like he
• 55:03
  Speaker 1: was standing there between two of them doing some sort
• 55:05
  Speaker 1: of disgusting diatribe.
• 55:07
  Speaker 2: Okay, so I am going to, I don't know if
• 55:09
  Speaker 2: I'm going to channel him, so do not blame me.
• 55:11
  Speaker 2: Don't blame the messenger. This is what I think is
• 55:13
  Speaker 2: going on. This is like mind reading inside Tim Cook's head,
• 55:16
  Speaker 2: which is probably unfair to Tim Cook, but I'm going
• 55:18
  Speaker 2: to try.
• 55:18
  Speaker 1: It'd be so funny if you did a really gay voice.
• 55:22
  Speaker 1: I will. Do keep going, I'm sorry. Just trying to
• 55:25
  Speaker 1: lighten it up at the end.
• 55:25
  Speaker 2: What I think is going on here is I think,
• 55:30
  Speaker 2: that he is somebody, and as I think most of
• 55:31
  Speaker 2: these CEOs, I think they are playing trade-offs in their mind.
• 55:35
  Speaker 2: This whole thing is a trade-off for them. They're saying
• 55:37
  Speaker 2: to themselves, I could raise my hand right now and say,
• 55:41
  Speaker 2: this is all wild and completely nuts, and I disagree
• 55:43
  Speaker 2: with everything that's going on here. And if I do that,
• 55:48
  Speaker 2: what's the upside for me to do that? And what's
• 55:51
  Speaker 2: the downside for me to do that? And I think
• 55:53
  Speaker 2: right now in this moment, the upside in truth is,
• 55:58
  Speaker 2: is probably not a lot. I think that a lot
• 56:01
  Speaker 2: of people at this table and a lot of listeners
• 56:03
  Speaker 2: would applaud those people, but it's unclear to me, unless
• 56:08
  Speaker 2: it's done as a collective, that it would have any
• 56:10
  Speaker 2: real impact. Right now, given what's happening in Washington in
• 56:13
  Speaker 2: terms of the Republican control of the White House, of Congress,
• 56:15
  Speaker 2: of the Senate, having even the business community come out
• 56:19
  Speaker 2: in any meaningful way and say, excuse me, we don't
• 56:22
  Speaker 2: like it this way, it's unclear that that would have
• 56:25
  Speaker 2: some kind of impact. The downside... I assume, is that
• 56:29
  Speaker 2: you sit there and you say, if I don't do this,
• 56:32
  Speaker 2: or if I raise my hand and say this, is
• 56:34
  Speaker 2: that I'm going to be slaughtered. That we are, that
• 56:37
  Speaker 2: that's what's happened in America. And by the way, it
• 56:40
  Speaker 2: depresses me to say this. That's where we are. It's
• 56:42
  Speaker 2: like a mafioso thing. It's like, if I raise my
• 56:44
  Speaker 2: hand and say there's a problem, I will be slaughtered.
• 56:47
  Speaker 2: That's what I think is, I mean, hopefully not literally slaughtered,
• 56:50
  Speaker 2: but that's the, I think that is the calculus. And
• 56:53
  Speaker 2: I think the calculus is all of these people are
• 56:56
  Speaker 2: thinking I want to be here. I want the company
• 56:59
  Speaker 2: to be here in not just tomorrow, but in two
• 57:03
  Speaker 2: and three and four and five and 10 years from now.
• 57:05
  Speaker 2: And can I just play this out? Can I just
• 57:08
  Speaker 2: stick this out long enough to get to the other side,
• 57:13
  Speaker 2: whatever you think the other side looks like?
• 57:15
  Speaker 1: So there's three parts of this. One is you mentioned,
• 57:18
  Speaker 1: which is they're not acting collectively, which is not in
• 57:21
  Speaker 1: their instinct. But is there an understanding behind the scenes
• 57:25
  Speaker 1: here that while any one short-term capitulation might be in
• 57:29
  Speaker 1: the interest of an Apple or another major company, that
• 57:32
  Speaker 1: in the long run, a patronage economy, like an Orban-style economy,
• 57:39
  Speaker 1: is not good for business. And that there is a
• 57:41
  Speaker 1: collective interest in finding ways to head that off, especially,
• 57:44
  Speaker 1: as you noted, the one governor of Trump has been
• 57:46
  Speaker 1: the markets and being afraid of sinking them. Right.
• 57:51
  Speaker 2: So I do think that behind the scenes, there is
• 57:54
  Speaker 2: consternation And anxiety and all sorts of things about what
• 57:58
  Speaker 2: this administration does. No question. I mean, I think one
• 58:00
  Speaker 2: of the reasons they don't speak out is because they're scared.
• 58:04
  Speaker 2: And privately, they will tell you, I am scared. Again,
• 58:07
  Speaker 2: this goes back to it almost doesn't matter how much
• 58:10
  Speaker 2: money you have in your bank account or what's on
• 58:12
  Speaker 2: your business card. Emotionally, you're still in that scared place.
• 58:16
  Speaker 1: And that's terrible that that's the case. And a generosity
• 58:19
  Speaker 1: to them. though perhaps unearned, they are responsible for people's jobs.
• 58:23
  Speaker 1: They have real responsibilities that they feel. So I think
• 58:25
  Speaker 1: that they think about that. Right.
• 58:27
  Speaker 2: I think they think, and maybe they'll be wrong about this,
• 58:31
  Speaker 2: that if in fact there's sort of a red line moment,
• 58:36
  Speaker 2: and the question is what is that red line moment,
• 58:38
  Speaker 2: that there's going to be some button that they're going
• 58:40
  Speaker 2: to push, that they would push the button if they're
• 58:45
  Speaker 2: this sort of red line moment happens. Now, there's obviously
• 58:48
  Speaker 2: a lot of people I imagine who are listening to
• 58:49
  Speaker 2: us now saying, hasn't the red line moment already happened?
• 58:52
  Speaker 2: Or if you think the red line moment is coming,
• 58:54
  Speaker 2: don't you need to get in front of it before
• 58:55
  Speaker 2: you ever get there? Because by the time you get
• 58:57
  Speaker 2: to that line, you won't be able to actually, you
• 58:59
  Speaker 2: won't even have an opportunity to touch the button because
• 59:01
  Speaker 2: you'll be so far away from it because somehow you'll
• 59:04
  Speaker 2: be in this sort of terrible place. I don't know
• 59:08
  Speaker 2: the answer. And I think this is what everybody in
• 59:11
  Speaker 2: the business community who does have these worries is grappling with.
• 59:15
  Speaker 2: I think they're sitting there saying, I know there's a
• 59:17
  Speaker 2: red line at some point. I don't know if we've
• 59:20
  Speaker 2: gone over it. I don't know when we're going to
• 59:21
  Speaker 2: get there. And I don't know when we get there.
• 59:23
  Speaker 2: What we're going to do about it.
• 59:24
  Speaker 1: Yeah. Well, it's hard, right?
• 59:26
  Speaker 2: I will say. Yeah, sorry. I was at a business meeting.
• 59:29
  Speaker 2: I was at a meeting recently with a number of
• 59:31
  Speaker 2: business leaders where a bunch of people said, you know what?
• 59:37
  Speaker 2: We should write down right now what the red line
• 59:41
  Speaker 2: is so that the line doesn't move.
• 59:45
  Speaker 1: That's a smart. That's a good idea, because presumably one
• 59:47
  Speaker 1: would think the government demanding 10 percent of intel. might've
• 59:52
  Speaker 1: been at least a shade of maroon, a light pink line,
• 59:57
  Speaker 1: one would think.
• 59:58
  Speaker 2: So that I think is, by the way, I think
• 1:00:00
  Speaker 2: it'd be very valuable for business leaders today to write
• 1:00:03
  Speaker 2: down on a piece of paper, have a plan. If
• 1:00:06
  Speaker 2: you think there's gonna be a day you're gonna raise
• 1:00:08
  Speaker 2: your hand and say, I don't like this and we've
• 1:00:10
  Speaker 2: got a problem, write down what are the parameters and
• 1:00:13
  Speaker 2: the metrics with which you would actually do that? Because
• 1:00:16
  Speaker 2: what keeps happening is the line that you thought nobody
• 1:00:19
  Speaker 2: would cross seems to get crossed. almost every day. And
• 1:00:24
  Speaker 2: we become to some degree a nerd to what's happening.
• 1:00:28
  Speaker 2: And so I think that's part of the sort of
• 1:00:30
  Speaker 2: psychological question that we all probably need to face a little.
• 1:00:34
  Speaker 1: So the first part is why there isn't more collective action.
• 1:00:38
  Speaker 1: The second part we talked about, which is why they're
• 1:00:40
  Speaker 1: afraid of Trump, which I think makes sense. Third part,
• 1:00:44
  Speaker 1: when Tim Cook goes and kisses the ring, when colleges
• 1:00:48
  Speaker 1: capitulate when law firms or media companies capitulate. It's not
• 1:00:51
  Speaker 1: just because they think Trump is scary. It's because they
• 1:00:52
  Speaker 1: think the people that don't like Trump aren't to be
• 1:00:54
  Speaker 1: worried about even one little bit. Now you've had Elizabeth
• 1:00:57
  Speaker 1: Warren and some other Democrats try to signal, Hey, it
• 1:01:03
  Speaker 1: doesn't matter if all your friends are doing it. Uh,
• 1:01:05
  Speaker 1: these are corrupt deals in some form. These, these are bribes. Uh,
• 1:01:09
  Speaker 1: we will come after you once we are in power again. Uh,
• 1:01:13
  Speaker 1: I think that matters and seem to matter very much. Uh,
• 1:01:15
  Speaker 1: And then you have moments where Democrats or people that
• 1:01:19
  Speaker 1: just don't like Trump almost organically cancel Disney Plus. And
• 1:01:22
  Speaker 1: that's noticed. That seems to be a moment of influence.
• 1:01:25
  Speaker 1: But for the most part, it feels like if you're
• 1:01:27
  Speaker 1: a CEO and you're more worried about Trump than you
• 1:01:30
  Speaker 1: are the opposition to Trump, that's correct. How does that change?
• 1:01:34
  Speaker 2: Well, it'll be very interesting to see if, in fact,
• 1:01:36
  Speaker 2: Democrats come into power, how they use that power. And
• 1:01:40
  Speaker 2: by the way, It's going to be very interesting to
• 1:01:42
  Speaker 2: see now that we're in this moment where, you know,
• 1:01:44
  Speaker 2: the president's going after Comey and he's going after Bolton
• 1:01:46
  Speaker 2: and whether every successive presidency, depending on which political party
• 1:01:52
  Speaker 2: is in place, is going to be sort of using
• 1:01:55
  Speaker 2: these powers in these different ways. And whether that then
• 1:01:59
  Speaker 2: either puts a stop to the politicization of all of
• 1:02:03
  Speaker 2: it or whether this just becomes sort of a spiral
• 1:02:07
  Speaker 2: out of control. I'm very curious to see. But you're right.
• 1:02:11
  Speaker 2: that nobody in the moment right now, especially in the
• 1:02:13
  Speaker 2: business community, feels pressure from the quote-unquote other side. So
• 1:02:18
  Speaker 2: they always, by the way, they always hated Elizabeth Warren
• 1:02:23
  Speaker 2: making comments about their business, trying to raise taxes on
• 1:02:26
  Speaker 2: them or implement wealth taxes or other things, but they
• 1:02:29
  Speaker 2: never really took it seriously. And so here we are.
• 1:02:35
  Speaker 1: Hey, what's the money saying about Mom Donnie now, now
• 1:02:38
  Speaker 1: that it's getting real?
• 1:02:40
  Speaker 2: Oh, he's going to, I mean, the money says that
• 1:02:44
  Speaker 2: he's going to be the mayor of New York. No question.
• 1:02:47
  Speaker 1: And, and what did like the kind of, uh, he's
• 1:02:50
  Speaker 1: done something interesting, right? He's gone and met with business
• 1:02:52
  Speaker 1: executives that would be really skeptical of him and he's
• 1:02:54
  Speaker 1: charming them a little bit. What are you hearing behind
• 1:02:57
  Speaker 1: the scenes about him?
• 1:02:58
  Speaker 2: So I think that the business leaders dislike him. I mean,
• 1:03:02
  Speaker 2: they genuinely dislike him.
• 1:03:04
  Speaker 1: Sure.
• 1:03:04
  Speaker 2: And it's not by the way, just because they think he's, uh,
• 1:03:07
  Speaker 2: forgetting about being a Democrat, being a socialist, or even
• 1:03:10
  Speaker 2: raising taxes. I actually don't think that that is the
• 1:03:13
  Speaker 2: thing that has them up in arms. Just to be
• 1:03:15
  Speaker 2: totally transparent with you. I think that they think there's
• 1:03:19
  Speaker 2: three things that are on their minds. I think they
• 1:03:23
  Speaker 2: are worried about how he's going to approach policing in
• 1:03:26
  Speaker 2: the city. I think that's for them a big, big issue.
• 1:03:29
  Speaker 2: I think they, there's an anti-Semitic question that is definitely
• 1:03:37
  Speaker 2: on their minds. And then there is, and this gets
• 1:03:40
  Speaker 2: to maybe the, the democratic socialist piece of it. You know,
• 1:03:45
  Speaker 2: I think they all believe that we need more affordability
• 1:03:49
  Speaker 2: in terms of New York city, especially when it comes
• 1:03:51
  Speaker 2: to rents and real estate and the like. And I
• 1:03:55
  Speaker 2: think they look at what he's the police, the plan
• 1:03:58
  Speaker 2: to stabilize rent stabilization and say to themselves, at least
• 1:04:02
  Speaker 2: as classic economists, that that is not really the answer
• 1:04:05
  Speaker 2: that the answer ultimately is, is what Ezra Klein would
• 1:04:09
  Speaker 2: tell you, which is abundance. We need supply. We need
• 1:04:11
  Speaker 2: more supply.
• 1:04:12
  Speaker 1: It has been zero days since we've talked about abundance.
• 1:04:15
  Speaker 1: Reset the sign back to zero. Continue.
• 1:04:18
  Speaker 2: And I think that they look at all of that
• 1:04:20
  Speaker 2: and say, that's a problem. Having said that, they think
• 1:04:24
  Speaker 2: he's very charming. They recognize that he is likely to
• 1:04:27
  Speaker 2: be the mayor. And I think you're starting to see
• 1:04:29
  Speaker 2: a bunch of them, I don't want to say fall
• 1:04:32
  Speaker 2: in line, but fall in line. And so you're seeing
• 1:04:35
  Speaker 2: some people come out with sort of more positive comments, hoping,
• 1:04:39
  Speaker 2: knowing that maybe, you know, if he's the mayor, that
• 1:04:41
  Speaker 2: if they're friendly early, that he'll be friendly later. I mean,
• 1:04:44
  Speaker 2: I think that's and and this is fascinating because it's
• 1:04:47
  Speaker 2: by the way, this does happen on both sides of
• 1:04:49
  Speaker 2: the political aisle. Right. It's a very interesting moment.
• 1:04:53
  Speaker 1: So the book is 1929 inside the greatest crash in
• 1:04:57
  Speaker 1: history and how it shattered a nation. Last thoughts on.
• 1:05:04
  Speaker 1: you know, last thoughts on this, which is, you know,
• 1:05:06
  Speaker 1: you end the book talking about two things, which is
• 1:05:07
  Speaker 1: humility and resilience.
• 1:05:11
  Speaker 2: We need a lot of both. We need a lot
• 1:05:12
  Speaker 2: of both.
• 1:05:12
  Speaker 1: I'm not interested in resilience right now because I sometimes
• 1:05:15
  Speaker 1: feel as though we kind of rely on it. And
• 1:05:18
  Speaker 1: let's say for a moment, we're not, let's act as
• 1:05:21
  Speaker 1: if we aren't. But humility, if we look back on
• 1:05:25
  Speaker 1: this moment and there is some kind of a crash
• 1:05:28
  Speaker 1: to come, whether it's around AI investments or crypto or
• 1:05:33
  Speaker 1: something we can't see coming, sort of the dark sides
• 1:05:35
  Speaker 1: of the market finding their way into people's 401ks? What
• 1:05:38
  Speaker 1: are the obvious signs right now that we'll look back
• 1:05:40
  Speaker 1: and say, God damn it, we were so fucking stupid.
• 1:05:43
  Speaker 1: It was staring us in the face.
• 1:05:46
  Speaker 2: I think the answer is we will look at what's
• 1:05:49
  Speaker 2: happening in AI, which by the way, I'm super excited
• 1:05:51
  Speaker 2: about and think it'll be like the internet. It'll be
• 1:05:54
  Speaker 2: a massive technological change. But you'll look at the valuations
• 1:05:58
  Speaker 2: of some of these companies right now and the way
• 1:06:00
  Speaker 2: they're getting financed, and all the debt and leverage in
• 1:06:02
  Speaker 2: the system, and you'll say, this doesn't make sense. Look
• 1:06:06
  Speaker 2: at companies that don't have enough money, are not making
• 1:06:09
  Speaker 2: any money. They're making no money today. They're losing money,
• 1:06:12
  Speaker 2: and yet they're making massive commitments to buy data centers,
• 1:06:16
  Speaker 2: to buy all sorts of things that they can't afford
• 1:06:18
  Speaker 2: to buy on a hope and a prayer and a
• 1:06:20
  Speaker 2: dream that this will be the future. Some of them
• 1:06:24
  Speaker 2: will be right, and they will be the future, and
• 1:06:26
  Speaker 2: some of them will be Amazons. but a lot won't be.
• 1:06:30
  Speaker 2: And we will look around and we will say, that
• 1:06:34
  Speaker 2: was a mistake. Andrew R.
• 1:06:35
  Speaker 1: Sorkin, so good to talk to you. So good to
• 1:06:37
  Speaker 1: talk to you. Great conversation.
• 1:06:38
  Speaker 2: Thank you, this was fun.
• 1:06:39
  Speaker 1: Everybody do really recommend the book, really fascinating and relevant
• 1:06:43
  Speaker 1: to this moment. Thanks so much.
• 1:06:44
  Speaker 2: Thank you.
• 1:06:47
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