Latest / Stephanomics / Remembering Paul Volcker

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Remembering Paul Volcker · Stephanomics

• 0:04
  Speaker 1: Hello, and welcome to Stephanomics, the podcast that brings the
• 0:07
  Speaker 1: global economy to you. You couldn't write an economic history
• 0:14
  Speaker 1: of the past fifty years without multiple mentions of poor Volca,
• 0:19
  Speaker 1: who died this week at the age of ninety two.
• 0:22
  Speaker 1: If you think about it, he played a key role
• 0:25
  Speaker 1: in not one, not two, but three of the financial
• 0:28
  Speaker 1: landmark events of the past half century. He advised President
• 0:32
  Speaker 1: Nixon on the decision to leave the gold standard, which
• 0:35
  Speaker 1: led to the collapse of the whole post war Breton
• 0:37
  Speaker 1: Wood system in one then, most famously, as Chair of
• 0:42
  Speaker 1: the Federal Reserve for much of the eighties, he forced
• 0:44
  Speaker 1: the US Central Bank to do what it took to
• 0:47
  Speaker 1: confront inflation, even when what it took was a deep
• 0:51
  Speaker 1: recession and a soaring dollar. And then he was still
• 0:54
  Speaker 1: around in two thousand and eight advising President Obama on
• 0:59
  Speaker 1: how to cope with fallout from the global financial crisis,
• 1:02
  Speaker 1: devising new rules for banks which remain in diluted form today.
• 1:07
  Speaker 1: Has a massive legacy which I'm going to discuss with
• 1:10
  Speaker 1: Paul Boker's co author Bloomberg's Christine Harper in a few minutes.
• 1:15
  Speaker 1: But first, India. Now India is a lot to get
• 1:19
  Speaker 1: your head round. Even for so called experts, you'll surely
• 1:22
  Speaker 1: know that it's got more than a billion people living
• 1:24
  Speaker 1: in it. But along with that, it has twenty three
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  Speaker 1: major languages, eighty five political parties, and three hundred ways
• 1:30
  Speaker 1: of cooking potato. It also has an ambitious Prime minister
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  Speaker 1: Knownrid Moody, who, like President Trump, has thrived by breaking
• 1:39
  Speaker 1: with traditional models of how politicians should behave. But now
• 1:43
  Speaker 1: the economy is hitting trouble and so is he. In
• 1:46
  Speaker 1: a few minutes, I'll ask our India economist Abushek Gupta
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  Speaker 1: whether the Prime Minister Moody has the capacity to turn
• 1:51
  Speaker 1: things round. But first, Bloomberg Economy reporter Annoban Nag has
• 1:56
  Speaker 1: this report from the diamond mines of West central India.
• 2:06
  Speaker 1: Take diamonds, Hollywood, A listeners and a two billion dollar
• 2:10
  Speaker 1: fraud and you have all the ingredients of made for
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  Speaker 1: TV scandal that had all India paying attention. So there
• 2:17
  Speaker 1: you have it. Now, Enforcement directed reading the offices of
• 2:22
  Speaker 1: need A Moody, the famous jeweler who's really at the
• 2:24
  Speaker 1: center of this entire scandal at the Punjab National Police
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  Speaker 1: rated the officers of Diamond mogul Nero Moody to investigate
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  Speaker 1: an Alex scam involving fake guarantees and sham transactions. Moody,
• 2:41
  Speaker 1: who's not related to Prime Minister Narrendra Modi, was once
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  Speaker 1: a joweler to the stars. He had boutiques in London,
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  Speaker 1: Hong Kong and Mumbai. Nero Mody has denied wrongdoing. He's
• 2:55
  Speaker 1: currently being held in the UK and fighting extradition to India. Meanwhile,
• 3:01
  Speaker 1: India's renowned precious stone dealers are still reeling from the reprocursions.
• 3:06
  Speaker 1: After it was first alerted of the bank loot in
• 3:08
  Speaker 1: the sixteenth of January, it took Punjab National Bank almost
• 3:11
  Speaker 1: a month to understand the extent and gravity. India's low
• 3:16
  Speaker 1: cost and high scale labor has turned the country into
• 3:20
  Speaker 1: a hub of global jewelry. India exports of the words
• 3:25
  Speaker 1: polish diamonds, according to the industry's Export Promotion Council, many
• 3:30
  Speaker 1: of which end up in engagement rings and diamond bracelets
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  Speaker 1: sold a jewelers like Tiffany's. According to the government, the
• 3:46
  Speaker 1: sector employs nearly five million workers, accounting for almost seven
• 3:51
  Speaker 1: percent of GDP, but the industry has been in serious
• 3:54
  Speaker 1: trouble since the scandal broke, workers are losing jobs and
• 4:01
  Speaker 1: businesses are shutting shops. If anything is to go by
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  Speaker 1: this way, Prime Minister Modi has little chance of achieving
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  Speaker 1: his goal of reaching one trillion dollars in annual exports
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  Speaker 1: over the next five years. It's also weighing on the
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  Speaker 1: broader economy. So what went wrong? For answers, we went
• 4:25
  Speaker 1: to the diamond hub of Surat. The city is a
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  Speaker 1: three and a half hour train journey north from India's
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  Speaker 1: financial capital Mumbai. It's home to over a million people
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  Speaker 1: employed in the sector, including the skilled artisans that polished
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  Speaker 1: their diamonds. Many of them migrate from elsewhere in India,
• 4:46
  Speaker 1: attracted by the prospects of higher income bubble by Criteria
• 4:51
  Speaker 1: started off as one such artisan about four decades ago,
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  Speaker 1: and he now has the Seut Diamond Association. He wears
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  Speaker 1: a yellow and red thread around his right hand, an
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  Speaker 1: amulet worn by many of India's Hindus to protect someone
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  Speaker 1: from trouble. It's a protection that his industry really needs
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  Speaker 1: right now. I have seen many slowdowns in my more
• 5:18
  Speaker 1: than forty year career in the diamond industry. The last
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  Speaker 1: time it was severe was in two thousand eight. But
• 5:27
  Speaker 1: conditions had normalized after a couple of months. But this
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  Speaker 1: time the slowdowns has dragged on for seven eight months
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  Speaker 1: now and has hurt a business immensely. How with the
• 5:42
  Speaker 1: Sponde is a skilled artisan with nearly two decades of experience.
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  Speaker 1: Five months ago, he reported to work at one of
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  Speaker 1: the thousands of diamond polishing factories, only to find the
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  Speaker 1: doors locked. The owner of the company had pulled down
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  Speaker 1: the shut ors overnight and fled without telling any of
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  Speaker 1: his forty workers. We were unable to track down the
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  Speaker 1: owner for comment. Ponde, who's thirty three, moved to Suos
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  Speaker 1: from across the country following the footsteps of his elder brother.
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  Speaker 1: Before losing his job, used to own the equivalent of
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  Speaker 1: around three d and fifteen dollars a month, roughly double
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  Speaker 1: the country's per capita income. But Ponde is now boring
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  Speaker 1: money from friends to pay the rent on his one
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  Speaker 1: room house and the tuition for his two kids. The
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  Speaker 1: owners shut shop without paying us our monthly salary. I
• 6:42
  Speaker 1: have been roaming the streets in the past month and
• 6:46
  Speaker 1: more trying to get another job. They leave in the
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  Speaker 1: morning and come back home in the evening, but no luck.
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  Speaker 1: Some factories say they don't have demand. Some say they
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  Speaker 1: don't have rough diamonds. The outcry following the near of
• 7:03
  Speaker 1: Mody scandal has created an atmosphere of distrust between banks
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  Speaker 1: and jeweler's. Rob Vrani is a second generation director and
• 7:14
  Speaker 1: be Vranian Company, a diamond cutting and polishing firm in Sura.
• 7:20
  Speaker 1: He talked to us in his Glass World office about
• 7:23
  Speaker 1: the factory floor. Behind him hangs his NBA diploma from
• 7:28
  Speaker 1: Canada's Ryerson University. So liquidity crunches is one of the
• 7:32
  Speaker 1: biggest problem. That is that kind of has you know,
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  Speaker 1: made this crisis even worse so because of these certain
• 7:40
  Speaker 1: companies that do want ethical practices, right bank have I
• 7:43
  Speaker 1: think all of a sudden they've said that we don't
• 7:45
  Speaker 1: want to give credit to the diamond industry because there
• 7:47
  Speaker 1: are there are many cases you know that. In addition,
• 7:52
  Speaker 1: the trade war between China and the US has put
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  Speaker 1: a dampener on sales. Vrani said. While the US is
• 8:00
  Speaker 1: the biggest consumer of Indian diamonds, a lot of stones
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  Speaker 1: transit through China for jewelry manufacturing or wholesale trading, with
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  Speaker 1: the U s cutting its purchases of Chinese goods. The
• 8:14
  Speaker 1: Indian gem industry has felt the impact. So although India
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  Speaker 1: is not part of any global supply chain, exports have
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  Speaker 1: been hit, dragging down overall economic growth to four point
• 8:27
  Speaker 1: five percent in the third quarter. It's lowest in six
• 8:30
  Speaker 1: years back in sorl It's hard times as employment in
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  Speaker 1: the industry has fallen and incomes for skilled artisans has
• 8:40
  Speaker 1: been reduced by more than sev in the past few months.
• 8:44
  Speaker 1: According to industry groups pour of A, the Sponde, the
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  Speaker 1: Skilled Artisan it's a bleak and hard struggle, mirroring much
• 8:54
  Speaker 1: of the slowdown in the economy when they had. I
• 8:57
  Speaker 1: am so stressed right now. If this environment continues, then
• 9:02
  Speaker 1: I have to consider leaving the industry and go back
• 9:06
  Speaker 1: to the village and work in the field for a
• 9:09
  Speaker 1: much less money. For Bloomberg News, I'm on near one now.
• 9:25
  Speaker 1: So Abushek Gupta is Bloomberg's India economist. He's got a
• 9:30
  Speaker 1: bit famous in the Indian market circles for disagreeing with
• 9:35
  Speaker 1: other economists in Mumbai over what the Central Bank of
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  Speaker 1: India is going to do next, and I should say
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  Speaker 1: he's more often right than wrong. Abishek, thank you very
• 9:43
  Speaker 1: much for joining us. Thanks a lot, Stephanie for having
• 9:46
  Speaker 1: me on the show. It's a pleasure. So those of
• 9:49
  Speaker 1: us who are not necessarily following every twist and turn
• 9:53
  Speaker 1: of the Central banks policies or indeed the Government of
• 9:57
  Speaker 1: India's policies, you know, we hear that story there from
• 10:00
  Speaker 1: Annaba Nag about how the diamond industry has been affected
• 10:04
  Speaker 1: by trade wars and by the slowing of the Indian economy.
• 10:08
  Speaker 1: If we step back from the day to day of
• 10:11
  Speaker 1: central bank policy and what's going on a month to
• 10:14
  Speaker 1: month with the economy, you know, most people will have noticed.
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  Speaker 1: I think when No Injury Moody came to office in
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  Speaker 1: India in fourteen he got reelected again um this year,
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  Speaker 1: there was a lot of talk about major reform and
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  Speaker 1: putting the economy on a completely different trajectory. We have
• 10:32
  Speaker 1: seen reforms, but if you look at the state of
• 10:35
  Speaker 1: the economy, it doesn't look that great. What's happened, Stephanie,
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  Speaker 1: I think that that's that's a great question. And indeed,
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  Speaker 1: if you look at No into more these drag record
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  Speaker 1: over the last few years, he has certainly delivered on
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  Speaker 1: a lot of significant structional reforms, I'll say, but the
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  Speaker 1: way I think about these reforms is that they aren't
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  Speaker 1: necessarily growth in anything at least in the short run.
• 11:02
  Speaker 1: They prove efficiency and productivity over the medium term, but
• 11:06
  Speaker 1: what's exactly happening in the near term. For instance, let's
• 11:09
  Speaker 1: just pick up one of the reforms, like Marin Smoothie
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  Speaker 1: delivered on a new bankruptcy law for India, and under
• 11:17
  Speaker 1: this law, what's happening is that, or instance, bad assets
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  Speaker 1: would now be changing hands, so from an old promoter
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  Speaker 1: to a new promoter, and that and sometimes things get
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  Speaker 1: delayed in the legal process and stuff like this would
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  Speaker 1: negatively impact the economic activity of that secution it in
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  Speaker 1: the short run, and similarly for other reforms as well,
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  Speaker 1: in the short run, in the initial years of these reforms,
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  Speaker 1: uh this that's uh, there's a transition phase which kind
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  Speaker 1: of slows things down. Having said that, my sense would
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  Speaker 1: have been that over the past few years, things should
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  Speaker 1: have already started looking up by now, but that has
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  Speaker 1: not been the case, And I kind of put the
• 12:01
  Speaker 1: blame more on not sufficient monitor easy rather than not
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  Speaker 1: more reforms. So clearly, I think Monkey policy could have
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  Speaker 1: done a lot more to support government structural reforms. Barallelly,
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  Speaker 1: but that hasn't been the case so far. Yeah, and
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  Speaker 1: it's true you've had you you were very critical and
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  Speaker 1: particularly of the previous head of the Reserve Bank of India.
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  Speaker 1: Um and when when the when Moody effectively got rid
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  Speaker 1: of him. You know, often when when governments interfere with
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  Speaker 1: who's going to run the central bank, there's a lot
• 12:36
  Speaker 1: of concern in the markets about the independence of the
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  Speaker 1: central bank being violated. But it was striking that there
• 12:43
  Speaker 1: was not that kind of reaction from the markets when
• 12:46
  Speaker 1: that happened, perhaps because investors agree with you that that
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  Speaker 1: the bank had been too tight. Yes, certainly that has
• 12:53
  Speaker 1: been the case. In fact, one of the key even
• 12:55
  Speaker 1: holding back India's economy is the weak state of uh
• 13:00
  Speaker 1: India's shadow banking sector. There are these non bank finance
• 13:05
  Speaker 1: companies in India which essentially are extending credit to consumers
• 13:10
  Speaker 1: and housing finance companies, and these companies were quite negatively
• 13:15
  Speaker 1: impacted due to a liquidly crunch which was created in
• 13:20
  Speaker 1: the economy in late twenty eighteen under the earlier RB governorate.
• 13:25
  Speaker 1: Over the last year, the new Central Bank governor has
• 13:28
  Speaker 1: reversed some of those politty mistakes and we have seen
• 13:32
  Speaker 1: credit spreads come down for the better rated companies, but
• 13:36
  Speaker 1: some of the weak created companies, the credit spreads are
• 13:39
  Speaker 1: still widening. And and that is financial financial shock that
• 13:43
  Speaker 1: needs to be eased. I mean, we we've we had
• 13:46
  Speaker 1: a bit in that piece about the pain that some
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  Speaker 1: of that the financial squeeze is causing in the diamond
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  Speaker 1: sector and for some for some in that region. But
• 13:56
  Speaker 1: obviously this is an enormously diverse economy. Um, the rural
• 14:02
  Speaker 1: sectors particularly important, not just economically but politically. If you're
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  Speaker 1: sitting in a rural area, how have how have you
• 14:11
  Speaker 1: really felt the impact of Prime Minister Moodi or maybe
• 14:14
  Speaker 1: you haven't felt that much different that's a separate discussion altogether.
• 14:19
  Speaker 1: So I mean, if you look at Prime Minister Marrieds
• 14:23
  Speaker 1: Moodies policies, he has also reinvented himself in the in
• 14:29
  Speaker 1: his political party, the b JP, in terms of delivering
• 14:32
  Speaker 1: more welfare oriented policies of the rural pool. In fact,
• 14:37
  Speaker 1: if you sort of talk about giving free gas cylinder
• 14:41
  Speaker 1: than gas connections, that that's being a very popular policy.
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  Speaker 1: Constructing toilets that has been another major campaign of his.
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  Speaker 1: And besides that, he's also increased electrification in rural villages
• 14:55
  Speaker 1: and opened bank accounts for for the rural poor. And
• 15:00
  Speaker 1: just this year he had announced an income support package
• 15:04
  Speaker 1: for farmers. So I think he has done a lot
• 15:08
  Speaker 1: for the rural poor. However, the impact of that has
• 15:11
  Speaker 1: been missing in terms of consumption. But probably the rural
• 15:16
  Speaker 1: economy has benefited from American movies policies. And if you
• 15:20
  Speaker 1: speak to taxi drivers in India who kind of come
• 15:23
  Speaker 1: from some of these rural villages in smaller towns, they
• 15:27
  Speaker 1: do confirmed that either they themselves and their families or
• 15:33
  Speaker 1: the extended families people have benefited from reading the movies policies.
• 15:37
  Speaker 1: So so he is popular in rural India as well. Hm,
• 15:42
  Speaker 1: that's interesting. I mean, I I guess people from a
• 15:44
  Speaker 1: distance will be wondering. I mean, he's a He's a
• 15:47
  Speaker 1: prime minister who has been controversial often outside of India
• 15:50
  Speaker 1: for his treatment of people in Kashmir. He's violated the
• 15:56
  Speaker 1: human rights in some ways or has been criticized for that.
• 15:59
  Speaker 1: He's also um not always been a fan of of
• 16:01
  Speaker 1: of press freedom. I think investors have sort of weighed
• 16:06
  Speaker 1: that against his ability to get the economy going. But
• 16:10
  Speaker 1: how important is it for his future to really change
• 16:14
  Speaker 1: the performance of the economy, or is he in a
• 16:16
  Speaker 1: is he in a strong enough now position politically that
• 16:20
  Speaker 1: he just needs to avoid a big recession. I think
• 16:24
  Speaker 1: that that's that's a very important question that that hits
• 16:27
  Speaker 1: said the point in terms of what will drive his
• 16:30
  Speaker 1: re election in two um. If you look at the
• 16:33
  Speaker 1: first year of a second term, he has had great
• 16:36
  Speaker 1: success in terms of delivering policies and legislation that appeals
• 16:42
  Speaker 1: to his majority in the water base. Be it as
• 16:46
  Speaker 1: you said, the application of Article three seventeen englishmir on
• 16:50
  Speaker 1: the Supreme Court ruling in favor of a temple um
• 16:55
  Speaker 1: or the current sort of ship amendment will which is
• 17:01
  Speaker 1: uh we just got past yesterday in the Parliament, which
• 17:05
  Speaker 1: discriminates against Muslims. So all of these kinds of things
• 17:10
  Speaker 1: do appeal to those database and have maintained his popularity
• 17:16
  Speaker 1: with the masters. But my sense is that this is
• 17:20
  Speaker 1: not what is going to count in four And I
• 17:23
  Speaker 1: think even he understands the importance of reviving the economy
• 17:27
  Speaker 1: because he had initially in twenty fourteen run on the
• 17:32
  Speaker 1: end of development and he needs to bring economic prosperity
• 17:37
  Speaker 1: and bring jobs for the junk demographic force, which is
• 17:43
  Speaker 1: coming into the job market, and that is why he
• 17:46
  Speaker 1: has been focusing a lot on this dollar five brillion economy. Well,
• 17:51
  Speaker 1: we will watch and wait, bishek Upta, thank you very much. Thanks.
• 18:01
  Speaker 1: I said something about Paul Volca at the beginning of
• 18:04
  Speaker 1: the program. Who's died this week, But someone who got
• 18:08
  Speaker 1: to spend a lot of time with him in the
• 18:10
  Speaker 1: last few years is Bloomberg's own Christine Harper, whose editor
• 18:14
  Speaker 1: of Markets magazine but also wrote with Paul Vocer a
• 18:18
  Speaker 1: memoir keeping at It, The Quest for Sound Money and
• 18:22
  Speaker 1: Good Government, which only came out a year ago. Christine,
• 18:27
  Speaker 1: I know you've you've written and had conversations with people
• 18:30
  Speaker 1: in the last few days since Paul Voker died. I
• 18:33
  Speaker 1: guess one question to ask you is about the difference
• 18:38
  Speaker 1: between the legend of Paul Volca, who I certainly found
• 18:42
  Speaker 1: quite scary the few times that I interviewed him, not
• 18:44
  Speaker 1: least because he was so tall, and the man that
• 18:48
  Speaker 1: that you got to know in writing this book because
• 18:50
  Speaker 1: it didn't quite work out the way you thought it
• 18:52
  Speaker 1: was going to go. Yes, I would say that's true.
• 18:55
  Speaker 1: And my understanding is that most people who have had
• 19:00
  Speaker 1: some personal dealings with him have come away with the
• 19:03
  Speaker 1: same conclusion, which is that he has this very forbidding
• 19:06
  Speaker 1: public persona. I mean, if you look at the you know,
• 19:09
  Speaker 1: the photography UM taken while he was fed chairman, or
• 19:13
  Speaker 1: the or the caricatures that were drawn of him, he
• 19:15
  Speaker 1: was always as a sort of Olympian godlike figure glowering
• 19:18
  Speaker 1: down at the mere mortals, who were you know, screwing
• 19:21
  Speaker 1: up the planet um. And so he did have this
• 19:25
  Speaker 1: He had this kind of Old Testament quality to him.
• 19:27
  Speaker 1: But once you met him in person, he was absolutely
• 19:32
  Speaker 1: a sweetie pie. He was one of those people who
• 19:35
  Speaker 1: seem like rough and could use that fearsome persona to
• 19:40
  Speaker 1: sort of achieve outcomes he wanted and take on, you know,
• 19:45
  Speaker 1: people or institutions he felt weren't living up to their requirements.
• 19:50
  Speaker 1: But he loved people and he was. He was actually
• 19:54
  Speaker 1: quite shy, and he was very humorous, and he was
• 19:59
  Speaker 1: unbelievable the kind. So when I first met him, I was,
• 20:04
  Speaker 1: I think, like anybody, quite nervous, and he instantly won
• 20:09
  Speaker 1: me over. He was very funny, love telling stories, chuckled
• 20:12
  Speaker 1: a lot, and was always smiling, nothing like what I expected,
• 20:17
  Speaker 1: And as I got to know him more, part of
• 20:20
  Speaker 1: what I really enjoyed talking to him was, of course
• 20:22
  Speaker 1: he had amazing stories about knowing everybody from you know,
• 20:25
  Speaker 1: the leaders of basically every country. He served under six presidents.
• 20:29
  Speaker 1: You know, he's he's had this kind of incredible career.
• 20:33
  Speaker 1: But but he also loved to talk about the crossword
• 20:37
  Speaker 1: puzzle or he was a passionate home cook, and he
• 20:40
  Speaker 1: would talk about the recipes in the New York Times.
• 20:43
  Speaker 1: And you know, when he found an editing error, he
• 20:45
  Speaker 1: would he would relish that he'd found something like that. Um.
• 20:49
  Speaker 1: He was really fun to be around and really pleasant
• 20:52
  Speaker 1: and kind and uh and I think in some ways,
• 20:57
  Speaker 1: you know, he he stood for for the people in
• 21:01
  Speaker 1: what he tried to do publicly, he always put himself
• 21:04
  Speaker 1: as somebody who wanted to take on corrupt influences and
• 21:08
  Speaker 1: and make the government better and make the economy better
• 21:11
  Speaker 1: for for the for the people. But he really did
• 21:14
  Speaker 1: love people. He you know, he took the regular city
• 21:17
  Speaker 1: bus to and from his office until he was ninety
• 21:19
  Speaker 1: years old. He didn't put himself apart. He he really
• 21:23
  Speaker 1: saw himself as a public servant. I thought I was
• 21:26
  Speaker 1: smiling at one of the comments in the Bitteries about
• 21:29
  Speaker 1: him often having shiny suits. You could imagine the Wall
• 21:32
  Speaker 1: Street people being a bit sniffy about him not having
• 21:35
  Speaker 1: spent money on his suits when he was FED chairman,
• 21:38
  Speaker 1: you know, famously, he sort of got a little studio
• 21:42
  Speaker 1: apartment in a building close to the FED that was
• 21:45
  Speaker 1: basically all you know, college students living there. And he
• 21:50
  Speaker 1: had I think a table, a chair, a bed, and
• 21:52
  Speaker 1: some milk crates. And he would take his laundry to
• 21:56
  Speaker 1: his daughters who lived nearby, to get it done every week.
• 21:58
  Speaker 1: And you know that's because his wife was stayed up
• 22:00
  Speaker 1: in New York and was was quite ill, and she
• 22:03
  Speaker 1: was taking care of their son, who had some disabilities,
• 22:05
  Speaker 1: and she didn't want to move. So he just lived
• 22:07
  Speaker 1: like this bachelor and flew back home every weekend. He
• 22:10
  Speaker 1: really didn't care about things. I mean, I remember him
• 22:12
  Speaker 1: once telling me he thought all of the furniture in
• 22:15
  Speaker 1: his apartment, which was quite a nice apartment in New
• 22:18
  Speaker 1: York that he bought at the bottom of the real
• 22:20
  Speaker 1: estate market in nineteen seventy three or something, all of
• 22:24
  Speaker 1: that furniture was probably you know, fifty years old or something.
• 22:27
  Speaker 1: He didn't he didn't really care um. He cared about people.
• 22:30
  Speaker 1: He cared about UM principles, UM. He cared that society
• 22:36
  Speaker 1: do right by people. But he wasn't he was a materialistic,
• 22:39
  Speaker 1: He wasn't selfish. I was. I was appalled that was
• 22:43
  Speaker 1: an event a few years ago that I was speaking
• 22:46
  Speaker 1: at was a sort of private thing of people thinking
• 22:48
  Speaker 1: about the global economy. And I was a pulled when
• 22:49
  Speaker 1: I saw the program that I was supposed to be
• 22:51
  Speaker 1: co presenting with Paul Volka. And then I rapidly realized
• 22:55
  Speaker 1: that it was actually quite liberating because it wouldn't matter
• 22:57
  Speaker 1: at all what I said, because people would really just
• 23:00
  Speaker 1: what he said. But what did you find? I mean,
• 23:02
  Speaker 1: did you find that he was actually quite cheerful? And
• 23:06
  Speaker 1: it was also increasingly he had and we've spoken about
• 23:11
  Speaker 1: this in the past. I mean that he was getting
• 23:13
  Speaker 1: on and he certainly and he had his voice was definitely,
• 23:18
  Speaker 1: you know, reflected his age. So sometimes when you're interviewing him,
• 23:21
  Speaker 1: at least the first time I interviewed him, I found
• 23:23
  Speaker 1: it sort of disconcerting that I was I was expecting
• 23:27
  Speaker 1: this person to play a crucial role in whatever piece
• 23:29
  Speaker 1: I was doing and deliver this great interview, and yet
• 23:33
  Speaker 1: he seemed, you know, he was in his late eighties
• 23:35
  Speaker 1: and would he possibly deliver. But then, of course you
• 23:37
  Speaker 1: the moment he started talking, you realized that he had
• 23:40
  Speaker 1: not only really prepared for the interview, but had incredibly
• 23:44
  Speaker 1: wise and sharp things to say that you wouldn't have
• 23:46
  Speaker 1: got from anyone out. So I always I did found
• 23:48
  Speaker 1: it a pleasure of that you had to, as you say,
• 23:50
  Speaker 1: you have to get past that rather intimidating demeanor, where
• 23:54
  Speaker 1: he did often seem to be sort of scowling when
• 23:56
  Speaker 1: I don't. I don't think he was. But we've talked
• 23:58
  Speaker 1: a lot about the personal stuff, which I think is
• 24:00
  Speaker 1: is always important to remember and a nice thing to
• 24:04
  Speaker 1: remember this week. But I'm of course people will also
• 24:07
  Speaker 1: be interested, particularly since you got to know him in
• 24:09
  Speaker 1: the last few years, of what his attitude was to
• 24:14
  Speaker 1: the current members of the American administration and particularly Donald Trump. Yes, well, um,
• 24:22
  Speaker 1: that was a constant source of frustration, because I think
• 24:26
  Speaker 1: one of the things about him that made him really
• 24:30
  Speaker 1: different was that even though he could he could have
• 24:32
  Speaker 1: a quite harsh judgment uncertain things if he felt they
• 24:36
  Speaker 1: were clearly wrong, Like he had no tolerance for sort
• 24:38
  Speaker 1: of people he felt were overpaid and you know, enriched themselves,
• 24:42
  Speaker 1: at the expense of their customers or the public, or
• 24:46
  Speaker 1: or you know who corrupted institutions. But he he was
• 24:50
  Speaker 1: he was an other in many other respects, this incredibly
• 24:52
  Speaker 1: pragmatic and this incredible sort of tolerant person. So he
• 24:56
  Speaker 1: wanted to give everybody the benefit of the doubt. So
• 24:59
  Speaker 1: as much as you know, I and I know other
• 25:02
  Speaker 1: people were trying to kind of get him to come
• 25:04
  Speaker 1: out and you know, cast strong views on the situation,
• 25:08
  Speaker 1: I think you know, he served under six presidents, he
• 25:10
  Speaker 1: served under Nixon, he served under you know, LBJ and Kennedy.
• 25:14
  Speaker 1: He'd seen a lot of things, and so he was
• 25:18
  Speaker 1: patient in a way that not many people are. Um.
• 25:22
  Speaker 1: I do know that at the end Um and you know,
• 25:25
  Speaker 1: he worked with me on a afterward for the paperback
• 25:29
  Speaker 1: version of his book. He he expressed more concerned about
• 25:33
  Speaker 1: the state of the world because in his book, in
• 25:36
  Speaker 1: the book he um he talked about how you know,
• 25:39
  Speaker 1: his mother had admonished him that things can look bad,
• 25:42
  Speaker 1: but this country has gotten through a lot and will
• 25:44
  Speaker 1: continue to be okay. But he wasn't so sure he
• 25:47
  Speaker 1: believed that anymore. He was very concerned about those sort
• 25:50
  Speaker 1: of forces of you know that we're just sort of
• 25:54
  Speaker 1: out there fighting facts, fighting science, you know, um, just
• 25:58
  Speaker 1: you know, it would seemingly no scorn about the good
• 26:01
  Speaker 1: of the country and of humanity. And so you know,
• 26:06
  Speaker 1: he didn't like to name names, um, but he I
• 26:10
  Speaker 1: think he was very, very displeased at at what he
• 26:13
  Speaker 1: sees going on in the country. And I'll also say,
• 26:16
  Speaker 1: you know, he was he was quite a fan of
• 26:18
  Speaker 1: of the FED, but he was very disappointed and how
• 26:21
  Speaker 1: they watered down the Vulkar rule in the last couple
• 26:24
  Speaker 1: of months. He had sent up a letter to J.
• 26:26
  Speaker 1: Powell warning him not to do that, and they went
• 26:29
  Speaker 1: ahead and did that, and he was not happy about that.
• 26:32
  Speaker 1: He thought that was a big mistake. The rule, the
• 26:34
  Speaker 1: rule that had been the response to the global financial
• 26:37
  Speaker 1: christ kind of constrain strain banks from taking excessive risks. Well, Christine,
• 26:43
  Speaker 1: thank you very much. I mean, I think that the
• 26:45
  Speaker 1: overriding conclusion, and when you read all these obituaries is
• 26:47
  Speaker 1: what a consummate public servant he was. And I certainly
• 26:51
  Speaker 1: hope that one of these days those kind of public
• 26:53
  Speaker 1: servants will will come back into favor. Yes, I think
• 26:56
  Speaker 1: that's more than anything what he wanted. His legacy to
• 26:59
  Speaker 1: be as an example for other people to follow into
• 27:02
  Speaker 1: public service and into really believing that it was a
• 27:05
  Speaker 1: noble calling, because he certainly felt it was. Where you'll
• 27:09
  Speaker 1: see Christine, thank you very much, Thank you, thanks for
• 27:17
  Speaker 1: listening to Stephanomics. We'll be back next week. In the meantime,
• 27:21
  Speaker 1: you can find us on the Bloomberg Terminal, website, app
• 27:23
  Speaker 1: or wherever you get your podcasts. And for more news
• 27:26
  Speaker 1: and analysis through the week from Bloomberg Economics, follow at
• 27:29
  Speaker 1: Economics on Twitter. You can also find me on at
• 27:32
  Speaker 1: my Stephanomics. The story in this episode was written and
• 27:36
  Speaker 1: reported by Swansea Afonso and Anniban nag. It was edited
• 27:40
  Speaker 1: by Bruce Douglas and produced by Magnus Hendrickson. Special thanks
• 27:44
  Speaker 1: to a Bushek Gupta, Christine Harper, and Nesserene Syria. Scott
• 27:49
  Speaker 1: Lammon is the executive producer of Stephanomics and the head
• 27:52
  Speaker 1: of Bloomberg Podcast is Francesca Levi bym By