Binyamin Appelbaum Discusses Monetary Policy

and our conversation is quite fascinating. It traces the pivot in American history from where economists are really part of a softer social science and not really thought of as a heart science and don't have a whole lot of influence at most levels of government or the monetary apparatus, to the point in let's call it the nineteen eighties where all of that changes, UM, maybe even in the nineteen seventies, where where there was some influence on presidents

and some major policies, and the past fifty years can really be thought of as the economist hour. How the economic class has economist class has very much influenced public policy, politics, fiscal policy, UM. Just pretty much the entire of American society can trace a lot of what's taken place UH to the economists and their influence, which appears to be coming full circle and starting to wane. So I found this conversation to be absolutely fascinating as I did the book,

and I think you will as well. So, with no further ado, my conversation with Binya Applemum, this is Masters in Business with Barry Ridholts on Bloomberg Radio. My special guest today is Binya Applebaum. He is the lead writer on business and economics for the editorial board of The New York Times, where he has worked since He is the author of a new book, The Economists, Our False Profits, Free Markets, and the Fracture of Society. Benya Applebaum, Welcome

to Bloomberg. Thanks, it's great to be here. Let's start with your career. Where where did you begin as a writer out of college? My first job was at the Florida Times Union in Jacksonville, Florida. I covered the news beat in a county outside of Jacksonville. The news beat meant anything that happened was my problem ad to write about it. So that includes crimes and crime, government, forest fires, county fairs, school board meetings, you name it. It was

my problem. When did you first start focusing on economics and business? After Jacksonville, I moved to the Charlotte Observer and the managing editor called me in one day and asked me if I wanted to cover banking, and I was a little skeptical, but he told me, Hey, you're the new banking reporter. So that's that's how it began. Did you have any academic background or any training in this or did they just throw you in? No? I didn't really. I got thrown in blind. I didn't know

much about the subject at all. It was really one of the things I love about journalism is the opportunity to learn and to study as you work, and so it really was an immersion experience. I learned as I as I worked. So what was the process like becoming I'm looking for the right word. Maybe it's a depth at covering banks because they're kind of a squishy, yeah group to pin down. It's not the easiest topic to cover.

First story ever wrote I didn't get the millions and the billions straight, so there was there was a learning curve, for sure. It was fascinating, you know, Charlotte. In those years, Bank of America and Lacovia were both there and and warring with each other, and I was sort of the center of this rapidly growing industry. And it was completely fascinating to be there and to be writing about it. And now that's become sort of the southern headquarters of

the banking industry, hasn't it. Yeah, it really is. It's a remarkable story how Charlotte came to be a financial center, really interesting story. But but to be there in that financial center with all of these bankers sort of trying to figure out the path of the industry and innovating and competing, it was. It was an exciting place to be. So from covering banks in Charlotte, that's not a giant leap to covering the biggest bank of all the Federal Reserve?

How did that transition happened? So it basically evolved through the financial crisis. I spent a lot of my time in Charlotte writing about mortgages and the financial crisis, went to the Boston Globe, where I continued to do that. Then came to the Washington Post the week that Fannie and Freddie were taken over by the government as the paper's national banking reporter, and I covered the financial crisis

for the next eighteen months. About two months after I got to the Washington Post, the paper sent my wife a box of chocolates with a note saying, you know, we're sorry you haven't seen been your recently. Maybe again someday. So that was an intense period. Uh. And then I came to the Times in initially to cover financial regulation, but then was asked to move over to the Federal Reserve as as Dodd Frank came into law and and

those issues started to settle down a little bit. So inven I basically began covering the Fed and monetary policy. And what was that like, all of a sudden, now you're the New York Times reporter for the Federal Reserve. That must have been quite heady, A ton of access I assume to seeing your FED people, governors and chairman and others. What what was that like? Yeah, you feel

a real responsibility. I don't know if I felt so much heady as as sort of a little scared at first, because a lot of people are counting on you to accurately represent what the FED intends to do, what it's communicating, and you do have a lot of access that the FED takes very seriously its efforts to communicate and and to convey its messages. And one of the ways it does that. One of the primary ways it does that is through big media outlets like the Times or the

Journal or Bloomberg. And it works very hard to explain itself to people like me, people in my job. And so yeah, you do get to spend a lot of time with the leading figures and monetary policy talking to them, picking their brains, trying to understand what a thinking. It's frankly fascinating. Uh And and it was really an interesting experience, particularly, you know, when the FED was in the middle of this sort of tumult and trying to figure out how

to deal with a new set of economic circumstances. So this new transparency, as some have called it, is very much a sea change from what the world was like forty years ago. There were no press releases. There certainly wasn't a press conference. The fed open market activity can effectively be seen in how prices on the short end of the bond market would move. That was pretty much the only way anyone had an idea that the FED

was doing anything. How different is it today then, when they seem to be cloaked in in mystery and secrecy. So I wasn't around back then, but I think that A big part of the change is how much the FED is communicating directly with the public. If you go back four years ago, the person who had my job was still spending a significant amount of time with Paul Volker, had access to him, was hearing his thoughts, uh had the opportunity to question him directly. But that wasn't happening

in a televised news conference. Volker wasn't going out there and talking directly to the public on sixty minutes, or you know, holding town hall forums or you know, all of these innovations and FED policy that we've seen in recent decades. So part of what happened at the FED as that so many other institutions, is they realized, you know, they could step out from behind the curtain and control their own communications, speak directly to their audience. And obviously

they're doing that much more aggressively than ever before. I don't recall Vulcan tweeting a whole lot. That wasn't He wasn't big on that. But Jay Powell doesn't tweet either, So maybe that's that the next FED chair will move on to Twitter. Maybe, But there are a bunch of Federal Reserve researchers and if you look, if you go through any of the regional FEDS or the main FED, there's a ton of stuff. It's a ton of content they generate um that works. It's well into Twitter and

the blogosphere and eventually in the mainstream media. So it's not like the FED is remotely quiet. They are very active in to communicate their messages. And to be clear, there was an intellectual revolution the FED at you know, forty years ago again really believed that there was some value and mystery that you didn't want to be too clear, that you didn't want to tell the public exactly what was about to happen. And there's just been this sea change,

you know. Ben Bernankie famously said that of monetary policy is communications is managing expectations. That idea that the fed's primary job is to communicate and to communicate clearly is a new thing in the world, and they're doing it in every way they can. So as you said, they're on Twitter, h FED presidents wander around giving public speeches all the time. There's a sense that some of this is a bit of a cacophony, and and sometimes the

message gets lost in the noise. But they're trying that this is now clearly the goal in a way that it wasn't in an earlier era. So your colleague at the Times wrote a fascinating piece in the headline was a President at war with his FED chief, five decades before Trump. The takeaway to me was, Hey, presidents have been pressuring and arguing with FED chairs for a long time. Only they kind of did it quietly and behind closed doors.

What what's your read of the battle between Trump and Powell, the President and the FED chair And how different is this than previous relationships. So that story is about President Lyndon Johnson summoning William mc chesney Martin, the chairman of the FED in the late nineteen sixties, to his Texas ranch and literally shoving him against a wall and yelling at him for daring to raise interest rates. So love, our boys are dying in Vietnam because of you. Yeah,

well not really, but it certainly is. The President says that to you, it should get your attention, and it did, and it did so clearly. You know, if you go back historically, the FED was essentially an arm of the Treasury Department during World War Two, and uh, you know, presidents in that era clearly thought of the FED as taking instructions from them, and they were not afraid to

issue those instructions. And through Johnson and through Nixon and even into Reagan arrow we have examples of presidents, as you say, behind the scenes, but quite explicitly, directly and confrontationally, putting pressure on the FED. I do think that there was a change beginning in the eighties, but really taking hold in the nine nineties where presidents concluded that that things worked out better if you left the FED alone.

Not not that they changed their mind about wanting the FED to deliver the best outcomes, but that they were convinced that if you gave it a little bit of space, a little bit of independence, that would be better for the economy, both in the medium term and in the long term. And so there was less of that kind

of communication. And I do think that we're now seeing a reversion to an earlier pattern in which the Trump administration is, you know, emulating much earlier presidential administrations in in sort of explicitly telling the FED what it wants and pressuring the FED to do it. And that's something we have not seen in a long time. So so I find this whole thing ironic for a couple of reasons. First, Um, when he was a citizen citizen, Trump was complaining that

Yellen was keeping rates too low. She he I believe the interview was she should be ashamed of herself, which is kind of ironic because when her term came up for renewal, he decided not to reappoint her, probably the most devish member of all the people on the FED that he could have put as as chair and he put Um Clarida and Jerome Powell as as vice chairman and chairman. I've argued they are certainly more hawkish than Yelling. Is this now the Trump's Fed? Or is this still

an independent Fed? I think it is an independent institution in part because Trump, as you say, was not hugely intelligent about who he picked to run it. If he had clear goals, if he wanted easy policy, he should have picked policymakers who agreed with him. And to be fair, To be fair, Yelling is short, and he said she was too short. People think I make that up when I say that, but he said that, and he said

it wasn't even behind closed doors. He said it publicly, which is kind of kind of shocking, so he replaced a dove with People have pushed back on me calling Powell hawk. He certainly was more hawkish than Yelling. Is that a fair I think that is fair. I would not call him a hawk. I think, you know, you don't want to overstate. And and we've seen the Fed just cut rates. We've seen him, you know, talking about his commitment to drive down unemployment and to create jobs.

I don't think he's anybody's idea of a hawk. But it's certainly the case that the easiest way to have continued to pursue easy policy under Trump would have been to keep Janet Yelling in place. It's not, you know, and and and in the way that Trump made his early appointments, he certainly didn't pick people who were particularly minded to cut rates. There are clearly voices on the

FED who want lower rates than j Powell. And and Trump you know, has both you know, bloviated publicly about how much he wants that, but then when he's had the opportunity to do something about it, he has consistently not taken advantage of those opportunities. To be fair. You see Jerome Pale, he looks good in the suit, he's

got a full head of hair. He looks very chairman like, and I suspect that those elements way heavily in a president who tends to be focused more on the optics and the television announcement moment and may not pay as much attention as you should to the specifics of the policies. Again, otherwise, he would have kept the diminutive statured yelling in place his chairperson. It is clear that the president views himself as a casting director. Yes, that's a good way to

discuss it. So you mentioned the independence of the FED. Are they truly independent? Especially, say what you will about Trump, he is very effective as a communicator. He is a very strong tactician. Maybe not the world's greatest strategist, but in terms of getting what he wants now, he seems to be pretty good at that. Not to act philosophical, but nobody is truly independent, and the FED certainly is not.

I think what we can say about the FED is that it has been provided with a degree of insulation to allow it to make short term decisions on the basis of technical considerations. But its goals are set by Congress, its officials are selected by the President, it is subject to political pressure in a wide variety of ways. It clearly thinks about politics as part of the considerations that inform the direction of monetary policy. It is very easy

to overstate what independence means. We were discussing earlier some of the pressures on the FED UM from the President and and the impact that has our markets. Let's talk a little bit about the pressure of the markets on the FED. By all measures, the US has the highest interest rates UM as a central bank and as a bond issuer in the developed world, be in the entire UH investment grade world. How does that impact what the FED does, both both market forces and what other central

banks do. I think there's two sort of dimensions to this. The first is that since the financial crisis, we've seen the FED embracing a responsibility for being the world's central bank. That was certainly true in the immediate aftermath of the financial crisis, where UH you know, a lot of the crisis era programs that the FED put in place to provide funding, we're really about funding the global financial system

more than about funding American financial institutions. Meaning the concern was, all right, we're starting to thaw here, but the freeze elsewhere can certainly reach back and send this back down the rabbit hole again. Absolutely, And so you know, this idea that the FED has a responsibility for keeping money pumping, not just domestically but internationally is clearly a part of the sort of the modern era FED, and it's thinking.

The other issue is that if you get too big a gap between the United States and Europe, just as you just suggested, or between the United States and the rest of the world, it starts to put pressure on both the FED and the American economy. It is difficult to be raising rates when everybody else is cutting rates and standing still and buying bonds. You just you can't

pull away that much from the pack. Uh. And and we've seen that tension play out in recent years where the FED has said, basically, listen, we think the American economy is ready to you know, detach and and to start growing again. And the mere fact that the rest of the world was standing still ended up limiting the

Fed's ability to move rates. So what we saw happen was all this given the yield differential between investment grade treasuries and other sovereign investment grade papers, all this capital comes flying into the United States to buy treasuries. It makes the dollar much much stronger, which hurts US exports. And and it's great if you go overseas and travel, but if you're making products and you want to export them, Um,

it's an issue. Does that force the FED to say, hey, we're out of line with the rest of the world central banks. I don't think it's by itself a sufficient factor to you know, move policy, but it's it's clearly a consideration for some members of the FED more than others. There are something Governor Lele Brainerd has been particularly vocal about her you know, her interest in international factors and her belief that they should influence the course of monetary policy.

It remains her of an active debate inside the FED how much attention you pay to these considerations, But there's no doubt that it matters, and that it is influencing the course of monetary policy, and that the United States is part of you know, the financial system is even more integrated than the global economy, uh and the FED operates in the financial system, and to the extent that there is a divergence as we've seen between rates domestically and rates and the rest of the world. It clearly

constrains the FEDS ability to act. So so let's talk about that integration. That that's an interesting observation. The financial world much more integrated than the economy. When we look around international Japan has negative interest rates, Europe has some

very major countries with with negative interest rates. I've heard some people make the argument that the US financial system is built on positive interest rates, whether it's fractional lending or mortgages or money market funds, we can't sustain negative rates. Is that a concern at the Federal Reserve? What would they do if negative rates came to America? It clearly is a concern. I think people would have said the same thing about Europe or Japan before they experienced, you know,

negative rates. That our understanding of modern finances predicated on the assumption that you get a return, and the idea that those returns are negative requires a lot of adjustments in the mechanics of the system, in the way that we think about the system, in the way that it functions. I think, you know, no one knows is the answer. It's a possibility that has to be unnerving because we've never been there before, and I think we just cannot

anticipate all the consequences. So so Ben Bernanke very famously apologized for some of the mistakes the FED UH made way back when I believe he was talking to Milton Friedman at the time. Is that right? Um? How often does a central bank step forward and say, hey, we were wrong about this, and here's how it's going to

change us going forward. That has been happening more lately, I mean, as part of this new era of transparency and clarity and communication, we have heard central bankers, particularly here in the United States, critiquing their own performance more publicly than was true in the past. UH. And that's

an interesting change and I think it's helpful. We heard j Powell last year explaining, you know, what he thought about the FEDS actions over the previous year, offering sort of in December a post mortem on the year that had been. That's something that it was unimaginable that Alan Greenspan would have delivered a performance like that. So it's a new thing to hear central banks talking this way about their own performance, and frankly, I think it's beneficial.

I do recall Greenspan admitted that he discovered a flaw in his philosophy, and some of the political cartoonists sort of showed him on the steps of the roman Um Senate with everything in in um uh just rumble, destructive, crumbled pillars and it was just a mess. Um How significant was green span ad minting error? And did that have an impact on future FED chiefs? So if you sort of stepped back for a moment, the FED, uh, you know, in the nineteen sixties was still run by

financial market types. The economists played a very limited role in the institution. The FED was essentially a part of of the financial system and and and there were not people like Alan Greenspan in charge. And what you get over the succeeding decades is people like Paul Volker and Alan Greenspan are elevated into positions of authority and they see the mission of the Central Bank much more narrowly

that the FED was created to prevent financial crises. That's why we decided to have a central bank post nineteen o six. UM there was a big crisis, in large part caused by um capital flows from big insurers in the UK to the US and bank and we were sort of operating UM with one arm behind our back if other countries have central banks. So we know that's exactly right, and so we decided to create this system

to serve as a backstop for our banks. Over time, that mission gets minimized, and so in the VOLCA and green Span eras the Fed's mission is transformed into inflation control, the one thing it has to do is just keep inflation slow and steady, and that will guarantee financial stability, It will guarantee broad prosperity. It was like a magic pill. The idea is, if you could just control inflation, and this comes from Milton Friedman, if you could just control inflation,

everything else would fall into place. And so Alan Greenspan, and he's been quite open about this, basically ignored financial regulation. It wasn't that he thought markets were perfect that often that's a bit of a caricature. What he thought is that markets were better than regulation, that that markets would do a better job, notwithstanding their flaws, than any human effort to regulate markets. Uh. And the result of that

was a massive financial crisis. The FED was so grossly indifferent to the misbehavior of the major financial institutions that we all ended up paying a significant price for that.

And so I think it was important for green Spend to come before Congress and under pressure say basically, yes, I now acknowledge that when I said that financial institutions would be sufficiently self interested not to crash themselves, not to put themselves out of business, that I was wrong in the sense that institutions, like all of us, make bad choices and do things that are not ultimately in our long term self interest, and that a number of

financial institutions behave so stupidly that they did put themselves out of business. And he was saying, you know, as far as that goes, right, I I blew it. Uh. And I think the FED as a whole has taken that lesson and said, you know what, actually we do need financial regulation, and actually our mission does need to be broader than just trying to control inflation. And so this era in which economists sat at the FED and

focused on one number has come to an end. At J. Pale is the first non economist to chair the FED in in half a century. And uh. He is part of this new era in which the FED has said, Okay, yes we are responsible for financial stability, Yes we are responsible for unemployment, and we're also responsible for inflation. But it's not enough to just provide low inflation. So what about the fact that there seems to be a focus on risk assets as well? Is that really the proper

role of a central bank, I mean the FED. The Fed's argument is basically that the FED cannot perform its role without focusing on risk assets. That that essentially, if one of the things you're trying to do is to maintain financial stability, you know, the risks to stability are going to come out of risk assets, and and you've got to pay attention to them. And if you're not paying attention to them, you're not doing your job. And and you know, I mean, there are clearly people who

think the FED should still be more narrowly focused. But you come out of two thousand and eight, you look around. You know also, you know the two thousand one recession, The last two times we've been down this mountain, it's because of financial stability issues. I think there's a pretty good case that the FED does need to have, you know, a focus on on risk assets. Let's start with Milton Friedman. You said he had a greater influence on American life

than any other economist explain. So again, backing up a little bit, if you go back to the mid century, economists were not and it's almost hard to convince people that this is true, but they were not in the halls of power. Presidents did not take their advice. President Roosevelt referred to John Maynard Keyes as an impractical mathematician. President Eisenhower warned against allowing technocrats to run the government.

The Supreme Court ruled that economic evidence was irrelevant. Uh. Congress took testimony from economists, but it didn't take it particularly seriously. There was this, uh, this sense that economists were, uh, you know, not particularly interesting or helpful. Uh. And and you know, places like the Federal Reserve didn't have economists in positions of power. Uh. You know, places that are now essentially economic institutions. Decisions that are now made by

economists did not involve economists until surprisingly recently. And it was only really in the nineteen sixties and the nineteen seventies that economists begin to play a larger role in public policy. And one of the foremost figures in the rise of the economists is Milton Friedman. And what he's really associated with is the idea that you've got this

period of growth after World War Two. It's breaking down by the late sixties, and Freedman comes forward and says, the problem is that the government is overly involved in the economy. We're not trusting markets enough. We're not allowing markets uh a sufficient scope to sort of, you know, allocate resources and produce growth. What we need to do is get out of the way. We need to stop,

you know, reduce government spending. We need to cut taxes, we need to roll back regulation, we need to you know, have the FED. He wanted the Federal reserved to be run by a computer program that would just you know, increase the money supply at a slow and steady rate. He wanted to minimize policymaking. That's what he thought was necessary.

And this was enormously influential. Much of the shift in public policy over the second half of the twentieth century can be traced directly to Milton Friedman's thinking in ways great and small. So he's the father of the earned income tax credit. He's the guy who convinced Richard Nixon to end military conscription. People don't know this, which is a fascinating part of the book. It's really quite fascinating, and I was going through it, I think I understand

who Milton Friedman is. And I'm reading this and saying to myself, wait, Milton Friedman convinced Richard Nixon to go to an all voluntary army and raise the pay for soldiers. That's an amazing story. It's an amazing story, and it's the first chapter in the book because I think it's such an amazing and little known story, and because it sets a pattern. It was really the first instance of these economists influencing policymaking in a in an area you

wouldn't have predicted. But they then come from that into into much broader power, and and you know, they succeed in deconstructing the post war global financial system, the Breton Wood system, and replacing it with with market set exchange rates. So across this whole waterfront of policy issues, if you look at what changed in the second half of the twentieth century and you say, where did that idea come from, a surprising amount of the time the answer is that

idea came from Milton Freeman. So interestingly enough, a lot of the ideas that he put forward seems to have come full circle and seems to be falling a bit

out of favor. We're recording this the week the Business round Table announced uh that they're replacing his concept of shareholder value, that the sole purpose of a corporation is to maximize profits on behalf of shareholders, with a concept that's much broader stakeholder interests um The idea that Breton woods and a global system where there's cooperation between different countries seems to be getting replaced with a form of economic populism. Not just here in the United States with

the election of Donald Trump. You have Boris Johnson in the UK. There are all sorts of different people running in Italy and Spain and Germany. There are a lot of issues as to that post war era that Milton Freeman influenced so much. Has his ideology run its course or is this just a little mean reversion. You know, economists said, listen, if you focus on efficiency, it will increase growth. They said, don't worry about inequality. It's not that bad. They said, you know, the more that we

rely on markets, the stronger democracy will become. They were wrong about all of these things. Growth has slowed down in the developed world. Inequality has turned out to be a really big problem where we're just learning how bad it is as the data piles up. Uh, and democracy

is being strained precisely by our reliance on markets. So I think there's a recognition that, you know, this revolution went way too far, and that the ideas espoused by Milton Friedman, while they were necessary correctives to problems at the time, uh, in some instances, UH, we're carried too far, as is often the case, and that the pendulum needs to swing back away from markets towards a recognition that government has a valuable and viable role to play in

economic management, towards the recognition that inequalities a problem public policy needs to address. I do think we're at the end of what I call the economists our and the question now is what takes its place. And hopefully the answer is not the kind of unfettered populism that we've seen in some countries. But if it's not going to be that, it has to be something better than the old nostrums about you know, trust the markets, everything will

be okay, because in fact, everything is not okay. So I don't agree with everything Milton Friedman said, although I'm fascinated by a lot of his work. The whole idea we don't need an f D A. Sure a few babies will die if the food or drug supply is poisoned, but companies will quickly protect the reputation clearly absurd. However, the defense of Freedman could be it's not that the

market forces have gone too far. It's that we've allowed a chrony capitalism and a rentier system to come in where the markets are being replaced by people related or having a professional relationship with presidents and governors and mayors. Uh. You look at what took place with the Amazon headquarters, with New York, one of the biggest companies in the world. Why do you need tax credits when you're not even

paying taxes in the first place. And if we had a true market uh forces in place, uh, that this inequality wouldn't have gone as far. My my favorite example is if you own a football team, you don't need me as a taxpayer to subsidize your for profit stadium. Stop being a socialist, Go build your own stadium. But you you give some money to a governor's race or a mayor's campaign, and suddenly you get a billion dollar

tax credit. To build a stadium. How much of the pushback to the ideas of Milton Friedman is this sort of um bastardized form of capitalism, this chrony capitalism. So I think it's kind of a false dichotomy. I think you know, what's important to understand about markets is that

they are constructed by humans. And this would have been obvious to our ancestors, who encountered markets as physically constrained spaces in the middle of town that operated it to find hours of bell rang to start at, a bell rang to end it literally literally and and so markets. They understood that a market was something they had made, that had rules that were laid out by the town fathers, and that it couldn't exist without those rules. Uh, markets

are now so pervasive. We live in a marketplace twenty four seven, three sixty, and you've lost that understanding that a market is inherently a regulated space. You're absolutely right. We need markets, and indeed, much of what is wrong with our economy is that markets are being impeded, distorted, uh, constraint perverted. But that is not The corrective is not to free the markets and return them to some kind of natural state. The corrective is to regulate markets effectively.

The concentration of corporate power is a product of the fact that we have abandoned antitrust enforcement. Uh. You know, uh, the the issues that we have, you know, with labor markets are are a function of the fact that we allow corporations to prohibit workers from seeking jobs at other companies, that we allow licensing boards to make sure that nobody can become a cosmetologist. You know, these are failures of the regulations. But the answer is not to do away

with regulation. The answer is to regulate wisely. And so the problem with Milton Friedman is that he made the argument that that you could just trust natural law basically to take care of these problems, and we actually need human laws. We actually need effective We need to make decisions as a society about what we market, what we want markets to do, and then we can structure markets

to achieve those goals. So so let me go to a quote from the book where you you cite John Kenneth Galbraith, and and I've always been fond of this quote. What is called sound economics is very often what mirrors the needs of the respectably affluent. Explain that it's a fascinating into wonderful quote. I think Gobra's point, and it's an important point, is that we often find that economics and other academic disciplines uh serve the interests of the

wealthy and powerful. They end up explaining the things that rich people want. So, you know, the rise, for example, of the idea that corporations should be focused on maximizing profits for shareholders was obviously very dear to shareholders who had a lot of money to fund economists. You know, there's this wonderful paper from the nineteen seventies that is still regarded as you know, one of the most important economic papers of all time, and what it basically says

is corporations are the apotheosis of capitalism. It's the best way to allocate resources between workers and capitalists. It's great, what a wonderful system. Was written by two very prominent economists, and at the bottom it says, you know, this research was funded by the Eli Lily corporation. Well, yeah, I knew that Eli Lily thought that, but you know, and

and maybe those economists legitimately thought that too. But the confluence of those two things is what you get A lot of the time you get economists justifying the things that are best for the wealthy. Um, I think you know, God breath goes too far, both in terms of, you know, saying that this is always the case, uh, and in terms of suggesting that economists are always doing it for the wrong reasons. They're clearly are times when uh, it's a it's a good thing for society as a whole.

But you want to be looking at the whole pyramid. It's not enough to just be uh, you know, writing policies that help the people at the top. You want to know that to be able at the middle and at the bottom also are benefiting. And it's hard because the people at the top undoubtedly have the loudest voices, the most direct connection to the powerful people, the greatest ability to influence the course of policy. And they'll stand there and scream all day that if you just keep

cutting their taxes, growth will ensue. At some point, you know, you want to start asking questions about why economists are still willing to believe something that has been repeatedly disproved for forty years now. So so when we make fun of the economists at the FED who have been wrong, really we should be making pointing out that the entire economics class, the entire all the economists, most of them

didn't see the financial crisis coming. Uh, most of them failed to see in real time the widely broadening economic and inequality you mentioned. Why should we be paying much attention to economists if if they're so bad at forecasting the future and so first off, they are so bad

at forecasting the future. I mean, one of the things I started in the book just because it amuses me, is every decade, every generation of economists, you get some very prominent into economists, often more than one, announcing that the problem of recessions has been solved. It's just plateau. That's just how is it that an economist can continue to make this claim with any knowledge of the history of the claims that have preceded their own. It's just

as mind blowing the arrogance of these claims. But you know, yeah, so economists have problems. It's important to say that economists are also really good at some things. Economics is a wonderful system for disciplining choice making. It really helps you to think carefully about costs and benefits. It forces you to to put into a system and to model the factors that you're considering, the pluses and the minuses. Uh. It allows you to think systematically about choices. That's great.

Where I think we go wrong is in privileging the views of economists about what the goals of policy should be. There's no special reason to think that economists deserve a greater hearing on that subject than anyone else. We as a society can decide what goals we want to pursue, and then economists have have the genuine ability to help us get there. But this faith that they can predict

the future is badly misplaced. Uh. And and the credence given to their priorities I think is badly misplaced as well. My favorite quote from Joan Robinson is the purpose of studying economics is not to acquire a ready made set of answers to economic questions, but rather to learn how to avoid being deceived by economists. And it's it's quite insightful. Can you stick around a little bit? I have a ton more questions. Absolutely. We have been speaking with Benya

apple Maam. He is a New York Times reporter on the Federal Reserve and the author of a new book, The Economists Our false profits, free markets, and the fracture of society. If you enjoy this conversation, we'll be sure and check out the podcast extras, where we keep the tape rolling and continue discussing all things Central bank related. You can find that at iTunes, Spotify, Google Podcast, Overcast, Stitcher,

wherever your final podcasts are sold. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. Check out my weekly column on Bloomberg dot com. Follow me on Twitter at Ridholt's sign up for my daily reads at Ridholts dot com. I'm Barry Riholts. You're listening to Masters in Business on Bloomberg Radio. Welcome to the podcast, Benya, Thank you so much for doing this. This is a subject that I find quite fascinating.

I think when we look at the list of people and institutions that were to blame for the O eight oh nine crisis, I can't help but think of Alan greenspan as near the top of that list. It wasn't just him. A lot of people did a lot of really silly things which all came home to Rooster around the same time. Um, but when you look at the federal reserve. Who stands out as heroes of the institution, and and who do you think are underrepresented in that

that pantheon. I want to start with the villain, because you're right, Alan Greenspand took an oath to be what was essentially the nation's chief financial regulator. And he says that as he took that oath, he had in mind that he did not mean it. And the fact that he was willing to become the nation's top financial cop with the intent of not doing the job, and and worse than that, with the intent of preventing everyone else

from doing the job. I just think that even to the extent that people have held him culpable for what happened in two thousands and date, there is still not a sufficient understanding of how bad and how devastating his conduct as FED chair was for the American economy. So that's number one as far as heroes go. I'm not sure there's a lot of heroes at the FED. That the group think around financial regulation was so pervasive in those years that it was almost impossible to be a

voice in opposition to the prevailing consensus. Everybody knows the famous story about Brooksley Borne, who has headed head of the CFTC, sought to regulate derivatives and was slapped down by who's who of Washington dignitaries, all very much against regulation absolutely uh and and you know she is. It's such a remarkable story because she tried, because she had the wisdom to know that regulation was necessary and the

courage to try to implement it. But both of those things were in very short supply in Washington in those years. It was mostly people outside of Washington, outside of sort of the conventional consensus, outside of the economics community, who are willing to raise their hands and say, listen, there are problems here. H. And you know, we're all familiar with our people who followed this probably know some of

these names. But Raguajan is an economist too. Sure. Famously, at the FEDS conference in Jackson Hole stood up and said that, you know, maybe financial innovation was dangerous. Um. You know, there were people at the FED at Grahamlet who you know, raised concerns about the Fed's unwillingness to regulate mortgage lending. Um. There are instances of people who were willing to to raise these questions. But you know,

it's just when we're gonna look back on it. We're gonna say, how did all of these people come to believe this insane thing? Uh? So wholeheartedly, so completely? How is it possible that they were all blind? Well, that's easy. The history of humanity is the history of a series of beliefs and false things that some last longer than others, but ultimately are revealed as we become more knowledgeable and

more experienced and dare I say more enlightened. The question is how long does it take for us to forget and backslide? Because that seems to happen, um every generation. So let me talk to you about a few other people at the FED that I think are quite fascinating. Um,

you mentioned the Johnson ex Arians. I think it was Paul Volker in his so he has a new book out, but there was a bio he wrote autobiography in the nineties and he I hope I'm not getting this wrong, but he essentially describes getting called to the White House to the map room. And the map room is notable because there are no recording devices like there are in

the Oval Office. And I believe it was Baker and President Reagan, and with Reagan sitting there, Baker says to Paul Vocer, the President orders you to cut interest rates, and Vulcar smiles and nods and says, how low do you want them? Or what do you want and then proceeds to go back to the office and explains to everybody why rates are not only gonna go higher, they're going much higher. Otherwise, these idiots left in their own devices are gonna cause hyper inflation. It will be terrible.

So that was a fascinating conversation. U admission, um, what are your thoughts on on Paul Oker and his role within the Federal Reserve is a seminal figure in the history of the Federal Reserve because he is the guy who implements this shift in the FEDS approach to its job. Prefall Vulcar, the FED, like most central banks around the world, has a very broad conception of its economic responsibilities. It's trying to minimize unemployment. It's trying to, you know, play

a role in currency markets. It sees a financial stability mandate. And Vulcar is the beginning of this period in which the Fed says, no, we have one job. Our job is to control inflation, to stomp it out. We're gonna do that as hard as we can. That's what the FED does, and and he does that single mindedly and successfully over the course of the nineteen eighties. Reagan's role in it is really interesting and a complicated story. Uh. There's a lot of moments that which Reagan is very

supportive of Vulcar. There are clearly times when when he can't take it anymore, or at least his aids can't. But but that relationship aside, it's very clear that Paul Woker, you know, inaugurated a new era at the FED, a period in which economists were making the decisions uh and and their primary focus was on minimizing inflation. So is it safe to say that the economic boom of the nineteen eighties and nineties traces in large part back to Paul Volker? As well as what are we coming up

on a forty year uh? Bullmarket in bonds? How much of that is can we give credit to Vulcan? For I think the bullmarket in bonds by all means make Paul Volker the patron saint. As far as America's prosperity in the eighties and nineties, I think there's a couple of things that often get lost in that discussion. The first is that, adjusting for population growth, economic growth in the United States has declined in every decade since the

nineteen sixties. The eighties is remembered as this period of rapid growth, but only because we had this sharp recession and then rebounded from it. The seventies were not a period of expansion or growth. It was stagflation. But the economy grew faster in the nineteen seventies than it grew in the nineteen eighties. Really, yes, the average annual average growth in nineteen seventies was higher than in the nineteen eighties.

People look at the good years in the eighties and they forget that Volker caused a bunch of bad years at the outset, and maybe that was necessary to clear the way for renewed prosperity. But the renewed prosperity was not as good as what had come before. So I think there is reason to wonder about our memories of that period. The other thing that's really important, and this particularly becomes true in the nineteen nineties, is that the

nineteen nineties really reaped the fruit of earlier periods. The nineteen nineties happened because the federal government had invested massively in technology UH and had built a new industry, a new sector of the economy with public funding that it then turned over to the private sector to exploit and to realize. And that was great, and productivity rose, and we had a genuine economic miracle. But the basis of

that miracle was the investment in earlier eras. And instead of paying it forward, what the federal government did in the nineteen nineties was to sharply reduce funding for the things that had worked previous slee so that we weren't

funding new technology, we weren't funding infrastructure. And one of the really important ones that people miss is when you go into the nineteen nineties, the American adults who are coming into the workforce in those years, the rate at which they have college degrees is much higher than any other developed nation. We had a huge educational advantage during the nineteen nineties. At present, we've fallen off a cliff were now below like thirteen other developed nations in the

share of our workforce that has college degrees. We've lost that educational advantage. How do we gain it by massive public investment in public education during the mid century. How have we lost it by massive disinvestment in public education during the nineteen nineties and since then. So I have a little bit of an unusual view of the Clinton era. I think it was a disaster for the American economy.

I think they basically harvested all of the trees that had been planted in earlier eras and forgot to plant any new ones. Quite quite interesting, you know, when I look at that era of eighties and nineties, everybody immediately thinks of the inter net. But if you want to see some other government sponsored programs, or the outgrowth of NASA and the Space race, semi conductors trace the White

Way back to to that. Everything on the computer side, everything mobile, the GPS and satellites, and any sort of communication that came out of that, all of that comes from original government research. Absolutely. And another thing about semi conductors that people don't know, which is very relevant to this conversation, when when when A T and T invented the semi conductor, the government forced it to share the technology.

A T and T literally held seminars where it invited its competitors rival firms to come to New York for training in how to make semi conductors because the government, as part of its antitrust program at the time, was committed to ensuring that large corporations couldn't monopolize important technologies. So it forced the sharing of semi conductors. And you know what you get from that is personal computers, Intel

and a thing where there's a chip involved. And I think computer cars are now the second largest consumer of chips. It's incredible. It forced IBM to share, uh, the ability to write software, and one of the first companies to take advantage of a company called Microsoft, forced Microsoft to like Google onto its machines. Nobody is forcing Google to

make way for the next competitor. Um. So you know, once again, you've got a role the government played for a long time in enforcing antitrust rules in making space for new companies that it's no longer playing. It's another example of this phenomenon that is quite horrifying, because nothing worse than eating your own uh, your own seed corn

when it comes to that. Um. So, so you start the book, I have to come back to this because I find it fastening, and you start the book during Nixon's presidency, is that because of the shift that Milton Friedman represented or was it really where the post war period pivots towards the modern ear. It's both things, right. So you see that this era, what the French called the thirty glorious years after World War Two, is coming

to an end. Growth is faltering. Policymakers are casting about for alternatives for answers and the answer that they find. Milton Freeman famously says that, you know, the way that you convince policymakers is by stocking the fridge with options, so that you know when they need something when they go there, they opened the door. There it is, and

and his ideas were there. And so you know, beginning in the late sixties and the early seventies, really beginning in the Nixon administration, these ideas become influential and we enter a new period in policy, a new period in economic history. And that's really the focus of this book is the revolution that began in those years, that that began with economists taking over the asylum, no longer technocrats

or or non economic actors. And I have to tell you, I found the book to be, uh, each chapter is really very distinct, and I found the book to be a very um enjoyable read. So one of the things that that only tangentially gets discussed is the issue of fiscal policy and how it affects monetary policy. There's an argument to be made that following the O eight o nine crisis, UH, there was a political response from the Mitch McConnell's of the world, which was, we don't care

so much about you know, the country. We want to just make sure this president is a one term president. He literally uh mentioned our our job one is to make sure this president doesn't get reelected. And so the fiscal stimulus was really narrow temporary tax cuts, temporary extension of unemployment benefits, and a couple of hundred billion dollars UH in shovel ready infrastructure. The argument has been made, following a crisis that size, this should have been a

two three four trillion dollar stimulus plan. So, so the first question is how much did the lack of fiscal response force a monetary response, and and is that the role of the FED is that the proper role the central bank should play. Yeah, so, I mean, as you said, I think it's well documented that this was the Republican strategy.

Politically speaking, it also reflected an economic philosophy. Again that goes back to Milton Friedman that said monetary policy is the only effective lever for for for improving economic conditions. That part of his central goal in the mid century was to convince policymakers to stop using fiscal policy to respond to recessions, to abandon the idea that government spending or tax cuts could help. He argued that that was always going to be damaging to the economy in the

long run and therefore should not be attempted. In the short run. Monetary policy was primary. And you can trace the rise of this idea through the famous you know, the Paul Samuelson, the great mid century economists who dominated the market for economics textbooks, uh, you know, released a new addition every few years, and you can actually watch

economic ideas evolve. The consensus, the mainstream wisdom is sort of charted in those books, and you can follow, you know, from the sixties when Samuelson is saying fiscal policy is really important, through the seventies when he says monterary policy is also important, into the eighties when he says, actually physical policy isn't important at all. Only monetary policy is important.

That is the victory of Milton Friedman, and so there's this intellectual groundwork that's laid to say, basically, you know, government spending doesn't actually help, so we're not going to do it. That's politically convenient for the Republicans, but they also have this intellectual foundation that they can stand on in making that argument, in arguing that, you know, the government should not do more. This was even more pronounced

in Europe and even more harmful there. I think there's no question that a greater fiscal policy response was necessary and would have been helpful. So you mentioned Europe, Look what took place in the UK where they forget fiscal stimulus, they want on full austerity. The argument is not only did it not help, it made the situation worse. It it hurt the GDP there her job creation, and ultimately led to some degree to the rise of popularism and Brexit. Absolutely.

I mean, I think you know we've seen this, This denigration of government, this sense that government does nothing productive and that the best government is the smallest government, is really problematic. It is clear that there is such a thing as too much government. It is clear that spending can be excessive or wasteful, that it can create problematic incentives.

These things are all true, but it is also clear that you can have too little and that you can cut too much, particularly during periods of economic difficulty, and and Britain is living evidence of it. I mean, they've really damaged their economy, the viability of their polity, their future prospects. I would not want to be the parent of a young child in Britain right now. Really that that's that's a serious statement. Um, So what about here

in the United States? We're seeing fiscal stimulus, but not in terms of government spending an infrastructure, but rather in terms of tax cuts and reduce government role. How does that play out here relative to the EU or UK? So tax cuts as an incentive, as a stimulus programmer kind of second best and and politically they've been much more palatable, and so we've tended to rely on them in recent decades. They help, they don't help as much.

The Trump administration actually has increased spending, particularly on defense, pretty significantly. H And that how significantly How much as the defense uptick actually been I don't have the numbers in front of me, but but government spending is actually if you look at the stimulus during the Trump here's the fiscal side boost and spending is pretty close to equivalent to the boost that you get from the tax cuts.

There's been a big increase in federal spending. It's gone a little bit under the radar screen, but it's a big deal. We used to call that weaponized Keensianism. I don't know if people still use that phrase, but you know, under rigg and a lot of money poured into the military helped bankrupt the USSR because their system wasn't as efficient as ours. Yeah, I mean, it's a long standing feature of our economy and and it's sort of a

thing we can all agree to spend money on. It has some real utility, but it's not as beneficial as building roads or building you know, broadband infrastructure, or investing in schools. It's the second best kind of spending. A lot of the money goes overseas, a lot of it gets put into things like bombs that blow up and don't leave anything positive behind. It's not the greatest way

to spend money. It's better than nothing. It's not the interstate highway system in terms of generating a multiplier effect. That's right, so so that that's quite interesting. So, give, given the lack of of fiscal stimulus, what is the role of the Federal Reserve in a post crisis era? So the Fed got left in this uncomfortable position where

it was the only game in town. The only people who were willing to do more to engage the needs of the economy were Federal Reserve policymakers and so they threw everything they could at the problem, not necessarily as quickly as they should have, but they cut rates to zero, and then they started buying bonds in large quantities. They were trying, but the reality is that they were never going to succeed completely. They could not buy themselves revive

the economy. They did what they could. What they did was important. Um, but I think one takeaway from this past decade should be that that, uh, you know, fiscal

policy turns out to be really important. So one of the more interesting and intriguing aspects of modern monetary theory, or m m T as it's called, is that we could do an infrastructure build of a few trillion dollars by having the Treasury issue infrastructure bonds to fund it, put it out there, and then let the Fed Reserve use those bonds purchase those bonds as their QUEI uh, and everybody's happy, the budget's balanced. The FED is basically

now in charge of fiscal and monetary policy. What are your thoughts on that? So it's not clear to me that there is a theory, a clear theory in m m T, or at least I haven't encountered a consensus description of what that would be. But let me say this. It is clear that the United States has fiscal space at present to spend more money, and if that money is spent wisely, it is likely that we would recoup

a return on that investment. That if we invest in infrastructure, if we invest in education, if we invest in you know, these kinds of improvements that over time our economy will grow fast enough, uh, you know, to make those worthwhile uses of public resources we can borrow at low rates right now, we'd be well advised to do so. I don't think you need to necessarily wander into some of the more extreme claims of m m T to accept that basic set of premises about what is possible and

desirable at present. Alright, So, so I'm gonna throw a curve ball at you right now, because what you just said jogged my thought process. One of the nominees for president tags you and say and says, I really want to shake things up. What should I say to the American public about infrastructure spending, about US reinvesting in our future, and about teeing up the rest of the twenty one century? As for America as an economic leader, what advice would

you give that person? I'll say two things about that. The first is that a lot of Americans find themselves looking with envy at the success of uh, you know, Asian countries that have managed rapid economic growth in recent decades. A very important thing to know about that is that those countries took the recipe from the United States. We invented this formula. We invented this formula of investing in domestic manufacturing, investing in education, growing in industrial base, cultivating

export industries. These were American innovations, and and they have spread to the rest of the world and been used successfully by other countries. UH. The lesson of recent decades is that, UH, that type of investment, that type of concerted effort, is productive and beneficial if it's well managed. UH. And so I think, you know, we need to get back to the things that have worked for America in

the past. Uh. You know, if you look at our golden age in the mid century, Uh, it had a lot to do with the way that government policy was managed. And and we do well not to go back to that and its entirety, because there are problems with it and it broke down. Uh, And it's important to recognize that it did so. But there are some valuable lessons there. Um. But this is a little bit of avoiding the question.

But let me tell you my barometer for a presidential candidate. Uh, the American that the iconic American worker is not a steel worker today, it's it's a woman who's providing home health care services for an AGA for an aging baby boomer. That is the rapid that's the most rapidly growing sector of employment. That is the identity of the American blue

collar worker. And the question is what are we doing to improve their life because they're making something very close to minimum wage, they work on too horrible conditions, they don't have benefits, they don't have vacation time, they're easily fired and replaced. Their life is not what it should be. That they're not living the American dream, and they have

no opportunity to live the American dream. And so for me, the standard frinding presidential candidate is, what are your policies going to do to improve the life of a forty five year old home health care worker? Because that person is the person who needs our help right now. Quite fascinating. So let's jump to our favorite questions that we ask all of our guests, sort of our speed rounds on. Let me jump right into this. What was the first car you've ever owned? Your making model? I don't know

what year it was. It was an old Ford Escort, old red Ford Escort that my father gave me when I graduated from college. It had been his commute car, and I inherited it and drove it until it was total. Uh, tell us the most important thing people don't know about, binya apple Bound. Wow, the most important thing. I don't even know how to answer that question. Um, how about

your mentors? Tell us who your early mentors were. You know, I was really lucky to work for some great editors and to work with some great colleagues at the Charlotte Observer. That's where I think I really grew up as a journalist. And so my editor there Patrick Scott and Ted Melnick, who was the data guy there who I collaborated with on a series of projects. I really feel like, you know, I learned journalism and grew up as a person in Charlotte, and so i'm I'm indebted to the folks I worked

for and worked with at The Observer. Any particular authors or journalists who influenced your approach to covering the Federal Reserve, covering the FED specifically, I mean, I think Greg it is kind of the gold standard in our r. I think his his understanding of monetary policy and his clarity as a journalist are just things that I admire enormously. And um full disclosure, he took me to task for calling um Rome pal hawk. I really should have said,

Jerome Pale is more hawk ish than yelling. She's not. He's not a pure hawk. So Greg, here's your Mia Kalpa live and in public. Um everybody's favorite question. Tell us some of your favorite books. What do you read? Be they FED or economics related or not? Fiction or nonfiction? So I read a lot about you know, the ft and monetary policy, but you know that's not necessarily the most enjoyable stuff that I read. Uh I love history,

you know. I My approach to to writing deeply influenced by historians like Daniel Borstein and fernand Brodel, who who saw, you know, economics and history has integrated. I'm very frustrated in general that historians pay very little attention to economics

and that economists pay very little attention to history. So people who work at the intersection of those two things, who see the connections, who understand how much history has been shaped by economic forces, who understand how much economics exists in a historical context, those, to me are are the people that I admire and love reading. Give us

some book titles. Everybody wants a good book recommendation. Well, you know, Fernan Brod I wrote this series of three books, The Wheels of Commerce maybe is the first of them. You can find them, but they're basically is history of of Europe's rise into the modern era. Just fascinating books that that integrate economics and history in a way that you know, at the time was unprecedented and remains deeply influential.

Uh So, I love those books. Daniel Borstian's trilogy on the American Experience just a wonderful history of of the United States that again has this capacity to tell our story much of what is so innovative and important about America as its rise as a commercial power and a commercial innovator. And he really captures that aspect of the American experience in a way that I think most historians failed to do. Uh, tell us about a time you

failed and what you learned from the experience. I already mentioned my my inability to get millions and billions straight in my first banking story, you know, and I know I think you know again to go back to Charlotte. You know, the importance of making sure that all the facts are right in a story is something that as a young journalist I didn't do. I didn't have a

high enough batting average. And you know, I had an editor who told me, you know, if you get one thing wrong, even if it's a small thing, the credibility of your entire story is lost. And and understanding that and internalizing that was was a very important step in in my development. What do you do for fun to either relax or get out of the office. What do you do when you're not in front of a computer writing? I love reading. I guess that's probably already clear. I

like running. I have two young kids, and I love spending time with them. That's that's pretty much a full life. With regards to the Federal Reserve, what are you most optimistic about today and what are you most pessimistic about? So I think that the FED has undergone a really important evolution in recent years, that it has embraced a broader set of responsibilities. That it seems to recognize that, you know, it can't simply pursue lower inflation without regard

to the consequences for American workers. That it can't ignore finantal regulation without regard to the consequences for all of us. That's really important. And I'm optimistic that the VET is going to move forward, uh, you know, with those things in mind, and that that will give it a better chance of of producing good results over time. On the flip side, you've got to be a little concerned about the feds room for maneuver rates are very low while

the economy is growing. There's not much room to cut rates when the next downturn comes. Uh. You know, they can do some bond buying, but a not totally clear how much that helps and be uh, you know, there are limits on that too. I think there's reason to be worried about the FEDS capacity to help if things go south, and reason to be worried about the willingness

of fiscal policy makers to step in. What sort of advice would you give a millennial or recent college grad who was just starting their career and interested in either journalism or central bank and economic coverage, So if you're specifically interested in writing about business and economics, I think one thing that has changed in journalism in recent decades is that it was once the case that the journalism

was much more stenographic. Your job was to sort of transfer the things that important people said to your readers with relatively little intermediation. There's a real priority now on expertise. You really need to know your subject, and so if you know what subject that is, you will serve your cause by by studying it and trying to master it

and becoming deeply versed. The best journalists, the ones that I follow most closely, the ones who most regularly illuminate issues for me, tend to be really not just really smart, but really well versed in their subject, really careful about the details. And that's hard, and it takes time, but

but it will give you a competitive advantage. And our final question, what is it that you know about the world of finance and central banking today that you wish you knew twenty five or so years ago when you were first getting started. Yeah, I mean, I guess you know.

One thing you learn is you get inside any system is how much of it is a little random, how much of it is is sort of arbitrary, and and things that you assume must have sort of a clear and logical explanation turn out to not not actually operate that way. So just I think to you know, have understood that this is true of just adulthood in general. Like you think that there's a reason for everything, and then you know, you become an adult and it turns out that a lot of things just happened. So just

randomness sits out there. Yeah, quite quite interesting. We have been speaking with Benya Applebaum. He is a lead writer on business and economics for the editorial board of The New York Times and the author of the new book The Economists Hours, False Profits, Free Markets, and the Fracture of Society. If you enjoy this conversation, well, have a look up an inch or down an inch on Apple iTunes and you could see all of the previous two hundred and fifth ye or so podcasts and interviews we've

done over the past five years. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. Feel free to go to Apple iTunes and give us a review if you enjoyed this conversation. Uh I would be remiss if I did not thank the crack staff that helps put this together each week. Michael bat Nick is my head of research Atika V Album Run is our project director. Michael Boyle is my producer.

I'm Barry Retults. You've been listening to Masters in Business on Bloomberg Radio