Adam Tooze On How This Crisis Is Different Than The Last

by by the time it actually gets out. Yeah, I'm not even sure it's a joke really, because there have been a few episodes that have been sort of superseded by events. It's been a struggle. So in light of that, I think today's episode might be a little bit risky,

like even riskier than our normal one. Oh boy. Why. Well, the reason I say it is because we're going to try, and I don't know if we'll be successful, but we're going to try and look a little bit big picture and sort of bigger lessons, bigger themes that we can take away from all the events that we've seen over

the last couple of months. And I think almost everyone who tries to project forward on what it all means will probably be looking a little bit foolish in some respect, but that's kind of what we're gonna attempt to do today. I mean, it's what everyone is interested in at the moment.

But as you say, forecasting this is hard because, as we have discussed, a sort of ad nauseum at this point, everything has the potential to change with the current crisis, and we really are in uncharted territory in many ways.

So yeah, sympathy for the forecasters at this point. It's it's a tough call of putting your neck out there for something completely unknown, right, So fortunately, I don't think we're going to make our guests today forecast the future, which is, as you say, extremely difficult even in normal times. But our guest today is someone who has a sort of very good ability to sum up the big themes of the moment and identify what, at essence, what what a crisis is really all about. Who are we speaking to?

So today we're going to be speaking to Adam Two's uh. A lot of people will know him as the author of the book Crashed, which was the sort of magnificent overview of the last financial crisis, and he is also the Catherine and Shelby Colin Davis, Professor of History at Columbia University. And for those who don't know who didn't

read it, Crashed was. You know, there were a lot of crisis books, but Crashed really sort of identified the tensions that emerge from the sort of global dollar system and how that really sort of played a huge part in the coming undone of the economy just over a decade ago. And we'll talk to Adam about what he sees as potentially this is the equivalent stresses that he's seeing in the system today. So Adam, thank you very much for joining us. God, it's a pleasure to be here.

Thanks for having me on your your book, Crashed was. I think it came out in a summer of eighteen. Actually did read the whole thing during a week vacation that I had on the beach. I was a big fan of it. But for those who don't know, I I sort of gave a half a sentence summary. But it came out on so basically eight years after the crisis. What was it about that crisis that took so long for you to sort of really tied together the big themes and to sort of put it all together in

such a such a big work. Well, I think, I mean, I'm I'm somewhat accidental tourists, if you like, in century financial history, and I now found myself in the room

and stuck on this particular island. But I came to it some bliquely, I have to say, I mean, I came to the topic through the history of the Eurozone crisis, which concerned me deeply as as somebody who's deeply passionately identified with the EU as a result of my upbring and then thinking hard about what sort of a crisis that was following the track back to the story really about the bank based crisis as opposed to the sovereign

debt crisis as being a kernel really of the disruption. Um, setting aside the immediate Greek issue, thinking about the instability of the European banking system that echoes through from two thousand and eight, and then basically stumbling across the b I S papers um, you know, the work of Shin and Boreo and others that matt this vary in some sense sort of counterintuitive story of the world before two thousand and eight, not as a world of you know,

driven essentially by current encountering the current accounting balances, trade deficits, and surfaces, but thinking through the flows of money through the the global dollar system and understanding that as one of the ways in which the supposedly American subcrime crisis of two thousand and eight in fact entangled all of

the European banks. And it was really that that set me going, and I did then have I've always heard I've had a longstanding preoccupation with the question of American and Germany American power, which goes all the way back to the beginning unit to World War One, and recognizing all of a sudden that looking at this twenty first century crisis two thousand and eight, I was actually looking at because it were the latest chapter, then the latest chapter of the fed's role as the pivot, the anchor

of the global dollar system, which is a story that goes back to the very origins of the FED just before World War One and then critically from nine onwards. So that's how I ended up engaging with it, and then the public keep publishing opportunity of the anniversary, the tenure anniversary came along, and that's how the sort of

the book came to be released. When it was there is I think if you go back to and subsequent like a strand of analysis, and you think of the likes Assault and Post are perimodil, and all of the people you've had on your show who have been had been in real time teasing away at the problem from

that side. And really what Crash tried to do was to connect that rather technical literature on the dollar system, on the financing, the market based financing of the global banking system, connect that to a grand narrative which had previously really revolved around current account deficits, the standard story of you know, the nightmare of the Chinese treasury sell off, that entire fantasy with support is not what actually happened.

So that was really the wager of that book was that you could take this technical analysis which in some you know, some people will refer to as the plumbing of the system, and connected to broader issues of political economy, which is now of course very much the dumb thing. This is really the analysis where where you guys obviously pioneers, but you could also think of Alphabill Perry to Assault

and Post, Daniel Legarbor. There's an entire genre of macro finance really now as critical political economy of which crashed. I would I would take, just to be one example. I was about to ask, just on that note, how much of that sort of dollar dominance of the financial system slash US hegemony would you say exists today, because people we certainly talk to you you seem to suggest that, if anything, it's become more entrenched than it was pretty

two thousands. Yeah, I mean, I think pross Had's idea of the dollar trap is a is a quite compelling idea, right, because, after all, the the reliance on global commerce, on global finance, on the dollar is is not is not simply reducible to politics or geopolitics, right, and so therefore is not vulnerable to the shenanigans in Washington, or the character of Donald Trump, or any of these other sorts of things.

I mean, it's an incredibly powerful entrenched system which originated in power political shifts in the early twentieth century and the rise of the United States economy and their eyes of Wall Street and Wall Street based banks, and now of course it's sustained my massive network effects. So you know, if you have major commodities being traded in this way, if you have major sources of trade finance being organized

around the dollar. If you have the depth and sophistication of America's financial institutions, then all sorts of actors around the world will begin to coordinate, will begin to use the dollar as their basic vehicle. And you're absolutely right. I mean the drift of the emerging market world, I mean, which is a sort of you know, a monika, which is becoming less and less helpful because if you never remember, it used to include countries like South Korea, highly sophisticated

twenty one century players in a multipolar globalization. Those countries are also piggybacking on the dollar. We know that private borrowers and China even heavily rely on the dollar for funding, so so that indeed does tend to create a sort of a bandwagon, a snowballing dependence on the dollar, which

is very pervasive. So I remember when I read Crashed, and you focused a lot of attention on the necessity of these UH dollar swap lines or swap lines that the Federal Reserve set up with central banks around the world so that domestic borrowers and other countries could get access to dollar liquidity. Since there was the central problem, and I remember thinking at the time, man, if they ever had to do this again, this would probably be

very politically controversial. Maybe people weren't as aware at the time of that, But now here we are and they've done it again, and yet there's about a million other things that people are focused on, so it actually has not gotten that much attention. In a sense. The issue that you identified is as central then is just like it almost feels like a minor chapter in a sense

of the given the enormity of this crisis. Well, I mean, I think from the point of view if the recipients of the swap lines in the current moment, it's been pretty important and um in oh a, it was critical because the people on the other end of the swap lines were essentially the big financial centers in in Europe, right, So if you look at the flow of funds through the swap line system in twenty it's completely different from the flow of funds through the swap line system in

I mean, the biggest recipients, you know, eight were basically the CP and that was because we had these gigantic, monolithic European banks which were engaged in deeply entangled in the American mortgage boom and the financial engineering of the early two thousands and were in serious and the serious funding stress, and the FED was doing its best to support them in Wall Street. And when they ran out of good dollar collateral, that needed roundabout mechanisms for supporting them.

And that's why at that moment the swap lines were absolutely critical. They already then rolled them out to a select group of emerging markets. But if you look at the flow of funds through the system, it's overwhelmingly to the e CP this time around. You know, a lot of folks are monomiting, monitoring this in very closely in

real time, and it's pretty obvious. I think that this time around the main flow of funds in absolute size and also proportionally it is to a bubble bank of Japan, another borrowers in Asia, where we think various types of currency mismatch exists, or shall we say, on the balance sheets, if not even necessarily banks, but some non bank actors in in Asia. So in a sense I agree that the swap lines are as it were less quantitatively significant than they were. But then this is also a very

different type of financial crisis. Um. The one thing that is very telling is that They were rolled out almost immediately as part of the first big spontaneous action by the well, the first big action by the FED on the weekend of March fift so swap lines were immediately part of the package. The Fed wanted to eliminate the possibility really of distressed selling I think, or stressed selling of treasuries, which they saw some of I think um in the second and third week of of March, and

that of course would have been profoundly destabilizing. So that's what they wanted to eliminate. Then here is a very good news from the Treasury's point of view. This is a bit of the system which seems to be working quite well. And then I think it's also quite telling that they created this new innovative mechanism through which, at least notionally, are the central banks are going to be

able to repot treasury is. Again I think basically devised as a mechanism, it was something that Brad Sets at the CFR was arguing for as a way of allowing central banks in the emerging market world to gain dollar liquidity without actually having to sell off any parts of their treasury portfolios. I've been trying to sort of get

this idea straight in my head. But two thousand eight feels to me like a very very financial crisis, like all the problems were sort of isolated in the financial system and then that's spilled over into the economy, Whereas what we're experiencing now is arguably a very very big economic crisis and it doesn't feel like the problems are as serious in the financial system. Is that the right way of looking at it, or what would you say

is actually different about now versus two thousand eight. I think that question is going to preoccupy all of us till Kingdom come. I mean, historians will be trying to pinpoint quite apart from the absurd ninety degree pivots in several of our major indicators. You know, the contrasting headlines of the Financial Times. I think this morning with the oil gag in the negative and unemployment number in New York Times cover Yes, clearly this is a very different event.

I think two and eight in retrospect, looks like an absolutely massive transnational version of a of a classic boom bust cycle, driven by the classic driver, which is the harnessing together of real and financial in the real estate construction mortgage finance sector, and then various other things spinning off from that. But that's kind of what that christ is. Increasingly, I think it looks like very very enormous so quantity

into quality. At some point when a when a classic crisis gets that big, it changes nature because all of a sudden, you know, the American mortgage finance system enrolled basically all of European high finance too, never had to manage a crisis quite like that before. But I agree that has a kind of classic feel, and it's a classic cycle also in that that it's it's tail wagging dog.

In other words, you have some small, dynamic over leverage cyclically sensitive sector which then causes a ripple effect systemic shock to the rest of the economy. The truly unusual thing about this crisis is that we were just full body checked, if you like, the largest slice of the modern economy, which is the service sector and household consumption. We're just stop dead or not, if not stop dead, then subject to an absolutely massive shop So there isn't

the tail wagging the dog quality. In fact, it feels a little bit more as though anticipating that because it hadn't the shock hadn't even really quite arrived yet, let alone the virus itself. In March. Financial markets then really began to panic. And that is in a sense where we suddenly get the very close analogies between or at least some similarities between March and two thousand and seven eight.

It's in that moment, in a sense, when the financial markets realize, oh my god, something utterly unprecedented is coming our way in let's call it the real economy, that you begin to get, as it were, anxiety around the whole range of products and the whole range of credit markets that the FED also found itself intervening in oh seven or eight, that I agree to a very different

The causation is is radically different. And and we of course also don't know what our system looks like under the sorts of stresses that we might be headed into at the pace we're heading into them, and we don't I'm not sure that we really know what the world economy or the American national economy, how it functions, its subject to the kind of hits we're going to be

absorbing over the next two or three months. So is the difference this time around, are one of the differences the speed of the regulatory response, maybe because the Federal Reserve sort of have the experience of two thousand eads and had tools ready to go in some sense, such as the dollar swaplines and a few other programs that were quickly revived. Yeah, I mean asset purchasing. You know, you've got people like low Logan and so on at the FED who just really know how to buy if

they have to epic quantities of assets incredibly quickly. They know what the legal instruments have got to be, they know who their partners are in the market, and so they can just do this. Again, we have to recognize the novelty of what they're doing because it is asset purchasing, but it's asset purchasing or or eight. Yeah, and you know the numbers like a million dollars a second, ninety

billion a day. That's the sort of rate and business that the FED was doing once a month under the Nankee, and they're doing it on a day by day basis, and they're doing it day after day after day. I mean, we're down to forty five billion a day now, but it's still absolutely astonishing in its scale. And for that, you need teams of people, you know, who know what they're doing and for whom it's not just a completely crazy request. Um, so yes, they had all of those

instruments in place. I do think again, we're going to be historians and for a long time we're gonna be puzzling over, you know, the makeup of the FED, in fact, the ECB at this moment. I did a post last night just trying to pull together the input from all of the journalist teams around the world who've been doing

these stories on who are these central bankers? Because we've been Nankee, we kind of had it, you know, we felt and at least as an academic, I felt I had some kind of red on the Nankee because he was after economic historian. We know that he was a student of you know, Freedman and Schwartz as that famous birthday address where you know, he speaks to Milton Friedman and Anna Schwartz and says, you know, you were right, We the FED were wrong in the nineteen thirties, and

thanks to you, we won't do it again. So we kind of had a sense that this was a man who had met his moment in history and were acting that script with Powell, I think most people's read was that he was a bit of a blank somehow, and then now he's ended up as you know, he's going to go down in history as the most activist FED chairman we've ever seen. And furthermore, breaching all sorts of boundaries in terms of the sort of assets they're buying

and in an incredibly close relationship. It's making me want to revisit, like what I think this conventional story is on the FED and the Treasury in oh nine, I'm not sure that it is as it was then as close as it appears to be between Treasury and FED with new can and and POAL because the that's one of the innovative things about what they're doing is how closely coupled is. So there's another dimension to this crisis that we haven't talked about. So obviously, of course there's

the financial dimension. There's the extraordinary political ash, the virtual complete halt of much aspect of the services sector and household consumption, and then I'm wondering, and then of course there's this just enormous stress tests that we're seeing of state capacity all over the world, and the fundamental questions of can governments simply do what's necessary, not on the spending side, not on the regulatory side, but on the basic question of can they get their act together on testing?

Can they implement a public health strategy that involves quarantines or lockdowns in the sustainable way while maintaining the underpinnings of a civil society. And I'm curious, you know, as your I assume in your mind um percolating your ideas for whatever the next crashed is going to be. Maybe it'll come out into hearty hopefully for readers it will be sooner. How much that is an important dimension to you of what the story will be. Yeah, I mean,

this guy's back to this point. Jo, think we sort of slipped away that you had earlier on where you were saying. A lot of us when we were thinking about the swap lines, you know, going forward, we felt that there was a real problem here because the swap lines in O A O nine were kind of fed internationalism, if you like, and fed cosmopolitanism. The FED was providing liquidity to the entire world, and surely in an era

of Donald Trump, this wouldn't be possible. There will be some difficulties with the Trump administration or someone in Congress, one of the you know, one of the hawkish or more slightly bad elements of the GOP would stick a spanner in the works and would trip up the world economy. And this wasn't just us. I mean, I've had conversations with extremely seniors people in the I m F who

wanted to ask me that question specifically. And you know, I don't have any better read on Congress than later in fact, and clearly they're better informed, but that is what they wanted to talk about. So if that kind of fed lender of last resort thing was as crucial as it is, will we be able to do that again?

And as you pointed out, the answer turns out to be that if you've got power the mutition and a Republican in the White House, which I think is probably the absolutely crucial thing here, there are a lot of people in the GOP and Congress who really want to make trouble. Though. I actually think in the Spring Week meetings last week it was probably a constraint on what Nucian thought he could do for the I m F. I mean, because everyone wanted you know, new sdr issuance.

It didn't happen. I think it's a reasonable hypothesis that Nucien really thought it was a bad idea to stir up the sleeping dogs in Congress over that issue, because you know, said Cruis and people like that had had played up very badly under the Abama administration on precisely that issue. So that constraint didn't arrive or hasn't arrived, and instead something else did blind us cide us, which

is just simply this issue of state malfunction. It wasn't It wasn't as it were, the manifest at times to most people, I think, sort of craziness of the GOP that turned out to be the issue. It was, in fact structural capacities, and to some extent also obviously the the negligence of the Trump administration which allowed this crisis in the United States to become a really profound shock.

And of course you could say that's far from coincidental, because where would you expect that but the American health system, except of course, America's public health, It's pandemic preparedness is in fact, you know, world class. So there are other series of you know, there are a series of other

links which snapped in a in an unpredictable way. It did turn out that, as it were, this linkage between global financial management governance on the one hand and domestic governance on the other was critical, but not critical in the way we expected. It wasn't the simple nationalist populism interrupts, you know, benign hegemonic functioning kind of model that was

the problem. It was just simply that several both European and the European states and the US turn out just simply to have failed to have managed this problem competently. That then did landless in a position where all of the trade offs are terrible, your economic choices and your public health options are both bad, and that then caused a panic in the financial system, which the FED and the other central banks have had to react with absolute

massive force too. But I think that for me is where you know, we kind of we do come back to that story. In other words, how does national state capacity linked or not link to global governance capacity. It just wasn't on the axis that we necessarily anticipated. M M. Yeah, it feels like there's a big divergence between I guess the authorities in the US who are managing the financial aspects um like the FED and the authorities who are managing the public health aspects at the moment. Yeah, no

links at all. It seems to me it's really strange if you think about what was hooked up, right, So last year, trade policy and the FED were in a really bad clinch. Right, every time the Trump people and hawkish security people raised the temperature on China, it would send panic signals. And we did get after all, remarkable reversals in central bank policy last year, broadly motivated by the sense that globalization and the world economy were in trouble.

Expectations were really uncertain, there was risk of deflation, new pleasure building up. There was massive radical uncertainty, and so with monetary policy needed to ease right. So there there was. It wasn't a functional relationship, but at least there was a connection. And the other area that folks like me were very interested in building out the relationships and the

connections was climate policy. I mean, as people began to get serious about climate you have folks like Mark Karney speaking up and saying, well, could we have a climate Minsky moment? Right? Could we be facing a really serious disruption to the financial system from stranded assets? We need to be thinking about this hypothetical. But at least there you've seen a joined up connectionship between a kind of, as it were, the client that field of policy and

financial regulation and monetary policy management. But exactly you're saying, I'm tracy. There was clearly there were people in the pandemic world and the national security world who knew the risks there. But it's not clear to me that it would be easy to point to anyone on the financial governance side who could really say they had thought through what the central banks would have to do in the event of a global shutdown as a result of our failure to contain a pandemic. I think that's just a

connection which I don't think it ever been. Now there is a paper by Larry Summers, it should be said, on Pandemic flu from I think twenty six, but he doesn't look at financial stress. It's just a standard matter economic modeling exercise based off stars and saying like how big would the shop be? And it's very big, and that the losses all come from the containment policy. But I don't the paper doesn't look at the financial stability

implications of that diagnosis. Adam, you wrote an essay a couple of weeks ago, I think for the London Review of Books, and you sort of talk about all the different structural flaws that this particular crisis has exposed, and I think three that you identified, at least on the political front or sort of domestic US politics, um, the sort of incompleteness of the European project and we see that with a lot of the tension building up about

euro bonds and fiscal sharing and so forth. And then China, China's own over indebted domestic economy. No one is doing great when you look at the sort of regions and each one of them having to do, uh, you know, sort of make pretty huge steps in a short period of time to address this. Who do you think has

sort of the best shot of emerging? I don't know if it's better from this, but at where there is the will or the capacity to meaningfully address some of the structural problem that they finished going into this, well, I mean it's I mean, I wrote that piece in a very gloomy mood. I mean, as you were saying earlier on and I'm completely agreed with you. I mean, I've done several podcasts recently where we've had to add

a tender late at night the morning. I mean, I wrote that piece, you know, in full max gloom moment, I would say, and I know, broadly speaking, still think it stands up and clearly parts of you know, from the perspective of a kind of you know, left liberal, kind of Westerner. I mean, one of the things which I think is should make us feel gloomy is that it's difficult to avoid the conclusion that our governance regimes

of which we're proud and failed this test. And you know, either short answer to your question, and I think it's tempting,

and I think it's difficult to risk. Is it that it's triba that looks as though it's going to emerge from this strengthened in relative terms, because apart from anything else they're authoritarianism gives them an ability to sculpt the narrative, to put it euphemistically, very brutally if necessary, and as it were, maintained a degree of control over the storyline, which is not something that Europeans or the Americans are papable of or if you like, have a very convincing

story to tell. I mean, you know, the Germans and the South Koreans come out of this looking not bad at all. That in Abrial the case, it's clearly dispiriting. And for all of the kudos I think the Germans will rightly earn for their domestic management of the public health problem, their contribution to the resolution of the constructive resolution of the Eurozone crisis is not is rather different,

shall we say so? Yes, it's difficult, I think to avoid the conclusion that the China's coming out of this first it has at least contained the first wave. If you I was scanning the other day just the the inside story of the global auto industry, because you know, it's very fascinated by how the shutdown actually happened, and it's an extraordinarily interesting case study. And and again and again you read like v W currently only has plants

operating and selling cars in China. So that shift in the balance of the global economy that has been looming on the horizon for over a decade, now you know, it's radically real. I believe the only Apple stores in the world that are opened up also those in China, though there maybe some others in Asia. Now like that that sense of a really quite fundamental shift in the balance, and a quite sudden shift in the balance. Is it's

difficult to escape that. There will be, of course answers and responses that we can make, and I'm sure that you know, the story of china success will be chipped away out because it's clear that they have things that they are hiding and there are clearly costs to it. After all, this was an extraordinary mobilization of Maoist kind of discipline within the party and this extraordinary repressive system of lockdown that they operated for a few weeks there.

But nevertheless, the outcome in terms of their ability to essentially contain it to one big province the size of Italy is remarkable. We are actually talking about some really big picture stuff. But how do those different political systems exist alongside each other going forward, especially given the sort of economic relationship that you described earlier with the dominance

the dollar. How do you square those two things? Well, I mean, this is is how I would I would I completely agree and is it is sort of jaw dropping, isn't it. Um? You know, and last year we were getting quite panicky about the fact that we were realizing just how serious the gulf between China and the United

states might become. You know, we were getting quite panicky about Huawei and Apple and decoupling and all of those kind of memes, and there was a lot of talk about whether markets had really priced all of that in. And that is to reiterate why the central banks, you know, it was extremely costly for them to perform the pivots that they did last year, both Pale and Druggi even more in Europe took huge flak, and all of it pales by compare with the reality that we confront today.

I mean, it's just quite our concerns for radical you know, remember that meme of like everyone's smarting finances talking about radical uncertainty. Well, this is what we're experiencing right now.

It's actual radical and you know, none of us can really in any reasonable and confident way predict what we're going to be doing this for um and that's level of existential uncertainty, which which is just novel in that form, and and it does expose really quite fundamental differences in our in our in our political systems and their ability to frame authoritatively frame, And I mean that in a general sense, not just in an authoritarian fashion, but just

in a convincing way frame an outlook, and without that, how do you do long term investment? Um what is the horizon against which you invest now? And we could make some wild gambles as you were saying, that tech comes out of this looking pretty good, But beyond that, what is our sense of how these things fit together? Given how stock these differences are, it isn't a matter simply a political regime and constitution and the rule of law.

It's also quite fundamental issues just simply about government's capacity. Whose quarantine system do you trust, who can do the tracking that you really need, whose tests are going to be tests that you think are actually reliable. Those kind of questions are going to become key to just basic questions of whether Americans can travel to Europe anymore, and

vice versa. So I joked earlier about you know, your sequel to crash, which will probably come out into your which prized not a joke because I suspect you will write another book on this, But I am just curious started from a personal perspective after you've finished the last book in your mind, where you're like, okay, well that was sort of the one big financial crisis I would see in my career, and now I can go back to being a you know, a non well known academic, like,

how surprised are you to see so many of these things erupt yet again in such a short period of time, based done where where you were headed. Well, I would go back to trace this point, you know, a while back, to say this isn't a financial crisis, like what it is is an absolutely epic, unprecedented economic crisis. And it is also and to pick up President Macross rather more

kind of optimistic typically sort of broad gage reading. It's a sort of anthropological shock in the sense that I mean, I don't know whether you see this I low number, but the I l O estimates that two point seven billion of the global workforce at three point three billion people are currently under one or other form of lockdown

or exiting a lockdown. That's one of the total global workforce. Well, they think one point three billion kids and young people have been furtherough from education, like now the entire planets doing it at once. I mean, it's a completely unprecedented events.

On the one hand, it's totally shocking. On on the other hand, for those of us who are interested in late twentieth and early twenty one century history as being the history of a kind of global interconnection and global interaction, a sort of strange synchronization of our activities, of which the global dollar is one very powerful and important expression. But just one this is you know, this is this is the most mind blowing confirmation of that of that premise.

Think back a hundred years to the worst pandemic of the Spanish flu. No one's talking about shutting India down. The British Imperial administration doesn't really get to grips with

the problem at all. And now you could argue the toss about whether or not Moody's strategy was right, but nevertheless, the government in Delhi felt it completely incumbent to respond, as a powerful global state, as a member of the G twenty, to roll out a crisis response package, and to do it, you know, at warp speed in a society with the limited resources of of India. So that in and of itself is an absolutely sort of dramatic confirmation if you like, the fact that we're in the multipolarity,

which was one of the big themes of crash. So I will absolutely, you know, hands up to saying I don't and I still don't think we're going to see a bank centered crisis like oh eight, that doesn't be our prospect at all. But I'm, on the other hand, not surprised that we're seeing this escalating series of prices, because I will, on the other hand, like most people

also agree that you know that that I was. I was very much for the book I was writing at the beginning of this year was Political Economy and Climate Church, because I was I still am commitsd that you know is the biggest structural challenge facing us. But pandemics fit within that in the sense that they are, you know, as it were, this symptom of our unbalanced relationship with nature and the extraordinary risk that we run through the interconnections of the global system, and our struggle in a

very uneven but interrelated way to grasp that. So at that level, it fits the molds neatly. It is, however, specifically not a shock that I had spent any time in Adam. It was so great to finally have you on. I feel like you're one of the guests that definitely a lot of people have wanted to hear, and in our minds is like we gotta have Adam on. We gotta have Adam on, and finally we had the right moment on it. So I really appreciate you joining us. Well,

thank you for having me on. It's been good, great, so much. Thanks Adam. That's awesome. So Tracy, I do think it was a little bit risky too in the middle of this, like right at the peak, start talking big picture and long term. But I do think uh Adam is particularly skilled at tying really big themes together. I totally agree, but I have to ask, have we done our standard disclaimer about when we are actually recording

this podcast? We have it so for those who are curious, so because the world could change by the time you hear it. It is Tuesday, April, and right now it's at New York Times, So you know, if the world changes by the time you're hearing this, or if this entire conversation sounds completely out of date. That's why I'm trying to think of those big picture topics that we just discussed, which one of them is most vulnerable to sort of changing or flipping in the near term. I mean,

we're talking about international political economy type stuff. It's hard to see an entire political model really flipping in the next week. But in this environment you never know. The only one that could modestly change, to my mind, is probably Europe in the sense that in theory you could have you know, China isn't going to change its economic model overnight, the US is not going to change its

political structure overnight. You could in theory, have you know the leaders of Austria and Germany in the Netherlands come out tomorrow and say, okay, we we we uh, we support some form of debt mutualization. It probably would not happen, and it seems very unlikely, but like in terms of well, like a few people could change their minds on something that she was plausibly it. But honestly, I mean, who knows,

are you making a forecast too? No, not understand. I just think, like in theory, what what's the the thing actually that I think was really uh, sort of striking about. I mean, he made a lot of good points, but this sort of cliche of radical uncertainty and everyone talks about it and the good times and the normal times,

how we don't know the future. But I do think, like I've been thinking about this a lot, like as he said, like We don't really know what life is going to be like in the US and the fall right now. We just don't. I mean, we might have some guesses of some different ways things could be structured, but no one can really get I can't remember ever a time, anytime recent lee in which not only was the future so uncertain, but the future was so uncertain

about a few months from now. Yeah. Absolutely. It's also one thing that strikes me is all these uncertainties sort of you know, last year, when we had the trade war between the US and China, we were thinking about a lot of these uncertainties, like the clash of political systems and economic systems between the US and China, but we were thinking about it at a sort of low level of concern. And now with the coronavirus, basically everything that we worried about with the trade war has gone

into complete overdrive. So the dominance of the US dollar in trade financing, uh, the clash of social and political systems between the US and China, like big picture stuff has just gone into really overdrive. Yeah, it's all at once. Is really is just everything happening at once? Is really how it feels. Is this sort of defined and characteristic of this crisis. Yeah. Yeah, it's a good way to

put it, putting it everything crisis, all right. Uh well, on that note, this has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway and I'm Joe wi Isn't all. You could follow me on Twitter at the Stalwart, and you should be sure to follow our guest on Twitter, Adam Two's. He's at Adam Two's. Be sure to follow

our producer on Twitter, Laura Carlson. She's at Laura M. Carlson, The Bloomberg head of podcast Francesca Levie at Francesca Today, and check out all of our podcasts under the handle at podcasts. Thanks for listening. A