Globalization’s Public Defender

most of us have never seen in our lives. We'll try to unpack it all with a very well known economist who focuses on global economics. But first, Bolda, I thought of you the other night because my daughter is she's very good at matt She's taking a P calculus and she was doing her homework and I confess I'm a little rusty on my calculus. I haven't used it in about thirty years. And so she knows this, and she knows not to ask me any advice on calculus.

And you know, I'm sitting in the room watching basketball and she she comes at me with a worksheet with a bunch of calculus problems on it. I think she sends the panic in my eye and she said, don't worry, Dad, it's not a calculus question. It's a grammar question. I've noticed a grammar problem in this word problem and I and I need you to tell me if this is right or wrong. And I thought this sounds like Fildonna.

Like Fildonna, you would you would like refuse to answer that calculus question until the grammar, as she was resolved. I feel like I'm one of those annoying people who will point out grammar mistakes to other people, you know, even when they're talking, or especially if Bloomberg with with all of our stories, I'll email people, I'll say you misspelled this, and it very rarely goes appreciated. Let the record show you're the one who said annoying, not me.

But by the way, about that, yeah, okay, but the the segway you're waiting for the segway? I know. And and I was thinking about the calculus of global relations right now. I think it's about as tricky of an equation as we've seen in years, and I think we got the perfect guests to solve it for us. What do you think we do. That's a great transition. I wasn't sure where you're you were going with it at first,

but great transition. I'm really really excited to have Adam Posen, president of the Peterson Institute for International Economics, join our show today. Adam, thank you so much for coming on the podcast. Thank you, and thank you for not seguaying to me about being annoying that would have been, or about calculus. Thank you, Adam. I know I'm not the only one who's I've lost all of my my high school and college calculus. It's just gone. It's like a

new language to me. It's great to me. Yeah. But as to her was when you're doing calculus homework, don't worry about the grammar. You're wasting your time. Just just just just georder. I think I think I think your daughter is onto something right A demonstrate it's how the question is phraised. Even if it's a word problem that matters. As you are about to demonstrate, it doesn't matter, Adam.

I want to start out very broadly speaking. I was hoping you could just lay out what the Peterson Institute is for our audience and what you guys are all about sure, thank you. We're a nonprofit, nonpartisan what's called

the think tank or research institute. We are committed to the idea that globalization well managed to open it for your trade remove of ideas and people is welfare and ancing is which is he can speak for better for the people of the world and people of the US, and that there are policies that matter in managing that.

So our staff, which is about senior scholars, half full time half academics nolsewhere are people who have generally served in senior roles in government and at some point in their life got a PhD into some research and now do policy work instead of teaching or instead of making a big map. You know, I want to get into sort of the nitty gritty of the current events around the world. Um, but I wanted to first take a step back and just talk about the notion of globalization. Uh.

And and the term globalists. You know, this has obviously become sort of a a loaded term among many in politics on the right, especially um um, starting on you know, during the Trump administration and now obviously you know, uh, this whole notion of what you know, what's going to happen to the global order of economics after Russia's invasion. Uh. You wrote a really interesting piece on this, asking, you know,

is this the end of globalization? But I was sticking back to when I was a kid, and I think you and I are pretty much in the ballpark of same age, you know, meaning we're very young guys obviously um strapping, trapping bright futures. But I was thinking back to, say, the seventies and eighties, when we're kids, and there was very much a major push back to globalization back then. You know, Japan was sort of emerging as a major

manufacturing powerhouse UM OPEC. There was a lot of resentment towards OPEC because of the oil embargoes of the seventies, and there was very much this sort of nationalist made in America push UM and and year after year you'd hear politicians saying, you know, I'm gonna fix this. We're gonna bring back manufacturing. We're gonna bring back you know, the steel mills and everything else, all these other good

blue collar jobs. But it all ended up to be sort of just talk, right, and through the years it seemed like sort of a further integration of the US and the global economy was almost inevitable, like like gravity, right, you know, um, with better technology, better transportation, air travel, that it was just inevitable that the world was gonna trade with each other more and become sort of more

liberal globally as far as trade goes. So I'm wondering, is this episode we're experiencing now and really which started under the Trump administration, is it a different Is this a game change or a nours it? You know, is it sort of the same idea that there's this pushback, but that sort of that gravity of globalization will will take over again and the world will bend towards that that outcome eventually. It's actually a little worse than you

portray it. Um. The it isn't just since Trump. We we published some research in colleagues did about two years ago where we decided to look at the facts, and the US has actually been deglobalizing or closing itself off more accurately basically since roughly two um, so it's twenty years. It accelerated on their Trump and but it and it got more vocal. But actually we have been falling behind.

And when I say coming behind, I mean that quite literally the rest of the world, including high income democracies like those in Europe and Japan, but also places that you would not think of as terribly liberal or open have been continuing to open up. The US is a very big outlire. It's not just trade, it's for direct investment, it's trade deals, it's immigration, the whole host of dimensions on which the US has been closing itself off increasingly

for twenty years. So you're right that the perception is the globalization most dish other not that wiped out everything in front of it. But that's actually a false characterization. What has happened and I do think is the turning point now, and there I agree with you, is that these longer term worries about China not playing fair and taking advantage of us, and this long term political sense in the US that we we have to protect the the limited number of manufacturing jobs in the world is

the problem. Those things are accelerated and reinforced by what's happening now in Ukraine, by the Russian invasion. And so I do think we're at a turning point where the world is starting to break into economic blocks in a way we haven't seen. As you said, you're in all time. So you have been writing quite a bit just to bring this all back to the recent event. You've been writing quite a bit about this, which is why I'm so happy to have you on the podcast this week.

But in one of your recent pieces, you did write exactly that that the world is splitting into two camps, one center on China, one around the US. So I wanted to ask you to to talk about them, what that looks like and how that develops. Yeah, and I'm grateful to you. Feel done for inviting me on the show and noticing what I've been writing. And then you're doing a think think that God is helping people notice what you're saying. Um, I think the splitting into two

camps isn't going to be absolute. So you know, Trump and his US trade representative Lightheiser had this term decoupling from China, which they didn't really do, but to the extent they tried it, As my colleague at Peterson, Chad Bound and others are documented the failed. Um. But what I do think is happening is what I call corrosion

of globalization. That there were these linkages along multiple lines, including people going back and forth, ideas going back and forth business norms as well as things like trading in hard woods manufacturers, um, and that's going to get increasingly separated. I think actually the trade stuff will continue more than other things because it's harder to control and it's harder

to substitute for. But you know, we're already seeing restrictions on American ownership in China and vice versa on Chinese ownership in the US. We're already seeing a lot of suspicion about Chinese grad students and otherwise students and professors in the US. I think a lot of its Exandrea. But whatever it is, we're gonna end up in a world where there's going to be a lot of restrictions focused on keeping technology moving between the US and China

and between US and allies and Chinese want. And that's a world that probably a slower innovation that reinforces the divisions because you start having different technical standards, you start having different product lines, and and so it just becomes real self reinforcing, you know. And Adam, I want to uh sort of ask you to put on your Central bankers hat um and and listeners who aren't familiar with that, AMA don't read his Wikipedia pages. One of these fascinating resumes.

We would need a whole another podcast to go through it all. But work for some time at the Federal Reserve, the Bank of England. UM. I don't know if you work for consulted with the Bundesbank in Germany. UM long ago. Thank you, Thank you for touting not mine. It's a good one. It's a good one. I encourage people to read it. But I want to talk specifically about UM inflation. You know, one of the things people like to say about this deterioration of globalization is that it will be

an upward pressure on inflation obviously going forward. But you know, when we look at this red hot inflation that we're seeing right now, there's a lot of finger pointing going on. Obviously. You know, there's some research from the FED sort of pointing out the finger at fiscal policy. UM. I think a lot of people are pointing their finger at the FED for keeping policy so loose, uh, perhaps for too long. UM. The de globalization and obviously the supply chain issues that

we've seen around the world. I wonder if if in your head it's possible to rank sort of what the contributors have been uh to inflation. And you know, with the benefit of hindsight, is there anything you think the FED or Congress and the government did wrong far as monetary or fiscal policy to get us in this situation. Yeah, I think that the story is a little more complicated in terms of the linkage between globalization and foreign policy.

I think the reduction in openness it does, uh diminish the amount of downward price pressure you get from abroad and diminishes competition, and over time that's bad for both inflation and productivity. But I think in the short term it's actually kind of disinflationary because it lowers the return on capital because you're investing duplications and redundancies. It lowers the diversification of capital because you're having to keep more money at home, either because of regulation or fear, and

so in the first instance, it slows things down. In terms of why we have such inflation in the US right now, I think a chunk of it is stuff that nobody foresaw. That people myself included lots of much smarter people in the central banking community, didn't fully get just how big a deal it was going to be to reopen the economy. After COVID shutdowns, and in particular how disruptive that would be to labor markets. Now, it's

interesting if you compare the US and Europe. The euro areas saying before the Russians in the Ukraine, their inflation rate was meaningfully lower than the US, and you know, and their difference between core and headline inflation, meaning how much of it was just attributable to energy versus more

general inflation was much bigger than the US. And I think that was consistent with the story that we did much better than the US had done in two thousand eight pen and in the past about looking after people when there was an external but an exologia crisis, in this case, the pandemic, but we didn't do it quite as well as the Europeans. That the Europeans ran their

programs to encourage people to stay in their jobs. They subsidize people working part time or people being furloughed but not laid off, whereas some classic US fashion, most workers who had to get aid had to actually lose their job, and I think that led to a lot of the job switching and bidding and mismatch that we saw um driving up wages. But the other thing, and here people like my colleagues leve a blond charge Jason Furm and

Larry Somers, I think are right. Is the American Rescue Package of early, the big additional fiscal package to the Biden administration path through Congress, really was too much and too short a time. I mean, we we didn't need as much as we spent then, and it was all spent in a pretty short order, and so you did get overheating. So then you turn to the FED, and I promise I won't go on forever, But then you

turn to the FED. I think the FED took a reasonable gamble, which was that if we run the economy hawk, which is a lot of good reasons to want to do, especially since we kept under shooting inflation for years before this UM, there's a chance E company overheat, but we can afford to see how loo we can go. I think the FED took the gamble, but I think they should have and I would have, sitting in their place,

made the same game. But I think by the time the Biden administration announced the American Rescue Package, and certainly by middle of one, it was very clear the gamble turned out badly and they should have been changing policy and admitting they should need a change policy, meaning move towards tightening. By that, I don't fully get what happened

essentially between April and December of last year. Adam. I think I can speak for Voldada, and when I say that journalists like us, we like it when people like you go on forever. So so I love to hear myself talk perfect Adam. What about the supply chains component of this. I heard another interview you did with the Marketplace podcast a couple of weeks ago, and you were talking about how there's this fear potentially with other countries that they're thinking maybe US, the US and others could

start to cut them off. Countries are moving production. I think the term that's used a lot is on shore or on shoring, And you know, we're hearing announcements from from countries like Hungary. They're reporting food because of the issues around supply chains and what's happening obviously with Russia and Ukraine. So how does how does that play a

part in all of this? Oh, it definitely plays a part. Atlanta, and we've got you know, the first thing that we said about supply chains is that they weren't designed and any sort of popped down way they were. They were

they sort of grew up organic. You had these large multinational companies who would make individual decisions at the working level of this departments as I got to cut cost, Oh I can move this from US to China, or from China to all and or if you're German, from Boland to Romania, um and and each individual decision may have made sense, but then it ended up with a situation which was revealed exposed to be we had really

overextended this projects. And similarly lots of small businesses as well as large businesses that oh, this is great just in time delivery. I don't need to worry about inventory. I can get what I need whenever I wanted. Oops,

that didn't really work out. And so I think there is just a genuine learning experience and adjustment that's worth doing in in terms of recalibrating what's in the supply chains and thinking about the more top down the sense as a risky portolio of investments rather than as a system you could rely out. And my colleagues at Peterson I mentioned chap Bow, but also Mary Lovely in particular, have been doing a lot of interesting work on this um.

But then as you mentioned there there it starts being this sort of political angle to it, and that's you angle to it, and that's where things really get as a trouble. The basic economic instinct and analysis is you're better off diversifying than trying to be self reliant, and

you're better off stockpiling than trying to insist on production. Uh. First, directly, just over time, is put your less at risk or where you get yourself from the second, because if you go into a world where everybody's scared the other people won't give them what they want, then you get hoarding, which is what we saw sadly at the start of the COVID pandemic, where the rich country's hoarded medical equipment and vaccines rather than allowing each other the poor countries

to get accessed and so and so. Now we see this situation where Germany made itself much to dependent on one supplier of energy as to Italy in this case Russia, and it would be better if they had been more diversified. But um, you know, uh, that's not the way it worked out. And yet we still have Americans officials like us t R. Ambassador tie or or or even President by himself saying we need to make more at home, we need manufacturing at home. Frankly, it's gonna make us

wor saw. I feel like there is a certain element of politician who wants to bring the manufacturing back on shore, but also cap immigration um. And it seems it seems to me like you can have one or the other. If you try to do, you're gonna be in trouble. I don't I don't see how we couldn't say a fox Con type of manufacturing facility or a semiconductor foundry without you know, some supply of both low skill and high skill skill immigrants to pull that off. Is that

is that basically you know the deal. I think they're exactly right on two counts. First, that for all the talk about economics, these are very much political decisions um that not by the individual companies necessary, but the elected officials. That often it's the same people who are anti immigration are also anti trade, also anti foreigner in other ways. And we saw this in the UK and Brexit as well.

That it you know, it wasn't just this rational decision. No, I don't want to have too much regulation from the EU. The same people who were voting for Brexit were the same people who were nasty the refugees, for the most part, who were the same people who are just generally suspicious of foreigners. So there's that element. But you made a very important point that immigration is critical through all kinds of processes, not just manufacturing services, the functioning of the

US economy. And this has been true across our entire history. This is frankly true going back to the ancient Egyptians where they brought in these the Israelites of the time to work in the fields. You know, you really set your economy back when you don't make good use of the people who want to come work there. And and so this is reassuring. When it is combined for ideological reasons or even unwittingly with anti immigration, is definitely going to fail. I also wanted to ask you how these

trends manifest themselves for the average person. So it's the average American. You know, if if the average American is looking around, how do we see some of these trends playing out? I think you mentioned we're going to have less innovation, but how else is the all changing around us? On an everyday basis sort of yeah, I think well, I mean, clearly, part of it is the short term inflation,

and that's very meaningful people, meaningful for people. Part of it is we're already starting to see less variety in our stories and you know, and evenage sometimes when people say that is, oh, you will feed liberal, you want twenty kinds of trees and competter. But it also means things very practically in terms of what kinds of cars are available, what kinds of computer capacities are available, what

kinds of training frankly is available. Because you start pulling out, for example, the thousands of Chinese graduate students and researchers from the US science system, we don't have enough people to teach a lot of classes, uh, and to to enable us to develop our our science capabilities. And so we're already starting to see some of these things. I think we're also going to see very soon. Um, you know, probably after some correction in the stock marked whenever the

I explain to you, which they will. Um, you're gonna see somewhat lower returns going forward because people are not going to be able to diversify and and money sort of shut up in inside the US doesn't have to elicit as competitive a yield. So I think people are going to really start feeling it very soon. Adam, I gotta say I personally, I do want the twenty types of cheese. Um, you can call me what everyone, I'm I'm done with that. But speaking of food, UM, that's

a big topic these days. I don't know if this takes you out of your ears comfort zone at all, because it's not often that sort of food and grain and fertilizer prices enters the discussion of macro economics. But I feel like they are now and and perhaps will even more so in the future. You know, obviously Ukraine Russia are both big producers of wheat, huge producers of all manner of fertilizers. Um. You know, there's a lot of talk about potential shortages of both. We've already seen

the prices go through the roof. You know, how are you thinking about this in economic terms and really geopolitical terms? I mean, is this the sort of the setup for the type of Arab spring that we saw where high food prices sort of led to a lot of destabilization in the Arab world? Um? How big of a risk is this just for the world in general and the next year or two. It's a very astute question. And again my colleagues of Peterson instut we have some experts

working on this. One is a political scientist, Colin Hendrix, who thinks about this very much and the geopolitical context, but also our colleagues Katherine Ross and Sherman Robinson have worked on food issues. The most important point is to understand that this is very much an issue for the

developing world. And so that's why I say you're very right to mention where example Arab spring, Um that it turns out that Egypt and other parts of North Africa and the Middle East are a very heavily dependent on we think of peter bread for a large part of the diet of for people and be they are very

dependent on Ukraine and Russia for that Um. And again some of what we said about medical technology as rich folk in the U s and I know not everybody in the US is rich, but on average by world standards, So it's Ridge spoke. In the US we get the stuff because we're willing to pay the higher price, and the developing world doesn't. UM and Secretary Yelling Treasure Yelling's latest speech talks a little bit about some of these things. UM, So it is an energy crisis, are very real for

a lot of these countries. The people in these countries that they are net importers of an energy and energy is priced in dollars, which means it's very expensive for people in these countries. So there's a lot going on there that's pretty scary and could have lasting geopolitical effects in the sense of maybe not revolutions, but changes in government, radicalization of people, and social unrest because you know, hunger

and lack of energy is is a big deal. Um to understate it, so I I can just go on. I don't want to, because it's it's it, this is the reality, and it's there are things the globe can do about it, even in the context of global warming. There are things we can do, but it requires a level of global coordination that we were inadequate in providing, we being the rich country governmance UM during COVID and so I'm not very confident we're going to respond any

better this time around US. What what types of responses because we did see the US, the EU and a bunch of other countries response very respond very forcefully to to Russia in terms of all of the sanctions that have been put on, and that a lot of people were saying did show the sort of unity among the cohort of western or democratically uh democratical country. So I think that's a fair point. Um in the piece you

already excited, I've written about that. I think the unity and an activism that the European Union has shown on this being the SANK coordinated sanction for fron not just the US, but Singapore, Australia, Switzerland and Korean is really impressive. But that's and even though that costs the money that is offense, it's another thing to then say, oh, let's worry about the spillovers on people in Africa or South Asia or Central America. UM, And unfortunately those those are

separate issues. And again I'm not blaming the Europeans. I mean, on on a year to year basis, they give five to tenfold in aid UH and open up their markets to trade as much or more than the US does from developing countries. But you know, I just I would there is terrible things that happened during covid UM that's already put burdens on these countries. The US having inflation and having to raise rates put another burden on these countries, and then shortages of energy and food is a third bird.

So you know, people at the i m F, like the managing director and the new deputy Managing director kee To Cobenough, have been speaking about this. But you said at the start about what are the policies, I don't seem much out there in the in the bucket of proposals. I mean, there should be coordinated buying and transferring of of limited resources over a temporary period. There should be strategic reserves like we have for energy, for food and

medicine for people in the developing world. There should be efforts to assure countries that if they are willing to export and sell their grain or or their soybean oil or whatever, that they will be able to get trade in return, because that's the only way you get countries to be willing to export to others. Um And as we mentioned, as we discussed, the Biden administration is not being very good about that. So there's a lot to do um and I hope I am completely wrong about

how little. In my view, uh, the the US is likely to do on this front, God dam to bring it back um soil to the realm where Bill down and I exist in you know, focused on markets, um U, a couple of things. I'm curious what you think about. Um What is obviously there's a lot of talk about how the US and European sanctions against Russia could potentially disrupt the dollars role as sort of the most important

international currency. You know, there's already been talk about UH Saudi Arabia perhaps selling oil to China priced in yuan, Russia's demanding rubles um for its energy. Um So, I'm curious, and from what I've read of yours, I I don't get that you buy sort of the death of the dollar story. Um So, wonder if you could talk a little bit about that, and also what you're thinking about interest rates going forward. I mean, it just seems like there's no lid on rates at this point and nothing

that's gonna stop this ascent in yields. Um So, I'm curious how you're thinking about both the dollar and and interest rates right now. And obviously this is what a lot of us are thinking about. And I'm spending most of my thinking time as the post management. I'm on

this um in terms of the dollar. There's no question that the first instinct of people seeing what the US alliance did to Russian all of ours to Russian companies to boot into the Russian economy, say oh my god, I would be better off if I had some way of getting around the US add some way of having assets to either couldn't be frozen or could be used

no matter what the US did. And this is particularly true for you know, people who borderline criminal regimes, people who are politically deemed enemies of the US, people with cleptocratic reviews. But it's also frankly even for a lot of businesses, individuals, companies, even country that might agree with the sanctions on Russia in the case of this invasion, but then are forced to think, but you know, the US is not that politically reliable. What happens if they

suddenly turn on me? Uh? There shows they're willing to do that. So there is that sense of people thinking, oh my god, I wish I had in alternives at the doll But the fact is there's a different problem that over overrides that, which is you need and alternatives, And if we're in a world where it's not just the US throwing its weight around, but the world which, as we've said, I think is dividing along political to

your political lines. Then you're sort of stuck with, well, I can put my money in China or in Chinese assets, but then can I get it out from there? Will

it be useful to me? And you look at things like the Chinese authorities deciding no, Jack Ma, you can't do an anti I p L because you've annoyed us, or you know, know all of you who owned assets in private school teaching those assets are now worthless, or you know, we're maintaining capital controls on even resident Chinese born people on how much money they can take out

of the the economy. So you end up with a world where people are not thrilled about being under the dollar, but because of the security situation, um the alternatives become even less attractive, and people are pushing more money frankly into say fassets. What are considers say facets like the

dollar UM. So I think over the long term, meaning five years or more, out you will see some pressures against the dollar or attempts to create other financial systems or to build up what the Chinese payment system looks like but for the next several years, I don't see it as as on net having much effect on the dollar. If anything, the general facility environment will lead to more of excess savings chasing the dollar because there's not as

many places the money. So can you actually talk more about that, about these places where money can go and where people will be turning to In terms of investments, I think you wrote recently that there will be new limits on where people can investor savings and that's going to drive down the range of diversification and average returns. So where do you see investors people putting their money.

It's a really good question, and and I think you know it's there's obviously this idea among tech pros and the Britarians and unholy breedings of them that cryptocurrency, cyber

currencies are going to be the answer. I mean, if it it's just like we were talking about the ideology of anti quopalization, the anti statist ideology leads to people saying, hey, this is exactly what we set up cyber for, and be it be a big coin or whatever, because the whole point is, look, the state does appropriate your money. The Russians are appropriating things that the Americans are expropriating. This is why you want an asset that's outside the state.

But again this sort of misses the point. The reason we have assets based on state isstruance, meaning cash and treasuries, is because only the state can guarantee things. And in fact, I think whatever happened that at the crypto fest that

you went to in Florida. Um, the the future for these these currencies is not very good because in the kind of situation we're in, they're going to be confronted with either you're adhering to the sanctions that we're putting on banks in other places to make sure that your your fake burreency doesn't become a way to avoid sanctions. And if the firms agree to that, then they lose

some of their appeal to the libertarian nut jobs. UM. And on the other hand, if they don't agree to that, then they're basically violating sanctions that are subject to criminal prosecution. So you know, it may or may not kill them. But if I were sitting in I don't mean the individuals, I mean these current these fake currencies, UM. If I were sitting in of a regulatory seat in the UTH government right now. I would be using this as my excuse to force as many of these these entities to

choose one side or the other. And anybody who chooses to say I'm not going to come slide with sanction but um, so you know, so then comes what do you what else are you gonna put your money? And then so you're gonna end up. You know. I think the euro potentially is a big winner from this process. UM and the more Europe acts and concert and and the issues, they have a real opportunity to issue euro bonds.

There's an alternative safe asset to the US UM to the dollar, and and there would be huge demand for that UM. But besides Europe, I don't see any other new asset classes that will will be able to retain all the attributes you want, which is liquidity, property rights, and wide acceptance. Mike, just to catch catch our listeners up, Adam is referring to the cryptoconference that I'm attending this

week in Miami. Yeah, Gildana is surrounded by that what Adam called the unholy breed of techno bros and libertarians. But that I hope you run it a Lambeau for the week. You could put that on the expense account rental Lambeau. You think, I think we should, I'll do it. We should fly Adam down to sit in the back seat of the Lamb but I'm not sure they have back seats actually, but he could sit in the Lambeau and you could, you know, give rides to techno bros.

And have Adam. That would be a good would be a good separate, separate podcast. I I wanted to ask you a little bit about Um Peterson's relationship with the government there in d c UM and the White House. From what I read, you know, uh, you know Peterson. Obviously, to me, it sounds like you try to take a nonpartisan, sort of objective approach to things, UM. And you've formerly had a dialogue with both Republican and Democratic administrations, you know,

the Bush administration, the Clinton administration. UM, it sounds to me like that all sort of ended with the Trump administration and correct me and if I'm wrong about that, But I'm curious, what's it What is it like now? Is there again sort of a dialogue with a Biden administration?

And if you know, you've got five minutes with Joe Biden, what would sort of be your advice to him right now with this this economic situation very clear, I do not have access to the president, and uh it is very rare in my career that I have had access to President may be president. Um. But we are generally, with the exception of the Trump years, seen as people who honestly are trying to make a difference on policy,

people whose views broadly are worth considering. Even if it turns out that we uh might disagree on some things that people who are evidence based, and therefore, as a result of all that, people are reasonably influential in certain spheres. And I mean that's the goal of being a think tank, to be seen as in line with your values, honestly

making arguments that the policymakers should consider. And um. And occasionally you get residents and you're able to get them to do things you want them to do, com persuade them that they should do it. So under the Trump administration, like people in all kinds of fields and areas, you know it was your political enemy. You disagree with us, therefore we're gonna say nasty things about you. I'm grateful

and glad we never got horribly attacked. We never got that by you know, some some flash mob either on the Internet or in general, that the Trump associated people have been known to sit on people they don't like. We've been fortunate that way. But you know, we essentially, with the exception of people at the Council of econocguisers, we essentially had no contact with senior officials in the Trump aministration in the forty years of the institute's existence

or thirty five years prior to that. UM, we had varying degrees of influence, but we always were in conversation. UM. We were in conversation constructively with people in the first Bush administration, very actively in conversation with and hope helpful I think to people in the Plan administration. We continued that in the second Bush administration. We continued that in

the Obama administration. So then you get to the Biding administration, and you know, it's like again, like everybody else, nothing special to us. The Bid administration respects will of law, and respects the idea that people can disagree, and respects that you should try to do the best thing in government, and whatever else you think of the Buying administration, those three things are very true and are good things. So we do have some resumption of normal interaction with senior

officials in the administration. But big but um the administration, including some people I know well personally and have spoken to, is in I think, a very different and wrong position on a lot of trade issues and a lot of globalization related issues. And they believe that people like us and some of our current staff and affiliates who were officials in the Clinton and Obama administrations were equally as wrong in their approach to trade and globalization, and that

it's politically and economically important to put that aside. So we are agreed to disagree, and we don't have anywhere near as much interaction with the people on the same trade side of the administration as we do with people on the finance macroeconomic side administration. That's fair, I mean, that's very different from being shut out and people denying

what you say. But I wish we had a bit more opportunity to persuade some of our colleagues in the Biden administration that where they're essentially continuing Trump administration policies on immigration, on trade, on foreign direct investment, they're making a mistakes in terms of globalization in this scenario that

we've been talking about about the corrosion of globalization. I actually wanted to ask if what the upsides are to this, because I heard an interview recently with a Washington Post reporter who actually was talking in response to one of your recent articles, and she was going over everything we've just been talking about, but she was saying that there is potentially some upside and that, for instance, millennials are welcoming to some of the aspects of some of the

changes that we see, including maybe better workplace practices and that type of things. So I want to ask what some of these maybe more positive developments might be yes and and there. For example, I frankly agree with a lot of the things the bid administration has wanted to do, even though they didn't get through Congress yet a lot of them, um, and I agree with a lot of

things they're doing on executive order basis. Well. The sad fact is that the US treats its workers worse than any other high income democracy, at least in economic terms. We we we give a lower shar of the economy to labor wages as supposed to capital. We do not provide universal health insurance. We do not provide universal higher education. We do not provide high quality education. We don't even

provide water. It's drinkable in some places. And even in countries that are far behind US in perr capita income, they mostly do provide all those things additionally at some economic costs, but I think justifiably and not at huge economic cost. These countries have more labor regulation that protect workers. Um, they protect them more from abuse by by their employers, they protect them more from uh, what happens since they get unemployed, to protect them more in terms of health

and safety. You know, the US is totally behind, in my view, on all these things, and you could move the US along way in that direction before getting anywhere close to where the economic costs become large versus what

you're doing to help. And the Biden administration has heard people, including the current nominee for the Federalers or Board of Governors, Lisa from Michigan State University, pointing out that lost it's not only that, it's not only unfair, but you're leaving money on the table in the sense of all this talent long women among people of color, that you're not

fully developing and using, and I think that's undeniable. And although on that issue, uh, we're no less, we're bad, but the differential between our badness and you say European badness is just great. Um. So hopefinitely, Donald. When you talk about the younger people and what they want, you know, I think it would be a great thing if we got more political pressure for that, uh, that including the

major acts to make it easier to unionize. That including much higher health and safety standards, which to me would be a very logical conclusion of the COVID experience. Um. The removal and a free market way of some of these restrictions state by state about what your qualifications are. The removal of some of these terrible non compete agreements or nondisclosure agreements. Said, workers in very you know, non technical jobs or not like fancy consultants still get constrained

so that they can't change jobs easily. There's a lot of stuff. A colleague of ours at Peterson who's primarily at m IG Sloan School, Anna Stansbury, has done some very powerful work saying, you know, you can raise them in on wage, but even before you do that, you got to make sure the workers can force employers to actually pay them in a wage, have to enforce it. Um. There's a whole agenda to be done, and it is

very worthwhile to keep asking the obvious question. You know, if Germany and France, and England and Australia and Canada, for that matter, even Spain and Portugal, you know, manage to provide all this for the workers and their economies, don't pray eater, why don't we? Yep? Absolutely well. But I will say there's one aspect of this podcast where globalization is very very very important, you know, or you know what I mean. The craziest, weirdest thing, the craziest

things we saw this week. I've got a special global crazy thing for Adam. But first let's let's hear yours first. Well, I'm going to go with something that I've been seeing at the bit coin Miami conference this week, and there's a couple of sort of uh, you know, attention grabbing things that have been happening. One is that the Mayor of Miami unveiled a statue of a of a It looks very much like the charging bull statue on Wall Street, except this one is more uh, I don't know it

sort of looks like a transformer. It has laser eyes and it's meant to speak to the crypto crowd. And then just hearing some of the panels and some of the speeches. Mike Novograts who is you know, he's the CEO of Galaxy Digital. He came out and he said he could see the quin going to a million dollars eventually a million dollars per coin, so that he doesn't own any of that interests interest, no pually effective analysis there, I'm sure filled outa your conference is uh, there's an

abundance of crazy things. Well to well to wrap them up all the ones you saw next week too, because I think you're there or something. Yeah, how about you, Adam, have you seen anything crazy this week? Yeah, there's a kind of crazy stuff out there obviously. Um. To me, the craziest thing is I is the disjunction between currency movements and reality. So you know, Turkeys there, they've got I think a six annualized inflation rate at the moment, which is a lot, and yet somehow are no I'm

still going and the Turkish lira hasn't gone to zero. Similarly, I'm happy to be in London at the moment, and I love London. As you mentioned, I used to work at Bank going on as a PC member for a while. But you know, I look at Briggs that, I look at how badly the U K is in terms of labor supply and energy supply and market opportunities, and I'm like,

why the hell is the pound up and stopped? They've stopped supposedly taking money from Russian all of arts, so I really don't know what's keeping the pound up anyway, those are the things i'd be looking at. That's pretty good. That's pretty good. And now I've read the rule is back to where it was before the word begin Yeah, I mean that I just have to be very clear that the you know, as far as we can understand it. And I callague something coming out of this. That's because

there's no actual the number is whatever. It's a it's a print on the screen, not not a true. Uh not a true. I well, Adam, I'm going to leverage your Bank of England experience for my crazy thing because and correct me if I'm wrong. But I picture when Bank of England policymakers get together that about of the discussion is official business, and then the other is all about soccer. Is that Is that a good ratio, you think, Bradley, It's all about cricket, which I even understand. All right,

I'm sure there's some football. I'm sure there's some football. Now there's some but all right, well, what a cricket crazy thing next next week. But in this week one of the most rage inducing incidents in international football for fans of the English side was in Night six quarterfinal World Cup game. Uh. England was playing Argentina, which had

the famous player Diego Maradonna. I've actually talked about this on the podcast before, but Maradonna scored in that game what's known as the hand of God goal, because he went up for a header and it went in and the refs didn't notice that he had used his hand, uh, but all the photographers caught it. The replay showed it. In England fans were outraged, but the goal went in the books and they asked him afterward, they said, well, how did you score that goal? Wasn't it a handball? Actually?

And he said, as a little bit of the head of Diego Maradodonna and a little bit of the hand of God. That was so famously became known as the hand of God goal. He scored a second goal in that game that was much more impressive. He charged like sixty yards straight ahead. Um and all the defenders were expecting him to fake left or right and they kind

of dumbled over themselves, but he charged straight ahead. And Mervin King, the former head of the Banquette of England, actually referenced that in a speech one time, saying, you know, policy can work the same way the markets expecting us to go to negative rates, and that alone is influencing the markets. Um uh, so that we don't have to actually go there. So a famous goal, albeit a very bittersweet defeat for England. Now how do we get this

to the craziest thing? The jersey Baradonna wore for that game is up for auction at South of Eyes. Um and let me, I'd like to keep us a poker face when I tell you about these things. Um So, I'm not going to sort of hint at what the uh what the value of this is, but I will read one quote from the auction house and they call this the moment is iconic in the history of sports. They're going to say this shart is on a small list of the most important sports memorabilia items in the world.

So Maradonna's shirt where he were the hand of God, he were during the hand of God, gold and what's called the goal of century, the second goal he scores up for auction, Bildana, what do you think SOBS is expecting for this jersey? I'm going with a hundred twenty thousand dollars? Hundred twenty dollars? What do you think, Adam? If this were prices right? Uh? What you what would you bid for the Maradonna jersey? Thunder fifty million rubles? I got to break out the currency translator to figure

out how much that is worth. I think you're probably closer though. Four million dollars five points too. I'm sorry, four million pounds five points two million US dollars they expect for this, and let's study. English soccer fans get outraged to me for even bringing up this episode. I want to point out that this may have been the goal of the century, but that shirt is the trade of the century because at the end of the game, Maradonna swaps jerseys with the English midfielder Steve Hodge, and

he's kept that jersey this whole time. And now is this deciding to deciding to put it off. So I'm shocked by this. Baradonna had the goal of the century. I think Steve Hodge has the trade of the century. Uh so, I'm quite sure the shirt he gave he gave a Manadonna is not having that resale. It's probably not having that resell. I would agree. I would agree. But my prediction is some some London bloke is going to buy this thing and set fire to it in

the middle of London. It's a prediction actually, and turn it into an n f T. If you set it on fire, you have to turn it into an n f T. It did you get you two bites at the Apple, Adam posing It was a real treat to hear your thoughts. Um, just absolutely perfect timing to have a guy like you on and share their insight with us. We really appreciate it, and hopefully we can bring you back some day in the future. That'd be great. Thank you so much for having me. I enjoy your podcast

and I appreciate getting partaking the fun. Thanks, thank you, Adam. What goes up? We'll be back next week. Until then, you can find us on the Bloomberg terminal, website and app wherever you get your podcasts, and you can find us on Twitter, follow me at Ring Anonymous, Balbata Hirich is at Bobana Hirich. You can also follow Bloomberg Podcasts at podcasts. We'd love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. What Goes Up is produced

by Magnus Hendrickson and Stacy Wong. The head of Bloomberg Podcast is Francesco Leavy. Thanks for listening, See you next time than before.