The Crash: What 1929 Has to Tell Us About 2025 with Andrew Ross Sorkin

We all know the date. But what really happened in October 1929? New York Times financial columnist and DealBook founder Andrew Ross Sorkin joins Katie to discuss his new book, 1929, which demystifies one of the most famous (and infamous) chapters in American History. Through extensive research into letters and diaries of the era’s biggest players, Sorkin reconstructs the chaos and conviction of a world on the brink. How the bankers, politicians, and investors thought they were saving the system even as they helped its unraveling. It’s a conversation about how good intentions can spiral into catastrophe—and why the real lesson of 1929 is not to dance while the music plays, but to remember that, at some point, it always stops.

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Episode Transcript

Speaker 1 (00:00):
I hope this is on the podcast you guys do outtakes.
I just want you to know this is a dream
for me because the last time we were sitting across
the way like this was literally on the Today Show.
I can't even think about when that was. I want
to say, maybe during the Martha Stewart trial, maybe back
then or even earlier, and you were there and it
was like the Queen was there. I couldn't even understand

(00:24):
what was happening. I was just beyond myself.

Speaker 2 (00:27):
And look at you. Now, you're such a huge star.

Speaker 1 (00:30):
No, nor you are.

Speaker 2 (00:32):
And I'm so proud of everything that you've accomplished. I've
always felt that Andrew should be co anchoring the Today
Show personally, but you've done pretty damn well on CNBC
and The New York Times. So thank you for being here,
thank you for having me. Let me go ahead and
do the intro. So what really happened in nineteen twenty

(00:54):
nine and why does it still matter? Nearly a century
after the most devastating crash in a mayor and history
deal book founder, New York Times reporter and CNBC host
Andrew Ross Sorkin has unearthed the human story behind at
the ambition, the greed, the blind faith that the boom
would never end. In his new book nineteen twenty nine,

(01:17):
Sorkin shows how that era's delusion still echoes today in
our markets, our tech obsessions, even our politics. We're going
to be talking about what history can teach us about capitalism, risk,
and our endless belief that this time it will be different. Andrew,
I'm so happy to see you.

Speaker 1 (01:36):
Thank you for having me. I'm so excited to do
this with you.

Speaker 2 (01:38):
First of all, you know when I saw this book,
I heard about this book, and then I actually put
the book on my scale. I thought, how the hell
did you find time to write this. You are the
busiest human being on the planet. You do squawk Box
on CNBC every morning. You write fantastic articles for the
New York Times. You do deal Book, a newsletter, the

(02:00):
deal Book Live event.

Speaker 1 (02:02):
What the hell it took me eight years, that's the answer.
I don't play golf, I don't do other things. I
do have three children I do who are so happy
that this book is over. By the way, but I
would do this on airplanes on weekends, at nights. I
would be sneaking little time in at any moment I
possibly could.

Speaker 2 (02:22):
So what was it about nineteen twenty nine? Andrew? I mean,
you have a choice to write about so many different
interesting moments in history and what's happening today too, because
the world is just exploding. So how did you decide? Gosh,
I really want to write about this one specific year.

Speaker 1 (02:40):
So I'm always chasing interesting, which oftentimes means chasing failure
and no, because I oftentimes think that's where the most
drama is. It's where the most interesting characters are. It's
where we can try to understand things that we do
well and things where we may need to do better.
I had written this book To Big to Fail in

(03:02):
two thousand and eight about the financial crisis then, and
people used to ask me about nineteen twenty nine and say,
how does two thousand and eight compared to nineteen twenty nine,
And I'd always be like, I don't know. I think,
like most Americans, we knew something very terrible happened in
nineteen twenty nine. We all sort of have a vague
notion that the Great Depression happened. Then the stock market fell,

(03:23):
But I didn't know who the people were, what they
were saying to each other, what their motivations were, what
their incentives were, Who's sleeping with who, what's going on here?
I mean, I really wanted to know these things. And
so I went on a vacation actually with my wife,
like a real nerd, and I brought all these books
with me about different characters in nineteen twenty nine and
La Da Dah, and they were all written in the

(03:43):
sort of the nineteen thirties forties, when most famous books
was written in the fifties. Most of my economists sort
of talking about them in sort of economic terms and
structures and charts and all of these things, and I
sort of walked away saying, there's got to be more
to this, more human drama, human drive. Look. The books
that I always loved were things like, you know, Den

(04:05):
of Thieves or Barbarians at the Gate. These were sort
of these great dramas about business where you felt like
you were watching a movie. And I thought, I wonder
if I could do that. And I happened to be
at Harvard University giving a speech and I got there early,
which you know me well enough to know I am
never anywhere early, and I had this extra time. I

(04:25):
walk into the library there, Baker Library, and I say
the archivist, Kai, look at these boxes you have from
the late twenties, early thirties, and there was a guy
named Thomas Lamont who was running JP Morgan then, and
his family had donated all of his papers as letters,
his diaries and all the things. And I open up
this box and there are these transcripts in the box

(04:48):
of his conversations. As secretary would keep these transcripts of
him conversing with Roosevelt and Hoover. It was a transcript,
so it would say what he said and what the
president said. And I thought, wow, I hadn't read this
in any of the books. And they're talking about all
the things that are actually happening. And by the way,
not to bring this to today, these conversations are like

(05:10):
the conversations that like all these CEOs are now having
with Trump.

Speaker 2 (05:13):
Yeah, all the time, and we're going to talk about
the parallel.

Speaker 1 (05:16):
But I'm thinking to myself, oh my goodness, Okay, could
I take that kind of material and do this writ
large now. The truth is the archivist said to me
that she had read to Bigger Fael and she said,
you're not going to do this book. This doesn't exist
because the material is not there. It's there for this guy,
but the other people you're gonna struggle.

Speaker 2 (05:36):
And you took that as a challenge.

Speaker 1 (05:37):
I took that I didn't want to believe her. Now
she by the way, she was partially right. I think
most historians sort of find two or three or four
archives and then they excavate the archive and they really
just go deep in the archive. The challenge in this
case was there really wasn't like one or two or
three places you could go. It was you had to
be like needle in a haystack situation with you know,

(06:00):
fifteen twenty thirty different places, and you'd almost have to guess.
You'd almost have to say, Okay, well I don't have
an archive for this character. But he might have called
somebody or talked to someone after Well, who are the
twelve people he might have talked to? Okay, I'm now
going to go to their archives and then pray to
God that I'm going to find some letter there. And

(06:20):
sometimes you would and sometimes you wouldn't.

Speaker 2 (06:21):
Tracking all this stuff down sounds like it was more
than a full time job. And I know that you
enlisted these grad students during COVID, right, So talk about
I mean, honestly just thinking about how overwhelming this task was.
How you were able to track all this stuff down.

Speaker 1 (06:39):
Well, So one of the things I did, and this
was sort of maybe the mother of invention. During COVID,
I had been going to a lot of these libraries.
I had a researcher who I'd worked with early on
and was planning to spend the time in the stacks,
and I ultimately did, by the way, spend extraordinary amount
of time, maybe too much time in the stacks. But
during COVID, you weren't allowed in. So we would call
the librarian and say, is there any student who's allowed

(07:02):
in the library. Sometimes they had a dissertation or a
thesis that was due, and so they were allowed. Those
like very select students were allowed in. And so I
would then pay the students.

Speaker 2 (07:12):
How did you find them?

Speaker 1 (07:13):
By the way, the librarian would usually say, I'll give
you some emails of some people go for yeah, and
then you'd pay them. And then you'd say, I need
to find box one fifty two or whatever it is,
and I need you to take a picture of every
page in one fifty two, and we'll set up these
sort of elaborate drop box folders and then you'd read it.
It was a very tedious process, but it was actually

(07:34):
quite helpful.

Speaker 2 (07:34):
I have to say, how many grad students did you
work with, and I hope you acknowledge them in the book?

Speaker 1 (07:40):
Did you Yes, a bunch of them? I do a handful,
only a handful. The truth is that after the pandemic
was over, I oftentimes found myself back at a lot
of the same libraries because one of the things I
really did learn was you almost felt like you needed
to see everything because you were worried that something was missed.
Maybe there was a box that you didn't know to
look in. I know about all this history stuff. You know.

(08:02):
Some boxes are indexed so people know what's in them.
Some boxes have nobody knows what's in them, and sometimes people,
as a result, don't even look. And that's where the
great sort of needle in a haystack situation comes into play,
because sometimes you will land on something go ah, that's amazing.

Speaker 2 (08:18):
Now I understand the eight year process. So you amass
all this original research, Andrew, and you read it, you
learn about all these specific characters, and you write this
tone about the year. And I'm curious as you read
and sifted through all these stories. What was the theme,

(08:40):
What surfaced that made you think this would make such
a compelling story, and what was that story?

Speaker 1 (08:48):
I think the animating idea for me was a the
people themselves sort of the human condition, and what was
happening in the nineteen twenties was just so fascinating to
me in that this was like a boom like nothing
we've ever seen it. Maybe it's a boom like today
we're having with AI or something, but it was like
a generational shift in the whole country. So prior to

(09:12):
nineteen nineteen, nobody ever took credit, nobody borrowed money. It
was considered a moral sin in America to borrow money,
like you just wouldn't do that. General Motors started doing
that actually helped them sell more cars, and then Sears
Roebuck clocked what was happening and said, okay, we should
do that for appliances. And then a guy named Charlie Mitchell,
who ran a bank called National City later on become

(09:34):
City Group you know now, said okay, well we can
do this too, and we're going to lend people money
so that they can buy stocks. And there was this
explosion and all of these people became celebrities, business people, CEOs.
All of this was the celebrity all of the things
that are happening now. You know, Elon mus Sam Altman,
Jamie Diamond, That like really started in the nineteen twenties.

Speaker 2 (09:55):
And it was all because of credit.

Speaker 1 (09:57):
And it was all because of credit, because all of
a sudden, everybody gamble and brokerage houses start emerging on
the corners of streets, like the way they're Starbucks today.
I mean, they're just everywhere and you could go in
and you could literally give them a dollar. If you
put down a dollar, they would give you. They would
lend you ten dollars. So as the market's going up.
And by the way, when I say the market's going up,

(10:17):
it's not like going up ten percent a year. In
nineteen twenty eight to the year before nineteen twenty nine,
the market went up forty eight percent. By September of
nineteen twenty nine, the market was up ninety percent. So
this was like free money and people, you know, they
feel wealthy. They're running around, they're doing all of these
crazy things, and it was just so fascinating to see.

(10:40):
I don't want to say greed, but I think the
human condition is to want more. Everybody wants more, and
people knew that this was getting out of hand. It
wasn't that nobody was saying, you know, this isn't crazy.
There were cassandras in the room, but nobody really wanted
to stop that. The party was going, the drinks were flowing,

(11:01):
you know what.

Speaker 2 (11:01):
I mean, wealth was growing.

Speaker 1 (11:03):
Well, there's a great line. It actually happened right before
the financial crisis in two thousand and eight. Guy himed
Chuck Prince, who was actually the CEO of City Group, says,
you know, when the music's playing, you have to dance.
And these folks in the nineteen twenties they were dancing,
and I thought that was it was so interesting to
see all of those component parts and then to see
the mistakes that they were making along the way. And

(11:25):
the story also goes in many ways actually beyond nineteen.
I mean, ninet twenty nine is sort of the pivotal domino,
but the story really goes through the summer of nineteen
thirty three because and I think that will also maybe
change your impression of nineteen twenty nine. People think like
there was some kind of great crash, the great depression happens.
That's not really what happens. It's like there's a series

(11:46):
of crashes actually, and then a series of terrible decisions
that get made in Washington, oftentimes in conjunction with the
CEOs and bankers who are trying to influence the president
and tell them crazy things that really lead to what
ultimately turns into the Great Depression.

Speaker 2 (12:03):
Before we talk about this moment, actually two moments in
nineteen twenty nine, and what happened in those bad decisions.
I'm fascinated by the Roaring twenties, you know, and was
this kind of environment or atmosphere where everybody was like
going crazy and live and large. Was that impacting everyone

(12:24):
or only a certain segment of society.

Speaker 1 (12:27):
It's a great question. So the inequality was real in
nineteen twentyine, very similar to now. But I do think
all of this was sort of under the guise of
democratizing finance. So you did have the quote unquote ordinary
American going into these effectively gambling salons otherwise known as

(12:47):
brokerages to try to participate in this dream. There was
this almost lottery like idea, but also, by the way,
a real shift in what I even describe as the
American Dream. You know, prior to this period, people really
did to talk about the sort of Horatio Alger story
being the American dream, the sort of get rich quick
fantasy of capitalism or whatever however you want to describe it.

(13:09):
That was a phenomenon of the nineteen twenties. There was
also a technological shift too, happening. So here we are
on a podcast with video. The hottest stock in the
nineteen twenties was tick or symbol radio.

Speaker 2 (13:25):
I knew you were going to say.

Speaker 1 (13:27):
RCA, and that was like the Nvidia of its time
or something. And everybody was going crazy because they thought
this is going to change the world, just the way
we thought the Internet was to change the world, just
the way we think AI is going to change the world.

Speaker 2 (13:39):
It's amazing how many similarities. And I do want to
talk about that in a moment, but first I want
to hear about some of the characters that you really
learn about and that you profiled, and whose diaries you read, etc.
And letters. I think a lot of people think, oh,
Hoover Rose about and maybe Carter Glass when they think
of this whole episode in American history. But let's talk

(14:02):
about some of the others that are less known but
will be now because of your book. Thomas Lamont, managing
partner at JP Morgan. Just tell us quickly about him, Okay.

Speaker 1 (14:11):
So JP Morgan was considered like the most important bank
in the country still now is now was then? He
really was the guy running the bank. So the guy
named Jack Morgan, the son of JP Morgan JPMorgan had
died at this point, was ostensibly the CEO, but Thomas
Lamont was really the man who ran the bank. And
he was the ultimate sort of client guy. He believed

(14:32):
that if you could just get a bunch of people
in a room, like the right people, you could control
the world. And he would have dinner with Hitler and
with Mussolini and with Roosevelt, with Hoover. You know, this
guy was just he was everywhere and everything. He was
befriending all the journalists, so he was.

Speaker 2 (14:48):
With Schmoozer and Chief.

Speaker 1 (14:49):
Schmoozer in Chief. He was whispering in everybody's ears. This
was that guy. And the truth is he tried to
control this thing, but it sort of got away from him.
So he did believe that somehow he could keep all
of this from bubbling over and then October ninet twenty
one comes around. He gets the people in the room
and doesn't work.

Speaker 2 (15:10):
I want to know what happened on that day, but
first let me go through a couple more characters. Charles
Sunshine Charlie Mitchell, CEO of National City Bank. You mentioned
him earlier.

Speaker 1 (15:20):
Charlie is my favorite character in the book. And Charlie really.

Speaker 2 (15:24):
Did feel like you know him, right, I feel like
I know Charlie.

Speaker 1 (15:27):
Charlie ran as I said, the bank that becomes City Group.
He was the Jamie Diamond of his time, and he
was as famous as Jamie Diamond run JP Morgan today,
but he's probably the most famous banker in America in
the world. He invented the idea. He was the one
who said, okay, we should lend money to folks to
buy stock. He was called Sunshine Charlie because he would

(15:47):
tell anybody who would listen to him that everything was
always going to be better. He always had a smile
on his face at all times. That was sort of
his job and his way. And he gets I don't
want to give away what happened, but he does a
little side deal at one point with his wife, who
gets involved in this whole thing. And let's just say
that the police show up at his house at one

(16:09):
point and he gets handcuffed. We won't say what happens
after that for lessons.

Speaker 2 (16:14):
So Sunshiny at that point.

Speaker 1 (16:16):
At that point, that happened in nineteen thirty three, so
it took a while for things to catch up to him.

Speaker 2 (16:21):
The other one is Jesse Livermore. Poor Jesse Livermore, right.

Speaker 1 (16:24):
Poor Jesse Livermore. So one of the I mean, look,
I know this probably sounds like a book about the economy.
It's kind of like a crazy drama. So Jesse Livermore
is a emotionally tortured short seller. This is somebody who
bets against stock and he was famous in the twenties
for betting against dock and winning. He almost is basically
out of business by nineteen twenty eight and twenty nine

(16:47):
because the stock market keeps going up and up. In
a book, he's losing his shirt. You can't bet stocks
are going down during this period, and he magically comes
back and makes a crazy trade in the fall of
nineteen twenty nine walks away with one hundred plus million dollars, which,
by the way, within a year or two, he had
simarily lost again.

Speaker 2 (17:06):
He was sort of addicted.

Speaker 1 (17:08):
Addicted you might describe as like degenerate gambler of sorts,
and I will give away the ending. He ultimately, in
nineteen forty one, walks into what was then the cloak
room at the Sherry Netherland up on Fifth Avenue near
the Apple Store, right, you know, the Apple store wasn't
there back then, and he shoots himself in the head

(17:28):
and kills himself. So there's actually a number of suicides
that take place during this whole period, a bunch of
people who jump out of windows.

Speaker 2 (17:37):
And I think that people who don't know that much
about the crash, I think that's what they always think of,
people jumping out of windows, people losing their everything, their wealth,
and a matter of minutes. Right.

Speaker 1 (17:51):
So, my grandfather, Sidney Sorkin, who's no longer alive, lived
so he was ninety one years old. He was down
there in October of ninety twenty nine. His brother was
a messenger boy, and I think he was eleven. He
went with his older brother down there, and he used
to tell us a story about how he saw somebody
to jump out of a window. In October nineteen twenty nine. Wow,
And he never in his whole ninety one years bought

(18:14):
a sheriff stock And it was interesting. It was a
generationally scarring event for him. I think he bought bonds.
Maybe he had some mutual funds. I don't know, but stock
like individuals. He always thought the stock market was like
this place for gamblers because of this sort of formidable
experience he had. But I think a lot of Americans
had that.

Speaker 2 (18:33):
My dad too, by the way, you know, when I
was starting to make some money and TV news, my
dad was always like Muni bonds. He really wanted something
super safe and secure. And thinking about that, my dad
was born in nineteen twenty so I think probably like
your grandfather, he had the same scarring experience, even if

(18:54):
it was from Afar right now.

Speaker 1 (18:56):
Weirdly, I should note, just to be factual as a journalist,
one of the more interesting things that I did learn
is that actually, from a data perspective, there were actually
not more suicides in nineteen twenty nine than there were
the year before. Oh wow, So there's sort of this
impression that you know that everybody's jumping out the window.

Speaker 2 (19:15):
No, But I guess because it was so dramatic that
it has been overblown in retrospect, right, Yeah, that is interesting.

Speaker 1 (19:22):
And I think also in the moment, to the extent
there were suicides, they were more dramatic. There were people
shooting themselves in the head, they were jumping out of windows,
and they were being covered in the newspapers constantly, because oftentimes,
if you read the article about somebody committed suicide, it
was also about how they had lost their fortune, or
lost all their money, or had to mortgage their home.

Speaker 2 (19:42):
Maybe it was in a sort of truncated period of time, Andrew,
maybe there weren't more, but maybe it was in a
limited time span. I don't know. Get on that, will you?

Speaker 1 (19:52):
I will? I will.

Speaker 2 (19:59):
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(20:20):
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(20:52):
with sunshine Charlie Mitchell, the CEO of National City Bank,
for turning to his office at fifty five Wall Street
on October twenty eighth, nineteen twenty nine, hours after the
market had closed with a thirteen percent drop.

Speaker 1 (21:06):
What happens next, Well, Charlie finds out that while he
was out of the office all day, he had joined
the board of the New York Fed while he was
out of these emergency meetings, that his trader had bought
a whole ton of stock in the bank itself, and

(21:26):
they didn't have the money to buy the stock. So,
you know how companies buy their own stock, So back then,
companies did the same thing. The problem was that during these,
especially these sort of crazy periods in October twenty nine,
the stock market, like if you looked at the board
of the stock prices on the exchange back then, they
were oftentimes like two or three or four five hours

(21:48):
behind what was actually happening in reality, and so people
were buying stocks not understanding what the prices were, and
so they effectively bought thirty plus million dollars worth of their
and they couldn't afford it, which put him in this
position trying to figure out what am I going to
do to try to save the bank without anybody knowing.
He all of a sudden has a sort of existential crisis,

(22:12):
and well, I don't know if I want to give
away what happens?

Speaker 2 (22:14):
We'll just give a little and people will still buy
the phone.

Speaker 1 (22:19):
No, no, no, no. One of the things one of the
things that he does is he decides he's going to
put this whole thing on his back. He goes to
JP Morgan to try to get them to give him
a loan and for him to buy the stock off
of the bank, because he didn't want anyone to know
that the bank would have otherwise been in trouble. And
that decision, which that sort of secret decision, turns into

(22:42):
a sort of bigger problem for him later because he
then tries to do some sort of tac shenanigans with
his wife.

Speaker 2 (22:51):
Lets to say, that leads to his arrest. I think
when we imagine this crash, right we think of a crash.

Speaker 1 (22:58):
Do you think one thing this is not real. It
was like multiple days.

Speaker 2 (23:01):
And you say it wasn't a moment, it was a
relentless unraveling. Talk about that.

Speaker 1 (23:07):
Well, so, the very strange thing is that despite the
market going down, you know, forty to fifty percent between
September or end of September and November, by the end
of the year, and this is the part that most
people probably would never even imagine, by the end of
the year, the stock market was only down seventeen percent,
and so there was this sort of relief thing happening,

(23:28):
except that all of these people had lost their money
in the process. And I think the one thing to
think about with this stock market, which is just so
different than it is today. You know, when the stock
market goes down today, people say, oh, well, I bought
the stock at fifty dollars and now the stocks at
thirty dollars, so I lost twenty dollars a share. Not good.
But what was happening is most people had borrowed all

(23:49):
the money to buy the stock. So it wasn't just
that you lost the twenty dollars, it was that you
owed the bank oftentimes like one hundred dollars. And so
people are going into hawk. I mean There's a great
little scene that I landed on with Graucho Marx, who
at that point was not actually famous or really that

(24:11):
famous yet, and he was out in Long Island. He
was pretty conservative, according to his son, with his money,
but he was spending like all day long at this
brokerage house in Long Island, just following the tape like constantly.
That's what he did.

Speaker 2 (24:24):
It was like smoking his cigars.

Speaker 1 (24:26):
Smarky cigars, and following the tape. And he actually was
a very smart guy. He was questioning his broker about
whether you should buy RCA. Why is RCA not giving
out dividends. Well, they weren't giving out dinners because they
don't have a cash. But the brokers were like, this
time is different. If you don't do this, you're gonna
lose out. Trust me, I do it too. We're all
doing this. Well, he gets a call in October nineteen

(24:47):
twenty nine says you got to get down here and
you're gonna have to pay off alone. He ends up
having a mortgage his own home to deal with it all.
And I think that that was sort of just a
little like microcosm of a story of what was happening.

Speaker 2 (24:59):
Everywhere little bit more about sort of the relentless unraveling,
if you will, Andrews, so give us a little time
stamp of all these events.

Speaker 1 (25:09):
Well, I don't know how far we want to go.
I mean, most of the real action happens in October
in terms of the market crash. However, as I said,
the sort of a series of dominoes. So the country
is sort of losing its shirt. In late nineteen twenty nine,
market starts actually coming back a little bit, but the
economy is not really coming back. And so there's a
big question is what is President Hoover going to do?

(25:30):
What is the government going to do? Talk about bad decisions.
So President Hoover's Treasury secretary then was a guy named
Andrew Mellon, who you may have heard of. And Andrew
Mellon was a true capitalist. His view was, if you
trade and you lose, you lose. We're not helping you,
we're not bailing you out, screw you. Hoover had this
sort of view that somehow the economy and the stock

(25:52):
market were like separated, that they weren't really connected to
each other, and this was almost like a psychological problem,
and that if you could just get the country over
the psychological problem that somehow you'd be in a better place.
But he also wanted to raise taxes at that time,
probably not the best decision. He then decides to implement tariffs. Again,

(26:15):
what's happening in America today tariffs. So he implements in
nineteen thirty something called the Smooth Holly tariffs. A year later,
global trade is down sixty percent and by the way,
same thing as now. A thousand economists wrote an open
letter to Hoover begging him not to do this. But
he had run on this because he wanted to get
the farmers in the middle of the country to vote

(26:36):
for him, and he wanted to make good on his promise.
So there were a series of these things. But of
course by nineteen thirty three, even before that, I mean,
you started to have what's called Hooverville's were emerging. These
were like tented camps, even including in DC. In DC,
also in Central Park, there were tented camps in Central
Park literally blocks away from Charles Mitchell's house. Charles Mitchell

(26:59):
lived York very well up on Fifth Avenue and seventy
fifth Streets the French Consulate. Uh huh, that was his house.
That's where he lived. They lived in these like they
were the kings. They lived in these mansions. There were castles,
but Hooverville's were emerging, and so you had this sort
of Those are sort of the series of dominoes of
things that really I think put the country in a very,
very tough place.

Speaker 2 (27:19):
It's amazing when you think about the culture of the twenties.
Obviously in this I'm sure struck you time and time again.
As you're writing this book, Andrew, and what we're seeing
today in terms of the economic climate, sort of income
and equality, a less a fair regulatory policy, mood, investors
and innovators becoming celebrities. Yes, and as I mentioned widening inequality.

(27:45):
I mean, were you like, holy shit, yeah, I mean
we are right for something like this to happen, or
how did you square the similarities between these two periods.

Speaker 1 (27:55):
I should just say straight up, when I started the project,
I didn't think that I was writing about to tay
like that was not really the goal. And by the way,
there's nowhere in the book, as you know, where I say, hey,
like this is like this right, But as I'm writing
the book, I would say, especially in the last couple
of years, I'd be like, oh, Okay, the tariff thing
is happening. The tariff thing is happening. This idea of
democratizing finance is happening. It's happening. We're going to take

(28:19):
some of the guardrails and rules away. And you realize,
by the way, in the nineteen twenties there were no rules,
I mean literally no rules. There was no sec instead
of trading. All these stocks are being manipulated like crazy
back then. And here we are right now trying to
take these rules away, trying to take transparency away.

Speaker 2 (28:37):
The tech titans are meeting at the White House.

Speaker 1 (28:40):
So many of the sort of same component parts of this.
And also I would argue even now with I don't
know if you call it a bubble, but here we
are on this sort of like Ai Revolution, feels a
little bit like the Radio Revolution. People are betting massive
quantities of money, using leverage, using debt, and it's happening
all over. And there's also this idea of the lottery ticket.

(29:03):
So right now, Trump just implemented a new law that
effectively was going to allow the venture capital guys and
the private equity guys and the private credit guys to
literally sell product to the ordinary investor for the first time.
This stuff's going to end up in people's retirement accounts
for the first time, like your four one K account
is now going to have access to these things which

(29:23):
we never allowed before because we thought it was too risky.
But now we're saying it's not too risky.

Speaker 2 (29:30):
And why is that happening. I don't quite understand that.
Is that also have to do with the government and
intel and sort of or is that a different thing.

Speaker 1 (29:37):
I think it's a different thing. I think it's the idea,
and this was a very nineteen twenties ish idea that
the elites were making all of this money and that
the little guy had no access. So it is true
that folks who've had access to buy shares of Uber
or Facebook before they ever went public, they're the ones
who made a fortune. And we created laws, by the way,

(29:58):
after nineteen thirty three, well, we said unless you have
a million dollars, you cannot invest in these type of
private investments because with lib to risk you we didn't
want people who didn't have enough money to be able
to risk all of it. That was the concept. But
in a way, there's a view today that somehow we
have not just protected them from losing money, we've protected

(30:20):
them from making money. And at the same time we're
sort of protecting the man. Right, So there's this sort
of subculture and elite that's been able to make all
this money and others haven't had access. And so what
I think this president is trying to do is say
we want everybody to have the lottery ticket. The thing
that I that worries me is when everybody has a
lot of ticket, most people have a lot of ticket lose.

(30:42):
That is the great conundrum of the lottery.

Speaker 2 (30:44):
And the people who lose are often the people.

Speaker 1 (30:47):
Who can't afford for to lose. Yes, that's exactly right.

Speaker 2 (30:52):
When you look at the big picture, what do you
think is responsible for all these kind of big cultural
and economic ships that were witnessing right now? If you
had to put the pieces together, are they all the
things that I mentioned In terms of the environment we're
living in, what forces are colliding right now?

Speaker 1 (31:12):
So I think there's a couple of things happening. Start
with the underlying issue of the human condition, which is
we all want more. That's not capitalism, that's just human
nature human nature. And you also have a group of people,
financiers who have a lot of money, who've been lobbying

(31:33):
in Washington to allow for a lot of this to happen.
So Crypto, which is again another seemingly speculative kind of
thing to do, those guys basically helped bankroll President Trump's election.
They effectually paid for that access. And there are people
I do believe that the people who are behind all

(31:54):
this genuinely do believe that this is good for America,
like they do believe that at letting the ordinary American
invest in these opportunities, they call them opportunities, and they
think they're a good thing. And by the way, they
may turn out to be a good thing in the
long run if you can keep all the guardrails around them.
I think one of the great lessons of nineteen eighty

(32:17):
nine was you need guardrails. People left to their own
devices will always want more. And we are not the
greatest self regulators of ourselves, which.

Speaker 2 (32:25):
Is a guardrails.

Speaker 1 (32:26):
And that's the conundrum I think right now, increasingly the
guardrails are coming off. The administration recently announced a plan
where corporations public companies who used to have to report
their earnings every quarter, four times a year. The President
came out and said, you know what, you don't need
to do that anymore. We want you to only do
that twice a year. So again less transparency, and the
SEC looks like they're probably going to back that plan.

(32:49):
So I think there's just a whole bunch of these
types of things that are happening in this moment that
are concerning.

Speaker 2 (32:56):
Let's go back to nineteen twenty nine. In the aftermath
following those few years there was regulation. Yes, talk about
what happened, and do you view some of the measures
as perhaps an over correction.

Speaker 1 (33:10):
It's a great question. So one of the big things
that happened, and one of the main characters in this
book is a guy.

Speaker 2 (33:15):
Named carter Glass glass Stiegel though.

Speaker 1 (33:18):
From Glass Stiegel. Carter Glass though, was really like the
Elizabeth Warren of his time, maybe AOC, but more like
Elizabeth Warren. And for many years in the nineteen twenties
he used to rail about the thing called Mitchellism in
Charlie Mitchell. He thought people at Charlie Mitchell were going
to ruin America because Charlie Mitch was loaning people his
money was going to lead to all the speculation and

(33:38):
up end the economy, and so there were a lot
of laws that were put in place by people like
Carter Glass, though again without giving away too much how
Glass Stiegel was actually put together. Even for me and
I think some scholars who's read the book, it's just
like a shock. It's like completely at odds with what
you'd think really happened, sort of a wild story. And
so you had that happen the creation of the SEC

(34:01):
in nineteen thirty four. By the way, Roosevelt course comes
into power in nineteen thirty three, he goes after some
of the bank shuts down a lot of the banks,
So there was a whole bunch of things. Is an
overcorrection probably to some degree, but was it too much?
I mean, the good news is we've had other financial
crises two thousand and eight being one of them, dot
Com bust being another. But we haven't gone totally off

(34:24):
the cliff for a decade or more at a time.
And the one thing I will say there was a
bit of a weird lesson for me. We all think
speculation is like a dirty word, right, You don't want
too much speculation, but we all need a little bit
of speculation, because speculation is like the twin of innovation,

(34:46):
like if you look at think about it, like Elon
Musk and Tesla. Somebody at some point had to speculate
on Elon Musk early on, when it seemed like an
insane thing to do. It was a complete speculation, and
you I need that in the economy for there to
be innovation, otherwise we're never gonna get any of it.
But the question is where's the line and when does

(35:07):
it become too much? And when does it become too
much of a group think. I do think, by the way,
we might be having a little bit of that. Well.

Speaker 2 (35:14):
I was going to ask you, of course, when you
said that, I'm thinking, Okay, the AI bubble, right, and
what's happening now? How do you think that's playing out?
And how does it relate to some of the other disasters.

Speaker 1 (35:27):
Honestly, I think the AI bubble is a bubble and
it will pop. But I think of it more like
the dot com bubble, which is to say, the Internet
came of age in the late nineties and there was
a pop, But the Internet is still here and is
more powerful and a bigger force than ever. So I
think something like that will probably happen with AI, meaning

(35:48):
there's definitely over investment and probably investment in the wrong areas,
and so there will be some kind of come up.
And I don't think that means that AI is not
a thing. I think AI is probably, you know, a
generational shift for everybody.

Speaker 2 (36:03):
There will be a correction. Question that we.

Speaker 1 (36:05):
Don't know this time around is if you believe that
every financial crisis is a function of too much leverage
in the system, too much borrowing money. Right in nineteen
twenty nine, there's too many people borrowing for stocks. In
two thousand and eight, is too many people borrowing for
subprime loans and the like. It could be that there's
too much borrowing going on around these AI data centers
people don't appreciate. Yes, you know, Google and Facebook, they're

(36:29):
all spending hundreds of billions of dollars. But to build
these data centers, there's energy companies that are taking on
extraordinary amount of debt, construction companies, real estate company. I
mean there's a and that debt we can't see anymore.
That's actually another big thing. It used to be that
you'd get a loan from a bank and so the
system could see the debt in the system, the leverage

(36:50):
in the system. Today, it's all moved into what they
call the shadows, into this private credit business, and so
we don't really know what's going on. And that's a
little scary. And I'll give you one more little not
to scared everybody, but you know, you're starting to see
what they called round trip deals, these like circular deals.
Where so in Vidia and open Ai did this very

(37:10):
unusual deal a couple weeks ago where open ai is
buying chips like crazy from Nvidia. But open Ai can't
afford to buy all the chips that it's committing to buy.
It doesn't make money, it's losing money right now. So
what's happened. In Vidia invests money into open Ai, so
they have now committed to give them a hundred billion dollars,

(37:33):
which then they're going to take one hundred billion dollars
and buy the Nvidia chips. So it's a completely circular transaction.
It's like magic. And then just I think two weeks
ago now a similar deal, open Ai is going to
buy chips from AMD. Can't afford to buy the chips
in AMD says to itself, well, if we announce that

(37:54):
we're going to buy chips from AMD. AMD stock is
likely to go up, so we're going to get a
stake in AMD, and when the shares magically go up,
we'll now have money from those and then we'll go
buy the chips.

Speaker 2 (38:06):
What's wrong with that, Well, it just.

Speaker 1 (38:08):
Reflects that there's not a sort of underlying stability in
that market. You know, when you get into what's called
vendor financing, when the vendor basically has to finance you,
it can come back to bite you. Now, yes, if
open ai turns out to be a massive success and
super profitable, no harm, no foul. But if it doesn't,
you know, the whole certain ecosystem can break. And I don't.

(38:31):
Right now, we're in this very weird moment in the
stock market where every time that a company announces they're
going to invest spend more money, the stock goes up,
doesn't go down. It used to be. You know, if
you fire people, stock will go up because they're gonna
spend less money. They're gonna invest less. Stock goes up.
This is like the opposite.

Speaker 2 (38:49):
You say, people aren't investing in the right thing with AI,
so I'll bite. What should I be investing? You should say.

Speaker 1 (38:56):
AI investing in AI. I think the way people are
investing in AI right now is just the big shares
in the big tech companies in video.

Speaker 2 (39:02):
And there are a lot of other smaller companies that
are going to be important to the whole AI environment.

Speaker 1 (39:08):
Maybe, And that's another question. There's so many small startups
that have been coming up around this whole ecosystem. Do
they last? Do they not last? I don't know if
we know the answer. The other piece of this that
we haven't got into, and maybe go back to nineteen
thirty three and think about this. So we had unemployment
in the country in nineteen thirty three of about twenty

(39:29):
five percent. It's kind of insane twenty five percent. A
quarter of people were unemployed. If AI is successful, so
if all of these AI companies for them to be successful,
they have to create more productivity. Companies are only going
to pay for these services if they create more productivity
for their company. Productivity is a euphemism. Dare I say

(39:50):
for taking out cost other cost? What is the other cost?
It's human cost people. So if they shoot the moon
and this is really successful, at the same time that
the companies may seemingly be successful, there's a lot of
people who lose their job who won't be able to
afford to use the services that these companies are going

(40:10):
to provide.

Speaker 2 (40:12):
Do you think anyone is thinking about that.

Speaker 1 (40:14):
I think that there's a lot of people wearing blinders saying,
let's hope for the best. I think there's a lot
of hope. I don't think there's a lot of actually
like modeled out spreadsheets that say if you do this
and this and this, it will do this. There's like
a lot of hope in prayer taking place right now.
And by the way, if you talk if you talk
to Soulten Valley today, they say, we are more scared

(40:38):
of being behind, and so therefore we're just going to
you know, we're putting all our chips down.

Speaker 2 (40:44):
It's jina, jina, jina, right. That's as the President would say.
I feel like they are saying, we cannot lose our
competitiveness and unintended or obvious consequences be damned. Honestly, there's a.

Speaker 1 (41:03):
Truth to that. You look at some of these companies
that they're spending basically half to maybe in some cases
more than all of their revenues. Literally, they're taking all
the money and investing in AI and maybe they'll be right.
And by the way, as I said, I am sure
that AI will be a powerful force, huge powerful force.
On the other side of this, I just think along
the way there will be a hiccup. And the question
is how big is the hiccup?

Speaker 2 (41:24):
Kind of like globalization, Like nobody really thought about the
long term impact of a flatter world, as Tom Friedman
would say, and this is kind of that on steroids, right.

Speaker 1 (41:36):
It could turn out to be.

Speaker 2 (41:38):
Yeah, isn't that when the government is supposed to come
in and say, whoa, everybody, let's kind of talk about
the impact of this technology and let's plan for Yes.

Speaker 1 (41:51):
That's what the government is supposed to do. Having said that,
we have both a broken government and we're in a rush.
It's a combination of two things. It's that the government clearly,
at least in this moment, I don't think you're gonna
have both sides talking on these issues. And the other
piece was is and they're not wrong in this respect.
If life is relative, you do need to care what
the competitors doing, and that is China. And if China

(42:14):
is going full steam ahead and they're throwing all their
chips down. Maybe at least the argument goes we have
to otherwise we lose, and that there's like a permanence
to the loss. Right, that's the issue. I think you
could do a lot of what we're doing marginally slower

(42:35):
without ultimately losing the game. I think we are still
ahead of the game relative to China, and I think
you could say, what does that mean in practice? I
think from a regulatory standpoint, instead of sort of opening
up all these new avenues for everybody to just throw
money at the problem, I think you probably do that

(42:57):
part in a slower and more methodical way then we're
doing it. And I don't think that would slow an
open AI or a Microsoft or a Google down that much.

Speaker 2 (43:06):
And that would give a chance for some of these
other considerations to be the.

Speaker 1 (43:11):
Bigger considerations about employment and about the yeah no, right,
really get talking to really get into like what's going
to happen with employment. I don't know what you're supposed
to do because or.

Speaker 2 (43:22):
What's going to happen to our way of life? And
should there be universal basic income?

Speaker 1 (43:26):
And how I think we need to be having those conversations.
People are probably not. I mean, you've been having some
of those conversations. Others have had those conversations, but it's
not like a active conversation in part because we don't know.
So that's the other piece of this. We don't really know.
And is it going to be a transitional period where
we're gonna have to set like transition from one thing
to another and that's going to be painful. But on

(43:46):
the other side of the transition, we all figure it
out and everybody learns how to use AI, and.

Speaker 2 (43:51):
Or there will be a robot or there'd be a robot.

Speaker 1 (43:54):
Apocalypse second and people will be listening to this podcast
and we will be holograms like that exactly.

Speaker 2 (44:00):
We should put this conversation in a time capsule.

Speaker 1 (44:02):
I mean, the craziest thing. I don't know if you've
played with like notebook LAM or any of these models.

Speaker 2 (44:07):
Yes, I actually just learned how to do that.

Speaker 1 (44:09):
So you know, you can create a podcast. I have
a son who now takes material from the Internet that
he has to learn, puts it into these models, puts
his headphones on, and goes for a walk and listens
to a effectively a AI generated podcast to teach him
about some of the classes that he's trying to learn.

(44:31):
There's part of me that thinks that's super exciting. By
the way, it's like a great it's like a very
cool thing. But it often, or I don't know if
it's often ultimately probably means we won't have as many teachers.
And what are those people? I mean, I don't know.
I don't know what we're I don't know where this
all heads.

Speaker 2 (44:47):
I just think we should be thinking about it some
more and hypothesizing about it some more, so.

Speaker 1 (44:53):
That we're we have a better position to at least
have thought about the debate when it actually hits us. Yes, yes,
I'm with you. Think about financial crisis in two thousand
and eight. I remember people two thousand and three and four,
people say, oh, I think there's a real estate bubble
going on. Remember, yeah, you know, I'm not going to
buy a house this year. I'm gonna wait. It's gonna
fall next year, so I'm just going to wait. In

(45:13):
the next year, you'd read a big article cover article
about how there's a real estate bubbies. No, I actually
wait another year. But you wait and then it keeps
going up, and then you say yourself, Okay, the train
is leaving the station.

Speaker 2 (45:24):
I better get it.

Speaker 1 (45:24):
I got you to get it on the chair. I'm
never gonna be able to get on this train. Of course,
everyone jumps on the train right before it's about to
curl off the track.

Speaker 2 (45:39):
Hi everyone, it's me Katie Couric. You know, if you've
been following me on social media, you know I love
to cook, or at least try, especially alongside some of
my favorite chefs and foodies like Benny Blanco, Jake Cohen,
Lighty Hoyke, Alison Roman, and Ina Garten. So I started
a free newsletter called good Taste to share recipes, tips

(45:59):
and kitchen muscle asks. Just sign up at Katiecouric dot
com slash good Taste. That's k A t I E
c o U r ic dot com slash good Taste.
I promised your taste buds will be happy you did.

(46:23):
Before we talk about today, because I want to ask
you some things about President Trump. I do want to
go back for a moment to talk about FDR and
his role in all of this, because I admire I
stan FDR in modern day parlance, and I thought it
was really interesting what you wrote about him. You said
that even though handling the economy wasn't actually Roosevelt's strength.

Speaker 1 (46:47):
It was not his things.

Speaker 2 (46:48):
Somehow Americans grew to trust him anyway, and as a
whole world fell apart, the United States fed off his
abundant confidence. People were desperate to believe in something. And
then you add, certainly didn't believe in money anymore.

Speaker 1 (47:02):
That's true.

Speaker 2 (47:02):
So just tell me what I don't know about FDR.

Speaker 1 (47:06):
FDR. I don't want to say FDR was Trumpian, but
FDR was kind of Trumpian. I mean, I think that
people there were people who just were believers, They really believed.
I don't think that anybody would have told you that
somehow FDR was some kind of you know, financial genius
or guru who understood how to deal with the economy.
I think he saw a mess. It was a mess.

(47:27):
I think he got a little bit lucky in terms
of the timing of when he came in and the fact, frankly,
that Hoover didn't make certain decisions he probably should have
or could have in the year or two before Roosevelt arrived,
and the country was sort of so psychologically damaged that
they just wanted, they like, almost willed certain things to happen.

(47:48):
And then of course the New Deal comes around. But
that was not like an economic plan really initially it was.
There was so many other social aspects to what he
was trying to do. But it all happened to work
and so and then of course World War two comes
along and that helps economically too. So there's there's a
whole bunch of things that I think we give Roosevelt

(48:10):
a lot of credit. I'm not saying he doesn't deserve.
It happened on his watch, but I'm not sure it
happened because he was the messiah when it comes to
economic activity.

Speaker 2 (48:22):
Speaking of messiahs or lack thereof, let's talk about Donald
Trump and his economic plans. Yes, just thirty seven percent
of US adults approve of his handling of the economy,
according to a recent APRC Center for Public Affairs poll.
What do you make of that number, given that so
many people look to him as a businessman, an all

(48:45):
knowing businessman, to set the economy straight.

Speaker 1 (48:49):
So this to me is a complicated question, and more
complicated maybe than you'd think. I don't know. The economy
seems to be doing shockingly well, at least on the surface. Now,
I would argue one of the reasons for that is
this AI bubble. I think if you would actually take
the AI investment piece out of it and look at

(49:11):
the rest of the economy, you'd say, actually, kind of
lowsy or not so great. And then you throw on
the tariff piece that he's put in place, and you
say to yourself, Okay, that is creating more of a
slowdown than we give it credit for. Because AI is
powering so much of it. I think it's masking a

(49:32):
lot of the other things that are happening in the economy.

Speaker 2 (49:35):
Are you talking about the stock market or the.

Speaker 1 (49:38):
I'm talking about the overall economy. So when I say
AI bubble, people think, oh, AI bubble is like the
Nvidia stock That's not what's happening here. The AI bubble
is impacting the entire economy. So what's happening is companies
are spending hundreds of billions of dollars. Those hundreds of
billions of dollars are being used to build a data
center or data centers all over. What does that mean?

(50:00):
Someone has to buy new real estate, they have to
go construct the data center. They have to create new
forms of energy. So the energy companies, the electricians, the
construction guide. I mean this is huge amounts, and obviously
the chip makers. There's so many pieces of the economy
where people are getting jobs now.

Speaker 2 (50:17):
And what about companies too that have to hire people
to help understand how AI is going to impact their business.
Is that contributing to it as well?

Speaker 1 (50:25):
I mean, I think there's a little bit of that happening.
I think the truth is more people who lose their
job in the short term from AI than the new
people that are actually coming on bubble transform to transform
the stuff. And the truth is a lot of this
is a sugar high. So I would say, are we
in like a gold rush or a sugar rush? Because
you know you're going to build the data center, which
could each data centers can take hundreds of people to build,

(50:48):
but once the data center is built, it could take
five or ten people to manage the data center. It's
not like it requires thousands of people.

Speaker 2 (50:56):
So even if this is a bubble though, Andrew, why
do just thirty seven percent of people approve of his
handling of the economy.

Speaker 1 (51:03):
I think costs are going up. It feels like things
are still more expensive. I think that's true to some extent, though,
by the way, to his credit, there's certain things that
are cheaper than they used to be, and other things
that are more expensive than they used to be. I
think people are just anxious and worried about, you know,
where we really are. And I think that in the

(51:23):
areas where he said that he was going to make
big changes, this is in the industrial you know, russ
belt of America. I don't think you've actually seen the
real changes. But we also haven't talked about like immigration
is a big issue. If you don't have immigrants, that's
a problem. There's a lot of sort of economic forces
at play here between tariffs and immigration and everything else

(51:45):
that I think we have to be thinking about. Having
said that, one of the biggest shifts in this whole conversation,
and the President has made it such, is they're now
tying tariffs to national security. And that's a very interesting concept,
by the way, that's the concept we were not talking
about in nineteen twenty nine.

Speaker 2 (52:06):
Interesting or scary, I don't know.

Speaker 1 (52:10):
I'm not sure. If we didn't have tariffs on cars
in America. There's a company called byd in China that
can make the cars better and cheaper than any car
that's made here. We would have no automobile industry at all.
You wouldn't make it a car here, just wouldn't happen.
Is that okay? Is that acceptable that there would be

(52:30):
no automobile industry if there was ever a problem where
you couldn't get access to cars in China? Would that
be a problem. I think we did learn during the
pandemic that you do need some form of resilience around drugs,
around masks, around potentially cars and parts and all sorts
of things. So I think there's this very interesting question

(52:51):
that we all have to resolve, which is, yes, we
could get the cheaper product from other places and we
could become a complete services economy, sort of like what
the UK did, or we could decide that we actually
need to be making these products here, and if we're
going to make these products here, then we got to
figure out how.

Speaker 2 (53:06):
We're going to do that, and how we're going to compete.

Speaker 1 (53:08):
And how we'd compete. I think we're not going to compete,
by the way, that's the other thing. So all these
tariffs are going to mean we're not going to compete.
It is likely the ten years from now, I'm talking
to the CEO of a big auto company. Ten years
from now, we will pay more for lousier cars in America,
then most people will be able to get in other places.
You'll go on vacation to Europe or to Asia or

(53:30):
somewhere like that, and you will sit in the back
of a car and think, Wow, this is pretty great.
We don't have things like this, or we have things
like this, but they cost so much that nobody has them.

Speaker 2 (53:39):
And do you think Americans can tolerate pay more for
crummy products?

Speaker 1 (53:43):
That's the fundamental question, or less.

Speaker 2 (53:45):
Less good products. I shouldn't say.

Speaker 1 (53:47):
We don't really like to pay more for things that
say made in America. Most people don't. Most people don't
seem to care. See the little sticker in the back
it says man China made in America. Nobody seems to really.

Speaker 2 (53:58):
Just give me the I want and give me the
best problem to pay too much, and I.

Speaker 1 (54:03):
Don't want to pay too much. And I think we
as a country sort of have to come to grips
with what that means.

Speaker 2 (54:07):
And we could talk about like wire cars so much
more expensive and lower quality in this country versus China,
right because we pay people to make them.

Speaker 1 (54:16):
Because we pay people to make them, that's a huge
part of it we pay people to make them, and
so we have decided do we want to pay people
to make them? I mean, these are all of that.

Speaker 2 (54:24):
Are we going to even need people making them in
the era of AI?

Speaker 1 (54:27):
We may not because the robots may ultimately make them.

Speaker 2 (54:31):
My head is exploding.

Speaker 1 (54:32):
Yeah, it's tough stuff.

Speaker 2 (54:34):
How would you characterize Trump's economic philosophy? I wanted to
ask Condy Rice. Andrew and I were at a conference
recently and Kandy Rice was there. I wanted to have
her characterize Trump's foreign policy philosophy. Unfortunately I didn't get
to ask her the question. So let me ask you,
how would you describe his economic philosophy? It seems all

(54:57):
over the place.

Speaker 1 (54:58):
I think there's actually one through line everything the man does,
which is he wants leverage over everyone, everyone, over people,
over countries. Where can he find the leverage? Where is
the leverage point that he will have over somebody else?
That is the entirety of the strategy. He went after

(55:19):
the universities, for example, and said I'm going to take
your money away for science and other things. He looked
and said, I don't like the DEI policies at universities.
Do I have any leverage with these people. Well I do. Actually,
if I take their science money away right.

Speaker 2 (55:34):
Now, they're federal funding for all those schools, or.

Speaker 1 (55:36):
They're federal funding away. Do I have leverage over China?
Do I have leverage over Europe? Do I have? You know,
I don't like the way Europe's treating American companies. Well
maybe if I have they need? What do I have
that they need? And can I put the screws to them?
And if I put the screws to them, will they
then do what I want? That is the strategy.

Speaker 2 (55:56):
I'm clary aboard. As someone who knows the economy like
the back of it hand. What are the pitfalls of
running a country that way?

Speaker 1 (56:04):
Well, it depends. This is a very interesting question. Depends
how mercenary you think the world really is. So I
think for the last fifty years, we've actually thought that
we could be a role model for the world, and
that we wanted people to like us, and we did
lots of things to make people like us. We let
our most of our economy be open, We tried to

(56:26):
share our prosperity with others. We oftentimes were donating money
to other countries and bailing them out, and doing all
sorts of things, and the question is did that help
us or not. He believes it did not help us.
He believes we had no leverage over these people and
that they took advantage of us.

Speaker 2 (56:44):
I was going to say that we got screwed, that.

Speaker 1 (56:46):
We got screwed. I think it's hard to say we
got screwed because I think the truth is we are
still this great Shanning Hill city, a city on a hill,
thank you. We could also be a hill. Yeah, And
I think we probably did get screwed in certain things,
but I think think on the whole we've done pretty
well doing it this way.

Speaker 2 (57:03):
And then this desire to have leverage on everyone, Let's
face it, it can also be very alienating to countries
when we need them, right.

Speaker 1 (57:13):
Well, that's going to be the big question when we
actually need them, what's going to happen? And I don't
think we know the answer. There's so many things where
this president is just shifting and changing the way we've
done things. Taking stakes in companies.

Speaker 2 (57:26):
Well, I wanted to ask you about that. Can you
talk about the government taking a ten percent interest and
intell because it is so unprecedented and explain it to me.
Somebody who doesn't really understand the economy that well, how
this is so needless to say unconventional.

Speaker 1 (57:44):
Okay, So historically we claimed we had a free market,
and the free market was such that companies could succeed,
they could fail, and the government was not an investor
or playing a real role in this. Maybe they were playing.

Speaker 2 (58:00):
We did bail out companies.

Speaker 1 (58:01):
We have bailed out companies, but typically there was a
serious crisis. It was a crisis, and the reason for
bailing them in two thousand and eight was we believe
that if we didn't bail them out, it was going
to have a wider effect on the economy. So here
we are, Intel is struggling. We've decided, as a country,
or at least this president has decided that chips and

(58:22):
making chips in America is a super important thing to
do for national security reasons. Most of our chips are
not made in America. We need to start making chips
in America. The Biden administration had given money to Intel
as a grant, said here's the money. We're not asking
for anything in return. What we're getting in return is
we'll have national security and we'll have more resilience because
chips will be made here, but we're not asking for

(58:45):
anything else. Handing you the money, Intel, to be honest,
became a mess. It was probably a bad investment in
Intel to start with, and became an even bigger problem.
Intel needed more money, more money, but needed this sort
of the next tranch of the money that they were
going to get, and this president said, you know what

(59:06):
this whole thing is, so screwball. I want more. If
I'm going to give you all this money, and instead
of granting you the money.

Speaker 2 (59:12):
Just so you could have it, what's in it for me?

Speaker 1 (59:14):
What's in it for me? I want a piece of
the action, and I want the taxpayer to have a
piece of the action. So if Intel is going to
do better over time, I want them to be able
to have shares in the company. And if they do worse,
by the way, we'll also lose our shares too. That's
the conceit of what happens. The problem with doing something
like this, in my mind, is it changes the dynamic.

(59:36):
Once the government becomes an investor in companies plural. So
let's say Intel in the future wants to merge with
another company, and normally whatever that merger is a regulator
might say, you know what, this seems like really bad
for customers. We don't want two of these big guys
getting together like this. Well, how does that dynamic in

(59:58):
that conversation change when you say to yourself, we actually
own ten percent of this company, and if we do this,
we will do a lot, but taxpayer will do a lot.
But customers make get screwed. But the taxpayers, the US
government that owns this will do better. So all of
a sudden, it's sort of.

Speaker 2 (01:00:13):
We're seeing it with these mergers of media companies that
play out in a different way. Die way.

Speaker 1 (01:00:18):
It just changes the whole dynamic with which how everything
gets played out, and it becomes political.

Speaker 2 (01:00:24):
So do you see this happening more and more? Is
this kind of a one off thase?

Speaker 1 (01:00:27):
No, Well, you're having it happen right now with rare earths,
these rare earth companies, which again we may need rare
earths in this country to have great success. Should those
be independent businesses? Should the government effectively subsidize them, If
they do subsidize them, should they get money? I have
one for you, And actually, because I think about this,
and I actually do think it's a very interesting one.

(01:00:48):
So One of the things that the Trump administration wants
to do is right now, the US government gives grants
to universities all the time, and scientists use that grant
money and they make amazing discovers inventions, and the profits
of those inventions and the patents for those inventions typically

(01:01:08):
go to the scientist and the university that's behind them. Now,
the money that was used to pay the scientist and
the university came from you, Katie Kirk, and me and
everybody in this room and who's listening and watching, because
we're the taxpayers. Historically, we have never gotten anything. We
have had no stake in it. What we've gotten is

(01:01:30):
the invention. We've decided that the invention, unto itself is
the benefit for our society. Right, should we, like an investor,
would get a stake in the patent because that's the
next place this is all going. They're going to go
to the universities and say, look, you want this grant money. Great,
if you have a great success creating crisper or the

(01:01:52):
next great drug, the US taxpayer should get a little
bit of that money. And you would look at that
and also in the context and say, oh, this government
we as a country are overspending and not taking enough revenue.
You have to figure out new ways to get revenue.
That would be one way to do it. Is that good?
Is that bad? The science community will tell you it's horrible.

Speaker 2 (01:02:13):
Why, I know, why would the science community be so against.

Speaker 1 (01:02:16):
That, Because they would say that they deserve the fruits
of their labor and that these are non inventions of
the taxpayer, and that the American public is getting a
great benefit.

Speaker 2 (01:02:28):
Because it's life saving work.

Speaker 1 (01:02:29):
Because it's life saving work, what do you think? I
have totally mixed views of it. I don't know. I
don't know if we said we want ten percent of
the action, whether that would change the dynamic with which
the universities would do this work, whether the professors a
scientists would not do this work or do.

Speaker 2 (01:02:47):
It different to a different country.

Speaker 1 (01:02:49):
I don't know that.

Speaker 2 (01:02:50):
I mean, right now they're not getting the funding, so
it's kind of a moot point.

Speaker 1 (01:02:54):
Philosophically, it's a very interesting concept. And irrespective whether you
think President Trump is a good president or a bad president,
these are some of the ideas that he's throwing around,
some of which I think at least merit A conversation
about saying Okay, maybe this is good, maybe this is bad.

Speaker 2 (01:03:10):
What about his view of the Federal Reserve. I mean,
it's very different. It's been a core guard rail for
decades and now he's pressuring as you know. I mean
you probably talk about this every morning, Andrew Jerome Pile
trying to ausk Governor Lisa Cook talk about the threats
to the Fed's independence. This is a different way of

(01:03:32):
looking at the Federal Reserve. Should it be an arm
of the executive branch or should it be independent?

Speaker 1 (01:03:39):
This I have a much stronger view about. I think
politics has to stay very very far away from the
Federal Reserve. And by the way, to bring it back
oddly to nineteen twenty nine, one of the reasons that
the Federal Reserve didn't do what it probably should have
done in nineteen twenty nine, which is raise interest rates
in a material way, was because they were worried about
the politics of it. They were worried about the optics
of it. The Federal Reserve was a entity started in

(01:04:01):
nineteen thirteen, and these guys thought, you know, what if
we do something that damages the economy, meaning we like
try to clamp down on all of this, we're gonna
get hauled up in front of Congress. We may lose
our jobs, but not just that. The Federal Reserve may disappear.
Now it's been around for a while, so people think
it's supposed to be here. That was not the case
back then. You do not want political pressure on the

(01:04:21):
folks operating the Federal Reserve. You want them to be
making a decision based on the math. Frankly, and the
second you think politics gets involved. At some point, I
would imagine that investors around the world to invest and
buy treasuries in America would say to themselves, do you
know what right now? I pay X percent for the

(01:04:43):
bond and you have to give me this kind of
premium because I trust you. But if you're going to
politicize all of this and I don't know what you're doing,
I'm going to charge you more. And if they charge
you more, it's going to cost.

Speaker 2 (01:04:55):
All of us. So the impact would be.

Speaker 1 (01:04:59):
Our day at the US debt would ultimately cost more,
and that would be a problem because we don't have
enough money to pay our debt as it is.

Speaker 2 (01:05:08):
Donald Trump has I think, kind of reimagined the presidency
to say the least and I'm just curious with everyone
you talk to every day about very complicated topics. And
I know your focus is on the economy and finances,
but when you look at what has gone on, Andrew,
I'm asking for a friend, Yeah, and asking a friend

(01:05:30):
from the time he went into office to now and
plans and you hear things like plenary authority and things
like that uttered by Stephen Miller, and this unprecedented power
of the executive branch. As somebody who's covered so many
administrations on a scale of one to ten, yeah, how

(01:05:50):
concerned are you for the country?

Speaker 1 (01:05:53):
Seven? Seven? Because and let me tell you why I
think you might be ten. I don't know.

Speaker 2 (01:06:00):
Maybe I'm a little higher than seven. I don't think.
I don't know if I'm ten now, but maybe.

Speaker 1 (01:06:05):
But I'm going to tell you the thing that I
grapple with. Okay, So there are things that this president
does that I think are completely unusual and problematic. And
I worry about democracy. And I see the indictment of Komi,
for example, and I Chis James, and that is to me,
at least from the outside, feels like a weaponization of

(01:06:25):
the system in a very bad way. And then I
see this deal that was just made between Israel and Amas,
which seems almost unthinkable, by the way, during the Biden administration, unthinkable,
and potentially, if lasting, could have a huge impact on

(01:06:45):
peace in the Middle least, if that is true. And
trying to balance and wave these things against each other
are harder for me than you'd think. And so I'm
not ready to wave my hand and say it's all awful.
And I'm definitely not ready to say it's all fabulous.

Speaker 2 (01:07:02):
You're ready to say you have mixed feelings.

Speaker 1 (01:07:07):
I'm out of seven.

Speaker 2 (01:07:08):
Well, the book is called nineteen twenty nine Inside the
Greatest Crash in Wall Street History and how it shattered
a nation. It is going to make a great dramatic
series for someone somewhere because the characters are so fascinating,
and I think part of it, I mean a big
part of it, Andrew, is because you write it like

(01:07:29):
a thriller, and it is so dramatic and the characters
are so interesting that they jump off the page. And
I hope everyone buys it and.

Speaker 1 (01:07:39):
From our lips than you give.

Speaker 2 (01:07:41):
And I love talking to you. Thank you so much
for coming in.

Speaker 1 (01:07:44):
I appreciate it.

Speaker 2 (01:07:46):
Thanks for listening. Everyone. If you have a question for me,
a subject you want us to cover, or you want
to share your thoughts about how you navigate this crazy world,
reach out send me a DM on Instagram. I would
love to hear from you. Next Question is a production
of iHeartMedia and Katiekuric Media. The executive producers are Me,

(01:08:07):
Katie Kuric, and Courtney Ltz. Our supervising producer is Ryan Martz,
and our producers are Adriana Fazzio and Meredith Barnes. Julian
Weller composed our theme music. For more information about today's episode,
or to sign up for my newsletter, wake Up Call,
go to the description in the podcast app, or visit

(01:08:28):
us at Katiecuric dot com. You can also find me
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wherever you listen to your favorite shows. Hi everyone, it's Katiekuric.
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