Markets and our economy don’t just happen — they’re crafted. While we often hear about the “free market” as a natural force governed by the invisible hand, the reality is far more intentional. In the US, markets are shaped by the decisions of policymakers, business leaders, and advocates. These decisions determine who benefits, who bears the risk, and what goals we prioritize. Understanding markets means understanding the people who design them and the values that guide those choices. It’s not just economics — it’s about power, accountability, and the kind of future and economy we want to build.
In his new book, “Marketcrafters: The 100 Year Struggle to Shape the American Economy,” Chris Hughes, economist, writer, and chair of the Economic Security Project, takes us on a journey through the modern history of American capitalism, telling the captivating stories of the most effective marketcrafters and the ones who bungled the job. He reveals how policymakers across the political spectrum have consistently attempted to organize markets for social and political reasons, like avoiding gasoline shortages, reducing inflation, fostering certain industries, fighting climate change, and supporting financial innovation. Hughes argues that by rediscovering the triumphs and failures of past marketcrafters, we can shape future markets to be more innovative, stable, and inclusive.
This virtual book talk — hosted by the Aspen Institute Economic Opportunities Program on June 5, 2025 — features Hughes in conversation with moderator Natalie Foster, senior fellow with EOP’s Future of Work Initiative and president and cofounder of the Economic Security Project.
For more information, including a transcript, speaker bios, and additional resources, visit our event page.
For highlights from this discussion, subscribe to EOP’s YouTube channel.
Or subscribe to our podcast to listen on the go.
Join us on Zoom on Thursday, June 26, at 3 p.m. Eastern time for our next virtual event, “Advising Small Businesses on Job Quality: Lessons from CDFIs.”
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:05):
Good afternoon. I'm Natalie Foster, a senior
fellow at the Aspen Institute and Co founder and president of
Economic Security Project. And it is my pleasure to welcome
you today to our conversation. Market Crafters The 100 Year
Struggle to Shape the American Economy.
(00:28):
A book talk with Chris Hughes onhis powerful new book Market
Crafts and it frankly couldn't come at a better time.
People are so disillusioned by the economy, how it works, for
whom it works, and if it will even work for our children in
(00:49):
the future. And in the midst of this, Chris
offers us a bold and a necessaryreframing that markets are not
natural or neutral, but they aremade, they are crafted, they are
shaped by policy, by power, and most importantly, by people.
So this conversation is part of our Opportunity in America
(01:11):
series, where we examine the changing economic landscape that
workers face and how we can create an economy that works for
everyone. We are so glad that you are all
here today. Before we get started, let's do
a quick review of the technology.
So everybody's muted today. And if you have questions, which
(01:34):
we hope you do over the course of this conversation, use the
Q&A button at the bottom of yourscreen to submit and upvote
questions. And we hope you'll share your
perspectives, ideas, examples, or resources that you have to
today's topic, things that are relevant to today's topic in the
(01:54):
chat. And we'd love it if you would
post about this conversation on the social media platform of
your choice. The hashtag is talk opportunity.
The event is being recorded and will be shared out via e-mail
and posted on our website. Closed captions are available
for this discussion. So click the closed caption
(02:15):
button, the CC button at the bottom of your screen to
activate them. And now to the reason we are all
gathered here today to speak with Chris Hughes.
Chris is an economist and a writer who serves as the chair
(02:36):
the Board chair of the Economic Security Project, a leading non
profit advocating for economic power for all Americans, and was
a Co founder of ESP alongside myself and Dorian Warren.
Chris holds degrees in history and economics from Harvard, The
New School and is completing hisPhD at the Wharton School at the
(02:58):
University of Pennsylvania. His writings and essays have
been published widely from The New York Times to the Financial
Times. And his first book in 2018 was
called Fair Shot, Rethinking Inequality and How We Earn.
And I have such fond memories ofthat book coming out.
So it's very exciting to have you, Chris, with your next book
(03:22):
here in 2025. And it's just going back in
history. In 22,004, Chris Co founded
Facebook and then later directedBarack Obama's digital
organizing efforts in President Obama's insurgent 2008 campaign.
So that's around the time when Igot to know Chris and I've
(03:44):
gotten a front row seat to watching your work, Chris.
His work on rebalancing the American economy over a decade
plus. So let's actually start there,
Chris, I'm so glad you turned your attention to the economy.
And I I couldn't be frankly, more important the time to do it
(04:08):
and, you know, subject matter totake on.
But tell us why, what shaped your journey?
Why the economy and why this book?
Well, I'm happy to go there and anywhere else that makes sense
in this conversation. But first, I just want to say
thanks to you Natalie for that very flattering and kind
(04:29):
introduction and more importantly for the past near
decade of of working together ascolleagues and as Co
conspirators in the effort to make the economy more fair and
prosperous. And also to Aspen for convening
us today and for everybody, for I'm tuning in.
(04:51):
So economics, why economics? You know, my career zigzagged
for a little while until I foundeconomics about 10 years ago.
And then I feel like I've had a home.
So as you said, I was part of the founding team of Facebook in
2004 at Harvard. I had grown up in North
Carolina. My mom was a public school
(05:12):
teacher. My dad was a traveling paper
salesman. I got in financial aid to go to
boarding school and then to Harvard.
We started Facebook and it exploded.
Everybody was interested in it, and I worked on the product and
communications teams for severalyears.
I liked it. I thought it was interesting.
(05:32):
It was not a mission for me in the way that it was for Mark in
particular, but also others on the founding team.
And so I left to go work for Barack Obama, as you mentioned,
for a couple years. And then I sort of wandered.
I was in my late 20s. I had, to be honest, made more
money than I could have ever dreamed.
(05:53):
I paid off all my loans from college, obviously, and all
kinds of things. And so I thought a little bit
about venture capital. Then I worked in media for a
while. But in 2016, after a lot of
conversations with you and with other people, I began to focus
more clearly on the question of how can we make the economy more
(06:14):
fair? You know, income inequality,
wealth inequality, we're all skyrocketing.
This was right before Trump was elected.
And my own story was, you know, so bizarre.
You know, I hadn't worked for a few years to create a company
that at that point, I was still generally proud of and made more
money than we could have ever imagined.
(06:35):
And while that had worked out great for me, it also didn't
feel fair. It felt like emblematic of a
kind of economy where a few people get these bonanza kinds
of wins and everybody else is struggling to make ends meet.
So that started on a long journey, first as in, you know,
activist and, and nonprofit in, in the nonprofit world.
(06:58):
And then over time it's been more as a researcher and a
writer. I got my masters.
I began to work on my PHDI wrotethe first book.
Now I've written the second. And I, I, I love economics
because it's important, you know, the study of money and
production and how we coordinate.
I think it is one of the most important stories in the history
(07:20):
of humanity, in the history of the United States, and it's also
very much up for grabs. It's a field that is debated,
and lots of people want to tell you exactly how it works.
And, you know, you got to agree with most of the things in the
textbooks. And that's just not what I do.
I'm sort of naturally suspicious.
And that means that I've gotten an opportunity to engage really
(07:42):
on a first principles kind of level with a lot of economic
ideas. And I find that challenging and
fulfilling. So that's why I do what I do.
And this book went through many iterations before it landed as
market crafters. Yes, it's awesome about that.
Well, my a lot of the academic work that I've done is in the
history of central banking. And so I thought that I was
(08:05):
initially writing a history of the Federal Reserve and the
history of American central banking, and that's where it
began several years ago. And then there was this
explosion of interest in industrial policy around
2021-2022. This term that had been really
(08:26):
banished from political and economic discourse was taking
center stage very quickly. And I was fascinated by that.
I thought it was really important and exciting and
relevant, but I also thought it was too limited because when
people kept talking about industrial policy, they were,
they were using a term that mostof the time was supposed to
(08:47):
apply to like manufacturing and blue collar kinds of of Labor.
And what I saw there was the government supporting a
particular industry because it believed that it was important
for whatever political ends thatcould be.
Semiconductor manufacturing, it could be climate, it could be a
(09:07):
lot of things. But if you look at the history
of American capitalism, we do that all the time.
I mean, the story of finance andbanking is this story where we
believe that it is important andit's critical to to keep prices
stable, to have financial stability, to ensure maximum
(09:29):
employment, moderate long term interest rates.
And all of those things are managed by government and
particularly the Fed, but not the Fed alone, the OCC, the SEC
to some extent, the other, the FTC and other other
institutions. And So what I saw was something
broader, which a political scientist, Stephen Vogel had
(09:50):
coined the term market craft several years before.
And that really stuck with me. And so I would decided that I
wanted to write a book that would combine my history, my
interest in a lot of the institutions of American finance
like the Fed with a history of industrial policy purposefully
to broaden out that term and to say that we have a long history
(10:11):
of crafting markets towards political ends.
Sometimes we're successful, sometimes we fail.
And but we have to be clear eyedabout that history if we're
going to pull out some of the lessons for the future.
And so that's what I am spendinga lot of time doing these days.
Before we get into the economic specifics, you just have this
(10:32):
metaphor of the garden that you worked in, I think grudgingly if
I remember, and how that is the the the metaphor you used when
writing this book. Will you connect those dots for
us? Yeah, I, I'll, I'll try my best.
So, you know, many of my friendsdo vegetable gardening and love
(10:55):
it. It's a source of a respite and
pleasure. And for me, my father had a
vegetable garden growing up. I grew up in Hickory, NC.
We lived in a a house that had ayard, but my dad tilled up a
third of the yard. And for me, gardening was just
the pits. It was the worst.
Like on summer evenings when I want to be inside watching TV or
(11:17):
reading, I had to go out and steak green beans or excuse me,
steak the tomato plants or, you know, harvest the green beans or
deal with the squash. You know, all this stuff that at
least I as a kid of 678 was not not that interested in doing.
However, all that time did lodgein my memory.
(11:37):
And so when I was thinking aboutwhat kind of metaphor I could
use to talk about how markets work, the one that I kept
circling back to was the idea ofa garden.
And the the IT was for a few different reasons.
The 1st is, you know, gardens are places of the natural world
(11:59):
where there are organic forces that seem to be propelled by
their own logic. So you know, the, the lifeblood
of the system is the, you know, the organic, the outdoors and
things grow and they're also places where we acknowledge that
growth. And then we pointed in a certain
(12:20):
direction, we harvest all that energy towards a particular kind
of production. And so in some kind of free
market fantasy, you might walk through the woods and just hope
that you find some blueberries that you can eat or, you know,
some tomatoes that are growing that you can eat.
But no, the history of humanity is we say, no, we want those
(12:40):
tomatoes. We like those tomatoes.
We're going to take them. We're going to plant them in the
garden. We're going to make sure they
would have the right amount of shade or the right amount of
sunshine. We're going to make sure that
they have water, maybe even fertilizers.
And because we do all this work to manage and harness those
organic forces, what do we get? A lot more tomatoes.
And you know, we can in fact be an innovative and even invent
(13:02):
new kinds of tomatoes or engineer new kinds of tastier or
nutritious food. And that metaphor of sort of
organic forces that may seem uncontrollable but then are
harnessed towards human ends. Things that can produce
abundance can produce more food than our ancestors could have
(13:26):
ever dreamed of. That metaphor I think sticks
with markets because markets too.
There are these cross historicaltrends in markets, you know,
property law, stable currencies,exploitation of Labor.
There are these trends, some of which are good, some of which
are very much not. And we can recognize that and
(13:47):
still say, but wait a second, wewant markets to work for us.
Capitalism is something that we can shape and harness so that it
works for people. People should not be working for
capitalism. And so that metaphor made it
into the introduction of the of the book, and it stuck with me.
I think it's great and I'll makesure to lay it out to my kids
(14:12):
when we garden in the future. But I want to talk more.
Why'd you say? They'll love gardening more than
I did. I'm.
The pits you let's talk about free markets because a second
ago you called it the free market fantasy, right, where we
might get blueberries if we're lucky.
(14:32):
And I think that is so right on at and I'm curious, why do you
think the myth of the free market is so durable?
And, and, and then you have thisthe I word, you call it right
intervene. Talk a little bit about those
(14:53):
two things. Well, I think really until about
20/16/2017, I would have talked about the power of, of, I think
I don't know if I would have said free markets, but I would
have talked about markets as if they were organic forces that
come first, that markets work this way or that way.
(15:15):
And then government is there to intervene.
To sort of the, the, the metaphor, there is something
like a, a stream rolling down a,a hill and government shows up
to, you know, put a dam in or tochange something that's
naturally occurring. And that metaphor is when I use,
and I think it's one that is continues to be pervasive, not
(15:37):
just on the right, but on the left.
So, you know, when I was writingthe book, I was determined not
to use the word intervene at anypoint.
And so by the end, I did a little control F just to make
sure in the manuscript I had notbecause because it's a sticky
idea, you know, And it's one that when we when we grasp for
the language, that's what we find.
But I think it's a really dangerous one because it does
(16:00):
suggest that markets are just fine on their own.
It makes no observations about the things that make markets
work in the first in the first place.
You know, the basics of propertylaw, contract law, a stable
currency, investment capital that can be developed and
(16:23):
deployed, all of which rely on government, on public policy.
Even in the most libertarian kind of scenarios, markets
require government. And then what I see when I look
at the history of, of American capitalism is something even
more robust, like if you go through some of the major
markets in the United States, banking and finance, health
(16:46):
insurance, pharmaceuticals, airlines, cars, defense,
defense, production, semiconductors, I could keep
going on the list. Every single one of these
industries has been managed by by policy makers for 100 years.
(17:08):
And so there is the idea that there's a free market where
government comes in afterward and then like moves things
around is, is not empirically, is not empirically true.
And yet that is still such a pervasive idea that we keep
using, we keep coming back to linguistically.
And that's one of the big reasons why I wrote the book is
(17:29):
to 1st off, just make it clear that markets are often managed
and crafted. And then to explore, well, if
we're going to do it, like a lotof those industries I just
mentioned are going so well, youknow, health insurance,
pharmaceuticals, etcetera. So let's talk about when it
works and when it fails, so thatwe can do it better.
Reading your book, it becomes soclear that markets are crafted
(17:52):
right even by the second section.
It's like, Oh yeah, of course and so and yet yet it is.
It is still a persistent myth. So who does it benefit to
believe in the free market fantasy?
And then I guess the other question I have is how do you
(18:12):
make the case that of how this is relevant to the everyday
family, right? That this that this enduring
myth holds us back and and, you know, harms the everyday family.
Yeah, those are great questions.I think, I think the the the
(18:34):
myth of the free market is particularly useful for the most
powerful market actors, which tend to be capital holders in a
lot of cases, because markets are often dominated sometimes by
private actors and sometimes by public actors.
(18:58):
And if you can get enough peopleto think that markets are
somehow self regulating magically organizing dynamic
structures, you have made the case that government should be
less active and thus those who are most benefiting from that
(19:23):
particular market order will stand to benefit even more.
And, you know, depending on depending on the market,
depending on the cost of capital, depending on the level
of investment that needs to happen, you can have markets
that you know will move into a kind of naturally oligopolistic
or monopolistic kind of arrangement.
And the idea that that is the result of free market tendencies
(19:48):
can enrich a lot of people in a very meaningful way.
Now, even in that story there isstill an important asterisk,
which is what I call the emergency room.
And we can see this super clearly in finance and banking.
Even people like Alan Greenspan,who I spend a good chunk of time
with in the book, who believed that government was often the
(20:11):
problem, who was a deregulator. He also had a market craft which
we can talk about towards financial innovation, which he
believed would exert market discipline and, you know, make
markets more stable. Even Greenspan.
Became so well known for his emergency room actions, what
many people might call bailouts or structured interventions.
(20:34):
We he did it in 1987. He does it famously with Mexico
in the early 90s, then with LongTerm Capital Management in 1999.
We can go through a long list. Even in the libertarian fantasy
of the free market, there's still there's still the state
coming in to help capital holders when the emergencies
(20:55):
come. And so that, that I think that
sort of mythology, that story has been particularly enduring
and worked very well for those who had the most resources and
the most, the most power. And obviously the one I'm trying
to offer is 1, where we say, uh,uh, guys, we need to structure
(21:15):
the market first in a way that makes it work for more people,
that prevents those kinds of emergencies and bailouts in the
1st place. But the only way that you can
follow a preventative regimen isif you, you know, understand
that markets need management andstructure in order to work well
(21:36):
and in order to be stable, whichI think we're closer to that set
of ideas now than in 2007 when Greenspan stopping or 2006 when
Greenspan stopping Fed chair. Yeah, yeah.
And so when you think about the everyday family, I mean, what I
hear in that is that costs are higher that, you know, there's a
(21:56):
concentration of power and wealth within a market.
If we pretend that it doesn't require some market crafting,
how do you how do you talk aboutwhat it what it means for an
everyday family? Yeah, You know, when I was
finishing this book, I talked toa politician who was like, I
like these ideas, Chris, but market craft is never going to
(22:19):
work on the stump like that. It's just not.
It's too heady. It's too intellectual.
And I said to him, yeah, I know that's not the idea.
The idea is that you as a policymaker and other economists,
influential folks, media, etcetera, can understand this as
(22:43):
a key foundational observation for future policy making.
It would never, it may not be just as you, you wouldn't run on
like, you know, competition policy or tax policy or
industrial policy on this dump. No, in in competition policy,
you would instead talk about corporate power and how it's
harming, you know, the voters that you're trying to court and
(23:05):
what you're going to do about itand how you're that particular,
that particular story or market.So what I'm trying to say is I
think market craft is relevant to everyone because how we craft
markets matters enormously. And it need not be the kind of
thing that we are all, you know,chatting about around the
Thanksgiving table. But now when I talk to
(23:28):
politicians these days and try to think about, well, what's The
upshot of market craft for the moment that we're living in now,
I think that the some of the keyurgent concerns that Americans
have are around the cost of living.
And there it's very clear that state action can craft markets
(23:48):
to at least stabilize prices forhousing, food, healthcare,
childcare, if not even bring them down.
And so as much as I wouldn't, you know, recommend like running
on a market craft agenda in 2028per SE, I would say, hey, we can
shape housing markets to make iteasier to build, make it cheaper
(24:12):
to build and to build faster. And we can go through modular
housing construction funds, zoning requirements, all the
different ways that we can craftthose markets to get that, to
get that done. So I think it's key and, and
critically important that policymakers and politicians
understand the history of marketcraft so that they have the
(24:35):
confidence to be able to say we just, we, we don't have to like
just lean back and accept markets as they are.
We can shape them to make them better.
Yeah. One of the things that your book
did for me was once you've seen it and you lay it all out so
clearly, right over the course of 100 years, like ways in which
(24:57):
we've shaped all the markets that you've named, you can't
Unsee it. And so part of what I'm hearing
in your answer, too, is, is the way we talk about like the
metaphors we use, for example, it may not be a politician
talking about, you know, market crafting on the stump.
But if they talk about the economy like the weather, like
something that just happens to us, then they're reinforcing
(25:19):
that fantasy of a free market asopposed to a clear role of
government and business and society, You know, all all have
roles to play in creating an economy that works for everyone.
Yeah, and it can apply. I mean, housing is a topic that
is partially because of its centrality in the abundance
agenda that and, you know, people in policy world have been
(25:42):
talking about recently, but it'sobviously been an urgent problem
for Americans for years now, particularly after the run up in
costs that came after the pandemic.
And I think a lot of politicians, including
Democrats, did not understand the urgency of this as an as an
issue. But that's a a a useful one to
(26:05):
think about how to craft those markets.
So in the book I go back to the 1930s when housing market craft
really began with the creation of Fannie Mae and a set of
policies that made it much easier and cheaper for Americans
to buy homes. America has the 30 year mortgage
(26:26):
which was pioneered in the New Deal area era.
We had the National Investment Bank called the Reconstruction
Finance Corporation that createda market for these mortgages so
that someone could loan to somebody in Denver to build a
house and a banker in New York could buy it.
(26:46):
And once you make it more liquid, you make it cheaper and
over the course of thirty you amortize it over the course of
30 years, suddenly housing became much more affordable to a
lot more folks. And of course the more houses
you build, the more jobs you have and the story goes.
So that market was very intentionally crafted in that
period. And then I think lots of people
know now about the history of zoning and how government is,
(27:10):
you know, crafted cities in a way that sometimes has worked
well, sometimes has become too sclerotic.
And then you zoom forward to today.
And I think we need to have an urgent question about how we can
craft housing markets to meet the housing shortage that we
have. I mean, the estimates are that
we need somewhere around 4 to 5 million new housing units to be
(27:33):
built. And with interest rates as where
they are now relatively high, there's not a lot of building
happening even in places like California where a lot of the
zoning rules have been reformed as the abundance folks make a
lot of hay out of. So what do you, what do you do?
I think you have to have something like a housing
(27:53):
construction fund that creates astructure that ensures that the
rates that multifamily developers for those who build
dense housing can have so that when rates go up, they have a
more stable rate and when rates come down, they have a more
stable rate so that they know that it's going to be
affordable. So the math works for them to
(28:15):
build, I think. And by the way, some of the
estimates on that mean that you could build over a million
housing units just through the creation of a $50 billion fun,
which, you know, sounds like a lot.
But in the context of the full federal budget, which is several
trillion dollars, it's pretty affordable given the urgent,
urgent need. You could have an industrial
policy for modular. You know, modular is the kind of
(28:36):
housing where it's the it's built off site and then you
bring it on site and it's fabricated.
Excuse me, it's the fabricated parts are used to build very,
very quickly and half of the homes in the Nordic countries
are built this way. We could do that in the United
States. There are challenges to it.
One of the biggest is the lack of private capital that's moving
(28:58):
into that public dollars can attract those private dollars.
So I'm saying all of that as a way of gesturing towards the
important mean to think about how can we craft markets,
housing markets, to bring down prices and to boost supply.
And we can use that kind of framework for housing.
(29:19):
We could use it for eggs and commodity prices.
You can use it for care. You can use it for a lot of
these things to get to an agendathat is at the end of the day,
somewhat simple and direct and speaks to the needs that
American families have. Let's stay on housing for a
second and digging into that example you're giving it, we
(29:39):
start to see some of the core elements of market crafting as
you lay out, right? So I hear an institution, right,
Housing construction fund that would be important institutional
player. I hear the need for leadership.
Name some of the elements here that you think are key to market
(30:00):
crafting. So when it goes well, I see
three things that happened in those stories.
And the book is a collection of a dozen different stories or
moments focused around the people who are the market
crafters, hence the name. And some of them fail and many
of them succeed. So the ones who succeed there
(30:23):
tend to be three ingredients. First off, there's a clear
mission. So build X number of housing
units in the context of housing.Or it could be onshore
semiconductor manufacturing, or it could be in short energy
(30:43):
prices remain stable or financial stability.
The mission has to be clear, sensical to everybody and and
aspirational. Secondly, you have to have an
institution that you can hold accountable for it.
We really don't like institutions in the United
States for the most part. We fear the consolidation of of
(31:04):
power, particularly in the federal government.
And the irony is a lot of the institutions that we have, when
we create them and then when we give them the third ingredient,
which is power and discretion toaccomplish a mission, they can
be very effective. So the Fed I think is maybe one
of the best examples that's out there. the Fed has a clear
(31:27):
mission price stability, maximumemployment and and it has read
financial stability as a piece of its mandate as well.
It has, you know, an institutionthat is very clear.
The central bank is what it's very complicated, of course,
(31:48):
with the FOMC and the Board of Governors and the reserve banks
and da, da, da, da, da. But none the less there's an
institution that we can hold accountable to fulfil that
mandate. And it has a lot of discretion
and power and it it makes mistakes for sure.
We just came out of a period of high inflation.
And so it is by no means perfect, but generally if you
zoom out for a second, you say, wait a second.
(32:09):
You know, there's a reason that finance loves having the Fed.
It's because they set the price of short term credit.
They make sure that, that, that price stays stable.
And that enables it the, the that industry to invest with
confidence and assuredness of what the cost of capital is
going to be like in the short term and the medium term.
(32:33):
And so I think that those ingredients of mission,
institution and power are reallykey.
You see it in semiconductors. You see an energy price
stability, you see in a lot of the other things that are that
are in the book. And that's the kind of approach
that I think is more often. Of course, that is very much not
(32:54):
in the in the zeitgeist now. You know, we are living through
a moment where on the right, as we've seen, they're trying to
bludgeon government and the institutions of government.
Now there is a steel man argument that they would say,
well, they've become sclerotic, they've become inefficient, and
we need to have them be more accountable to the executive.
(33:16):
I think that's mostly a theoretical argument.
In practice, that doesn't seem like what doge in particular has
actually been doing. But there is a sense that the
institutions are the problem on the right.
And as much as I agree with someof the conclusions of the
abundance movement, I think underneath it there is also a
kind of appeal to common sense. Well, don't you know, the
(33:36):
institutions of government, again, are really the problem.
That's why we don't have cheap housing in the United States.
And it takes you to, you know, it's a different politics, so it
takes you to a different conclusion.
But on both sides, there's a wariness of institutions.
And I think that's been much more common than not in the
(33:56):
history of America. And from where I sit, what I'm
trying to do with this book is to say institutions are
fallible, but they also often really succeed.
So instead of just saying the institutions are always the
problem, let's take a magnifyingglass to the moments when
government actually works so that we can not just celebrate
(34:18):
those so that we can replicate them, because there are many,
many problems that we are going to need government to help
solve. Well, let's spend the last 10
minutes and then we'll go to questions from folks on the the
Zoom with us. But it's been the past 10
minutes talking about one of those ingredients that make
institutions work, which I really do think is leadership
and the people, the people who hold the mission, articulate the
(34:40):
mission. And I love the stories
throughout this book, like we learn about Bill Martin's, you
know, one of the longest servingfed chairs that like his
dedication to his faith and his tennis game or part of what set
him up for, you know, 5. It's five different presidential
(35:02):
administrations. Is that right that he was the
Federal Reserve chair? Eisenhower, Kennedy.
Johnson. Yeah.
Four or five, Yeah. Yeah.
And and so it's it's stories like that which, well, I just
have been amazed at, you know, what you were able to find, but
from antitrust enforcers to central bakers, it's like the
(35:24):
market crafters, right, are partof, you know, are really what
animates this book. So tell us about one of your
favourites from the past. And then I'd also look for you
to tell us about one of one of the market crafters from a more
current era, which I think you call new market crafting the the
sort of last section of the book, which includes a lot of
(35:47):
the Biden folks. So start with the history,
though. Let's go there.
Let's go back for a second. Tell us about a market crafter
and what they did and and how itshaped American history.
I think the thing that sustainedme in writing this book was the
people as and I, you know, I was, I was writing it.
And so I hope that it is what sustains the reader.
(36:09):
I, I wrote it as a collection ofa dozen different stories and
moments in time and don't tell my publisher, but I wrote it so
that if one does not want to read it cover to cover, that is
a OK. You know, they always say you
should write a book in the way that you want you, the way that
you want the book that you want to read.
And for me, a lot of books, you know, I'll read the introduction
(36:31):
and the 1st chapter and then I'll go to the T the table of
contents and see the chapters that are most out of the stuff I
know a lot about. I want to see what the author
has to say about it or things I know nothing about.
And I just want to learn something new.
So I wrote the book so that you could do that if you wish.
I mean, a lot of people have read it cover to cover, which
is, you know, just great too. And so because of that, you got
(36:53):
to go, I got to go really deep into these characters stories
and you really, you know, get you feel like you get to know
them. You're going through their
correspondence, their appointments, books, their, they
do oral histories in many cases in the last decades of their
life. So you hear them reminiscing in
(37:14):
some cases. I talked to their kids.
Anyway, I did a lot of characterresearch around the, the, the,
the market crafters and the onesthat I found that were the most
fascinating were the ones who I found who I thought were most
entrepreneurial. I do think that is the word.
And they came in ready with a idea of what they wanted to see.
(37:36):
And then they were creative in getting it done.
And so one that I'll talk about is actually, he was the most
difficult character for me to write about.
His name is Bill Simon, and he was the Treasury Secretary in
the Nixon administration. He was a libertarian who didn't
really believe in government so much and yet ends up in the
(37:59):
Nixon administration being put in charge of oil and gas.
And the Yom Kippur War happens and the oil embargo is a result.
And all of a sudden he is responsible for ensuring that
nobody in America freezes to death in the first oil crisis.
And he's actually very successful.
So he crafts markets, he does a few things he carefully he's
(38:23):
they, he stockpiles the oil and gas reserves.
He does resource allocation to industries to make and to
geographies, making sure that hospitals and and the military
are taken care of. He creates price controls so
that allowing the prices to go up, but more moderately than
(38:44):
they do in Western Europe. And through all of this work to
in that crisis moment, on the other side of it, the actual
first oil crisis in the 1970s isrelatively successful.
He did a good job and it was he was a difficult guy to read his
stuff because he's not a person I would have been friends with.
(39:04):
And yet it was hard not to come to that conclusion.
And that's in contrast to what happens at the end of the decade
in the second energy crisis whenJimmy Carter is president and he
after the Iranian revolution, hemakes the move to decontrol
prices to just sort of let it all go and say, you know what,
the market is going to just sortit out and prices skyrocket.
(39:27):
There are the lines that we all remember culturally as as part
of the problem. And so it was like the mirror
image of that story. The the institutional thing that
though that comes out of the Simon experience is they create
the Strategic Petroleum Reserve,which stores hundreds of
millions of, of gallons of, of oil in salt, these salt caverns
(39:53):
in the southeast of the United States.
And it still exists today. And it's one of the big reasons
why we have had significantly more energy stability at least
until recent years when domesticproduction significantly
increased. So Simon was fascinating, but
you know, there were so many other characters.
Andrew Brimmer, who was the first black.
Governor of the Federal Reserve is in the book who really
(40:15):
hustles to make global finance work and and his story is
fascinating. I talk about this woman, Nancy
Teeters in the midst of the Volcker shock, who wanted to
find a different way to squelch inflation that didn't have such
an extreme effect on manufacturing jobs.
(40:36):
The stories were what sustained me.
Yeah, absolutely. And it's what makes it so fun to
read, too. I mean, not only is it, you
know, it's sweeping history, butthen people and some of whom
we've heard about, but most of whom we haven't.
And it's, it's a wonderful glimpse into their lives in that
period of, of time. And you know, the hard part
(40:56):
about the period of time we're living in is you don't always
see it as history making. It's just sort of the headline
of the day. And one of the things your book
did was situate the last four years, the last six years really
in the historical context. So tell us about a market
crafter that we do know, whetherit be Lena Khan or Brian Deese.
(41:20):
Yeah, I focus on 2 folks in the past 15 years, but with a lot of
supporting characters. So, you know, the the final
quarter of the book is contemporary, and it was a
totally different way of researching.
You know, the first sections were much more in the archives
and, you know, trying to recreate these people who are
(41:43):
not alive. The later chapters were
something I lived through and people that I could interview.
So, you know, Brian Deese is a fascinating character.
He's not a household name for sure.
He was the director of the National Economic Council under
Joe Biden. And I think his story matters
(42:04):
because he's emblematic of a shift in political economy that
has happened over the past 15 years.
He grows up as part of the crew in the 2000s with Jason Furman
and Larry Summers. He actually works for Larry and
Jason in the early White House, and he's chart in the Obama
White House. And he is charged with
(42:25):
overseeing auto bailouts. If you remember, in the great
financial crisis, not only did the banks all threatened to go
under, but GM, Chrysler, Ford, all of these companies were just
hemorrhaging money. And, you know, the government
steps in, provides that kind of emergency room assistance.
(42:46):
And the lesson that Brian takes away from that is radically
different than the lesson that Larry and others.
I talked to them both about thatexperience and I and and their
answers were just like diametrically post.
Brian's take away was, you know,these markets need to be managed
so that we never get back into an emergency room kind of
(43:06):
situation. So you, you know, a bailout is
not what you need to be talking about.
Where is in the classic sort of economics, neoclassical
vernacular, it would be about market failure while markets
sometimes fail and government, you know, has to take care of
that. That could be with an
externality, that could be in a crisis moment, but that's just
sort of how markets work and what government's there to do.
(43:28):
So Brian took away this lesson. And then he continued to do all
kinds of interesting things in the Obama administration.
He becomes the climate czar. He's at OMB for a time, but in
the Biden years, he becomes the director of the National
Economic Council. And he assembles a team of
people who are very focused on spurring clean energy
(43:52):
investment, bring back the semiconductor industry to the
United States, making major investments in infrastructure.
And on each one of those things,the Biden folks succeed
legislatively and substantively.Now, of course, the inflation
that happens with up to 9% turnseveryone's attention away from
(44:17):
those pieces of the agenda and towards price, price stability.
And Americans rightly, understandably suffer and are
very angry about it. And of course, Joe Biden didn't
win the election. It was partially because of the
economic legacy. But I think it's critically
important to separate those two things out.
The inflation was not caused by that legislation.
Even the the the highest estimates that come from
(44:41):
moderate economists like OlivierBlanchard or Ben Bernanke or
that about 2% at most of the 9% of inflation was related to that
early ARP stimulus bill. The vast majority of the
inflation was because of the supply chain bottlenecks,
bottlenecks that we all experienced in that rapid shift
(45:01):
in consumer demand. And yet and yet so many people
just want to throw the baby out with the with the bathwater.
So the last thing I want to say on this is I think that, you
know, wherever you might stand on Bidenomics, it is clear that
there is a new kind of conventional wisdom on the right
and the left, which puts the state at the center of economic
(45:23):
stories. And it's the question is not
like, you know, how do we get government out of markets these
days? It's between like should tariffs
be broad based or should they betargeted?
Should industrial policy be justfor national security reasons or
might it be important to have critical minerals here to
support a private industry as well?
That's the contour of the conversation.
(45:44):
That is very different than the world that Brian started out in,
you know, 15 plus years ago. Yeah, yeah, a paradigm shift.
A paradigm shift. Chris, I get to the first
question that I'm seeing in the chat, and this is from Edmund
Morris. And he I, I if, if I can distill
it down, I think he's asking essentially, are there some
(46:07):
things that just don't need to be in the market that should be
a public good for people, healthcare education, he names
out. And how do you think about that
related to market crafting? Yeah, I think so.
You know, it seems we haven't anagreement in the United States
that education, at least K through 12, education, should
(46:29):
not be driven by market forces. And I think that's a good thing.
We do not have that agreement onhealthcare as lots of other
industrialized countries do, andI think that it causes Americans
to pay double. What people in Western Europe
(46:52):
pay for healthcare with health outcomes that are roughly on
par. So I think it's really important
to say, in fact, one of the moredifficult chapters for me to
write in the book was the one onhealthcare because even before I
embarked on it, I hesitated to say, you know, is this really
(47:13):
what I wanted? Is, is, are healthcare markets
are, are crafted for sure by thestate and we can, you know, I
focus on the creation of Medicare and Medicaid in the
1960s. But you I could have written it
about the ACA, You could write it about many of these different
moments you see government trying to shift a market and
point it in a way that makes it cheaper for certain goods.
It makes it more accessible, that makes it work in a
(47:35):
different way. But just by talking about it as
a market, am I going to sort of reinforce that idea that that
healthcare should be a market? And you know what, I think I
managed to not do that at the end of the day.
But but I think that that that tension is very, very, very
(47:57):
alive and well. And there are a lot of places
where I think we just, we don't have a cultural or political
consensus. For instance, student loans, you
know, there's certainly a, a market dimension for those and
you can make an argument for it.You can make an argument against
it, but it's but it's really tricky.
(48:18):
Yeah, this your book really, andyour thinking influenced me when
I was writing the guarantee, my book Inside the Fight for
America's Next Economy. And both of those instances were
really tricky to write about. You know, healthcare, you know,
we're in this moment where we'vepassed some of the most
(48:42):
important subsidies that we've ever seen.
They're robust to enroll people onto the ACA.
So it's like we've had this deeply imperfect system, this
market system, and then we've figured out crafting that helps
make it work, right? So 10 million more people were
part of the ACA over the last few years than were in the past
(49:02):
because of these subsidies that are going to expire in just a
few short months. So it's like we're a ticking
time bomb that will have a huge impact on upcoming elections, on
people's individual lives. And it's like all interesting
because in this case, it's market crafting that feels
(49:22):
invisible to so many people until the time bomb goes off,
and then it won't be. But that's why we get back to,
well, when you have successful market craft, you build an
institution with the mission of making healthcare cheap.
And so instead of putting subsidies all over the place in
the tax code that expire and youhave to renew every year, you
know, you could have just had Medicare have either an option
(49:44):
for everyone to join. And obviously, politically that
wasn't possible. So it's not everything's 2020.
In retrospect, I'm not. It's less about blame and more
about, well, why wasn't it possible?
Why do we still struggle to say actually we should have an
institution that is responsible for providing quality,
affordable healthcare to all Americans?
And when we do that, we can holdit accountable.
(50:05):
People hold Medicare rightly accountable for what it does
with seniors. Historically, the prices have
been managed by Congress. Now we have Medicare Advantage
plans, which I think need to be meaningfully reformed.
But my point is, is like when you when you craft the market to
bury it in the tax code and provide these incentives rather
than either creating or reinforcing an existing
(50:28):
institution with the power. Ironically, we get much more
balkanized, less efficient healthcare that's more
politically fragile than if we just done it the, you know, the
clear way in the first place. Did your?
What are some of the opinions you Were there any opinions you
(50:50):
had that shifted as you wrote the book?
That's a great question. I mean, I certainly learned an
enormous amount. I don't know if there were any
closely held opinions that changed because of the research.
I, I think that maybe that my position on discretion and power
(51:17):
in the administrative state, to use a sort of wonky set of
words, evolved over time. I think, you know, I had, I
have, I have been and am sympathetic to a lot of the
concerns about the administrative state being too
isolated or insulated. But most of the time when I
(51:38):
looked at government workers doing their jobs, I saw them
struggling for resources and power to get things done.
And then when they got it, they more often than not succeeded.
And then so I definitely became more sensitive to all of the
restraints that we have put on government, thinking that it is
(51:59):
going to be a good idea. I mean, the paperwork reduction.
I mean, we could go through specific examples of things that
sound good in theory but limit discretion and power and sort of
hobble the state. So that might be one thing.
Another thing would be the role of Congress.
You know, we live in this time that is hyper partisan and I
(52:20):
think people are very suspiciousof Congress being able to get
anything done. And, you know, the Congress
under Joe Biden was quite productive and often on
bipartisan lines. I mean, everything from the
confirmation of Lena Khan to theCHIPS Act to the infrastructure
bill to, you know, these are these are things that I think
(52:41):
that we need to take note of andultimately expect Congress to be
in the driver's seat. And these days, you know,
particularly on the right, the theory of the unitary executive,
the president is the only personwho's going to be able to
actually get the administrative state into shape.
And I, I see Congress as the ultimate boss of the Fed or
(53:05):
Fannie and Freddie or a lot of these institutions.
And I think that's that's a better arrangement than
investing it all in the executive.
Yeah, very relevant for today's headlines.
A couple questions come togetherat this Nexus.
(53:25):
What Tony Simon said in project development, government action
has been primarily limited to mitigating potential harms, for
example through NEPA and permitting.
What can be the narrative aroundgovernment advancing community
benefits? And then Allison Lingone says if
you were to lay out a market crafting agenda, right, that
(53:46):
could like a government advancing market crafting agenda
that could result in changes that are helpful to everyday
people, what would it look like?I thought that was an
interesting way to frame it fromthe passive to the sort of.
Proactive. Yeah, yeah, Yeah, I think so
too. The first question in some ways
feeds into the second. Listen, I think the number one
(54:09):
thing that Americans are frustrated about is cost and
dignity. And the second is harder to
solve. But I think needs to be part.
If I were, you know, if I if I were advising A politician, I
think it she or he would need tospeak to speak to both on cost.
(54:30):
You know, we talked a lot about housing already, so, but I think
the that agenda would be where Iwould start.
So housing, food costs, care costs and on each one of these,
crafting those markets to eitherstabilize those costs or bring
them down. I think you also need to talk
about jobs because Americans care about how expensive things
(54:53):
are, but you know, people want astable job.
That's like, if this is not a big insight over here, this is
in not just bowling, but just everyday conversations with,
with people. And so that means I'm thinking
about higher minimum wages, sectoral bargaining, a lot of
these things that Democrats havetalked about for some time.
(55:14):
But I think they need to explainhow those are going to help
people. And then the the hardest set of
issues I think is around sort offuture proofing, to use a term,
because there's a lot of there are a lot of threats on the
horizon. I mean, climate is an obvious
one. We, you know, I live in New York
(55:35):
and our air is full of the smokefrom the Canadian wildfires.
And this now seems to happen every single year.
I read yesterday that the dust from the Sahara has affected air
quality levels in the Southeast.Anyway, you're reminded of like
the global nature of these problems and the fact that
public policy needs to respond to it.
And AI and AI is radically changing, I think how we all
(55:57):
live. And that'll only accelerate.
And there'll be significant labor market disruptions that
come for it. And this time less so for blue
collar folks and more for white collar.
So I think I'm a market craftingagenda that speaks to those
things. Is is it's critical, but I will
say, you know, you don't need touse the word market craft on the
stump. You know what I mean?
(56:18):
It's about the outcomes for people.
I think that's what people care most about the how industrial
policy this and that how you going to do this with the tax
cut deduction. You know, that's the how the
sausage is made. And so that may not be stump
ready. Well, it's Stump ready for me,
so I'll I'll vote for you. That's funny.
(56:41):
Last question is just who are some of the market crafters
today? You know, obviously you wrote
this book in a different administration in a different
world and now you're talking about it in a moment that is,
you know, completely, completelyshifted.
And so how do you think about the market?
How do you think about what market crafting in the headlines
(57:02):
today and and who are if they exist?
Yeah, the irony, The irony is inthe first Trump administration,
there were real gestures towardsmarket crafting.
A lot of the tariffs in that administration were more
targeted and than the ones today.
And the CHIPS Act actually started in the Trump
administration. It was a Trump idea to pursue.
(57:26):
So there were there was a marketcraft in that.
This administration is their economic policy seems to be
defined by impulsive decisions around tariff and trade and
increasingly around, you know, tax cuts for the wealthiest on
the backs of cutting Medicaid and food stamps.
(57:50):
And so there's not a lot of market craft to be seen.
That's what I'm trying to say. There are some examples.
Listen, the steel and aluminum tariffs are a clear market
craft. They want to reinforce that
industry for the jobs and for national security reasons.
You can agree with it or disagree with it, but that is a
market craft. The crypto reserve fund, which
they've created, it's small, it's only $20 billion.
(58:11):
But none the less there is a, a,a mission build and deepen the
crypto markets and they want to pursue that.
So there are signs of this in the corners.
But by and large, this is an across the board economic
policies that affect markets in a significant way and not not
the kind of market craft that wecould have otherwise we we might
(58:34):
have otherwise seen. Well, in a decade from now,
Chris Hughes, I really look forward to Market Crafters
volume to that will help us makeeven more sense of what it is.
I just want to say, you know, itwas really a pleasure to read
it. I am so grateful you wrote it
because it's a gift to all of usto contextualize what we're
(58:54):
living through in this moment. I hope folks pick it up.
It's a beach read for all the nerds out there.
As well said. And just couldn't thank you more
for joining us today, Chris. So I hope folks will stay tuned
for Economic Opportunity programs next event on June
26th, advising small businesses on job quality lessons from the
(59:19):
CDF is and I want to thank our team at the Economic
Opportunities program, includingExecutive Director, Maureen
Conway, Matt, Francis, Tony and Nora for pulling together
today's event and our colleaguesat architects and we will see
you all next time. Thank you for being here, Chris,
and thank you all for joining ustoday.
Good afternoon. I'm Natalie Foster, a senior
fellow at the Aspen Institute and Co founder and president of
Economic Security Project. And it is my pleasure to welcome
you today to our conversation. Market Crafters The 100 Year
Struggle to Shape the American Economy.
(00:28):
A book talk with Chris Hughes onhis powerful new book Market
Crafts and it frankly couldn't come at a better time.
People are so disillusioned by the economy, how it works, for
whom it works, and if it will even work for our children in
(00:49):
the future. And in the midst of this, Chris
offers us a bold and a necessaryreframing that markets are not
natural or neutral, but they aremade, they are crafted, they are
shaped by policy, by power, and most importantly, by people.
So this conversation is part of our Opportunity in America
(01:11):
series, where we examine the changing economic landscape that
workers face and how we can create an economy that works for
everyone. We are so glad that you are all
here today. Before we get started, let's do
a quick review of the technology.
So everybody's muted today. And if you have questions, which
(01:34):
we hope you do over the course of this conversation, use the
Q&A button at the bottom of yourscreen to submit and upvote
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perspectives, ideas, examples, or resources that you have to
today's topic, things that are relevant to today's topic in the
(01:54):
chat. And we'd love it if you would
post about this conversation on the social media platform of
your choice. The hashtag is talk opportunity.
The event is being recorded and will be shared out via e-mail
and posted on our website. Closed captions are available
for this discussion. So click the closed caption
(02:15):
button, the CC button at the bottom of your screen to
activate them. And now to the reason we are all
gathered here today to speak with Chris Hughes.
Chris is an economist and a writer who serves as the chair
(02:36):
the Board chair of the Economic Security Project, a leading non
profit advocating for economic power for all Americans, and was
a Co founder of ESP alongside myself and Dorian Warren.
Chris holds degrees in history and economics from Harvard, The
New School and is completing hisPhD at the Wharton School at the
(02:58):
University of Pennsylvania. His writings and essays have
been published widely from The New York Times to the Financial
Times. And his first book in 2018 was
called Fair Shot, Rethinking Inequality and How We Earn.
And I have such fond memories ofthat book coming out.
So it's very exciting to have you, Chris, with your next book
(03:22):
here in 2025. And it's just going back in
history. In 22,004, Chris Co founded
Facebook and then later directedBarack Obama's digital
organizing efforts in President Obama's insurgent 2008 campaign.
So that's around the time when Igot to know Chris and I've
(03:44):
gotten a front row seat to watching your work, Chris.
His work on rebalancing the American economy over a decade
plus. So let's actually start there,
Chris, I'm so glad you turned your attention to the economy.
And I I couldn't be frankly, more important the time to do it
(04:08):
and, you know, subject matter totake on.
But tell us why, what shaped your journey?
Why the economy and why this book?
Well, I'm happy to go there and anywhere else that makes sense
in this conversation. But first, I just want to say
thanks to you Natalie for that very flattering and kind
(04:29):
introduction and more importantly for the past near
decade of of working together ascolleagues and as Co
conspirators in the effort to make the economy more fair and
prosperous. And also to Aspen for convening
us today and for everybody, for I'm tuning in.
(04:51):
So economics, why economics? You know, my career zigzagged
for a little while until I foundeconomics about 10 years ago.
And then I feel like I've had a home.
So as you said, I was part of the founding team of Facebook in
2004 at Harvard. I had grown up in North
Carolina. My mom was a public school
(05:12):
teacher. My dad was a traveling paper
salesman. I got in financial aid to go to
boarding school and then to Harvard.
We started Facebook and it exploded.
Everybody was interested in it, and I worked on the product and
communications teams for severalyears.
I liked it. I thought it was interesting.
(05:32):
It was not a mission for me in the way that it was for Mark in
particular, but also others on the founding team.
And so I left to go work for Barack Obama, as you mentioned,
for a couple years. And then I sort of wandered.
I was in my late 20s. I had, to be honest, made more
money than I could have ever dreamed.
(05:53):
I paid off all my loans from college, obviously, and all
kinds of things. And so I thought a little bit
about venture capital. Then I worked in media for a
while. But in 2016, after a lot of
conversations with you and with other people, I began to focus
more clearly on the question of how can we make the economy more
(06:14):
fair? You know, income inequality,
wealth inequality, we're all skyrocketing.
This was right before Trump was elected.
And my own story was, you know, so bizarre.
You know, I hadn't worked for a few years to create a company
that at that point, I was still generally proud of and made more
money than we could have ever imagined.
(06:35):
And while that had worked out great for me, it also didn't
feel fair. It felt like emblematic of a
kind of economy where a few people get these bonanza kinds
of wins and everybody else is struggling to make ends meet.
So that started on a long journey, first as in, you know,
activist and, and nonprofit in, in the nonprofit world.
(06:58):
And then over time it's been more as a researcher and a
writer. I got my masters.
I began to work on my PHDI wrotethe first book.
Now I've written the second. And I, I, I love economics
because it's important, you know, the study of money and
production and how we coordinate.
I think it is one of the most important stories in the history
(07:20):
of humanity, in the history of the United States, and it's also
very much up for grabs. It's a field that is debated,
and lots of people want to tell you exactly how it works.
And, you know, you got to agree with most of the things in the
textbooks. And that's just not what I do.
I'm sort of naturally suspicious.
And that means that I've gotten an opportunity to engage really
(07:42):
on a first principles kind of level with a lot of economic
ideas. And I find that challenging and
fulfilling. So that's why I do what I do.
And this book went through many iterations before it landed as
market crafters. Yes, it's awesome about that.
Well, my a lot of the academic work that I've done is in the
history of central banking. And so I thought that I was
(08:05):
initially writing a history of the Federal Reserve and the
history of American central banking, and that's where it
began several years ago. And then there was this
explosion of interest in industrial policy around
2021-2022. This term that had been really
(08:26):
banished from political and economic discourse was taking
center stage very quickly. And I was fascinated by that.
I thought it was really important and exciting and
relevant, but I also thought it was too limited because when
people kept talking about industrial policy, they were,
they were using a term that mostof the time was supposed to
(08:47):
apply to like manufacturing and blue collar kinds of of Labor.
And what I saw there was the government supporting a
particular industry because it believed that it was important
for whatever political ends thatcould be.
Semiconductor manufacturing, it could be climate, it could be a
(09:07):
lot of things. But if you look at the history
of American capitalism, we do that all the time.
I mean, the story of finance andbanking is this story where we
believe that it is important andit's critical to to keep prices
stable, to have financial stability, to ensure maximum
(09:29):
employment, moderate long term interest rates.
And all of those things are managed by government and
particularly the Fed, but not the Fed alone, the OCC, the SEC
to some extent, the other, the FTC and other other
institutions. And So what I saw was something
broader, which a political scientist, Stephen Vogel had
(09:50):
coined the term market craft several years before.
And that really stuck with me. And so I would decided that I
wanted to write a book that would combine my history, my
interest in a lot of the institutions of American finance
like the Fed with a history of industrial policy purposefully
to broaden out that term and to say that we have a long history
(10:11):
of crafting markets towards political ends.
Sometimes we're successful, sometimes we fail.
And but we have to be clear eyedabout that history if we're
going to pull out some of the lessons for the future.
And so that's what I am spendinga lot of time doing these days.
Before we get into the economic specifics, you just have this
(10:32):
metaphor of the garden that you worked in, I think grudgingly if
I remember, and how that is the the the metaphor you used when
writing this book. Will you connect those dots for
us? Yeah, I, I'll, I'll try my best.
So, you know, many of my friendsdo vegetable gardening and love
(10:55):
it. It's a source of a respite and
pleasure. And for me, my father had a
vegetable garden growing up. I grew up in Hickory, NC.
We lived in a a house that had ayard, but my dad tilled up a
third of the yard. And for me, gardening was just
the pits. It was the worst.
Like on summer evenings when I want to be inside watching TV or
(11:17):
reading, I had to go out and steak green beans or excuse me,
steak the tomato plants or, you know, harvest the green beans or
deal with the squash. You know, all this stuff that at
least I as a kid of 678 was not not that interested in doing.
However, all that time did lodgein my memory.
(11:37):
And so when I was thinking aboutwhat kind of metaphor I could
use to talk about how markets work, the one that I kept
circling back to was the idea ofa garden.
And the the IT was for a few different reasons.
The 1st is, you know, gardens are places of the natural world
(11:59):
where there are organic forces that seem to be propelled by
their own logic. So you know, the, the lifeblood
of the system is the, you know, the organic, the outdoors and
things grow and they're also places where we acknowledge that
growth. And then we pointed in a certain
(12:20):
direction, we harvest all that energy towards a particular kind
of production. And so in some kind of free
market fantasy, you might walk through the woods and just hope
that you find some blueberries that you can eat or, you know,
some tomatoes that are growing that you can eat.
But no, the history of humanity is we say, no, we want those
(12:40):
tomatoes. We like those tomatoes.
We're going to take them. We're going to plant them in the
garden. We're going to make sure they
would have the right amount of shade or the right amount of
sunshine. We're going to make sure that
they have water, maybe even fertilizers.
And because we do all this work to manage and harness those
organic forces, what do we get? A lot more tomatoes.
And you know, we can in fact be an innovative and even invent
(13:02):
new kinds of tomatoes or engineer new kinds of tastier or
nutritious food. And that metaphor of sort of
organic forces that may seem uncontrollable but then are
harnessed towards human ends. Things that can produce
abundance can produce more food than our ancestors could have
(13:26):
ever dreamed of. That metaphor I think sticks
with markets because markets too.
There are these cross historicaltrends in markets, you know,
property law, stable currencies,exploitation of Labor.
There are these trends, some of which are good, some of which
are very much not. And we can recognize that and
(13:47):
still say, but wait a second, wewant markets to work for us.
Capitalism is something that we can shape and harness so that it
works for people. People should not be working for
capitalism. And so that metaphor made it
into the introduction of the of the book, and it stuck with me.
I think it's great and I'll makesure to lay it out to my kids
(14:12):
when we garden in the future. But I want to talk more.
Why'd you say? They'll love gardening more than
I did. I'm.
The pits you let's talk about free markets because a second
ago you called it the free market fantasy, right, where we
might get blueberries if we're lucky.
(14:32):
And I think that is so right on at and I'm curious, why do you
think the myth of the free market is so durable?
And, and, and then you have thisthe I word, you call it right
intervene. Talk a little bit about those
(14:53):
two things. Well, I think really until about
20/16/2017, I would have talked about the power of, of, I think
I don't know if I would have said free markets, but I would
have talked about markets as if they were organic forces that
come first, that markets work this way or that way.
(15:15):
And then government is there to intervene.
To sort of the, the, the metaphor, there is something
like a, a stream rolling down a,a hill and government shows up
to, you know, put a dam in or tochange something that's
naturally occurring. And that metaphor is when I use,
and I think it's one that is continues to be pervasive, not
(15:37):
just on the right, but on the left.
So, you know, when I was writingthe book, I was determined not
to use the word intervene at anypoint.
And so by the end, I did a little control F just to make
sure in the manuscript I had notbecause because it's a sticky
idea, you know, And it's one that when we when we grasp for
the language, that's what we find.
But I think it's a really dangerous one because it does
(16:00):
suggest that markets are just fine on their own.
It makes no observations about the things that make markets
work in the first in the first place.
You know, the basics of propertylaw, contract law, a stable
currency, investment capital that can be developed and
(16:23):
deployed, all of which rely on government, on public policy.
Even in the most libertarian kind of scenarios, markets
require government. And then what I see when I look
at the history of, of American capitalism is something even
more robust, like if you go through some of the major
markets in the United States, banking and finance, health
(16:46):
insurance, pharmaceuticals, airlines, cars, defense,
defense, production, semiconductors, I could keep
going on the list. Every single one of these
industries has been managed by by policy makers for 100 years.
(17:08):
And so there is the idea that there's a free market where
government comes in afterward and then like moves things
around is, is not empirically, is not empirically true.
And yet that is still such a pervasive idea that we keep
using, we keep coming back to linguistically.
And that's one of the big reasons why I wrote the book is
(17:29):
to 1st off, just make it clear that markets are often managed
and crafted. And then to explore, well, if
we're going to do it, like a lotof those industries I just
mentioned are going so well, youknow, health insurance,
pharmaceuticals, etcetera. So let's talk about when it
works and when it fails, so thatwe can do it better.
Reading your book, it becomes soclear that markets are crafted
(17:52):
right even by the second section.
It's like, Oh yeah, of course and so and yet yet it is.
It is still a persistent myth. So who does it benefit to
believe in the free market fantasy?
And then I guess the other question I have is how do you
(18:12):
make the case that of how this is relevant to the everyday
family, right? That this that this enduring
myth holds us back and and, you know, harms the everyday family.
Yeah, those are great questions.I think, I think the the the
(18:34):
myth of the free market is particularly useful for the most
powerful market actors, which tend to be capital holders in a
lot of cases, because markets are often dominated sometimes by
private actors and sometimes by public actors.
(18:58):
And if you can get enough peopleto think that markets are
somehow self regulating magically organizing dynamic
structures, you have made the case that government should be
less active and thus those who are most benefiting from that
(19:23):
particular market order will stand to benefit even more.
And, you know, depending on depending on the market,
depending on the cost of capital, depending on the level
of investment that needs to happen, you can have markets
that you know will move into a kind of naturally oligopolistic
or monopolistic kind of arrangement.
And the idea that that is the result of free market tendencies
(19:48):
can enrich a lot of people in a very meaningful way.
Now, even in that story there isstill an important asterisk,
which is what I call the emergency room.
And we can see this super clearly in finance and banking.
Even people like Alan Greenspan,who I spend a good chunk of time
with in the book, who believed that government was often the
(20:11):
problem, who was a deregulator. He also had a market craft which
we can talk about towards financial innovation, which he
believed would exert market discipline and, you know, make
markets more stable. Even Greenspan.
Became so well known for his emergency room actions, what
many people might call bailouts or structured interventions.
(20:34):
We he did it in 1987. He does it famously with Mexico
in the early 90s, then with LongTerm Capital Management in 1999.
We can go through a long list. Even in the libertarian fantasy
of the free market, there's still there's still the state
coming in to help capital holders when the emergencies
(20:55):
come. And so that, that I think that
sort of mythology, that story has been particularly enduring
and worked very well for those who had the most resources and
the most, the most power. And obviously the one I'm trying
to offer is 1, where we say, uh,uh, guys, we need to structure
(21:15):
the market first in a way that makes it work for more people,
that prevents those kinds of emergencies and bailouts in the
1st place. But the only way that you can
follow a preventative regimen isif you, you know, understand
that markets need management andstructure in order to work well
(21:36):
and in order to be stable, whichI think we're closer to that set
of ideas now than in 2007 when Greenspan stopping or 2006 when
Greenspan stopping Fed chair. Yeah, yeah.
And so when you think about the everyday family, I mean, what I
hear in that is that costs are higher that, you know, there's a
(21:56):
concentration of power and wealth within a market.
If we pretend that it doesn't require some market crafting,
how do you how do you talk aboutwhat it what it means for an
everyday family? Yeah, You know, when I was
finishing this book, I talked toa politician who was like, I
like these ideas, Chris, but market craft is never going to
(22:19):
work on the stump like that. It's just not.
It's too heady. It's too intellectual.
And I said to him, yeah, I know that's not the idea.
The idea is that you as a policymaker and other economists,
influential folks, media, etcetera, can understand this as
(22:43):
a key foundational observation for future policy making.
It would never, it may not be just as you, you wouldn't run on
like, you know, competition policy or tax policy or
industrial policy on this dump. No, in in competition policy,
you would instead talk about corporate power and how it's
harming, you know, the voters that you're trying to court and
(23:05):
what you're going to do about itand how you're that particular,
that particular story or market.So what I'm trying to say is I
think market craft is relevant to everyone because how we craft
markets matters enormously. And it need not be the kind of
thing that we are all, you know,chatting about around the
Thanksgiving table. But now when I talk to
(23:28):
politicians these days and try to think about, well, what's The
upshot of market craft for the moment that we're living in now,
I think that the some of the keyurgent concerns that Americans
have are around the cost of living.
And there it's very clear that state action can craft markets
(23:48):
to at least stabilize prices forhousing, food, healthcare,
childcare, if not even bring them down.
And so as much as I wouldn't, you know, recommend like running
on a market craft agenda in 2028per SE, I would say, hey, we can
shape housing markets to make iteasier to build, make it cheaper
(24:12):
to build and to build faster. And we can go through modular
housing construction funds, zoning requirements, all the
different ways that we can craftthose markets to get that, to
get that done. So I think it's key and, and
critically important that policymakers and politicians
understand the history of marketcraft so that they have the
(24:35):
confidence to be able to say we just, we, we don't have to like
just lean back and accept markets as they are.
We can shape them to make them better.
Yeah. One of the things that your book
did for me was once you've seen it and you lay it all out so
clearly, right over the course of 100 years, like ways in which
(24:57):
we've shaped all the markets that you've named, you can't
Unsee it. And so part of what I'm hearing
in your answer, too, is, is the way we talk about like the
metaphors we use, for example, it may not be a politician
talking about, you know, market crafting on the stump.
But if they talk about the economy like the weather, like
something that just happens to us, then they're reinforcing
(25:19):
that fantasy of a free market asopposed to a clear role of
government and business and society, You know, all all have
roles to play in creating an economy that works for everyone.
Yeah, and it can apply. I mean, housing is a topic that
is partially because of its centrality in the abundance
agenda that and, you know, people in policy world have been
(25:42):
talking about recently, but it'sobviously been an urgent problem
for Americans for years now, particularly after the run up in
costs that came after the pandemic.
And I think a lot of politicians, including
Democrats, did not understand the urgency of this as an as an
issue. But that's a a a useful one to
(26:05):
think about how to craft those markets.
So in the book I go back to the 1930s when housing market craft
really began with the creation of Fannie Mae and a set of
policies that made it much easier and cheaper for Americans
to buy homes. America has the 30 year mortgage
(26:26):
which was pioneered in the New Deal area era.
We had the National Investment Bank called the Reconstruction
Finance Corporation that createda market for these mortgages so
that someone could loan to somebody in Denver to build a
house and a banker in New York could buy it.
(26:46):
And once you make it more liquid, you make it cheaper and
over the course of thirty you amortize it over the course of
30 years, suddenly housing became much more affordable to a
lot more folks. And of course the more houses
you build, the more jobs you have and the story goes.
So that market was very intentionally crafted in that
period. And then I think lots of people
know now about the history of zoning and how government is,
(27:10):
you know, crafted cities in a way that sometimes has worked
well, sometimes has become too sclerotic.
And then you zoom forward to today.
And I think we need to have an urgent question about how we can
craft housing markets to meet the housing shortage that we
have. I mean, the estimates are that
we need somewhere around 4 to 5 million new housing units to be
(27:33):
built. And with interest rates as where
they are now relatively high, there's not a lot of building
happening even in places like California where a lot of the
zoning rules have been reformed as the abundance folks make a
lot of hay out of. So what do you, what do you do?
I think you have to have something like a housing
(27:53):
construction fund that creates astructure that ensures that the
rates that multifamily developers for those who build
dense housing can have so that when rates go up, they have a
more stable rate and when rates come down, they have a more
stable rate so that they know that it's going to be
affordable. So the math works for them to
(28:15):
build, I think. And by the way, some of the
estimates on that mean that you could build over a million
housing units just through the creation of a $50 billion fun,
which, you know, sounds like a lot.
But in the context of the full federal budget, which is several
trillion dollars, it's pretty affordable given the urgent,
urgent need. You could have an industrial
policy for modular. You know, modular is the kind of
(28:36):
housing where it's the it's built off site and then you
bring it on site and it's fabricated.
Excuse me, it's the fabricated parts are used to build very,
very quickly and half of the homes in the Nordic countries
are built this way. We could do that in the United
States. There are challenges to it.
One of the biggest is the lack of private capital that's moving
(28:58):
into that public dollars can attract those private dollars.
So I'm saying all of that as a way of gesturing towards the
important mean to think about how can we craft markets,
housing markets, to bring down prices and to boost supply.
And we can use that kind of framework for housing.
(29:19):
We could use it for eggs and commodity prices.
You can use it for care. You can use it for a lot of
these things to get to an agendathat is at the end of the day,
somewhat simple and direct and speaks to the needs that
American families have. Let's stay on housing for a
second and digging into that example you're giving it, we
(29:39):
start to see some of the core elements of market crafting as
you lay out, right? So I hear an institution, right,
Housing construction fund that would be important institutional
player. I hear the need for leadership.
Name some of the elements here that you think are key to market
(30:00):
crafting. So when it goes well, I see
three things that happened in those stories.
And the book is a collection of a dozen different stories or
moments focused around the people who are the market
crafters, hence the name. And some of them fail and many
of them succeed. So the ones who succeed there
(30:23):
tend to be three ingredients. First off, there's a clear
mission. So build X number of housing
units in the context of housing.Or it could be onshore
semiconductor manufacturing, or it could be in short energy
(30:43):
prices remain stable or financial stability.
The mission has to be clear, sensical to everybody and and
aspirational. Secondly, you have to have an
institution that you can hold accountable for it.
We really don't like institutions in the United
States for the most part. We fear the consolidation of of
(31:04):
power, particularly in the federal government.
And the irony is a lot of the institutions that we have, when
we create them and then when we give them the third ingredient,
which is power and discretion toaccomplish a mission, they can
be very effective. So the Fed I think is maybe one
of the best examples that's out there. the Fed has a clear
(31:27):
mission price stability, maximumemployment and and it has read
financial stability as a piece of its mandate as well.
It has, you know, an institutionthat is very clear.
The central bank is what it's very complicated, of course,
(31:48):
with the FOMC and the Board of Governors and the reserve banks
and da, da, da, da, da. But none the less there's an
institution that we can hold accountable to fulfil that
mandate. And it has a lot of discretion
and power and it it makes mistakes for sure.
We just came out of a period of high inflation.
And so it is by no means perfect, but generally if you
zoom out for a second, you say, wait a second.
(32:09):
You know, there's a reason that finance loves having the Fed.
It's because they set the price of short term credit.
They make sure that, that, that price stays stable.
And that enables it the, the that industry to invest with
confidence and assuredness of what the cost of capital is
going to be like in the short term and the medium term.
(32:33):
And so I think that those ingredients of mission,
institution and power are reallykey.
You see it in semiconductors. You see an energy price
stability, you see in a lot of the other things that are that
are in the book. And that's the kind of approach
that I think is more often. Of course, that is very much not
(32:54):
in the in the zeitgeist now. You know, we are living through
a moment where on the right, as we've seen, they're trying to
bludgeon government and the institutions of government.
Now there is a steel man argument that they would say,
well, they've become sclerotic, they've become inefficient, and
we need to have them be more accountable to the executive.
(33:16):
I think that's mostly a theoretical argument.
In practice, that doesn't seem like what doge in particular has
actually been doing. But there is a sense that the
institutions are the problem on the right.
And as much as I agree with someof the conclusions of the
abundance movement, I think underneath it there is also a
kind of appeal to common sense. Well, don't you know, the
(33:36):
institutions of government, again, are really the problem.
That's why we don't have cheap housing in the United States.
And it takes you to, you know, it's a different politics, so it
takes you to a different conclusion.
But on both sides, there's a wariness of institutions.
And I think that's been much more common than not in the
(33:56):
history of America. And from where I sit, what I'm
trying to do with this book is to say institutions are
fallible, but they also often really succeed.
So instead of just saying the institutions are always the
problem, let's take a magnifyingglass to the moments when
government actually works so that we can not just celebrate
(34:18):
those so that we can replicate them, because there are many,
many problems that we are going to need government to help
solve. Well, let's spend the last 10
minutes and then we'll go to questions from folks on the the
Zoom with us. But it's been the past 10
minutes talking about one of those ingredients that make
institutions work, which I really do think is leadership
and the people, the people who hold the mission, articulate the
(34:40):
mission. And I love the stories
throughout this book, like we learn about Bill Martin's, you
know, one of the longest servingfed chairs that like his
dedication to his faith and his tennis game or part of what set
him up for, you know, 5. It's five different presidential
(35:02):
administrations. Is that right that he was the
Federal Reserve chair? Eisenhower, Kennedy.
Johnson. Yeah.
Four or five, Yeah. Yeah.
And and so it's it's stories like that which, well, I just
have been amazed at, you know, what you were able to find, but
from antitrust enforcers to central bakers, it's like the
(35:24):
market crafters, right, are partof, you know, are really what
animates this book. So tell us about one of your
favourites from the past. And then I'd also look for you
to tell us about one of one of the market crafters from a more
current era, which I think you call new market crafting the the
sort of last section of the book, which includes a lot of
(35:47):
the Biden folks. So start with the history,
though. Let's go there.
Let's go back for a second. Tell us about a market crafter
and what they did and and how itshaped American history.
I think the thing that sustainedme in writing this book was the
people as and I, you know, I was, I was writing it.
And so I hope that it is what sustains the reader.
(36:09):
I, I wrote it as a collection ofa dozen different stories and
moments in time and don't tell my publisher, but I wrote it so
that if one does not want to read it cover to cover, that is
a OK. You know, they always say you
should write a book in the way that you want you, the way that
you want the book that you want to read.
And for me, a lot of books, you know, I'll read the introduction
(36:31):
and the 1st chapter and then I'll go to the T the table of
contents and see the chapters that are most out of the stuff I
know a lot about. I want to see what the author
has to say about it or things I know nothing about.
And I just want to learn something new.
So I wrote the book so that you could do that if you wish.
I mean, a lot of people have read it cover to cover, which
is, you know, just great too. And so because of that, you got
(36:53):
to go, I got to go really deep into these characters stories
and you really, you know, get you feel like you get to know
them. You're going through their
correspondence, their appointments, books, their, they
do oral histories in many cases in the last decades of their
life. So you hear them reminiscing in
(37:14):
some cases. I talked to their kids.
Anyway, I did a lot of characterresearch around the, the, the,
the market crafters and the onesthat I found that were the most
fascinating were the ones who I found who I thought were most
entrepreneurial. I do think that is the word.
And they came in ready with a idea of what they wanted to see.
(37:36):
And then they were creative in getting it done.
And so one that I'll talk about is actually, he was the most
difficult character for me to write about.
His name is Bill Simon, and he was the Treasury Secretary in
the Nixon administration. He was a libertarian who didn't
really believe in government so much and yet ends up in the
(37:59):
Nixon administration being put in charge of oil and gas.
And the Yom Kippur War happens and the oil embargo is a result.
And all of a sudden he is responsible for ensuring that
nobody in America freezes to death in the first oil crisis.
And he's actually very successful.
So he crafts markets, he does a few things he carefully he's
(38:23):
they, he stockpiles the oil and gas reserves.
He does resource allocation to industries to make and to
geographies, making sure that hospitals and and the military
are taken care of. He creates price controls so
that allowing the prices to go up, but more moderately than
(38:44):
they do in Western Europe. And through all of this work to
in that crisis moment, on the other side of it, the actual
first oil crisis in the 1970s isrelatively successful.
He did a good job and it was he was a difficult guy to read his
stuff because he's not a person I would have been friends with.
(39:04):
And yet it was hard not to come to that conclusion.
And that's in contrast to what happens at the end of the decade
in the second energy crisis whenJimmy Carter is president and he
after the Iranian revolution, hemakes the move to decontrol
prices to just sort of let it all go and say, you know what,
the market is going to just sortit out and prices skyrocket.
(39:27):
There are the lines that we all remember culturally as as part
of the problem. And so it was like the mirror
image of that story. The the institutional thing that
though that comes out of the Simon experience is they create
the Strategic Petroleum Reserve,which stores hundreds of
millions of, of gallons of, of oil in salt, these salt caverns
(39:53):
in the southeast of the United States.
And it still exists today. And it's one of the big reasons
why we have had significantly more energy stability at least
until recent years when domesticproduction significantly
increased. So Simon was fascinating, but
you know, there were so many other characters.
Andrew Brimmer, who was the first black.
Governor of the Federal Reserve is in the book who really
(40:15):
hustles to make global finance work and and his story is
fascinating. I talk about this woman, Nancy
Teeters in the midst of the Volcker shock, who wanted to
find a different way to squelch inflation that didn't have such
an extreme effect on manufacturing jobs.
(40:36):
The stories were what sustained me.
Yeah, absolutely. And it's what makes it so fun to
read, too. I mean, not only is it, you
know, it's sweeping history, butthen people and some of whom
we've heard about, but most of whom we haven't.
And it's, it's a wonderful glimpse into their lives in that
period of, of time. And you know, the hard part
(40:56):
about the period of time we're living in is you don't always
see it as history making. It's just sort of the headline
of the day. And one of the things your book
did was situate the last four years, the last six years really
in the historical context. So tell us about a market
crafter that we do know, whetherit be Lena Khan or Brian Deese.
(41:20):
Yeah, I focus on 2 folks in the past 15 years, but with a lot of
supporting characters. So, you know, the the final
quarter of the book is contemporary, and it was a
totally different way of researching.
You know, the first sections were much more in the archives
and, you know, trying to recreate these people who are
(41:43):
not alive. The later chapters were
something I lived through and people that I could interview.
So, you know, Brian Deese is a fascinating character.
He's not a household name for sure.
He was the director of the National Economic Council under
Joe Biden. And I think his story matters
(42:04):
because he's emblematic of a shift in political economy that
has happened over the past 15 years.
He grows up as part of the crew in the 2000s with Jason Furman
and Larry Summers. He actually works for Larry and
Jason in the early White House, and he's chart in the Obama
White House. And he is charged with
(42:25):
overseeing auto bailouts. If you remember, in the great
financial crisis, not only did the banks all threatened to go
under, but GM, Chrysler, Ford, all of these companies were just
hemorrhaging money. And, you know, the government
steps in, provides that kind of emergency room assistance.
(42:46):
And the lesson that Brian takes away from that is radically
different than the lesson that Larry and others.
I talked to them both about thatexperience and I and and their
answers were just like diametrically post.
Brian's take away was, you know,these markets need to be managed
so that we never get back into an emergency room kind of
(43:06):
situation. So you, you know, a bailout is
not what you need to be talking about.
Where is in the classic sort of economics, neoclassical
vernacular, it would be about market failure while markets
sometimes fail and government, you know, has to take care of
that. That could be with an
externality, that could be in a crisis moment, but that's just
sort of how markets work and what government's there to do.
(43:28):
So Brian took away this lesson. And then he continued to do all
kinds of interesting things in the Obama administration.
He becomes the climate czar. He's at OMB for a time, but in
the Biden years, he becomes the director of the National
Economic Council. And he assembles a team of
people who are very focused on spurring clean energy
(43:52):
investment, bring back the semiconductor industry to the
United States, making major investments in infrastructure.
And on each one of those things,the Biden folks succeed
legislatively and substantively.Now, of course, the inflation
that happens with up to 9% turnseveryone's attention away from
(44:17):
those pieces of the agenda and towards price, price stability.
And Americans rightly, understandably suffer and are
very angry about it. And of course, Joe Biden didn't
win the election. It was partially because of the
economic legacy. But I think it's critically
important to separate those two things out.
The inflation was not caused by that legislation.
Even the the the highest estimates that come from
(44:41):
moderate economists like OlivierBlanchard or Ben Bernanke or
that about 2% at most of the 9% of inflation was related to that
early ARP stimulus bill. The vast majority of the
inflation was because of the supply chain bottlenecks,
bottlenecks that we all experienced in that rapid shift
(45:01):
in consumer demand. And yet and yet so many people
just want to throw the baby out with the with the bathwater.
So the last thing I want to say on this is I think that, you
know, wherever you might stand on Bidenomics, it is clear that
there is a new kind of conventional wisdom on the right
and the left, which puts the state at the center of economic
(45:23):
stories. And it's the question is not
like, you know, how do we get government out of markets these
days? It's between like should tariffs
be broad based or should they betargeted?
Should industrial policy be justfor national security reasons or
might it be important to have critical minerals here to
support a private industry as well?
That's the contour of the conversation.
(45:44):
That is very different than the world that Brian started out in,
you know, 15 plus years ago. Yeah, yeah, a paradigm shift.
A paradigm shift. Chris, I get to the first
question that I'm seeing in the chat, and this is from Edmund
Morris. And he I, I if, if I can distill
it down, I think he's asking essentially, are there some
(46:07):
things that just don't need to be in the market that should be
a public good for people, healthcare education, he names
out. And how do you think about that
related to market crafting? Yeah, I think so.
You know, it seems we haven't anagreement in the United States
that education, at least K through 12, education, should
(46:29):
not be driven by market forces. And I think that's a good thing.
We do not have that agreement onhealthcare as lots of other
industrialized countries do, andI think that it causes Americans
to pay double. What people in Western Europe
(46:52):
pay for healthcare with health outcomes that are roughly on
par. So I think it's really important
to say, in fact, one of the moredifficult chapters for me to
write in the book was the one onhealthcare because even before I
embarked on it, I hesitated to say, you know, is this really
(47:13):
what I wanted? Is, is, are healthcare markets
are, are crafted for sure by thestate and we can, you know, I
focus on the creation of Medicare and Medicaid in the
1960s. But you I could have written it
about the ACA, You could write it about many of these different
moments you see government trying to shift a market and
point it in a way that makes it cheaper for certain goods.
It makes it more accessible, that makes it work in a
(47:35):
different way. But just by talking about it as
a market, am I going to sort of reinforce that idea that that
healthcare should be a market? And you know what, I think I
managed to not do that at the end of the day.
But but I think that that that tension is very, very, very
(47:57):
alive and well. And there are a lot of places
where I think we just, we don't have a cultural or political
consensus. For instance, student loans, you
know, there's certainly a, a market dimension for those and
you can make an argument for it.You can make an argument against
it, but it's but it's really tricky.
(48:18):
Yeah, this your book really, andyour thinking influenced me when
I was writing the guarantee, my book Inside the Fight for
America's Next Economy. And both of those instances were
really tricky to write about. You know, healthcare, you know,
we're in this moment where we'vepassed some of the most
(48:42):
important subsidies that we've ever seen.
They're robust to enroll people onto the ACA.
So it's like we've had this deeply imperfect system, this
market system, and then we've figured out crafting that helps
make it work, right? So 10 million more people were
part of the ACA over the last few years than were in the past
(49:02):
because of these subsidies that are going to expire in just a
few short months. So it's like we're a ticking
time bomb that will have a huge impact on upcoming elections, on
people's individual lives. And it's like all interesting
because in this case, it's market crafting that feels
(49:22):
invisible to so many people until the time bomb goes off,
and then it won't be. But that's why we get back to,
well, when you have successful market craft, you build an
institution with the mission of making healthcare cheap.
And so instead of putting subsidies all over the place in
the tax code that expire and youhave to renew every year, you
know, you could have just had Medicare have either an option
(49:44):
for everyone to join. And obviously, politically that
wasn't possible. So it's not everything's 2020.
In retrospect, I'm not. It's less about blame and more
about, well, why wasn't it possible?
Why do we still struggle to say actually we should have an
institution that is responsible for providing quality,
affordable healthcare to all Americans?
And when we do that, we can holdit accountable.
(50:05):
People hold Medicare rightly accountable for what it does
with seniors. Historically, the prices have
been managed by Congress. Now we have Medicare Advantage
plans, which I think need to be meaningfully reformed.
But my point is, is like when you when you craft the market to
bury it in the tax code and provide these incentives rather
than either creating or reinforcing an existing
(50:28):
institution with the power. Ironically, we get much more
balkanized, less efficient healthcare that's more
politically fragile than if we just done it the, you know, the
clear way in the first place. Did your?
What are some of the opinions you Were there any opinions you
(50:50):
had that shifted as you wrote the book?
That's a great question. I mean, I certainly learned an
enormous amount. I don't know if there were any
closely held opinions that changed because of the research.
I, I think that maybe that my position on discretion and power
(51:17):
in the administrative state, to use a sort of wonky set of
words, evolved over time. I think, you know, I had, I
have, I have been and am sympathetic to a lot of the
concerns about the administrative state being too
isolated or insulated. But most of the time when I
(51:38):
looked at government workers doing their jobs, I saw them
struggling for resources and power to get things done.
And then when they got it, they more often than not succeeded.
And then so I definitely became more sensitive to all of the
restraints that we have put on government, thinking that it is
(51:59):
going to be a good idea. I mean, the paperwork reduction.
I mean, we could go through specific examples of things that
sound good in theory but limit discretion and power and sort of
hobble the state. So that might be one thing.
Another thing would be the role of Congress.
You know, we live in this time that is hyper partisan and I
(52:20):
think people are very suspiciousof Congress being able to get
anything done. And, you know, the Congress
under Joe Biden was quite productive and often on
bipartisan lines. I mean, everything from the
confirmation of Lena Khan to theCHIPS Act to the infrastructure
bill to, you know, these are these are things that I think
(52:41):
that we need to take note of andultimately expect Congress to be
in the driver's seat. And these days, you know,
particularly on the right, the theory of the unitary executive,
the president is the only personwho's going to be able to
actually get the administrative state into shape.
And I, I see Congress as the ultimate boss of the Fed or
(53:05):
Fannie and Freddie or a lot of these institutions.
And I think that's that's a better arrangement than
investing it all in the executive.
Yeah, very relevant for today's headlines.
A couple questions come togetherat this Nexus.
(53:25):
What Tony Simon said in project development, government action
has been primarily limited to mitigating potential harms, for
example through NEPA and permitting.
What can be the narrative aroundgovernment advancing community
benefits? And then Allison Lingone says if
you were to lay out a market crafting agenda, right, that
(53:46):
could like a government advancing market crafting agenda
that could result in changes that are helpful to everyday
people, what would it look like?I thought that was an
interesting way to frame it fromthe passive to the sort of.
Proactive. Yeah, yeah, Yeah, I think so
too. The first question in some ways
feeds into the second. Listen, I think the number one
(54:09):
thing that Americans are frustrated about is cost and
dignity. And the second is harder to
solve. But I think needs to be part.
If I were, you know, if I if I were advising A politician, I
think it she or he would need tospeak to speak to both on cost.
(54:30):
You know, we talked a lot about housing already, so, but I think
the that agenda would be where Iwould start.
So housing, food costs, care costs and on each one of these,
crafting those markets to eitherstabilize those costs or bring
them down. I think you also need to talk
about jobs because Americans care about how expensive things
(54:53):
are, but you know, people want astable job.
That's like, if this is not a big insight over here, this is
in not just bowling, but just everyday conversations with,
with people. And so that means I'm thinking
about higher minimum wages, sectoral bargaining, a lot of
these things that Democrats havetalked about for some time.
(55:14):
But I think they need to explainhow those are going to help
people. And then the the hardest set of
issues I think is around sort offuture proofing, to use a term,
because there's a lot of there are a lot of threats on the
horizon. I mean, climate is an obvious
one. We, you know, I live in New York
(55:35):
and our air is full of the smokefrom the Canadian wildfires.
And this now seems to happen every single year.
I read yesterday that the dust from the Sahara has affected air
quality levels in the Southeast.Anyway, you're reminded of like
the global nature of these problems and the fact that
public policy needs to respond to it.
And AI and AI is radically changing, I think how we all
(55:57):
live. And that'll only accelerate.
And there'll be significant labor market disruptions that
come for it. And this time less so for blue
collar folks and more for white collar.
So I think I'm a market craftingagenda that speaks to those
things. Is is it's critical, but I will
say, you know, you don't need touse the word market craft on the
stump. You know what I mean?
(56:18):
It's about the outcomes for people.
I think that's what people care most about the how industrial
policy this and that how you going to do this with the tax
cut deduction. You know, that's the how the
sausage is made. And so that may not be stump
ready. Well, it's Stump ready for me,
so I'll I'll vote for you. That's funny.
(56:41):
Last question is just who are some of the market crafters
today? You know, obviously you wrote
this book in a different administration in a different
world and now you're talking about it in a moment that is,
you know, completely, completelyshifted.
And so how do you think about the market?
How do you think about what market crafting in the headlines
(57:02):
today and and who are if they exist?
Yeah, the irony, The irony is inthe first Trump administration,
there were real gestures towardsmarket crafting.
A lot of the tariffs in that administration were more
targeted and than the ones today.
And the CHIPS Act actually started in the Trump
administration. It was a Trump idea to pursue.
(57:26):
So there were there was a marketcraft in that.
This administration is their economic policy seems to be
defined by impulsive decisions around tariff and trade and
increasingly around, you know, tax cuts for the wealthiest on
the backs of cutting Medicaid and food stamps.
(57:50):
And so there's not a lot of market craft to be seen.
That's what I'm trying to say. There are some examples.
Listen, the steel and aluminum tariffs are a clear market
craft. They want to reinforce that
industry for the jobs and for national security reasons.
You can agree with it or disagree with it, but that is a
market craft. The crypto reserve fund, which
they've created, it's small, it's only $20 billion.
(58:11):
But none the less there is a, a,a mission build and deepen the
crypto markets and they want to pursue that.
So there are signs of this in the corners.
But by and large, this is an across the board economic
policies that affect markets in a significant way and not not
the kind of market craft that wecould have otherwise we we might
(58:34):
have otherwise seen. Well, in a decade from now,
Chris Hughes, I really look forward to Market Crafters
volume to that will help us makeeven more sense of what it is.
I just want to say, you know, itwas really a pleasure to read
it. I am so grateful you wrote it
because it's a gift to all of usto contextualize what we're
(58:54):
living through in this moment. I hope folks pick it up.
It's a beach read for all the nerds out there.
As well said. And just couldn't thank you more
for joining us today, Chris. So I hope folks will stay tuned
for Economic Opportunity programs next event on June
26th, advising small businesses on job quality lessons from the
(59:19):
CDF is and I want to thank our team at the Economic
Opportunities program, includingExecutive Director, Maureen
Conway, Matt, Francis, Tony and Nora for pulling together
today's event and our colleaguesat architects and we will see
you all next time. Thank you for being here, Chris,
and thank you all for joining ustoday.
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