How does a promising young scholar go from dreams of designing glider planes to the study of physics and then on to a celebrated career as one of the world’s foremost monetary economists? In a “solo” installment of GoodFellows, John Cochrane—Hoover’s Rose-Marie and Jack Anderson senior fellow and coauthor of the newly released Crisis Cycle: Challenges, Evolution, and Future of the Euro—discusses his academic journey, his mentors, and the fellow economists who’ve inspired him along the way; his ongoing concerns with inflation and debt; plus his interest in penning a follow-up to Milton Friedman’s Free to Choose. Later, John takes part in a “Herbert Hoover Questionnaire,” in which he details proper airplane etiquette (if you occupy the window seat, raise the shade!), describes the virtues of his beloved family dog, and extols the culinary skills of his wife (author Elizabeth Fama, who makes a cameo appearance at the show’s end for the couple’s 39th wedding anniversary).
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Episode Transcript
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>> Speaker 3 (00:00):
[MUSIC]
>> Bill Whalen (00:08):
It's Thursday, June 12th, 2025, and welcome back to Goodfellows,
a Hoover Institution broadcast examiningsocial, economic, political, and
geopolitical concerns.
I'm Bill Whalen.
I'm a Hoover Distinguished Policy Fellow,and I'll be your moderator today.
Looking forward to a spiritedconversation, not with three, two, but
one Good Fellow.
In fact, maybe you should rename the showGood Fellow instead of Goodfellows.
(00:29):
And here's the reason why we have onlyone Good Fellow on Summertime has hit
the Hoover Institution, and we dial backGoodfellows a little bit in the summer.
You'll notice this.
We'll have a couple of shows outin July as well as August, but
to keep you engaged, we periodicallywill give you a one-on-one Goodfellow.
And that's what today is.
And the first one out of the shoot, it'sthe Hoover Institution's Rose-Marie and
Jack Anderson Senior Fellow, author of theGrumpy Economist blog, Wall Street Journal
(00:52):
columnist, and he has a book comingout next week, we're gonna talk about.
Please welcome John Cochrane.
John, good to see you.
>> John H. Cochrane (00:58):
Thanks, pleasure as always.
And wow, I don't have to fight forairtime this week.
>> Bill Whalen (01:03):
At long last, no Niall, no H.R. Live the dream.
>> John H. Cochrane (01:06):
Yes.
>> Bill Whalen (01:08):
Yeah, you just got back from a flight.
I hope your flights did well foryou yesterday.
I know this,
I had a real adventure flying a couple ofweeks ago to South Carolina to see family.
But I got there and I got to spend a fewdays with my sister's grandsons and
they're really fun to hang out with, John,because they're between the ages of 9 and
7 and they're becoming little men.
And they think they'vegot the world figure out.
And the latest episode is that theynow know what they want to do with
(01:30):
their lives.
Two of the boys want to play football,one of the boys wants to be a millionaire.
And the fourth one, John, this is the oneI have my eye on because I can't decide if
he's gonna be an underachiever orwhite collar criminal, he just decided
he's not gonna do anything,he's gonna live with his wealthy cousin.
So they've all got their lives mapped out.
I mention this, John, because we all gothrough life trying to figure out what it
(01:50):
is that we should be doing orwhat it is we want to do.
Sometimes we know this before college,sometimes we discover during college,
sometimes we have a career coursecorrection after college as well.
But if you're lucky, you land on what itis that you really enjoy doing this and
you seem to really thriveat being an economist.
My question to you, John, when didyou decide to become an economist?
>> John H. Cochrane (02:10):
It was a long process and you hit on important things.
You have to find something you reallyenjoy and something you're good at and
avoid the things that you're bad at.
So learning I was bad at a coupleof other things helped a lot
in that decision I had gone to.
And I do want to say also I was luckyto be born in an era where you could
(02:34):
move around and try things in a way that Idon't think is possible or easy anymore.
I went to college thinking I'dbe an aeronautical engineer.
I thought I would design gliders.
I quickly learned there's only one job.
There's two jobs doing that.
They're in Germany and they're taken.
And the aeronautical engineeringmajor I saw hypersonic flow and
(02:55):
propeller theory, said,I'm not interested in that.
So I turned this physics, which Ihad loved as a high school student.
I had a fantastic highschool physics teacher and
I loved physics my four years at MIT.
And I really to some extent regret nothaving studied it further because it was
beautiful.
But I recognized some of the limitsof what I was good at and
(03:18):
that wasn't going to go well.
There weren't that many jobs.
I'm not smart enough to be a theorist.
I'm certainly not organizedenough to run a lab.
And I'd taken two economicsclasses in college.
They were my humanitiesdistribution requirement.
Interesting, I love the micro class.
I thought the macro class was awful eventhough it was taught by Bob Solow himself.
(03:40):
But I thought economics was reallycool because you get to use
the tools of freshman andsophomore physics in the same kind of CLE
theory to talk aboutimportant social problems.
So called up Berkeley.
I called up all the places that letme in for physics grad school and
most of the big, Harvard, MIT, Stanford.
(04:02):
You can't change your major in August forcoming next September.
Apply with everyone else next year, buddy.
But Berkeley and Chicago let me in.
And this is in August no Internet.
I wrote them letters ona typewriter saying,
can I change my major physics,to economics for grad school?
And they let me in.
(04:22):
Never happen today.
So I knew it didn't snow in Berkeley andit snowed in Chicago.
So I went off to Berkeley andhad just both a wonderful time and
a conversion experience.
Learned a tremendous amount andthat's how I became an economist.
And I kept dabbling in different thingswhich wonderful that you could do in
(04:45):
economics, jump around.
So that's how it all got started.
It fit in with also sort of a politicalevolution of sort of becoming
a libertarian at the time.
So the learning economics andfiguring out the wonders of freedom and
free markets came at the same time.
>> Bill Whalen (05:00):
And then do you encounter economists who have this split in their
education?
They go one way undergrad andthen they go economics postgraduate.
>> John H. Cochrane (05:09):
Yeah, economics undergrad is typically not that great
preparation for postgrad economics.
Well, because rightly so,economics undergrad is produces,
it's a gentleman's major orgentle ladies major in many cases.
It's a great thing to do to go to businessschool or law or something of the sort.
(05:30):
But learning to be a research economist,
you have to kind of startover again much more.
Learn the mathematical modeling.
I think it would have been helpful totake more undergraduate classes and
kind of know where I was going more.
But the modeling skills that I learned andthe applied math that I learned as
a physics major turned out to be reallykey to doing physics in grad school.
There's a lot of us fallenphysicists in economics.
>> Bill Whalen (05:53):
And doing Goodfellows.
Now, do you wish you takenmore time behind a mic?
Maybe done some drama, some stage work or.
>> John H. Cochrane (05:59):
Yeah, actually teaching is wonderful.
A lot of academics,
teaching which I find kind ofreprehensible because who pays the bills?
And it's kind of your duty to spreadthings to the next generation.
But teaching and the difficult MBAteaching was really good in the end.
(06:21):
Trial by fire for communication,distilling ideas,
meeting people where theyare more effective writing.
Yeah, that's where I learnedto do that sort of thing.
>> Bill Whalen (06:35):
In public speaking as well.
You were just giving a speech inMilwaukee yesterday, for example.
>> John H. Cochrane (06:40):
I'm not great at it.
My wife keeps, she watches Goodfellows andsays, John, you gotta shape up,
finish your sentences, think a littleclearer so we could all be better at it.
And you're right.
As learning to write is something.
It's a skill you need to learn as a youngeconomist, learning to speak is important.
(07:00):
I wish I could be like Larry Summers, whowill show up at a conference, think for
three minutes, and then say item one,item two, item three, boom, boom.
Richard Epstein is that way too.
He just talks and it's like chapterheading, paragraph, paragraph,
chapter heading.
I'm not that good at that.
And when I see transcripts of what Iactually say, I'm always embarrassed, but
(07:23):
so we could all learn to be better.
>> Bill Whalen (07:25):
Yeah, there's a joke in broadcast radio, John, that that when a DJ
plays the song in a godda devita by IronButterfly, which goes on for like, 15 or
20 minutes, that means he'sprobably going to the men's room.
[LAUGH] I kind of joke.
I've done podcasts with Richard Epsteinin the past, and he's a brilliant mind.
I love talking to him.
But Richard, kind of the same way.
If you ask Richard a question,you can walk away sometimes for 10 or
(07:47):
15 minutes [LAUGH].
>> John H. Cochrane (07:48):
Well, I have problems.
>> Bill Whalen (07:50):
First, you have to go back, and [LAUGH].
>> John H. Cochrane (07:52):
That is a key of public speaking.
I have that problem of giving too long anddetailed answers.
It turns into a speech or a A lesson.
So the talent of thinking of what'sjust the right thing to say and
saying just that right thing is,is what I need to keep working on.
And I'll stop that one there just totry to implement the same advice.
>> Bill Whalen (08:12):
So that sounds like then a writing for
the Wall Street Journal where you'relimited to what, about a thousand words,
twelve hundred words.
And that sounds like a challenge for you.
>> John H. Cochrane (08:18):
Nine hundred.
And my God, is it a challenge?
In a way, it's why I do a blog.
You know, why is each blog essaynot a Wall Street Journal op ed?
Well, a blog, I boom, boom,boom, boom, boom, boom.
You know, three hours draft anda half, it's, it's done.
Then to send it intothe Wall Street Journal,
you got to first get 2,000 wordsdown to 900, not one word over 900.
(08:40):
And then you beat back and forth.
It's like a haiku.
Every little sentence counts.
It's, you know, the product isbetter when you're done, but
the time and effort is a lot harder.
>> Bill Whalen (08:54):
Yeah, I think it's Dorothy Parker John, who said, I hate writing, but
I love having written.
Is that the case for you?
Or do you also like writing?
>> John H. Cochrane (09:00):
Right, writing is always hard.
Writing is all editing.
And I should say, a little note to myfellow economists, this is not a talent,
this is a skill.
And I put some effort intodeveloping writing as a skill.
In part, I'm young enough that Inever had what are generation before,
had somebody who sat down with you once aweek, made you write a page of prose, and
(09:23):
they knew what they were doing and really,you know, showed you how to do it.
I had to learn all that on my own.
In part, I was very influencedby my father, Eric Cochrane,
who was a wonderful writer.
But I grew up watching him onan electric typewriter, do the fifth and
sixth and seventh draft of, of each bookbecause he cared about the prose and
(09:45):
he wrote a wonderful little mimeo,that's what it was back then for
his students called how toWrite Historical Prose.
And so I recognized that andthen I put a lot of effort.
Zinser, who's a distant relative,
wrote a great book on howto write nonfiction prose.
I really studied that and mostly justpaid attention to what do I like,
(10:07):
what do I not like,to find some rules in my own writing.
I'm not great at it, butI'm a lot better than I was.
And dear young economists,you are mostly an author.
Your prose really matters.
Learn to do this and don't learn to do itby following the examples of what you read
in academic journals.
Because they will take.
(10:27):
If you, if you start writing like academicjournals, you will take what might have
been some decent skills in the beginningand just completely destroy them.
>> Bill Whalen (10:38):
Now, you came to Hoover via the University of Chicago.
I think you came to hoover, John, in 2015.
Not mistaken.
>> John H. Cochrane (10:45):
Yeah, 2014 is a visitor and then 2015 for permanently.
>> Bill Whalen (10:50):
And I think that makes you actually the Senior Goodfellow because you
might have beat Neil hereby a couple of months.
And hr, well, HR was a NationalSecurity Fellow a long time ago, but
HR came to us after his year ofduty at the, at the White House.
So you, you're the senior of the three.
>> John H. Cochrane (11:05):
It's funny because when I was hired,
of course I was the youth movement.
Uber had not hired seniorfellows in a while.
And so John Raisin, who hired me,said, John, you're the youth movement.
I was 57 at the time.
So I said, you got a problem, buddy,and I'll take some credit for
helping to bring Neil on.
Neil was kind of dancing back and forth.
So we sat down outside ona beautiful afternoon out in
(11:28):
the Japanese trees in front of Hoover, and
I think I had an influence with him tocome to Hoover and to structure it.
Right.
>> Bill Whalen (11:38):
I mentioned Chicago.
Chicago is the home to some legendaryeconomists, Gary Becker and of course,
Milton Friedman.
My question to you, John,if you were to create a Mount Rushmore for
economists, if you put four facesup on the side of the mountain,
would Friedman be one of those three,who'd be your four choices?
>> John H. Cochrane (11:55):
Absolutely.
>> Bill Whalen (11:57):
So Friedman's one.
>> John H. Cochrane (11:58):
Milton Friedman.
Now, do I only get four?
So there's.
In terms of academic economics, and
this will be partly based on my own,you know, where I ended up.
Bob Lucas andGene Fama are absolutely important there.
Bob is actually with Milton andpossibly more than Milton,
(12:22):
even important forthe development of macroeconomics
in the 20th century anda tremendous person.
I didn't really know Milton personally.
He came andvisited Chicago every now and then and
would take the assistantprofessors out of lunch.
So what are you working on now?
And you had better have hada good answer to Milton.
(12:43):
But Bob was, was around and
just a superb economist anda superb human being,
as Gene Fama is also a superb economist,superb human being.
Very different talents, Bob and Gene, andboth of them just ethical straight arrows.
(13:06):
You just, you do things right.
You don't.
There's all sorts of shenanigans in,in academics, and neither of
them would ever do any of that, that Iwould, that, that was important to me.
As well as>> Bill Whalen: three names,
we've got one to go.
Tom Soul.
(13:26):
I'll put him on my list of.
Spectacular economists>> Bill Whalen: who turns 95 in
a few days, by the way.
Yes. And good health to him.
And one thing I'll tell you aboutTom Soul, I've been in over 11 years.
I have seen him once, met him 0 Tom's andhe shouldn't be meeting me.
>> Bill Whalen (13:46):
John, I've been here, I've been here twice as long as you and
I've seen him one time he was cominghere to do an interview at C span.
So he came to the door andtook a right and went off and that was it.
>> John H. Cochrane (13:55):
Yeah. One thing I've learned from all of my,
all of my great heroes, they are peoplewho know how to defend their time.
>> Bill Whalen (14:04):
Yes. >> John H. Cochrane
older in this profession there's lots ofpeople who want to soak up your time with
lots of junk and they know how to focusattention on the important research thing
that they're going to do not get.
Would you write us a keynote speech and anintroduction to the volume of X, Y and Z?
No, I'm focusing on what's important andthey know how to defend their time.
(14:26):
I wish I could learn that talent.
Well, but you're pretty busy yourself and so
why don't we make that opportunity to talkabout the book which comes out on June 17.
The title Crisis Cycle ChallengesEvolution and Future of the Euro.
It is available on Amazon for thosepeople who want to pick up and read it.
It's also by my count,the third Cochrane book.
(14:49):
I found two others on Amazon.
>> John H. Cochrane (14:51):
Depends how you count.
I have a whole bunch more that are sortof co edited the whole sequence.
>> Bill Whalen (14:56):
So I found, I found the Fiscal theory of price level and
I also found Asset pricing.
>> John H. Cochrane (15:01):
Yeah, those are my sole auth.
So this is, well, The Fiscal Theater,Price Level, Master Pricing were sole
authored and I have a bunch ofother books, but let's not quibble.
Yes, third big book.
>> Bill Whalen (15:14):
Okay.
This also, by the way,
this makes it the second book that youhave put out during the Goodfellows years.
So that puts you in a tie with the hr.
Puts you one ahead ofNeil Ferguson by the way.
>> John H. Cochrane (15:23):
Well he's gestating the biography of Henry Kissinger and
I, I am just amazed atthe productivity in writing of hr.
Both HR and, and especially Neil Neilbecause he's on the plane all the time.
As you know, it's next to impossibleto nail him down for Goodfellas.
It's one of the things Ilove about Goodfellows.
(15:44):
You nail down Neil Ferguson andmake him have a structured conversation,
you know, sohe has to be on the ground to do that.
So,yeah, Euro Crisis Cycle, a bookwritten with two wonderful co-authors,
Luis Garicano, who is currently atLondon School of Economics, was at
the University of Chicago and was a memberof Parliament for the European Union.
(16:07):
He stepped up and, and served,served his country and, and
his continent, which I really admire.
And Klaus was a longtime personat the European Central Bank.
He was the guy in charge of Greece.
So he actually knew wherethe bodies were buried and
what all the Alphabetsoup of acronyms mean.
(16:28):
And, and educated Luis and, andmyself on how everything worked.
So it was a wonderful collaboration and
I'm very glad the bookwill be out next week.
Only 35 bucks fromPrinceton University Press.
I think we're the cheapest bookon the Princeton press website.
Another 30% discount, I think,if you put in the code PUP30 today.
So run out and buy it, everybody.
>> Bill Whalen (16:49):
Okay, so why the euro?
Why this topic?
And why a book instead of just say,a paper?
>> John H. Cochrane (16:55):
Well, [LAUGH] why is the book as short as it is,
is the big question.
I wrote this book,Fiscal Theory of the Price level,
capping off 30 years of thinking aboutmonetary and fiscal affairs together.
Where does inflation really come from?
And so forth.
And Luis, who had been talkingto Klaus already about the euro,
(17:17):
who's been a good friend formany, many years, said,
john, we need to write a bookon fiscal theory of Europe.
And I said, that's a great idea becauseI had sort of thought about how does
the Euro fit into the fiscal theory?
And there's, you know, a chapter back inthe end of Fiscal theory price level about
that, but I was kind of guessing.
I didn't really knowhow it worked too well.
So to be forced to sit down with two guyswho understand Europe perfectly and think
(17:40):
about the fiscal monetary foundations ofthe Euro was just a wonderful chance.
And then it went on from there.
And it was a great partnership.
Klaus knows all the gobbledygook and,you know, he would talk in acronyms and
then Luis and I say, what does that mean?
And then he would say, well,here's how this works.
(18:01):
And we go, we don't understand that.
So just in part explainit to me in simple terms.
And then we write.
That [LAUGH] was, I think, very useful.
I'll pitch the basicidea of the euro effect.
If you're going to giveme another 30 seconds.
>> Bill Whalen (18:15):
No, please do.
Because to the uninitiated,the most they know about the euro, John,
it's a currency they getwhen they go to Europe.
So they're just interested in exchangerates more than anything else.
El so explain why this is me too.
>> John H. Cochrane (18:25):
And there's nothing I like more than than visiting Europe.
Nothing like I, I like more thanmy cappuccino and pizza being,
you know, cheap when I get there.
And in part I'm a Europhile.
I spent a lot of time in my youth in,in Europe.
So, you know, my, my sympathy is forEurope and my sympathy is for
a European Union for free trade.
(18:45):
I think it's wonderful.
So, you know, I want to help fix it.
Well, you know, not for all sorts ofreasons, not just cheap cappuccinos.
>> Bill Whalen (18:52):
Right.
But the essence of the book.
>> John H. Cochrane (18:54):
The essence of the book.
Please stop, stop dissembling, John,and get to the point, I gotcha.
So the euro is a common currency,
as the US Dollar is a commoncurrency across the many states.
It's a good idea if you want tohave a large integrated economy.
But it is a common currency,a monetary union without fiscal union.
(19:16):
So the individual countries stillmaintain their taxing spending and
borrowing capacity and a lot oftheir individual economic policies.
Now that leads to an obvious problem,
which is the government of Greececould borrow way too much money,
use it to, you know, buy Porsches,and then say, my God, crisis.
(19:37):
We don't have any way to pay it back.
Ecb, print some money, bail us out.
Because it would be a terrible catastropheshould we have to default on this debt.
So you can see that that problem mightbe a problem in the US we haven't tested
what happens when states like Illinois,California and
big pension systems go under.
Will the federal government bail us out?
(19:59):
And will, will the Fed bail those out?
We have a federal governmentwith big taxing power.
The European Union does not have bigtaxing power at the EU level, so
it's not even that easy for them.
So the obvious problem, andyou can see fiscal and monetary policy,
you can see why they broughtme on board for that.
(20:21):
Now the people who set upthe euro were really smart.
And as I look at it,I go, wow, these guys.
Nobody in 1990 was thinking aboutsovereign debt problems and
so forth, but they recognizedthat this problem was there and
they did a pretty good jobof setting up the euro.
The European Central bank has one mandate,price stability, nothing else.
(20:44):
It's not supposed to buy sovereign bonds,and that helps.
Countries are supposed to follow debt anddeficit limits so
that they don't get introuble in the first place.
These people thought about it.
Now they didn't writedown every little detail.
In particular they didn'treally talk about.
So do countries defaultjust like companies?
(21:05):
Is there a bankruptcy mechanism?
How is that going to work?
And in particular do we make bankstreat country debts as risky
the way they have totreat corporate debts?
Or can they keep up the fiction thatcountries will never default when they buy
sovereign bonds?
Now why didn't they do that?
Well, the night before the wedding,
you don't want to really pushtoo hard on the prenup, right?
(21:28):
We're trying to get a bunchof countries together.
So, you know, the Germans sittingdown with the Italian saying,
now what happens when youdon't pay your bills?
That's not a good way to, you know,have a pleasant wedding night.
So they kind of left that one.
Well, we'll figure itout if the time comes.
And that's wise too, you know.
You know, you write a constitution,you don't write every single law.
(21:48):
But as now, now we get into the.
That's the setup part of the book,the history part of the book.
Crisis after crisis.
First the French and Germans said, yeah,we don't want to deal with the debt and
deficit rules.
And they kind of got away with it.
So people say, well,what are these rules for?
Then of course, the financial crisis,the ECB ramped up its interventions.
(22:09):
The sovereign debt crisis was the bigearthquake where Greece threatened
to default, which would have broughtdown a lot of German and French banks.
And so what are we going to do about that?
And that was kind of chaotic becausethere was no real mechanism for default.
The banks,this is one of the big problems.
The banks are stuffedwith the sovereign debt.
(22:30):
So if the sovereign goes down,the banks all go down.
So there's a kind of a hostagein the banking system to
not let the sovereigns go down.
And then, so that that crisis, a kindof a good system emerged from there.
There was a system that my co authorKlaus was very responsible for
putting together that would allow inthe end a restructuring where people would
(22:53):
take some losses, butthe country would get help in return for
promises to put it back on solvency.
Sort of what the IMF does forinternational crises.
But then that got kind ofput on the back burner.
And so the QE era Covidthe Russian invasion of Ukraine,
the inflation, and now we're kind ofback to a pretty bad equilibrium.
(23:15):
The ECB holds a lot of government debt.
It is able to buygovernment debt anytime it
feels the need with notmany rules in its way.
And markets all expect that anytimethere's any blip, any hiccup in Italian,
Greek or now French yields or bonds,that the ECB will step in and buy them.
(23:41):
And that the problem isthe problem of incentives.
All of economics is about incentives.
So with that situation,
countries don't feel the pressureto fix their fiscal problems.
And they've got fiscal problems justlike we've got fiscal problems.
They don't feel the need that they don'tsee the market interest rates going up,
saying, hey,you better watch it a little bit here.
(24:04):
They don't feel the pressure toreform their economies to grow.
Europe's big problem is not monetary andfiscal, it's that it stopped growing.
And we kind of know why.
Too much regulation.
But one great way to pay off your debtsis to allow that microeconomic growth,
which means all sorts of people whoare benefiting from the current system,
they'll benefit.
(24:25):
And we've still got this thing wherethe banks are all holding sovereign bonds
of their country inundiversified portfolios and
they're allowed to pretendsovereign debt is risk free.
So it's a great trade for the banks.
Borrow very cheap from the ecb,buy as much sovereign debt as you want to,
which pays high interest rates andit's like an arbitrage.
(24:48):
So of course,they're stuffed with sovereign debt.
And the local regulators love themto be stuffed with sovereign debt.
So it's a fragile system.
They got through,they did what they had to do.
In a crisis, everyone bails out, butafterwards you need to fix the system and
fix the incentives and that.
And it's not an individual problem, it'skind of Europe as a whole has a lot of
(25:08):
things where it needs to fixthe system and fix the incentives.
So that's where we are.
And then we have a bunch ofrecommendations on how to fix this
stuff and get the incentives back in line.
>> Bill Whalen (25:22):
Christine Lagarde was the president of the ECB, John.
She gave a speech,I think it was in Berlin in May, and
she referenced what she called a,quote, global Euro moment.
What was she getting at, John?
And do you agree with her assessmentthat there's a global Euro moment?
I assume she's talking about trade warsbetween China and the United States and
dollar fluctuations and so forth.
>> John H. Cochrane (25:40):
Well, I don't want to say what she means, but
I can channel some chatterI'm hearing from Europe.
Yeah, if the US wants to shoot ourselvesin the foot, ankle, knees and kill,
keep going north by cutting ourselvesoff from the rest of the world,
then there is a moment forEurope to lead the global free market.
(26:03):
Open trade, prosperity.
Now, Europe is not that well positionedfor it, Madame Lagarde, because there's
a lot of external trade barriers,there's a lot of internal trade barriers.
Europe is not a free internal market.
And let me advertise my colleagueLuis Garricano, his, my co author,
his blog Silica Continent is wonderful onall things Europe and lists all the ways
(26:28):
in which it's hard to trade insideEurope as well as outside Europe.
And of course Europe isa regulatory nightmare.
There's a reason there's no AI in Europe.
There's a reason andenergy is fleeing Europe.
It's de industrializing fast.
So it would be wonderful wereEurope to seize this moment and
(26:48):
we're part of a very small part of thatto become the free market, free trade,
property rights, efficient regulation,state capacity, governments that know how
to get things done at halfway reasonablecost, lead the global trading system.
I'm not quite sure Europe is, is readyto sit up and do that now that there's
(27:10):
a lot of chatter about replacethe dollar as the risk free asset.
And I would say that's nice.
But doctor heal thyself first, make surethat the euro does not fall apart in
the global sovereign debt crisis coming inwhich everybody runs away from the dollar.
bBecause you know, China invades Taiwan,
(27:33):
there's going to bea global financial crisis.
Stress on the dollar as the UStries to borrow a ton of money, but
stress on the euro as all thosecountries get in financial trouble too.
So, you know,your number one job is survive and
then you can worry aboutcompeting with the dollar.
>> Bill Whalen (27:49):
Yeah, speaking of moments, Sean,
we've had a moment when it comesto talking about inflation.
And I found it reallyfascinating to eavesdrop,
to just sit in on yourmonetary conferences.
Each year Hoover puts togethera gathering of economists and
it's fascinating to kind of getyour temperature on things.
I remember a couple years ago this isa room full of angry economists talking
about how the Fed approached inflation.
So I'm not sure how your temperatureis on the Fed right now.
(28:11):
But having had a moment on inflation,John, do you think we're headed
in the next five years or so to havea moment in a conversation about debt?
>> John H. Cochrane (28:18):
Well, we seem to be having that conversation now.
Now I'm a little bit chastened.
I've been holding up that signsaying the world is ending for 25 or
30 years about debt andout of control deficits.
But it does seem thatwe're kind of waking up.
Of course in the US the realproblem is the spending.
Our tax code is horribly inefficient.
(28:39):
It needs reform more than anything else.
But are we going to get serious?
And that has to happen in many waysthere's there the attitude was until 2020,
solve every problem with a river ofgovernment money, which goodness knows we
did during COVID 5 trillion bucks out thewindow, a lot of it to Nigerian scammers.
So you know, we got to be seriousabout debt has to be repaid.
(29:02):
So I definitely do think this isthe moment now to Christine Lagarde.
Europe is not really clearthat debt is a problem.
Germany is, is going,is going to weaken its,
its admirable debt break legislationto allow itself to borrow for
military reasons without having tocut back on a huge welfare state.
(29:26):
And, and a lot of Europe is cheeringthat as great, we'll get stimulus guys,
didn't you learn about stimulus in 2020?
We everyone spent 10 years saying theroute to success is if only the government
could print and borrow money andthrow it out the window, we would all be.
We would all be growing like crazy.
And they, we did what they asked andwe got inflation out of it.
(29:48):
Likewise, you know,I'll tell one more debt story from Europe.
Italy's super bonus is I think whathappens when you don't really face markets
and reality about death.
This is a plan that came in in the sortof huge Covid spending splurge.
And Italy said using a lotof European Union money,
(30:09):
if you do energy efficiencyupgrades to your house,
you can have 110% tax credit forthe costs.
Now you know, energy efficiency.
Who could be against energy efficiency?
Just think, think a second.
Italians are very cleverentrepreneurial people.
Offered 110% reimbursement of cost asa tax, as a transferable tax credit.
(30:35):
Enzo Luigi,the bill isn't really high enough.
Do you think you could put some likegold plating on that, you know, energy.
So it's just been a morass.
Of course now the contractors love it andthe banks love it and they're, you know,
even Giorgio Maloney is havingtrouble getting rid of this one.
That's the example of the kind ofmentality that happens when you're not
serious about debt.
So short.
(30:56):
Didn't I say I was going togive you short answers today?
I do think we're coming to a momentthat we're worrying about debt but
we're not yetunderstanding what needs to be done.
Which is not a year ortwo of austerity, not budget gimmicks,
not we'll have a temporary tax this andthen phases out.
Then the answer to debt is youneed to have a reformed tax
(31:17):
system that raises goodrevenue at low marginal rates.
And a simple one, you need to havespending that vaguely makes any sense,
not down rat holes.
You need to solve the disincentivesof social programs which is their,
their major problem.
And you need const confidence that nomatter what happens, we will return
(31:39):
to decades of small primary surpluses topay off debts past the budget window.
And it's really not aboutspecific CBO forecasts.
Everybody understands that,yes, Congress is responsible,
administrations are responsible,whenever whatever is happening
(32:00):
now is over are structural fiscal policywill be steady, small primary surpluses
in a strong pro growth economy becausetax revenue is tax rate times income.
Grow the income isthe easiest way to do it.
That's just a different mentality thanmost people have when they talk about
deficit problems.
(32:20):
So I think we'll get there,but maybe you will.
>> Bill Whalen (32:24):
And what would be the trigger event to start this?
John, you mentioned Taiwan, for example.
Back here in the United States,
would it be in a crisis withan entitlement program or?
>> John H. Cochrane (32:33):
I hope the US does not need a crisis to reform.
>> Bill Whalen (32:37):
Right. >> John H. Cochrane
undertaken in a crisis tend tobe not very well thought out.
For example, you know, the Dodd Frank act,there was a crisis and to their credit,
they said, hey, we got to do something andnot let this happen again.
And you know that that impetus to reformis what has gone away in the US and
(32:59):
in Europe.
You know,the euro had five crises like that.
And nobody said this was a mistake.
How do we fix it?
They said, great, we bailed every route,you know, on to the next,
we'll bail out again.
That's what, you know, we're doing.
2020 was a massive bailout.
It was the same size as 2008.
And nobody is saying we made a mistake.
Yeah, great for us,we bailed everybody out.
So during a, you know, Rahm Emanuelsaid don't let a crisis go to waste.
(33:23):
But at a minimum, you have to have reallywell worked out plans on the shelf if
you're going to implement in a crisis.
But I think it's much betterif you want long run sanity.
I mean, we just need to do the sortsof things that your grandmother and
Marie Kondo would tell you to do.
Simplify the tax code.
(33:45):
Dramatically simplify the tax code,lower marginal rates.
Simplify the, simplify andunify the entitlements programs.
But you know, that takes work andit's very hard to do if you're just,
if you're trying to plugthe holes in a crisis.
And so typically when there is a crisis,you know, look at Greece,
they had a crisis.
They're actually doing pretty well now.
And they, they are doing wellin their government budgets,
(34:08):
they're doing well in economic growth.
They went through horrible years.
And I, I don't think the US wants tohave a crisis like China invades Taiwan,
financial meltdown, global trade meltdown.
Uncle Sam says,I need to borrow $10 billion.
Financial market says no, then we don'thave enough money to meet the need.
(34:30):
We have an unmet financial crisis.
We have years of economic depression,plus global, you know, global setbacks.
And then we finally get our acttogether and reform and get out of it.
That would be awful.
So I hope instead, you know,America has done reforms before and
many countries have saidthis isn't sustainable.
(34:51):
Let's get together and fix it.
The 1980s had a Social Security reformthat put it on a stable path for decades.
It might not have been perfect,but they did it.
They had a spectacular tax reform in 1986.
They deregulated.
It is possible forAmerica to do things like that.
And let's hope->> Bill Whalen: I'm curious, John,
I'm curious if we kind of revisitthe Tea Party at some point.
(35:12):
Because if you, if you look at recentpolitical history, Ross Perot runs for
president in 1992.
He runs very hard on two things.
One is lousy trade deals.
NAFTA he went after, andhe also ran after, very hard on debt.
Now, Perot in the Reform Party movementdoesn't work out, he's out of it by 2000.
But by the end of the first decade ofthe 2000s, we have this thing called
the Tea Party movement whichis all worked up about debt.
(35:34):
And then you can argue the Tea Partygives way to Donald Trump in terms of
angry populism.
But Trump's mo, John,is not solving debt problems, is it?
>> John H. Cochrane (35:42):
No, Trump, Trump's M.O. is managing bankruptcies.
He might be just the perfect president forthe moment.
You know, fundamentally this needsCongress and this needs, you know,
reform of how we do our spending andhow we do our taxes.
And you know, Doge came in because theOffice of Management and Budget failed and
the Budget Empowerment andcontrol act of 1974 failed and
(36:06):
the Inspectors General failed andthe transparency.com failed.
And you know, all the institutions wehave to try to make things work are,
are I'm being too extreme, but,but you know, need fixing.
So I think focusing on the debt isactually the wrong answer because it,
if you focus on the debt,it says, well, raise taxes.
(36:28):
Well, the all in marginal tax rate on highearners in the US is already, you know,
as high or higher than Europe.
And you raise taxes on everyone,then you get European growth out of it if,
if you're lucky, cut spending.
Well, you know, there actually issome useful stuff in there as,
as well as the useless stuff.
So, you know,focusing on the debt as the problem, I,
(36:52):
I think is a mistake because what'sthe real problem is the institutions
by which we choose how much to spend andhow to tax and, and
how to regulate and if you fix those,you'll fix the problem.
And in that sense, the Tea Partysentiment is one I'd like to bring back.
(37:13):
Give me back my country.
Give me back institutions thatare competent, you know, like J.
Bhattachary is off to fix.
We saw our public health institutionsshowing complete politicization,
incompetence.
Our universities are sufferingan immense lack of trust.
Those institutions need to be fixed.
The basic institutions of, of Congress.
(37:35):
You know, let's pass laws and let's do it.
You know, let's obey our budget rules orat least come up with better budget rules.
Rule by executive order taken undera decree of national emergency.
I don't wanna see even heavy-melee cometo the US and try to fix us that way.
(38:00):
So the Tea Party sentimentof let's get back to our
constitutional order Ithink is a good one.
>> Bill Whalen (38:08):
Yeah, I think.
Speaking of these issues, John, theimmigration issue maybe how about a minute
on immigration, Justin,while we're talking about dysfunctional.
Problems, immigration tariffs,health care, bank regulation,
I'm ready to go and nobody can stop.
The right wants to hammeron criminal behavior.
The left wants to talk about sad stories.
Congress does not wanna touchimmigration reform of the ten foot pole.
(38:30):
Im sits out there, the problem continuesto fester and here we are in California.
John, it's been 30 years sinceCalifornians voted on immigration and
the problem keeps going on.
>> John H. Cochrane (38:39):
Well actually most of Congress does want to work on immigration
reform and there's a kind of an outlinesof a bipartisan consensus on what needs to
be done that unfortunately the leadersof neither party want to bring forward.
And that's it instance of how ourCongression, our congressional mechanism
is, is really broken that you know,sort of basic simple reforms can't pass.
(39:05):
Now I'll give you the economist's view.
Our immigration system is brokenbecause what it has consisted of in so
far has been a lot oftolerated illegal immigration.
And that's just a bad system.
You know,
people around us who don't have theprotections of lies is not a good system.
(39:25):
You can get to the US if you're willingto walk across Central America and
scam the asylum system orfamily reunification.
That's not a good way to runan immigration system either.
Now from an economic perspectivewe need immigration.
Immigration is a great and wonderful thingand you know that people want to come
to this country, work hard, pay taxes,start businesses, pay off our debts,
(39:49):
take care of us when we get old,be nurses in our overpriced hospitals.
I mean remember,teach schools there's all sorts
of our problems would behelped a lot by immigrants.
And we want economic immigrants.
You want young people, well educatedpeople that we let students in,
(40:10):
give them degrees, andthen kick them out of the country.
Is, is just insane.
And remember, every economic migrant,he's not stealing American jobs.
He's working, he's building houses, orshe is building houses or doing gardens.
But then, they go down to Home Depot andWalmart, buy stuff just like we do.
(40:32):
Every new person is a consumer,
is the source of demand aswell as a source of supply.
So young, energetic, energetic, educated,
economically productive peopleare a great boon to this country and
a central part of,a central part of what made us great.
(40:52):
So for an economic perspective,
you know what I would love to see isimmigration that doesn't focus on numbers,
but focus on rules of the game,encourages economic migrants.
Come to the U.S,show us you got some money.
Show us you got a job.
Show us you won't be onsocial programs for a while.
Maybe put a bond at the border.
(41:14):
That's a Gary Becker idea, which is ofcourse an obvious one for the economy,
economics, pay your taxes.
I don't mind if you have to tell us youspeak English and can pass the citizenship
test, which most Americans can't pass, andthen come to this country and contribute.
That's what the Economist would love,love to see.
And I think even, you know, Victor Hansen,
(41:36):
who complains aboutimmigration on social basis.
If we did that, I don't think VictorHansen would have a lot to complain about.
So our system is completelydysfunctional relative to that ideal.
And anything morefunctional would be fine.
>> Bill Whalen (41:50):
Getting back to our idea of Congress not doing its job, John,
in a better world,we would lose the word omnibus and
Congress would just take immigration anddo it piece by piece,
because that's what you have to do here,piece by piece.
But you do it in one big bundle.
Invariably it's a poison pillthat somebody can't swallow.
So they should do, as a separate measure,they should address the issue of
immigration and skilled workers andthen do immigration unskilled and
(42:12):
just kind of go after it,just issue by issue by issue.
>> John H. Cochrane (42:15):
Yeah, so here you and
I are both guilty of playing amateurpolitical scientist, which is dangerous.
>> Bill Whalen (42:20):
And Pollyannish wants- >> John H. Cochrane
on the one hand or on the other hand.
Yes. >> John H. Cochrane
bills is that if you can't get everyone toagree on a small bill, sometimes you can
say, well, I'll hold my nose on that partif I get to throw into the bill this part.
Now, ideally, a functional system isable to make bargains in which it says,
we'll put together a coherent immigrationbill and I promise to support you on
(42:44):
the farm bill if you promise tosupport me on the immigration bill.
Sometimes you have to staple them togetherbecause you can't trust each other.
I think, I think you're right in a systemwhere you can trust each other, but there
is a reason sometimes for stapling thingstogether, which is how you get it through.
But yeah,the big beautiful mess kind of bill.
It also leads to very poorlywritten legislation because nobody
(43:06):
has the time to read it, think about it,debate it, and so forth.
So it is an interesting challenge.
I think you and I politically sort ofwould mouth the belief that, you know,
Congress should be doing things, and wethink state and local governments closer
to the taxpayers should be doingthings and be more accountable.
(43:27):
But Congress is pretty darndysfunctional right now, and
I don't have magic fixes becauseI'm not a political science
slash game theorist on how tohelp it be more functional.
You need a time machine, John.
There was a window in 1995when this could have happened.
When Bill Clinton was fighting forpolitical survival,
Newt Gingrich was new king of the world,Republicans were ascendant, and
(43:48):
Clinton would have workedwith them on immigration.
But Gingrich did not want toplay ball on immigration.
He had other things he wanted to go after.
And I think the doors kindof closed after that.
JOHN but okay, final question for
you before we go into what is going tobe an equivalent lightning round about
writing a deep philosophicalpiece about being a glider pilot.
Gliding fascinates me in this regard.
I don't like heights.
(44:08):
If I had a dream where I woke up andI was on a plane gliding at myself,
I think I'd probablywake up in a cold sweat.
But it's a fascinating thing to lookat in terms of the skills involved,
in terms of just how aware youhave to be of currents around you,
just being cognizant all times.
You can't sit up there anddaydream necessarily.
Sully Solberger was a glider pilot.
I didn’t know that until I wassnooping around the other day.
(44:29):
But he learned how to fly glidersat the Air Force Academy, and
that happened to save a lot of livesone day on the, the Hudson River.
But what attracts youto being glider pilot?
JOHN>> John H. Cochrane: well,
there's a book actually in there.
I, I did a lot of analyticalwork on the theory of,
of gliding Turns out to mapvery well into economic theory.
Keep meaning to put it into a book,but haven't, haven't done it.
(44:51):
But of course, what's wonderfulabout gliding, it is many ways,
like economics, we use theory to kindof develop some simple tools and then,
then you have to apply it inthe real world with, you know, time.
So we're all world championson the ground, but
doing it in the air underthat pressure is a challenge.
And it's sort of a relentlesschallenge of can I become better?
(45:15):
I don't just fly gliders are race gliders.
So it's this endless quest forself improvement.
Can I learn to not make the samemistakes over and over again?
And it is though, it is very sensory.
I've also been flying light planes,which is very the opposite.
It's kind of, you know, by the numbers.
(45:35):
Watch the instruments.
Flying a glider, you do have instruments.
But flying a glider, well, is verymuch a combination of feel the force,
Luke, on what is the airaround you telling you, but
also experience understanding the weather,analyzing what's going on.
You know, I see a cloud or
a mountain over there that I thinkis going to be a good thermal.
(45:58):
Can I get there in time?
Always, where is therea safe place to land?
Together with the joy of flying.
If you enjoy flying, go fly a glider.
Light planes are great transportation.
Gliders are flying like a bird.
And then the challenge of climbingin a glider, we have no engine, and
(46:19):
I fly six hours and three to 400miles every weekend with no engine.
So finding rising air,the wonderful feeling of flying.
I have dreams, in my flying dreams,I'm thermaling.
I'm catching the risingair current because it's
such a beautiful feeling to be goingup and sometimes birds join you.
(46:39):
And then, you know,flying over the Sierra.
I spent, you know, last weekend, I wasflew from Truckee down to Mount Whitney
over the top of the Sierra at 17, 000ftwith this beautiful view of the canopy.
So it's very relaxing.
And you cannot worry about the book,about the podcast.
Your mind is engaged 110% of the time,so it displaces all those worries.
(47:03):
Great, great passion.
Okay, I am sold.
All right, John, there is no lightninground in this episode of GoodFellows, but
we're gonna do something youmight find just as excruciating.
And that is the firstHerbert Hoover questionnaire.
[MUSIC]
(47:25):
Okay, well, here we go, my friend.
Question number one,what is the best sandwich?
>> John H. Cochrane (47:30):
Best sandwich.
Okay, I'm going to give you one hand,other hand.
Economist because I can never makeup my mind about anything were I
not worried about my weight,my health and everything else.
Of course, pastrami on ryewith Swiss cheese sauerkraut.
(47:51):
Pastrami Reuben, absolutely.
>> [LAUGH]>> Bill Whalen: Outstanding, all right,
second question.
Apples or oranges?
Okay, on the one hand, oranges are lovely,
except they're kind of messy.
So oranges on the ground,apples in the air.
>> Bill Whalen (48:13):
What do you think happens when we die?
>> John H. Cochrane (48:15):
We rot.
Bertrand Russell.
>> Bill Whalen (48:19):
Which talent would you like to have that you don't?
>> John H. Cochrane (48:24):
Better facility with abstract math would have been lovely.
Better ability to focuslike everyone else.
I find it hard to just keepplugging away at something and
my email doesn't scream, come check me.
>> Bill Whalen (48:41):
Okay.
For those times where you condemna flat commercial John, window or
aisle for flights longer than two hours.
>> John H. Cochrane (48:49):
Aisle for unfettered bathroom access for
flights under two hours.
Window.Because I'm a pilot,
I love looking out the window.
Why do people pull the shades?
We have this magical machinethat takes us at 500 miles
an hour at 35,000ft overspectacular country.
And I'm in this magical machine inthe aisle seat because I need to get to
(49:13):
the bathroom.
And, and people, the whole thing,they've lowered the window shades.
And when I sit at the window,
I open the window shade because I wantto look out at the beautiful scenery.
And also because on international flights,you want blue light going in your eyes.
And people are yelling at me.
Last time they brought the stewardessover, the flight attendant.
Sorry.Over 15 times to say,
(49:33):
could you lower your window sheets?
No, I'm not lowering my window sheet.
Sorry.
>> Bill Whalen (49:39):
Favorite smell.
>> John H. Cochrane (49:42):
Walking into the house.
And Beth's tomato sauce issimmering away on the stove.
>> Bill Whalen (49:52):
Good answer.
Most used app on your phone.
>> John H. Cochrane (49:55):
It is probably pretty boring.
You know, Google Maps, email,text messages back to Beth
about lies about when I'm goingto be home, messages to my kids,
and foreflight,a really nice flying flying app.
(50:16):
Nothing interesting there.
Sorry.>> Bill Whalen: I think I know
the answer to this one.
Cats or dogs?
Dogs.
>> Bill Whalen (50:22):
Okay.
You get only one song to listen to forthe rest of your life.
John.What is it?
>> John H. Cochrane (50:27):
So I'm a James Taylor fan.
And you can, you can score that for
the video of my life history,when anybody cares.
So I'm just trying to pick one thathas stuck with me most through.
Through the years.
And, you know,there's a lot of top ones there.
(50:48):
I'll.
I'll pick something in the Way she moves.
>> Bill Whalen (50:52):
Good choice.
Finally, John, describe the restof your life in five words.
>> John H. Cochrane (50:56):
Too short.
>> Bill Whalen (50:59):
And there we have it.
>> John H. Cochrane (51:00):
Three more words.
That's like the old joke,you know, Five word obituary.
Only died.
You get three more words.
Only died.
Both for sale.
>> Bill Whalen (51:10):
Well, it's the urban myth story here at Stanford that you know,
you're supposed to.
Your admissions essay to Stanford ishugely important because everybody who
applies is smart.
And so they're looking forsome personality in the, in the essay.
And one year the essay questionwas describe your most, you know,
interesting trait as opposed to the kidwho got into Stanford answered brevity.
>> John H. Cochrane (51:33):
Too short. I, I would hope that the answers
would include productive, happy,
and is there one word for in.
In engaged with my, my family,who I love tremendously.
>> Bill Whalen (51:51):
And with that, I'm going to let you go because you have other
things to do today, includingtoday is your wedding anniversary.
Where is she is she saysbet somewhere back there.
Beth.
An appearance.
Come out, come out, wherever you are.
Beth.>> [LAUGH]
>> Speaker 3 (52:05):
So the trouble is I always
tell, I always tell John hecan't show up with wet hair.
And now I have wet hair.
>> Bill Whalen (52:14):
Beth, congratulations.
Today it's your 39th anniversary.
I have to ask you,did you think it would last this long?
>> Speaker 3 (52:21):
We both come from two very long marriages,
our parents, so I suspected.
And the amount of crazy I was about him,I just assumed and
he's such a great partner that actuallyit's, it looks like it'll go on forever.
>> Bill Whalen (52:40):
Beth, while I have you here, maybe a shout out to your father.
John mentioned Gene Farmerearly in the show, but
just a couple words about your dad.
What makes him special?
>> Speaker 3 (52:48):
Well, he's actually kind of responsible for us getting really getting
together because they were,they became windsurfing partners.
>> John H. Cochrane (52:59):
That was after we got?
>> Speaker 3 (53:01):
After we met and I tried to entice John with windsurfing.
He, he joined the windsurfinggroup with my dad and
>> John H. Cochrane (53:09):
actually I met your.
Dad before I met you beforewe had our first date.
>> Speaker 3 (53:14):
Yeah, we were both windsurfers, but my dad was more avid, so
John decided to go hang out with them.
>> Bill Whalen (53:21):
So you've destroyed the whole dating social convent.
Forget about going to bars for,about going on apps.
Forget about blind dates.
Simply ask your dad andtake somebody wind surfing.
>> John H. Cochrane (53:31):
Met at a,
a setup dinner of a common familyfriend the night I got back to Chicago.
Fell instantly in love.
It actually took me a while to call Bethbecause I had to call Gene Fama's house
that, you know, the most famous professoraround in order to get a date with Beth.
That.It took me a while to get.
>> Speaker 3 (53:47):
Going with that and I didn't understand that.
I didn't know why he wasn't calling me.
>> John H. Cochrane (53:52):
But then Jean became, you know,
colleague as well as father in law.
My office was next to him for years.
We, we wind surfedtogether many afternoons.
We work till one or two andthen go windsurfing together.
So he was my windsurfing buddy andof course, you know,
we had family dinner together.
Jean was a total straight arrow.
(54:13):
We're colleagues during the day and we'refamily after five and the two don't mix.
But so it was a wonderful friend and
colleague to me as well as alsofather in law and part of our family.
>> Bill Whalen (54:27):
You know, Beth, I joked with John about doing a WAG show.
WAGs is a sports phrase.
In British sports it stands forwives and girlfriends.
And I've kind of joked thatinstead of Neil, John and
HR that maybe we need to turn over the micto Beth and ion and Katie McMaster.
>> Speaker 3 (54:42):
I actually think that would be a great show.
>> Bill Whalen (54:47):
Sounds good.
Well, Cochrans,I hope you have a great anniversary.
John, thanks for all you do for not justfor the Hoover Institution, the show, but
just being a great guy.
We sure appreciate it.
39 years is spectacular.
Congratulations to the both of you.
>> Speaker 3 (54:58):
Everybody's invited to the 40th next year.
>> Bill Whalen (55:02):
Thank you.
And with that, that's going to be it forthis episode of Goodfellas.
But I mentioned beginning of the show,
we'll be back in July witha couple of shows and
we'll have a couple of one on ones aswell with Neil Ferguson and HR McMaster.
On behalf of my friend John Cochran,the grumpy economist himself,
all of us here at the Hoover Institution,we hope you enjoyed today's conversation.
If you want to keep abreast ofGoodfellows, subscribe to the show.
(55:23):
That way, you won't miss any episodes, andof course, send in your comments to us.
We'll do a mailbag showin the near future.
We always like to hearwhat's on your mind.
So take care.
Thanks for watching andwe will see you soon.
If you enjoyed this show and
are interested in watching
(55:46):
more content featuring H.R.
McMaster, watch Battlegrounds,
also available at hoover.org.
[MUSIC]
>> Bill Whalen (00:08):
It's Thursday, June 12th, 2025, and welcome back to Goodfellows,
a Hoover Institution broadcast examiningsocial, economic, political, and
geopolitical concerns.
I'm Bill Whalen.
I'm a Hoover Distinguished Policy Fellow,and I'll be your moderator today.
Looking forward to a spiritedconversation, not with three, two, but
one Good Fellow.
In fact, maybe you should rename the showGood Fellow instead of Goodfellows.
(00:29):
And here's the reason why we have onlyone Good Fellow on Summertime has hit
the Hoover Institution, and we dial backGoodfellows a little bit in the summer.
You'll notice this.
We'll have a couple of shows outin July as well as August, but
to keep you engaged, we periodicallywill give you a one-on-one Goodfellow.
And that's what today is.
And the first one out of the shoot, it'sthe Hoover Institution's Rose-Marie and
Jack Anderson Senior Fellow, author of theGrumpy Economist blog, Wall Street Journal
(00:52):
columnist, and he has a book comingout next week, we're gonna talk about.
Please welcome John Cochrane.
John, good to see you.
>> John H. Cochrane (00:58):
Thanks, pleasure as always.
And wow, I don't have to fight forairtime this week.
>> Bill Whalen (01:03):
At long last, no Niall, no H.R. Live the dream.
>> John H. Cochrane (01:06):
Yes.
>> Bill Whalen (01:08):
Yeah, you just got back from a flight.
I hope your flights did well foryou yesterday.
I know this,
I had a real adventure flying a couple ofweeks ago to South Carolina to see family.
But I got there and I got to spend a fewdays with my sister's grandsons and
they're really fun to hang out with, John,because they're between the ages of 9 and
7 and they're becoming little men.
And they think they'vegot the world figure out.
And the latest episode is that theynow know what they want to do with
(01:30):
their lives.
Two of the boys want to play football,one of the boys wants to be a millionaire.
And the fourth one, John, this is the oneI have my eye on because I can't decide if
he's gonna be an underachiever orwhite collar criminal, he just decided
he's not gonna do anything,he's gonna live with his wealthy cousin.
So they've all got their lives mapped out.
I mention this, John, because we all gothrough life trying to figure out what it
(01:50):
is that we should be doing orwhat it is we want to do.
Sometimes we know this before college,sometimes we discover during college,
sometimes we have a career coursecorrection after college as well.
But if you're lucky, you land on what itis that you really enjoy doing this and
you seem to really thriveat being an economist.
My question to you, John, when didyou decide to become an economist?
>> John H. Cochrane (02:10):
It was a long process and you hit on important things.
You have to find something you reallyenjoy and something you're good at and
avoid the things that you're bad at.
So learning I was bad at a coupleof other things helped a lot
in that decision I had gone to.
And I do want to say also I was luckyto be born in an era where you could
(02:34):
move around and try things in a way that Idon't think is possible or easy anymore.
I went to college thinking I'dbe an aeronautical engineer.
I thought I would design gliders.
I quickly learned there's only one job.
There's two jobs doing that.
They're in Germany and they're taken.
And the aeronautical engineeringmajor I saw hypersonic flow and
(02:55):
propeller theory, said,I'm not interested in that.
So I turned this physics, which Ihad loved as a high school student.
I had a fantastic highschool physics teacher and
I loved physics my four years at MIT.
And I really to some extent regret nothaving studied it further because it was
beautiful.
But I recognized some of the limitsof what I was good at and
(03:18):
that wasn't going to go well.
There weren't that many jobs.
I'm not smart enough to be a theorist.
I'm certainly not organizedenough to run a lab.
And I'd taken two economicsclasses in college.
They were my humanitiesdistribution requirement.
Interesting, I love the micro class.
I thought the macro class was awful eventhough it was taught by Bob Solow himself.
(03:40):
But I thought economics was reallycool because you get to use
the tools of freshman andsophomore physics in the same kind of CLE
theory to talk aboutimportant social problems.
So called up Berkeley.
I called up all the places that letme in for physics grad school and
most of the big, Harvard, MIT, Stanford.
(04:02):
You can't change your major in August forcoming next September.
Apply with everyone else next year, buddy.
But Berkeley and Chicago let me in.
And this is in August no Internet.
I wrote them letters ona typewriter saying,
can I change my major physics,to economics for grad school?
And they let me in.
(04:22):
Never happen today.
So I knew it didn't snow in Berkeley andit snowed in Chicago.
So I went off to Berkeley andhad just both a wonderful time and
a conversion experience.
Learned a tremendous amount andthat's how I became an economist.
And I kept dabbling in different thingswhich wonderful that you could do in
(04:45):
economics, jump around.
So that's how it all got started.
It fit in with also sort of a politicalevolution of sort of becoming
a libertarian at the time.
So the learning economics andfiguring out the wonders of freedom and
free markets came at the same time.
>> Bill Whalen (05:00):
And then do you encounter economists who have this split in their
education?
They go one way undergrad andthen they go economics postgraduate.
>> John H. Cochrane (05:09):
Yeah, economics undergrad is typically not that great
preparation for postgrad economics.
Well, because rightly so,economics undergrad is produces,
it's a gentleman's major orgentle ladies major in many cases.
It's a great thing to do to go to businessschool or law or something of the sort.
(05:30):
But learning to be a research economist,
you have to kind of startover again much more.
Learn the mathematical modeling.
I think it would have been helpful totake more undergraduate classes and
kind of know where I was going more.
But the modeling skills that I learned andthe applied math that I learned as
a physics major turned out to be reallykey to doing physics in grad school.
There's a lot of us fallenphysicists in economics.
>> Bill Whalen (05:53):
And doing Goodfellows.
Now, do you wish you takenmore time behind a mic?
Maybe done some drama, some stage work or.
>> John H. Cochrane (05:59):
Yeah, actually teaching is wonderful.
A lot of academics,
teaching which I find kind ofreprehensible because who pays the bills?
And it's kind of your duty to spreadthings to the next generation.
But teaching and the difficult MBAteaching was really good in the end.
(06:21):
Trial by fire for communication,distilling ideas,
meeting people where theyare more effective writing.
Yeah, that's where I learnedto do that sort of thing.
>> Bill Whalen (06:35):
In public speaking as well.
You were just giving a speech inMilwaukee yesterday, for example.
>> John H. Cochrane (06:40):
I'm not great at it.
My wife keeps, she watches Goodfellows andsays, John, you gotta shape up,
finish your sentences, think a littleclearer so we could all be better at it.
And you're right.
As learning to write is something.
It's a skill you need to learn as a youngeconomist, learning to speak is important.
(07:00):
I wish I could be like Larry Summers, whowill show up at a conference, think for
three minutes, and then say item one,item two, item three, boom, boom.
Richard Epstein is that way too.
He just talks and it's like chapterheading, paragraph, paragraph,
chapter heading.
I'm not that good at that.
And when I see transcripts of what Iactually say, I'm always embarrassed, but
(07:23):
so we could all learn to be better.
>> Bill Whalen (07:25):
Yeah, there's a joke in broadcast radio, John, that that when a DJ
plays the song in a godda devita by IronButterfly, which goes on for like, 15 or
20 minutes, that means he'sprobably going to the men's room.
[LAUGH] I kind of joke.
I've done podcasts with Richard Epsteinin the past, and he's a brilliant mind.
I love talking to him.
But Richard, kind of the same way.
If you ask Richard a question,you can walk away sometimes for 10 or
(07:47):
15 minutes [LAUGH].
>> John H. Cochrane (07:48):
Well, I have problems.
>> Bill Whalen (07:50):
First, you have to go back, and [LAUGH].
>> John H. Cochrane (07:52):
That is a key of public speaking.
I have that problem of giving too long anddetailed answers.
It turns into a speech or a A lesson.
So the talent of thinking of what'sjust the right thing to say and
saying just that right thing is,is what I need to keep working on.
And I'll stop that one there just totry to implement the same advice.
>> Bill Whalen (08:12):
So that sounds like then a writing for
the Wall Street Journal where you'relimited to what, about a thousand words,
twelve hundred words.
And that sounds like a challenge for you.
>> John H. Cochrane (08:18):
Nine hundred.
And my God, is it a challenge?
In a way, it's why I do a blog.
You know, why is each blog essaynot a Wall Street Journal op ed?
Well, a blog, I boom, boom,boom, boom, boom, boom.
You know, three hours draft anda half, it's, it's done.
Then to send it intothe Wall Street Journal,
you got to first get 2,000 wordsdown to 900, not one word over 900.
(08:40):
And then you beat back and forth.
It's like a haiku.
Every little sentence counts.
It's, you know, the product isbetter when you're done, but
the time and effort is a lot harder.
>> Bill Whalen (08:54):
Yeah, I think it's Dorothy Parker John, who said, I hate writing, but
I love having written.
Is that the case for you?
Or do you also like writing?
>> John H. Cochrane (09:00):
Right, writing is always hard.
Writing is all editing.
And I should say, a little note to myfellow economists, this is not a talent,
this is a skill.
And I put some effort intodeveloping writing as a skill.
In part, I'm young enough that Inever had what are generation before,
had somebody who sat down with you once aweek, made you write a page of prose, and
(09:23):
they knew what they were doing and really,you know, showed you how to do it.
I had to learn all that on my own.
In part, I was very influencedby my father, Eric Cochrane,
who was a wonderful writer.
But I grew up watching him onan electric typewriter, do the fifth and
sixth and seventh draft of, of each bookbecause he cared about the prose and
(09:45):
he wrote a wonderful little mimeo,that's what it was back then for
his students called how toWrite Historical Prose.
And so I recognized that andthen I put a lot of effort.
Zinser, who's a distant relative,
wrote a great book on howto write nonfiction prose.
I really studied that and mostly justpaid attention to what do I like,
(10:07):
what do I not like,to find some rules in my own writing.
I'm not great at it, butI'm a lot better than I was.
And dear young economists,you are mostly an author.
Your prose really matters.
Learn to do this and don't learn to do itby following the examples of what you read
in academic journals.
Because they will take.
(10:27):
If you, if you start writing like academicjournals, you will take what might have
been some decent skills in the beginningand just completely destroy them.
>> Bill Whalen (10:38):
Now, you came to Hoover via the University of Chicago.
I think you came to hoover, John, in 2015.
Not mistaken.
>> John H. Cochrane (10:45):
Yeah, 2014 is a visitor and then 2015 for permanently.
>> Bill Whalen (10:50):
And I think that makes you actually the Senior Goodfellow because you
might have beat Neil hereby a couple of months.
And hr, well, HR was a NationalSecurity Fellow a long time ago, but
HR came to us after his year ofduty at the, at the White House.
So you, you're the senior of the three.
>> John H. Cochrane (11:05):
It's funny because when I was hired,
of course I was the youth movement.
Uber had not hired seniorfellows in a while.
And so John Raisin, who hired me,said, John, you're the youth movement.
I was 57 at the time.
So I said, you got a problem, buddy,and I'll take some credit for
helping to bring Neil on.
Neil was kind of dancing back and forth.
So we sat down outside ona beautiful afternoon out in
(11:28):
the Japanese trees in front of Hoover, and
I think I had an influence with him tocome to Hoover and to structure it.
Right.
>> Bill Whalen (11:38):
I mentioned Chicago.
Chicago is the home to some legendaryeconomists, Gary Becker and of course,
Milton Friedman.
My question to you, John,if you were to create a Mount Rushmore for
economists, if you put four facesup on the side of the mountain,
would Friedman be one of those three,who'd be your four choices?
>> John H. Cochrane (11:55):
Absolutely.
>> Bill Whalen (11:57):
So Friedman's one.
>> John H. Cochrane (11:58):
Milton Friedman.
Now, do I only get four?
So there's.
In terms of academic economics, and
this will be partly based on my own,you know, where I ended up.
Bob Lucas andGene Fama are absolutely important there.
Bob is actually with Milton andpossibly more than Milton,
(12:22):
even important forthe development of macroeconomics
in the 20th century anda tremendous person.
I didn't really know Milton personally.
He came andvisited Chicago every now and then and
would take the assistantprofessors out of lunch.
So what are you working on now?
And you had better have hada good answer to Milton.
(12:43):
But Bob was, was around and
just a superb economist anda superb human being,
as Gene Fama is also a superb economist,superb human being.
Very different talents, Bob and Gene, andboth of them just ethical straight arrows.
(13:06):
You just, you do things right.
You don't.
There's all sorts of shenanigans in,in academics, and neither of
them would ever do any of that, that Iwould, that, that was important to me.
As well as>> Bill Whalen: three names,
we've got one to go.
Tom Soul.
(13:26):
I'll put him on my list of.
Spectacular economists>> Bill Whalen: who turns 95 in
a few days, by the way.
Yes. And good health to him.
And one thing I'll tell you aboutTom Soul, I've been in over 11 years.
I have seen him once, met him 0 Tom's andhe shouldn't be meeting me.
>> Bill Whalen (13:46):
John, I've been here, I've been here twice as long as you and
I've seen him one time he was cominghere to do an interview at C span.
So he came to the door andtook a right and went off and that was it.
>> John H. Cochrane (13:55):
Yeah. One thing I've learned from all of my,
all of my great heroes, they are peoplewho know how to defend their time.
>> Bill Whalen (14:04):
Yes. >> John H. Cochrane
older in this profession there's lots ofpeople who want to soak up your time with
lots of junk and they know how to focusattention on the important research thing
that they're going to do not get.
Would you write us a keynote speech and anintroduction to the volume of X, Y and Z?
No, I'm focusing on what's important andthey know how to defend their time.
(14:26):
I wish I could learn that talent.
Well, but you're pretty busy yourself and so
why don't we make that opportunity to talkabout the book which comes out on June 17.
The title Crisis Cycle ChallengesEvolution and Future of the Euro.
It is available on Amazon for thosepeople who want to pick up and read it.
It's also by my count,the third Cochrane book.
(14:49):
I found two others on Amazon.
>> John H. Cochrane (14:51):
Depends how you count.
I have a whole bunch more that are sortof co edited the whole sequence.
>> Bill Whalen (14:56):
So I found, I found the Fiscal theory of price level and
I also found Asset pricing.
>> John H. Cochrane (15:01):
Yeah, those are my sole auth.
So this is, well, The Fiscal Theater,Price Level, Master Pricing were sole
authored and I have a bunch ofother books, but let's not quibble.
Yes, third big book.
>> Bill Whalen (15:14):
Okay.
This also, by the way,
this makes it the second book that youhave put out during the Goodfellows years.
So that puts you in a tie with the hr.
Puts you one ahead ofNeil Ferguson by the way.
>> John H. Cochrane (15:23):
Well he's gestating the biography of Henry Kissinger and
I, I am just amazed atthe productivity in writing of hr.
Both HR and, and especially Neil Neilbecause he's on the plane all the time.
As you know, it's next to impossibleto nail him down for Goodfellas.
It's one of the things Ilove about Goodfellows.
(15:44):
You nail down Neil Ferguson andmake him have a structured conversation,
you know, sohe has to be on the ground to do that.
So,yeah, Euro Crisis Cycle, a bookwritten with two wonderful co-authors,
Luis Garicano, who is currently atLondon School of Economics, was at
the University of Chicago and was a memberof Parliament for the European Union.
(16:07):
He stepped up and, and served,served his country and, and
his continent, which I really admire.
And Klaus was a longtime personat the European Central Bank.
He was the guy in charge of Greece.
So he actually knew wherethe bodies were buried and
what all the Alphabetsoup of acronyms mean.
(16:28):
And, and educated Luis and, andmyself on how everything worked.
So it was a wonderful collaboration and
I'm very glad the bookwill be out next week.
Only 35 bucks fromPrinceton University Press.
I think we're the cheapest bookon the Princeton press website.
Another 30% discount, I think,if you put in the code PUP30 today.
So run out and buy it, everybody.
>> Bill Whalen (16:49):
Okay, so why the euro?
Why this topic?
And why a book instead of just say,a paper?
>> John H. Cochrane (16:55):
Well, [LAUGH] why is the book as short as it is,
is the big question.
I wrote this book,Fiscal Theory of the Price level,
capping off 30 years of thinking aboutmonetary and fiscal affairs together.
Where does inflation really come from?
And so forth.
And Luis, who had been talkingto Klaus already about the euro,
(17:17):
who's been a good friend formany, many years, said,
john, we need to write a bookon fiscal theory of Europe.
And I said, that's a great idea becauseI had sort of thought about how does
the Euro fit into the fiscal theory?
And there's, you know, a chapter back inthe end of Fiscal theory price level about
that, but I was kind of guessing.
I didn't really knowhow it worked too well.
So to be forced to sit down with two guyswho understand Europe perfectly and think
(17:40):
about the fiscal monetary foundations ofthe Euro was just a wonderful chance.
And then it went on from there.
And it was a great partnership.
Klaus knows all the gobbledygook and,you know, he would talk in acronyms and
then Luis and I say, what does that mean?
And then he would say, well,here's how this works.
(18:01):
And we go, we don't understand that.
So just in part explainit to me in simple terms.
And then we write.
That [LAUGH] was, I think, very useful.
I'll pitch the basicidea of the euro effect.
If you're going to giveme another 30 seconds.
>> Bill Whalen (18:15):
No, please do.
Because to the uninitiated,the most they know about the euro, John,
it's a currency they getwhen they go to Europe.
So they're just interested in exchangerates more than anything else.
El so explain why this is me too.
>> John H. Cochrane (18:25):
And there's nothing I like more than than visiting Europe.
Nothing like I, I like more thanmy cappuccino and pizza being,
you know, cheap when I get there.
And in part I'm a Europhile.
I spent a lot of time in my youth in,in Europe.
So, you know, my, my sympathy is forEurope and my sympathy is for
a European Union for free trade.
(18:45):
I think it's wonderful.
So, you know, I want to help fix it.
Well, you know, not for all sorts ofreasons, not just cheap cappuccinos.
>> Bill Whalen (18:52):
Right.
But the essence of the book.
>> John H. Cochrane (18:54):
The essence of the book.
Please stop, stop dissembling, John,and get to the point, I gotcha.
So the euro is a common currency,
as the US Dollar is a commoncurrency across the many states.
It's a good idea if you want tohave a large integrated economy.
But it is a common currency,a monetary union without fiscal union.
(19:16):
So the individual countries stillmaintain their taxing spending and
borrowing capacity and a lot oftheir individual economic policies.
Now that leads to an obvious problem,
which is the government of Greececould borrow way too much money,
use it to, you know, buy Porsches,and then say, my God, crisis.
(19:37):
We don't have any way to pay it back.
Ecb, print some money, bail us out.
Because it would be a terrible catastropheshould we have to default on this debt.
So you can see that that problem mightbe a problem in the US we haven't tested
what happens when states like Illinois,California and
big pension systems go under.
Will the federal government bail us out?
(19:59):
And will, will the Fed bail those out?
We have a federal governmentwith big taxing power.
The European Union does not have bigtaxing power at the EU level, so
it's not even that easy for them.
So the obvious problem, andyou can see fiscal and monetary policy,
you can see why they broughtme on board for that.
(20:21):
Now the people who set upthe euro were really smart.
And as I look at it,I go, wow, these guys.
Nobody in 1990 was thinking aboutsovereign debt problems and
so forth, but they recognizedthat this problem was there and
they did a pretty good jobof setting up the euro.
The European Central bank has one mandate,price stability, nothing else.
(20:44):
It's not supposed to buy sovereign bonds,and that helps.
Countries are supposed to follow debt anddeficit limits so
that they don't get introuble in the first place.
These people thought about it.
Now they didn't writedown every little detail.
In particular they didn'treally talk about.
So do countries defaultjust like companies?
(21:05):
Is there a bankruptcy mechanism?
How is that going to work?
And in particular do we make bankstreat country debts as risky
the way they have totreat corporate debts?
Or can they keep up the fiction thatcountries will never default when they buy
sovereign bonds?
Now why didn't they do that?
Well, the night before the wedding,
you don't want to really pushtoo hard on the prenup, right?
(21:28):
We're trying to get a bunchof countries together.
So, you know, the Germans sittingdown with the Italian saying,
now what happens when youdon't pay your bills?
That's not a good way to, you know,have a pleasant wedding night.
So they kind of left that one.
Well, we'll figure itout if the time comes.
And that's wise too, you know.
You know, you write a constitution,you don't write every single law.
(21:48):
But as now, now we get into the.
That's the setup part of the book,the history part of the book.
Crisis after crisis.
First the French and Germans said, yeah,we don't want to deal with the debt and
deficit rules.
And they kind of got away with it.
So people say, well,what are these rules for?
Then of course, the financial crisis,the ECB ramped up its interventions.
(22:09):
The sovereign debt crisis was the bigearthquake where Greece threatened
to default, which would have broughtdown a lot of German and French banks.
And so what are we going to do about that?
And that was kind of chaotic becausethere was no real mechanism for default.
The banks,this is one of the big problems.
The banks are stuffedwith the sovereign debt.
(22:30):
So if the sovereign goes down,the banks all go down.
So there's a kind of a hostagein the banking system to
not let the sovereigns go down.
And then, so that that crisis, a kindof a good system emerged from there.
There was a system that my co authorKlaus was very responsible for
putting together that would allow inthe end a restructuring where people would
(22:53):
take some losses, butthe country would get help in return for
promises to put it back on solvency.
Sort of what the IMF does forinternational crises.
But then that got kind ofput on the back burner.
And so the QE era Covidthe Russian invasion of Ukraine,
the inflation, and now we're kind ofback to a pretty bad equilibrium.
(23:15):
The ECB holds a lot of government debt.
It is able to buygovernment debt anytime it
feels the need with notmany rules in its way.
And markets all expect that anytimethere's any blip, any hiccup in Italian,
Greek or now French yields or bonds,that the ECB will step in and buy them.
(23:41):
And that the problem isthe problem of incentives.
All of economics is about incentives.
So with that situation,
countries don't feel the pressureto fix their fiscal problems.
And they've got fiscal problems justlike we've got fiscal problems.
They don't feel the need that they don'tsee the market interest rates going up,
saying, hey,you better watch it a little bit here.
(24:04):
They don't feel the pressure toreform their economies to grow.
Europe's big problem is not monetary andfiscal, it's that it stopped growing.
And we kind of know why.
Too much regulation.
But one great way to pay off your debtsis to allow that microeconomic growth,
which means all sorts of people whoare benefiting from the current system,
they'll benefit.
(24:25):
And we've still got this thing wherethe banks are all holding sovereign bonds
of their country inundiversified portfolios and
they're allowed to pretendsovereign debt is risk free.
So it's a great trade for the banks.
Borrow very cheap from the ecb,buy as much sovereign debt as you want to,
which pays high interest rates andit's like an arbitrage.
(24:48):
So of course,they're stuffed with sovereign debt.
And the local regulators love themto be stuffed with sovereign debt.
So it's a fragile system.
They got through,they did what they had to do.
In a crisis, everyone bails out, butafterwards you need to fix the system and
fix the incentives and that.
And it's not an individual problem, it'skind of Europe as a whole has a lot of
(25:08):
things where it needs to fixthe system and fix the incentives.
So that's where we are.
And then we have a bunch ofrecommendations on how to fix this
stuff and get the incentives back in line.
>> Bill Whalen (25:22):
Christine Lagarde was the president of the ECB, John.
She gave a speech,I think it was in Berlin in May, and
she referenced what she called a,quote, global Euro moment.
What was she getting at, John?
And do you agree with her assessmentthat there's a global Euro moment?
I assume she's talking about trade warsbetween China and the United States and
dollar fluctuations and so forth.
>> John H. Cochrane (25:40):
Well, I don't want to say what she means, but
I can channel some chatterI'm hearing from Europe.
Yeah, if the US wants to shoot ourselvesin the foot, ankle, knees and kill,
keep going north by cutting ourselvesoff from the rest of the world,
then there is a moment forEurope to lead the global free market.
(26:03):
Open trade, prosperity.
Now, Europe is not that well positionedfor it, Madame Lagarde, because there's
a lot of external trade barriers,there's a lot of internal trade barriers.
Europe is not a free internal market.
And let me advertise my colleagueLuis Garricano, his, my co author,
his blog Silica Continent is wonderful onall things Europe and lists all the ways
(26:28):
in which it's hard to trade insideEurope as well as outside Europe.
And of course Europe isa regulatory nightmare.
There's a reason there's no AI in Europe.
There's a reason andenergy is fleeing Europe.
It's de industrializing fast.
So it would be wonderful wereEurope to seize this moment and
(26:48):
we're part of a very small part of thatto become the free market, free trade,
property rights, efficient regulation,state capacity, governments that know how
to get things done at halfway reasonablecost, lead the global trading system.
I'm not quite sure Europe is, is readyto sit up and do that now that there's
(27:10):
a lot of chatter about replacethe dollar as the risk free asset.
And I would say that's nice.
But doctor heal thyself first, make surethat the euro does not fall apart in
the global sovereign debt crisis coming inwhich everybody runs away from the dollar.
bBecause you know, China invades Taiwan,
(27:33):
there's going to bea global financial crisis.
Stress on the dollar as the UStries to borrow a ton of money, but
stress on the euro as all thosecountries get in financial trouble too.
So, you know,your number one job is survive and
then you can worry aboutcompeting with the dollar.
>> Bill Whalen (27:49):
Yeah, speaking of moments, Sean,
we've had a moment when it comesto talking about inflation.
And I found it reallyfascinating to eavesdrop,
to just sit in on yourmonetary conferences.
Each year Hoover puts togethera gathering of economists and
it's fascinating to kind of getyour temperature on things.
I remember a couple years ago this isa room full of angry economists talking
about how the Fed approached inflation.
So I'm not sure how your temperatureis on the Fed right now.
(28:11):
But having had a moment on inflation,John, do you think we're headed
in the next five years or so to havea moment in a conversation about debt?
>> John H. Cochrane (28:18):
Well, we seem to be having that conversation now.
Now I'm a little bit chastened.
I've been holding up that signsaying the world is ending for 25 or
30 years about debt andout of control deficits.
But it does seem thatwe're kind of waking up.
Of course in the US the realproblem is the spending.
Our tax code is horribly inefficient.
(28:39):
It needs reform more than anything else.
But are we going to get serious?
And that has to happen in many waysthere's there the attitude was until 2020,
solve every problem with a river ofgovernment money, which goodness knows we
did during COVID 5 trillion bucks out thewindow, a lot of it to Nigerian scammers.
So you know, we got to be seriousabout debt has to be repaid.
(29:02):
So I definitely do think this isthe moment now to Christine Lagarde.
Europe is not really clearthat debt is a problem.
Germany is, is going,is going to weaken its,
its admirable debt break legislationto allow itself to borrow for
military reasons without having tocut back on a huge welfare state.
(29:26):
And, and a lot of Europe is cheeringthat as great, we'll get stimulus guys,
didn't you learn about stimulus in 2020?
We everyone spent 10 years saying theroute to success is if only the government
could print and borrow money andthrow it out the window, we would all be.
We would all be growing like crazy.
And they, we did what they asked andwe got inflation out of it.
(29:48):
Likewise, you know,I'll tell one more debt story from Europe.
Italy's super bonus is I think whathappens when you don't really face markets
and reality about death.
This is a plan that came in in the sortof huge Covid spending splurge.
And Italy said using a lotof European Union money,
(30:09):
if you do energy efficiencyupgrades to your house,
you can have 110% tax credit forthe costs.
Now you know, energy efficiency.
Who could be against energy efficiency?
Just think, think a second.
Italians are very cleverentrepreneurial people.
Offered 110% reimbursement of cost asa tax, as a transferable tax credit.
(30:35):
Enzo Luigi,the bill isn't really high enough.
Do you think you could put some likegold plating on that, you know, energy.
So it's just been a morass.
Of course now the contractors love it andthe banks love it and they're, you know,
even Giorgio Maloney is havingtrouble getting rid of this one.
That's the example of the kind ofmentality that happens when you're not
serious about debt.
So short.
(30:56):
Didn't I say I was going togive you short answers today?
I do think we're coming to a momentthat we're worrying about debt but
we're not yetunderstanding what needs to be done.
Which is not a year ortwo of austerity, not budget gimmicks,
not we'll have a temporary tax this andthen phases out.
Then the answer to debt is youneed to have a reformed tax
(31:17):
system that raises goodrevenue at low marginal rates.
And a simple one, you need to havespending that vaguely makes any sense,
not down rat holes.
You need to solve the disincentivesof social programs which is their,
their major problem.
And you need const confidence that nomatter what happens, we will return
(31:39):
to decades of small primary surpluses topay off debts past the budget window.
And it's really not aboutspecific CBO forecasts.
Everybody understands that,yes, Congress is responsible,
administrations are responsible,whenever whatever is happening
(32:00):
now is over are structural fiscal policywill be steady, small primary surpluses
in a strong pro growth economy becausetax revenue is tax rate times income.
Grow the income isthe easiest way to do it.
That's just a different mentality thanmost people have when they talk about
deficit problems.
(32:20):
So I think we'll get there,but maybe you will.
>> Bill Whalen (32:24):
And what would be the trigger event to start this?
John, you mentioned Taiwan, for example.
Back here in the United States,
would it be in a crisis withan entitlement program or?
>> John H. Cochrane (32:33):
I hope the US does not need a crisis to reform.
>> Bill Whalen (32:37):
Right. >> John H. Cochrane
undertaken in a crisis tend tobe not very well thought out.
For example, you know, the Dodd Frank act,there was a crisis and to their credit,
they said, hey, we got to do something andnot let this happen again.
And you know that that impetus to reformis what has gone away in the US and
(32:59):
in Europe.
You know,the euro had five crises like that.
And nobody said this was a mistake.
How do we fix it?
They said, great, we bailed every route,you know, on to the next,
we'll bail out again.
That's what, you know, we're doing.
2020 was a massive bailout.
It was the same size as 2008.
And nobody is saying we made a mistake.
Yeah, great for us,we bailed everybody out.
So during a, you know, Rahm Emanuelsaid don't let a crisis go to waste.
(33:23):
But at a minimum, you have to have reallywell worked out plans on the shelf if
you're going to implement in a crisis.
But I think it's much betterif you want long run sanity.
I mean, we just need to do the sortsof things that your grandmother and
Marie Kondo would tell you to do.
Simplify the tax code.
(33:45):
Dramatically simplify the tax code,lower marginal rates.
Simplify the, simplify andunify the entitlements programs.
But you know, that takes work andit's very hard to do if you're just,
if you're trying to plugthe holes in a crisis.
And so typically when there is a crisis,you know, look at Greece,
they had a crisis.
They're actually doing pretty well now.
And they, they are doing wellin their government budgets,
(34:08):
they're doing well in economic growth.
They went through horrible years.
And I, I don't think the US wants tohave a crisis like China invades Taiwan,
financial meltdown, global trade meltdown.
Uncle Sam says,I need to borrow $10 billion.
Financial market says no, then we don'thave enough money to meet the need.
(34:30):
We have an unmet financial crisis.
We have years of economic depression,plus global, you know, global setbacks.
And then we finally get our acttogether and reform and get out of it.
That would be awful.
So I hope instead, you know,America has done reforms before and
many countries have saidthis isn't sustainable.
(34:51):
Let's get together and fix it.
The 1980s had a Social Security reformthat put it on a stable path for decades.
It might not have been perfect,but they did it.
They had a spectacular tax reform in 1986.
They deregulated.
It is possible forAmerica to do things like that.
And let's hope->> Bill Whalen: I'm curious, John,
I'm curious if we kind of revisitthe Tea Party at some point.
(35:12):
Because if you, if you look at recentpolitical history, Ross Perot runs for
president in 1992.
He runs very hard on two things.
One is lousy trade deals.
NAFTA he went after, andhe also ran after, very hard on debt.
Now, Perot in the Reform Party movementdoesn't work out, he's out of it by 2000.
But by the end of the first decade ofthe 2000s, we have this thing called
the Tea Party movement whichis all worked up about debt.
(35:34):
And then you can argue the Tea Partygives way to Donald Trump in terms of
angry populism.
But Trump's mo, John,is not solving debt problems, is it?
>> John H. Cochrane (35:42):
No, Trump, Trump's M.O. is managing bankruptcies.
He might be just the perfect president forthe moment.
You know, fundamentally this needsCongress and this needs, you know,
reform of how we do our spending andhow we do our taxes.
And you know, Doge came in because theOffice of Management and Budget failed and
the Budget Empowerment andcontrol act of 1974 failed and
(36:06):
the Inspectors General failed andthe transparency.com failed.
And you know, all the institutions wehave to try to make things work are,
are I'm being too extreme, but,but you know, need fixing.
So I think focusing on the debt isactually the wrong answer because it,
if you focus on the debt,it says, well, raise taxes.
(36:28):
Well, the all in marginal tax rate on highearners in the US is already, you know,
as high or higher than Europe.
And you raise taxes on everyone,then you get European growth out of it if,
if you're lucky, cut spending.
Well, you know, there actually issome useful stuff in there as,
as well as the useless stuff.
So, you know,focusing on the debt as the problem, I,
(36:52):
I think is a mistake because what'sthe real problem is the institutions
by which we choose how much to spend andhow to tax and, and
how to regulate and if you fix those,you'll fix the problem.
And in that sense, the Tea Partysentiment is one I'd like to bring back.
(37:13):
Give me back my country.
Give me back institutions thatare competent, you know, like J.
Bhattachary is off to fix.
We saw our public health institutionsshowing complete politicization,
incompetence.
Our universities are sufferingan immense lack of trust.
Those institutions need to be fixed.
The basic institutions of, of Congress.
(37:35):
You know, let's pass laws and let's do it.
You know, let's obey our budget rules orat least come up with better budget rules.
Rule by executive order taken undera decree of national emergency.
I don't wanna see even heavy-melee cometo the US and try to fix us that way.
(38:00):
So the Tea Party sentimentof let's get back to our
constitutional order Ithink is a good one.
>> Bill Whalen (38:08):
Yeah, I think.
Speaking of these issues, John, theimmigration issue maybe how about a minute
on immigration, Justin,while we're talking about dysfunctional.
Problems, immigration tariffs,health care, bank regulation,
I'm ready to go and nobody can stop.
The right wants to hammeron criminal behavior.
The left wants to talk about sad stories.
Congress does not wanna touchimmigration reform of the ten foot pole.
(38:30):
Im sits out there, the problem continuesto fester and here we are in California.
John, it's been 30 years sinceCalifornians voted on immigration and
the problem keeps going on.
>> John H. Cochrane (38:39):
Well actually most of Congress does want to work on immigration
reform and there's a kind of an outlinesof a bipartisan consensus on what needs to
be done that unfortunately the leadersof neither party want to bring forward.
And that's it instance of how ourCongression, our congressional mechanism
is, is really broken that you know,sort of basic simple reforms can't pass.
(39:05):
Now I'll give you the economist's view.
Our immigration system is brokenbecause what it has consisted of in so
far has been a lot oftolerated illegal immigration.
And that's just a bad system.
You know,
people around us who don't have theprotections of lies is not a good system.
(39:25):
You can get to the US if you're willingto walk across Central America and
scam the asylum system orfamily reunification.
That's not a good way to runan immigration system either.
Now from an economic perspectivewe need immigration.
Immigration is a great and wonderful thingand you know that people want to come
to this country, work hard, pay taxes,start businesses, pay off our debts,
(39:49):
take care of us when we get old,be nurses in our overpriced hospitals.
I mean remember,teach schools there's all sorts
of our problems would behelped a lot by immigrants.
And we want economic immigrants.
You want young people, well educatedpeople that we let students in,
(40:10):
give them degrees, andthen kick them out of the country.
Is, is just insane.
And remember, every economic migrant,he's not stealing American jobs.
He's working, he's building houses, orshe is building houses or doing gardens.
But then, they go down to Home Depot andWalmart, buy stuff just like we do.
(40:32):
Every new person is a consumer,
is the source of demand aswell as a source of supply.
So young, energetic, energetic, educated,
economically productive peopleare a great boon to this country and
a central part of,a central part of what made us great.
(40:52):
So for an economic perspective,
you know what I would love to see isimmigration that doesn't focus on numbers,
but focus on rules of the game,encourages economic migrants.
Come to the U.S,show us you got some money.
Show us you got a job.
Show us you won't be onsocial programs for a while.
Maybe put a bond at the border.
(41:14):
That's a Gary Becker idea, which is ofcourse an obvious one for the economy,
economics, pay your taxes.
I don't mind if you have to tell us youspeak English and can pass the citizenship
test, which most Americans can't pass, andthen come to this country and contribute.
That's what the Economist would love,love to see.
And I think even, you know, Victor Hansen,
(41:36):
who complains aboutimmigration on social basis.
If we did that, I don't think VictorHansen would have a lot to complain about.
So our system is completelydysfunctional relative to that ideal.
And anything morefunctional would be fine.
>> Bill Whalen (41:50):
Getting back to our idea of Congress not doing its job, John,
in a better world,we would lose the word omnibus and
Congress would just take immigration anddo it piece by piece,
because that's what you have to do here,piece by piece.
But you do it in one big bundle.
Invariably it's a poison pillthat somebody can't swallow.
So they should do, as a separate measure,they should address the issue of
immigration and skilled workers andthen do immigration unskilled and
(42:12):
just kind of go after it,just issue by issue by issue.
>> John H. Cochrane (42:15):
Yeah, so here you and
I are both guilty of playing amateurpolitical scientist, which is dangerous.
>> Bill Whalen (42:20):
And Pollyannish wants- >> John H. Cochrane
on the one hand or on the other hand.
Yes. >> John H. Cochrane
bills is that if you can't get everyone toagree on a small bill, sometimes you can
say, well, I'll hold my nose on that partif I get to throw into the bill this part.
Now, ideally, a functional system isable to make bargains in which it says,
we'll put together a coherent immigrationbill and I promise to support you on
(42:44):
the farm bill if you promise tosupport me on the immigration bill.
Sometimes you have to staple them togetherbecause you can't trust each other.
I think, I think you're right in a systemwhere you can trust each other, but there
is a reason sometimes for stapling thingstogether, which is how you get it through.
But yeah,the big beautiful mess kind of bill.
It also leads to very poorlywritten legislation because nobody
(43:06):
has the time to read it, think about it,debate it, and so forth.
So it is an interesting challenge.
I think you and I politically sort ofwould mouth the belief that, you know,
Congress should be doing things, and wethink state and local governments closer
to the taxpayers should be doingthings and be more accountable.
(43:27):
But Congress is pretty darndysfunctional right now, and
I don't have magic fixes becauseI'm not a political science
slash game theorist on how tohelp it be more functional.
You need a time machine, John.
There was a window in 1995when this could have happened.
When Bill Clinton was fighting forpolitical survival,
Newt Gingrich was new king of the world,Republicans were ascendant, and
(43:48):
Clinton would have workedwith them on immigration.
But Gingrich did not want toplay ball on immigration.
He had other things he wanted to go after.
And I think the doors kindof closed after that.
JOHN but okay, final question for
you before we go into what is going tobe an equivalent lightning round about
writing a deep philosophicalpiece about being a glider pilot.
Gliding fascinates me in this regard.
I don't like heights.
(44:08):
If I had a dream where I woke up andI was on a plane gliding at myself,
I think I'd probablywake up in a cold sweat.
But it's a fascinating thing to lookat in terms of the skills involved,
in terms of just how aware youhave to be of currents around you,
just being cognizant all times.
You can't sit up there anddaydream necessarily.
Sully Solberger was a glider pilot.
I didn’t know that until I wassnooping around the other day.
(44:29):
But he learned how to fly glidersat the Air Force Academy, and
that happened to save a lot of livesone day on the, the Hudson River.
But what attracts youto being glider pilot?
JOHN>> John H. Cochrane: well,
there's a book actually in there.
I, I did a lot of analyticalwork on the theory of,
of gliding Turns out to mapvery well into economic theory.
Keep meaning to put it into a book,but haven't, haven't done it.
(44:51):
But of course, what's wonderfulabout gliding, it is many ways,
like economics, we use theory to kindof develop some simple tools and then,
then you have to apply it inthe real world with, you know, time.
So we're all world championson the ground, but
doing it in the air underthat pressure is a challenge.
And it's sort of a relentlesschallenge of can I become better?
(45:15):
I don't just fly gliders are race gliders.
So it's this endless quest forself improvement.
Can I learn to not make the samemistakes over and over again?
And it is though, it is very sensory.
I've also been flying light planes,which is very the opposite.
It's kind of, you know, by the numbers.
(45:35):
Watch the instruments.
Flying a glider, you do have instruments.
But flying a glider, well, is verymuch a combination of feel the force,
Luke, on what is the airaround you telling you, but
also experience understanding the weather,analyzing what's going on.
You know, I see a cloud or
a mountain over there that I thinkis going to be a good thermal.
(45:58):
Can I get there in time?
Always, where is therea safe place to land?
Together with the joy of flying.
If you enjoy flying, go fly a glider.
Light planes are great transportation.
Gliders are flying like a bird.
And then the challenge of climbingin a glider, we have no engine, and
(46:19):
I fly six hours and three to 400miles every weekend with no engine.
So finding rising air,the wonderful feeling of flying.
I have dreams, in my flying dreams,I'm thermaling.
I'm catching the risingair current because it's
such a beautiful feeling to be goingup and sometimes birds join you.
(46:39):
And then, you know,flying over the Sierra.
I spent, you know, last weekend, I wasflew from Truckee down to Mount Whitney
over the top of the Sierra at 17, 000ftwith this beautiful view of the canopy.
So it's very relaxing.
And you cannot worry about the book,about the podcast.
Your mind is engaged 110% of the time,so it displaces all those worries.
(47:03):
Great, great passion.
Okay, I am sold.
All right, John, there is no lightninground in this episode of GoodFellows, but
we're gonna do something youmight find just as excruciating.
And that is the firstHerbert Hoover questionnaire.
[MUSIC]
(47:25):
Okay, well, here we go, my friend.
Question number one,what is the best sandwich?
>> John H. Cochrane (47:30):
Best sandwich.
Okay, I'm going to give you one hand,other hand.
Economist because I can never makeup my mind about anything were I
not worried about my weight,my health and everything else.
Of course, pastrami on ryewith Swiss cheese sauerkraut.
(47:51):
Pastrami Reuben, absolutely.
>> [LAUGH]>> Bill Whalen: Outstanding, all right,
second question.
Apples or oranges?
Okay, on the one hand, oranges are lovely,
except they're kind of messy.
So oranges on the ground,apples in the air.
>> Bill Whalen (48:13):
What do you think happens when we die?
>> John H. Cochrane (48:15):
We rot.
Bertrand Russell.
>> Bill Whalen (48:19):
Which talent would you like to have that you don't?
>> John H. Cochrane (48:24):
Better facility with abstract math would have been lovely.
Better ability to focuslike everyone else.
I find it hard to just keepplugging away at something and
my email doesn't scream, come check me.
>> Bill Whalen (48:41):
Okay.
For those times where you condemna flat commercial John, window or
aisle for flights longer than two hours.
>> John H. Cochrane (48:49):
Aisle for unfettered bathroom access for
flights under two hours.
Window.Because I'm a pilot,
I love looking out the window.
Why do people pull the shades?
We have this magical machinethat takes us at 500 miles
an hour at 35,000ft overspectacular country.
And I'm in this magical machine inthe aisle seat because I need to get to
(49:13):
the bathroom.
And, and people, the whole thing,they've lowered the window shades.
And when I sit at the window,
I open the window shade because I wantto look out at the beautiful scenery.
And also because on international flights,you want blue light going in your eyes.
And people are yelling at me.
Last time they brought the stewardessover, the flight attendant.
Sorry.Over 15 times to say,
(49:33):
could you lower your window sheets?
No, I'm not lowering my window sheet.
Sorry.
>> Bill Whalen (49:39):
Favorite smell.
>> John H. Cochrane (49:42):
Walking into the house.
And Beth's tomato sauce issimmering away on the stove.
>> Bill Whalen (49:52):
Good answer.
Most used app on your phone.
>> John H. Cochrane (49:55):
It is probably pretty boring.
You know, Google Maps, email,text messages back to Beth
about lies about when I'm goingto be home, messages to my kids,
and foreflight,a really nice flying flying app.
(50:16):
Nothing interesting there.
Sorry.>> Bill Whalen: I think I know
the answer to this one.
Cats or dogs?
Dogs.
>> Bill Whalen (50:22):
Okay.
You get only one song to listen to forthe rest of your life.
John.What is it?
>> John H. Cochrane (50:27):
So I'm a James Taylor fan.
And you can, you can score that for
the video of my life history,when anybody cares.
So I'm just trying to pick one thathas stuck with me most through.
Through the years.
And, you know,there's a lot of top ones there.
(50:48):
I'll.
I'll pick something in the Way she moves.
>> Bill Whalen (50:52):
Good choice.
Finally, John, describe the restof your life in five words.
>> John H. Cochrane (50:56):
Too short.
>> Bill Whalen (50:59):
And there we have it.
>> John H. Cochrane (51:00):
Three more words.
That's like the old joke,you know, Five word obituary.
Only died.
You get three more words.
Only died.
Both for sale.
>> Bill Whalen (51:10):
Well, it's the urban myth story here at Stanford that you know,
you're supposed to.
Your admissions essay to Stanford ishugely important because everybody who
applies is smart.
And so they're looking forsome personality in the, in the essay.
And one year the essay questionwas describe your most, you know,
interesting trait as opposed to the kidwho got into Stanford answered brevity.
>> John H. Cochrane (51:33):
Too short. I, I would hope that the answers
would include productive, happy,
and is there one word for in.
In engaged with my, my family,who I love tremendously.
>> Bill Whalen (51:51):
And with that, I'm going to let you go because you have other
things to do today, includingtoday is your wedding anniversary.
Where is she is she saysbet somewhere back there.
Beth.
An appearance.
Come out, come out, wherever you are.
Beth.>> [LAUGH]
>> Speaker 3 (52:05):
So the trouble is I always
tell, I always tell John hecan't show up with wet hair.
And now I have wet hair.
>> Bill Whalen (52:14):
Beth, congratulations.
Today it's your 39th anniversary.
I have to ask you,did you think it would last this long?
>> Speaker 3 (52:21):
We both come from two very long marriages,
our parents, so I suspected.
And the amount of crazy I was about him,I just assumed and
he's such a great partner that actuallyit's, it looks like it'll go on forever.
>> Bill Whalen (52:40):
Beth, while I have you here, maybe a shout out to your father.
John mentioned Gene Farmerearly in the show, but
just a couple words about your dad.
What makes him special?
>> Speaker 3 (52:48):
Well, he's actually kind of responsible for us getting really getting
together because they were,they became windsurfing partners.
>> John H. Cochrane (52:59):
That was after we got?
>> Speaker 3 (53:01):
After we met and I tried to entice John with windsurfing.
He, he joined the windsurfinggroup with my dad and
>> John H. Cochrane (53:09):
actually I met your.
Dad before I met you beforewe had our first date.
>> Speaker 3 (53:14):
Yeah, we were both windsurfers, but my dad was more avid, so
John decided to go hang out with them.
>> Bill Whalen (53:21):
So you've destroyed the whole dating social convent.
Forget about going to bars for,about going on apps.
Forget about blind dates.
Simply ask your dad andtake somebody wind surfing.
>> John H. Cochrane (53:31):
Met at a,
a setup dinner of a common familyfriend the night I got back to Chicago.
Fell instantly in love.
It actually took me a while to call Bethbecause I had to call Gene Fama's house
that, you know, the most famous professoraround in order to get a date with Beth.
That.It took me a while to get.
>> Speaker 3 (53:47):
Going with that and I didn't understand that.
I didn't know why he wasn't calling me.
>> John H. Cochrane (53:52):
But then Jean became, you know,
colleague as well as father in law.
My office was next to him for years.
We, we wind surfedtogether many afternoons.
We work till one or two andthen go windsurfing together.
So he was my windsurfing buddy andof course, you know,
we had family dinner together.
Jean was a total straight arrow.
(54:13):
We're colleagues during the day and we'refamily after five and the two don't mix.
But so it was a wonderful friend and
colleague to me as well as alsofather in law and part of our family.
>> Bill Whalen (54:27):
You know, Beth, I joked with John about doing a WAG show.
WAGs is a sports phrase.
In British sports it stands forwives and girlfriends.
And I've kind of joked thatinstead of Neil, John and
HR that maybe we need to turn over the micto Beth and ion and Katie McMaster.
>> Speaker 3 (54:42):
I actually think that would be a great show.
>> Bill Whalen (54:47):
Sounds good.
Well, Cochrans,I hope you have a great anniversary.
John, thanks for all you do for not justfor the Hoover Institution, the show, but
just being a great guy.
We sure appreciate it.
39 years is spectacular.
Congratulations to the both of you.
>> Speaker 3 (54:58):
Everybody's invited to the 40th next year.
>> Bill Whalen (55:02):
Thank you.
And with that, that's going to be it forthis episode of Goodfellas.
But I mentioned beginning of the show,
we'll be back in July witha couple of shows and
we'll have a couple of one on ones aswell with Neil Ferguson and HR McMaster.
On behalf of my friend John Cochran,the grumpy economist himself,
all of us here at the Hoover Institution,we hope you enjoyed today's conversation.
If you want to keep abreast ofGoodfellows, subscribe to the show.
(55:23):
That way, you won't miss any episodes, andof course, send in your comments to us.
We'll do a mailbag showin the near future.
We always like to hearwhat's on your mind.
So take care.
Thanks for watching andwe will see you soon.
If you enjoyed this show and
are interested in watching
(55:46):
more content featuring H.R.
McMaster, watch Battlegrounds,
also available at hoover.org.
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