December 12, 2024 • 11 mins
Chris dives into Amity Shlaes’ The Economic Consequences of Populism, reflecting on how repeated government interventions in the economy often do more harm than good. Drawing parallels from the Great Depression to today, Markowski explains why getting the government out of the way is key to unleashing economic potential and avoiding stagnation. www.watchdogonwallstreet.com
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski ah.
Speaker 2 (00:16):
Man, Yes, I'm a nerd. I just finished a piece
by Amiti Shales, phenomenal historian economic writer, entitled The Economic
Consequences of Populism, and I read through the entire thing,
(00:37):
and it's amazing to me kind of how history manages
to repeat itself and how we don't learn, and we
have this tendency to continue to look to Washington, d C.
To look to others to solve our problems. And that's,
(01:00):
you know, in essence, the perils of government intervention, the
perils of policy intervention. I couldn't get out of my
head well reading the piece. Quite frankly, Mary, is the
myriad of different policy interventions just over the past the
past few decades that haven't worked out, haven't worked out.
(01:25):
Conventional wisdom may say that they have worked out again.
We'll talk about the Great Recession a little bit and
the bailouts, the bailouts that took place, the too big
to fail. Nonsense that we have to deal with today,
the regulations that have been put into place that makes business,
(01:48):
it's doing business much more difficult than it was. You
can go all the way back to Sarbanes Oxley. Again,
it's the government, you know. Here, I come to save
the day problem out there, all the King's horses and
all the King's men trying to put Humpty back together again.
They can't, they can't. They just make matters worse. But
(02:13):
again we keep calling on them to do so we do.
I remember that Jim Kramer rant on CNBC at the
time bear Stearns was failing. Bear Sterns was failing. They
had massive hedge funds that we reported on that were
(02:34):
going into the toilet with all of these toxic assets
on their books. At the time, bear Stearns was trading
over one hundred dollars a share, but they had put
out a bit of news that they need capital, they
need capital. And Kramer goes on this rant, Oh my god,
(02:57):
the Fed nodes nothing, and Bill Poole was nothing, and
it's tough out there, and these banks are going to fail.
And I said, so what, so what Let them fail?
Let them fail. They're the ones that put themselves in
(03:18):
this situation, and the ones that couldn't manage, couldn't manage
the risk. Remember all the policy interventions. You Oh, we
had tarp one and that got rejected in the market
sold off. Then we had tarp too. I'm trying to
recollect all the crap and AIG and all the bull
(03:42):
excrement bailouts that took place. I told this story before.
I have a friend friend back from Long Island, and
she actually used to manage the households for a lot
(04:02):
of the Lehman Brothers executives from that period of time,
at least allow of their houses. They're still loaded, They're
all fine. There's no repercussion. There were no repercussions for
any of their actions. Okay, I remember reporting on this
several years ago. Dick Fold wanted to start a registered
(04:24):
investment advisory former CEO of Lehman Brothers who wanted the
same thing that I do for a living. I don't
even know how it's doing. I didn't even know if
he kept it going or not well. In this piece
by Amiti, Shales makes a point point that a great
(04:45):
Depression was the Great Depression, not because of a damn
dust bowl. You want to know why there's a dust ball. Oh,
they didn't tell you this back in social studies class.
The reason why there was a dust bowl, it was
a man made cological disaster. Again was a government. The
government caused it, all sorts of government wheat subsidies. He
(05:08):
had all sorts of unsustainable plowing under of erosion resistant
native plants that started off our you know, our downward
spiral when it comes to food here in the United States,
And we do the same bullshit today when we put
corn into cars with ethanol. Basically, we had a great
(05:32):
depression because okay, started off on the wrong foot tariffs
when we didn't need them. There wasn't a lot of
liquidity in the system at the time. Hoover decided to
do the exact opposite of what his predecessors did. With
Harding and Coolidge. You know that there was a they
call it the small Depression the early parts of the
(05:54):
nineteen twenties. You want to know what Harding and Coolidge did. Nothing.
They stayed the hell out of the economy. That's what
presidents were supposed to do. They weren't supposed to be
involved in the economy. I made the comparison here to
(06:14):
UH again, this is the remember the Naked gun remember
uh remember Enrico Palazzo there when he's the UH is
playing the opera singer and he's the umpire and he's
doing all this crazy stuff. Yeah, having to get involved
and putting on a show as an umpire, No no, no, no, okay,
you're not supposed to get involved. And the economy, you're
(06:37):
supposed to stay the hell out of the way. The
economy will fix itself, the ship will right itself. Yeah, well,
companies fail, Will things go in the wrong dra Absolutely,
But that's okay, there's nothing wrong with that. In a piece,
(07:00):
Shelles talks about you know, people back in the day.
I mean they were blaming you know you unemployment and
over ten percent for almost decade, you know, blaming it.
You know, that was a god's wrath. It wasn't It
was one bit of government intervention after another. And if
(07:23):
you again, I highly recommend you go and read the piece.
It's it's an excellent piece. The economic consequences of populism
by Amity Shells and all of the terrible things by
these again fuddy Duddy Ivy League and know it all
so think actual transcripts of court cases where they're bringing
(07:45):
in immigrants that own businesses and ridiculum here you're not
an expert on agricultural economics. I mean, they would go
after they had these these organizations that would tell businesses
how much, how much they could chards for their product,
what they had to pay their workers, and business like, well,
(08:05):
we can't can't operate like this. We're not going to
be profitable if we do this. Again, we don't have
the same crap going on today with the government dictating
to companies what you have to make, how you have
to make them certain standard electric cars, whatever it may be.
(08:28):
It's the same thing, and it's a failure. This is
why economic growth has stagnated here in the United States.
You can't obviously compare the period of the Great Depression
the global economy, which quite frankly, the size of it
insulates us from the massive downturns that we had during
(08:51):
the Great Depression. But again, I've often talked about here
on the program wasted talent. Talent. We're not nearly operating
at full capacity. And I try to explain to people, beware,
beware of these politicians that say they're going to rescue
(09:12):
the economy. They're going to fix the economy. They're not. Okay,
the only way you make things better again is by
getting out of the way. The government has zero credibility.
Zero credibility is a god awful track record when it
(09:35):
comes to intervention and the economy. Okay, you take a
look AUTO bailouts, all the COVID bailouts, everything, all the
picking of choosing the winners and losers. It doesn't matter
if it's a Democrat, it doesn't matter if it's a Republican.
All we can ask for at this point in time. Again,
(09:59):
I I hope you know Elon and Vivek are enormously
successful in getting the government out of the way, getting
rid of regulations, cutting government spending, leaving us the hell alone.
We need to get rid of these Elizabeth Warren types
(10:20):
and all these others. I feel that they've got to
be involved in it. I've said this before. Public private
partnerships are one of the biggest disasters going Again. It
is touted out there like it's some sort of damn
Kumbai ah crap. Okay, it's nonsense. The government needs to
(10:42):
get out of the way. If the government wants to
contract out a service. And I said, before you take
a look at you know some of the stories in
regards to the post office, and what a joke that is.
I don't even know why we need a post office anymore?
Why not have you know? We've got FedEx, we've got ups,
you got Amazon. Let them handle it. You know it's
going to be done better contracting us who does a
(11:05):
better job. Give them incentive. They'll do it at a
much much lower cost. Believe me, you'll start seeing, you
start saying the price of stamps go down if you
allow the private sector to handle it. That's fine. You
want to you want to contract a company to build
a road, whatever may be. We know government doesn't need
(11:26):
to be involved. And you put it out for forbidding,
and a way we go. But take the strings off,
don't demand. Oh you got to pay a prevailing wage,
you got to pay the union wage, and you got
to have you know this DEI score no, no, no, no,
no no no no no no no. Stay out of
the free market. Wages will adjust, they'll setter where they
(11:49):
need to be. All of your tinkering makes matters worse.
Watchdog on Wall Street dot Com
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski ah.
Speaker 2 (00:16):
Man, Yes, I'm a nerd. I just finished a piece
by Amiti Shales, phenomenal historian economic writer, entitled The Economic
Consequences of Populism, and I read through the entire thing,
(00:37):
and it's amazing to me kind of how history manages
to repeat itself and how we don't learn, and we
have this tendency to continue to look to Washington, d C.
To look to others to solve our problems. And that's,
(01:00):
you know, in essence, the perils of government intervention, the
perils of policy intervention. I couldn't get out of my
head well reading the piece. Quite frankly, Mary, is the
myriad of different policy interventions just over the past the
past few decades that haven't worked out, haven't worked out.
(01:25):
Conventional wisdom may say that they have worked out again.
We'll talk about the Great Recession a little bit and
the bailouts, the bailouts that took place, the too big
to fail. Nonsense that we have to deal with today,
the regulations that have been put into place that makes business,
(01:48):
it's doing business much more difficult than it was. You
can go all the way back to Sarbanes Oxley. Again,
it's the government, you know. Here, I come to save
the day problem out there, all the King's horses and
all the King's men trying to put Humpty back together again.
They can't, they can't. They just make matters worse. But
(02:13):
again we keep calling on them to do so we do.
I remember that Jim Kramer rant on CNBC at the
time bear Stearns was failing. Bear Sterns was failing. They
had massive hedge funds that we reported on that were
(02:34):
going into the toilet with all of these toxic assets
on their books. At the time, bear Stearns was trading
over one hundred dollars a share, but they had put
out a bit of news that they need capital, they
need capital. And Kramer goes on this rant, Oh my god,
(02:57):
the Fed nodes nothing, and Bill Poole was nothing, and
it's tough out there, and these banks are going to fail.
And I said, so what, so what Let them fail?
Let them fail. They're the ones that put themselves in
(03:18):
this situation, and the ones that couldn't manage, couldn't manage
the risk. Remember all the policy interventions. You Oh, we
had tarp one and that got rejected in the market
sold off. Then we had tarp too. I'm trying to
recollect all the crap and AIG and all the bull
(03:42):
excrement bailouts that took place. I told this story before.
I have a friend friend back from Long Island, and
she actually used to manage the households for a lot
(04:02):
of the Lehman Brothers executives from that period of time,
at least allow of their houses. They're still loaded, They're
all fine. There's no repercussion. There were no repercussions for
any of their actions. Okay, I remember reporting on this
several years ago. Dick Fold wanted to start a registered
(04:24):
investment advisory former CEO of Lehman Brothers who wanted the
same thing that I do for a living. I don't
even know how it's doing. I didn't even know if
he kept it going or not well. In this piece
by Amiti, Shales makes a point point that a great
(04:45):
Depression was the Great Depression, not because of a damn
dust bowl. You want to know why there's a dust ball. Oh,
they didn't tell you this back in social studies class.
The reason why there was a dust bowl, it was
a man made cological disaster. Again was a government. The
government caused it, all sorts of government wheat subsidies. He
(05:08):
had all sorts of unsustainable plowing under of erosion resistant
native plants that started off our you know, our downward
spiral when it comes to food here in the United States,
And we do the same bullshit today when we put
corn into cars with ethanol. Basically, we had a great
(05:32):
depression because okay, started off on the wrong foot tariffs
when we didn't need them. There wasn't a lot of
liquidity in the system at the time. Hoover decided to
do the exact opposite of what his predecessors did. With
Harding and Coolidge. You know that there was a they
call it the small Depression the early parts of the
(05:54):
nineteen twenties. You want to know what Harding and Coolidge did. Nothing.
They stayed the hell out of the economy. That's what
presidents were supposed to do. They weren't supposed to be
involved in the economy. I made the comparison here to
(06:14):
UH again, this is the remember the Naked gun remember
uh remember Enrico Palazzo there when he's the UH is
playing the opera singer and he's the umpire and he's
doing all this crazy stuff. Yeah, having to get involved
and putting on a show as an umpire, No no, no, no, okay,
you're not supposed to get involved. And the economy, you're
(06:37):
supposed to stay the hell out of the way. The
economy will fix itself, the ship will right itself. Yeah, well,
companies fail, Will things go in the wrong dra Absolutely,
But that's okay, there's nothing wrong with that. In a piece,
(07:00):
Shelles talks about you know, people back in the day.
I mean they were blaming you know you unemployment and
over ten percent for almost decade, you know, blaming it.
You know, that was a god's wrath. It wasn't It
was one bit of government intervention after another. And if
(07:23):
you again, I highly recommend you go and read the piece.
It's it's an excellent piece. The economic consequences of populism
by Amity Shells and all of the terrible things by
these again fuddy Duddy Ivy League and know it all
so think actual transcripts of court cases where they're bringing
(07:45):
in immigrants that own businesses and ridiculum here you're not
an expert on agricultural economics. I mean, they would go
after they had these these organizations that would tell businesses
how much, how much they could chards for their product,
what they had to pay their workers, and business like, well,
(08:05):
we can't can't operate like this. We're not going to
be profitable if we do this. Again, we don't have
the same crap going on today with the government dictating
to companies what you have to make, how you have
to make them certain standard electric cars, whatever it may be.
(08:28):
It's the same thing, and it's a failure. This is
why economic growth has stagnated here in the United States.
You can't obviously compare the period of the Great Depression
the global economy, which quite frankly, the size of it
insulates us from the massive downturns that we had during
(08:51):
the Great Depression. But again, I've often talked about here
on the program wasted talent. Talent. We're not nearly operating
at full capacity. And I try to explain to people, beware,
beware of these politicians that say they're going to rescue
(09:12):
the economy. They're going to fix the economy. They're not. Okay,
the only way you make things better again is by
getting out of the way. The government has zero credibility.
Zero credibility is a god awful track record when it
(09:35):
comes to intervention and the economy. Okay, you take a
look AUTO bailouts, all the COVID bailouts, everything, all the
picking of choosing the winners and losers. It doesn't matter
if it's a Democrat, it doesn't matter if it's a Republican.
All we can ask for at this point in time. Again,
(09:59):
I I hope you know Elon and Vivek are enormously
successful in getting the government out of the way, getting
rid of regulations, cutting government spending, leaving us the hell alone.
We need to get rid of these Elizabeth Warren types
(10:20):
and all these others. I feel that they've got to
be involved in it. I've said this before. Public private
partnerships are one of the biggest disasters going Again. It
is touted out there like it's some sort of damn
Kumbai ah crap. Okay, it's nonsense. The government needs to
(10:42):
get out of the way. If the government wants to
contract out a service. And I said, before you take
a look at you know some of the stories in
regards to the post office, and what a joke that is.
I don't even know why we need a post office anymore?
Why not have you know? We've got FedEx, we've got ups,
you got Amazon. Let them handle it. You know it's
going to be done better contracting us who does a
(11:05):
better job. Give them incentive. They'll do it at a
much much lower cost. Believe me, you'll start seeing, you
start saying the price of stamps go down if you
allow the private sector to handle it. That's fine. You
want to you want to contract a company to build
a road, whatever may be. We know government doesn't need
(11:26):
to be involved. And you put it out for forbidding,
and a way we go. But take the strings off,
don't demand. Oh you got to pay a prevailing wage,
you got to pay the union wage, and you got
to have you know this DEI score no, no, no, no,
no no no no no no no. Stay out of
the free market. Wages will adjust, they'll setter where they
(11:49):
need to be. All of your tinkering makes matters worse.
Watchdog on Wall Street dot Com
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