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This is Bloomberg business Week Inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

This is Bloomberg business Week Inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. It's a holiday weekend thanks to the July fourth holiday. Many may be finding themselves on the beach, up in the mountains, in a nearby park, or sitting on their front stupid some time on their hands.

Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. It's a holiday weekend thanks to the July fourth holiday. Many may be finding themselves on the beach, up in the mountains, in a nearby park, or sitting on their front stupid some time on their hands.

So with that in mind, here's our team summer reading list, in no particular order, and including books from a Nobel laureate and a former witch on Wall Street to one about selling the high Seas alone, to the journalist who's keeping track of those who break barriers later in life.

So with that in mind, here's our team summer reading list, in no particular order, and including books from a Nobel laureate and a former witch on Wall Street to one about selling the high Seas alone, to the journalist who's keeping track of those who break barriers later in life.

We begin with our team's pick by Nobel Laurie. Joseph Stieglitz, Professor of economics at Columbia University. He was Chairman of the Council of Economic Advisors under President Clinton and a former Chief Economist of the World Bank.

We begin with our team's pick by Nobel Laurie. Joseph Stieglitz, Professor of economics at Columbia University. He was Chairman of the Council of Economic Advisors under President Clinton and a former Chief Economist of the World Bank.

He's written many books, authored numerous research papers on many aspects of economics, equality, and more. His latest subject matter is covered in a new book. It's called The Road to Freedom, Economics and the Good Society. Our conversation began with the Fed's commitment to that two percent inflation objective and whether a little above actually makes much of a difference. We spoke to Professor Stieglitz in late April.

He's written many books, authored numerous research papers on many aspects of economics, equality, and more. His latest subject matter is covered in a new book. It's called The Road to Freedom, Economics and the Good Society. Our conversation began with the Fed's commitment to that two percent inflation objective and whether a little above actually makes much of a difference. We spoke to Professor Stieglitz in late April.

From the point of view of economics, having two and a half or even three percent inflation is not a big deal. You know, the two percent target was pulled out of thin air. It was not based on economic science. What we want to be sure of is that we don't have runaway inflation. And inflation has clearly been tamed, it's been brought down, it's stable at lecture, wakes from month to month, but it is not as your problem. We should be focusing on other things, continuing economic growth, making sure that all Americans share in that growth. Those are the kinds of things that we ought to be thinking more about.

From the point of view of economics, having two and a half or even three percent inflation is not a big deal. You know, the two percent target was pulled out of thin air. It was not based on economic science. What we want to be sure of is that we don't have runaway inflation. And inflation has clearly been tamed, it's been brought down, it's stable at lecture, wakes from month to month, but it is not as your problem. We should be focusing on other things, continuing economic growth, making sure that all Americans share in that growth. Those are the kinds of things that we ought to be thinking more about.

So, Professor Stieglitz, should the FED abandon the two percent inflation goal? Should they have a different inflation goal, a different metric that they should be held accountable to.

So, Professor Stieglitz, should the FED abandon the two percent inflation goal? Should they have a different inflation goal, a different metric that they should be held accountable to.

Yes, I think they should.

Yes, I think they should.

I think they should be talking about keeping within a range to maybe three three and a half four percent. You know, there's actually some economic science that says, especially in a time of major structural change such as we're going through, having a little higher inflation actually is helpful in reallocating resources in the presence of downward nominal rigidities of wages, because what guides the movement of resources from one place to another is relative wages, and if some wages are sticky downward, you want other wages to go up enough to move labor, and that means you're going to have to have more inflation. So actually a little higher inflation is actually good for the economy.

I think they should be talking about keeping within a range to maybe three three and a half four percent. You know, there's actually some economic science that says, especially in a time of major structural change such as we're going through, having a little higher inflation actually is helpful in reallocating resources in the presence of downward nominal rigidities of wages, because what guides the movement of resources from one place to another is relative wages, and if some wages are sticky downward, you want other wages to go up enough to move labor, and that means you're going to have to have more inflation. So actually a little higher inflation is actually good for the economy.

Do you think the FEDS management of the economy has been a good one in terms of policy?

Do you think the FEDS management of the economy has been a good one in terms of policy?

Quite? Frankly, no, put it bluntly.

Quite? Frankly, no, put it bluntly.

Let's go back to when inflation broke out after the pandemic and the Russian invasion of Ukraine. The question was what was the cause, the primary cause of the inflation.

Let's go back to when inflation broke out after the pandemic and the Russian invasion of Ukraine. The question was what was the cause, the primary cause of the inflation.

It was unambiguous.

It was unambiguous.

It was the pandemic and war related interruptions in supply chains and rising prices caused by shortages of oil and food. It was demand shifts. People wanted to live in different places, and that meant housing prices went up where there was a scarcity, but it didn't go down as much where there was where people didn't want to live in parts of New York, raising interest rates actually impedes the ability of the economy to respond to that kind of.

It was the pandemic and war related interruptions in supply chains and rising prices caused by shortages of oil and food. It was demand shifts. People wanted to live in different places, and that meant housing prices went up where there was a scarcity, but it didn't go down as much where there was where people didn't want to live in parts of New York, raising interest rates actually impedes the ability of the economy to respond to that kind of.

Structural to that kind of challenge.

Structural to that kind of challenge.

We needed to build more houses in the places where there was a scarcity, and having higher interest rates actually works makes it more difficulty. They also have a model of the economy that's based on competition. That might have been true some time ago, but we have an economy with a lot of market power at firms are trading off. If they raise their prices, they get more profits today, they lose profits in the future, and in that trade off, when you raise the interest rate, they value those future losses less and they're induced to raise their prices more. So margins go up, and a marked aspect of the inflation that we've just been through is that markets have increased enormously.

We needed to build more houses in the places where there was a scarcity, and having higher interest rates actually works makes it more difficulty. They also have a model of the economy that's based on competition. That might have been true some time ago, but we have an economy with a lot of market power at firms are trading off. If they raise their prices, they get more profits today, they lose profits in the future, and in that trade off, when you raise the interest rate, they value those future losses less and they're induced to raise their prices more. So margins go up, and a marked aspect of the inflation that we've just been through is that markets have increased enormously.

Hey, Professor Stieglitz, I just wanted to speaking of the FED, Carol, I know you would a.

Hey, Professor Stieglitz, I just wanted to speaking of the FED, Carol, I know you would a.

Well, one one thing before we have a bigger broader question, and it's certainly been a bigger to jump in on that. Well, what do you think then we should be cutting rates already, that we're behind the curve right now.

Well, one one thing before we have a bigger broader question, and it's certainly been a bigger to jump in on that. Well, what do you think then we should be cutting rates already, that we're behind the curve right now.

Yes, I think I think the risks are asymmetric. I think with Europe already slowing down in recession, we don't know where China is going to be going. I think uh proudents would have us uh going back to a more normal infrast rate. The higher interest rates are are really not going to be taming inflation.

Yes, I think I think the risks are asymmetric. I think with Europe already slowing down in recession, we don't know where China is going to be going. I think uh proudents would have us uh going back to a more normal infrast rate. The higher interest rates are are really not going to be taming inflation.

That that model was wrong.

That that model was wrong.

In another way, they dramatically had said that we're going to need five percent of inflation for five percent unemployment for some time in order to get inflation down.

In another way, they dramatically had said that we're going to need five percent of inflation for five percent unemployment for some time in order to get inflation down.

They were absolutely wrong.

They were absolutely wrong.

We got inflation down where in a period where we kept unemployment relatively low, So they are analysis of the economy was just off. And meanwhile they have put at risk our banking system. We had a problem in Selicom Valley Bank partly because of the enormous changes in terms structure which their policies led to. And we're facing a debt crisis in the developing countries and emerging markets.

We got inflation down where in a period where we kept unemployment relatively low, So they are analysis of the economy was just off. And meanwhile they have put at risk our banking system. We had a problem in Selicom Valley Bank partly because of the enormous changes in terms structure which their policies led to. And we're facing a debt crisis in the developing countries and emerging markets.

So there's enormous one sided risk. I believe in the policies that they've been pursuing.

So there's enormous one sided risk. I believe in the policies that they've been pursuing.

Well on the FED, Professor Stieglitz, I got to ask you about this Wall Street Journal report that broke last night that said how former Trump administration officials are coming up with plans to take on the independence of the Federal Reserve essentially at one end of the spectrum, even allowing if President Trump gets re elect him to weigh in on FED policy when it comes to interest rates. Talk a little bit about your reaction to if this were to come to fruition, how important the independence of the FED is and if that would really put at risk the model of the independence of the US financial system.

Well on the FED, Professor Stieglitz, I got to ask you about this Wall Street Journal report that broke last night that said how former Trump administration officials are coming up with plans to take on the independence of the Federal Reserve essentially at one end of the spectrum, even allowing if President Trump gets re elect him to weigh in on FED policy when it comes to interest rates. Talk a little bit about your reaction to if this were to come to fruition, how important the independence of the FED is and if that would really put at risk the model of the independence of the US financial system.

Well, I think Trump is himself a major argument why you want to have independence.

Well, I think Trump is himself a major argument why you want to have independence.

Of the FED.

Of the FED.

You don't want somebody who doesn't understand monetary policy, who would put at risk the long run stability of the economy for the short term electoral advantage of having a hot economy right before an election. That's precisely why there is an argument for independence. So, you know, I believe in the accountability of the FED. It is a public institution.

You don't want somebody who doesn't understand monetary policy, who would put at risk the long run stability of the economy for the short term electoral advantage of having a hot economy right before an election. That's precisely why there is an argument for independence. So, you know, I believe in the accountability of the FED. It is a public institution.

We have.

We have.

Previous chairmen of the FED. We're very cognizant of that.

Previous chairmen of the FED. We're very cognizant of that.

I remember Paul Voker saying Congress created us and Congress can uncreate us. So there is a kind of accountability that responsible to heads of the FED, understand, But we certainly don't want Donald Trump to be running monetary policy.

I remember Paul Voker saying Congress created us and Congress can uncreate us. So there is a kind of accountability that responsible to heads of the FED, understand, But we certainly don't want Donald Trump to be running monetary policy.

All right, We do want to dig into your book because you've been thinking a lot about the meaning of freedom, and I think we throw the word abown a lot. I think the folks who created the United States are founding fathers thought about freedom a lot and the difference though between what that really means and maybe it comes down to, as you think about it, the values that we all have in society tell us about how we need to kind of maybe redefine freedom and what it means in terms of citizens more broadly and generally, as well as economically in terms of their six.

All right, We do want to dig into your book because you've been thinking a lot about the meaning of freedom, and I think we throw the word abown a lot. I think the folks who created the United States are founding fathers thought about freedom a lot and the difference though between what that really means and maybe it comes down to, as you think about it, the values that we all have in society tell us about how we need to kind of maybe redefine freedom and what it means in terms of citizens more broadly and generally, as well as economically in terms of their six.

Sure you know, I approached the issue obviously as an economist, and as an economist we think of freedom is free to do what you can do.

Sure you know, I approached the issue obviously as an economist, and as an economist we think of freedom is free to do what you can do.

What are the choices that you can make.

What are the choices that you can make.

Somebody who is at the point of starvation doesn't really have any freedom. He has to do what he does what he can to survive, and so expanding the set of choices that an individual is available is a way of saying that he has more freedom. And here there are a couple of ideas I put forward in my book. The first is that in our integrated urban twenty percentury economy, one person does the expansion of his freedom may.

Somebody who is at the point of starvation doesn't really have any freedom. He has to do what he does what he can to survive, and so expanding the set of choices that an individual is available is a way of saying that he has more freedom. And here there are a couple of ideas I put forward in my book. The first is that in our integrated urban twenty percentury economy, one person does the expansion of his freedom may.

Lead to less freedom of others.

Lead to less freedom of others.

Isaiah Berlin, the great Oxford philosopher, put it this way. He said, freedom for the war has often meant death for the sheep, and in the context of the US, for instance, the freedom to carry an AK forty seven means that people will die, and it means that our school children are not free from fear. They have to learn what to do if a gunman comes into the classroom, and teachers have to go to school worried about whether they'll be attacked. Freedom not to wear masks is exposed taking away the freedom of others to live.

Isaiah Berlin, the great Oxford philosopher, put it this way. He said, freedom for the war has often meant death for the sheep, and in the context of the US, for instance, the freedom to carry an AK forty seven means that people will die, and it means that our school children are not free from fear. They have to learn what to do if a gunman comes into the classroom, and teachers have to go to school worried about whether they'll be attacked. Freedom not to wear masks is exposed taking away the freedom of others to live.

So we.

So we.

Have to balance these freedoms. There are trade offs. Many cases, those trade offs are easy. Freedom to pollute takes away the freedom to have somebody with asthma to even live, let alone the freedom of all of us to live on our planet. So there I think we have to constrain the freedom of the pluters and the freedom of exploiters.

Have to balance these freedoms. There are trade offs. Many cases, those trade offs are easy. Freedom to pollute takes away the freedom to have somebody with asthma to even live, let alone the freedom of all of us to live on our planet. So there I think we have to constrain the freedom of the pluters and the freedom of exploiters.

So we're talking with Joseph Stieglitz, Nobel Laureate Economists, Professor of Economics at Columbia University, and we're talking about his new book, The Road to Freedom, Economics and the Good Society. All right, So if we think Professor Stieglitz the idea of freedom, so it's maybe more inclusive or it's a broader definition, how do we do that within society? With corporations, the need to be profitable for those we are in earning season. We look at companies and their reports and that's how we kind of measure them, grade them. What does government need to do? How can we maybe be better if you will for more.

So we're talking with Joseph Stieglitz, Nobel Laureate Economists, Professor of Economics at Columbia University, and we're talking about his new book, The Road to Freedom, Economics and the Good Society. All right, So if we think Professor Stieglitz the idea of freedom, so it's maybe more inclusive or it's a broader definition, how do we do that within society? With corporations, the need to be profitable for those we are in earning season. We look at companies and their reports and that's how we kind of measure them, grade them. What does government need to do? How can we maybe be better if you will for more.

First, let me emphasize that in the world i've just described, there's an important role for regulations. Corporations often don't like that, but we have to remember the purpose of our economy is to improve the lives and livelihoods of our citizens.

First, let me emphasize that in the world i've just described, there's an important role for regulations. Corporations often don't like that, but we have to remember the purpose of our economy is to improve the lives and livelihoods of our citizens.

It's not the other way around that the economy.

It's not the other way around that the economy.

The economy is supposed to serve society, not the other way around.

The economy is supposed to serve society, not the other way around.

There's another aspect.

There's another aspect.

Regulations can't actually expand the freedom of all of us. Think about stop likes if we don't have stop stop likes. We have gourdlock. None of us has the freedom to move. Stop likes ors are a little bit of coercion, mean that I have to take turns, but by taking turns, we all have more freedom. And that basic idea extends much more broadly. People don't like to pay taxes. That that's they often feel kind of coercion. But when those tax revenues are used productively, like they were to invest in the Internet and invest in the m R any platform that led to the vaccine against COVID nineteen, that expands our freedom to do. And so we have to look at this in I would say in a little bit more holistic way.

Regulations can't actually expand the freedom of all of us. Think about stop likes if we don't have stop stop likes. We have gourdlock. None of us has the freedom to move. Stop likes ors are a little bit of coercion, mean that I have to take turns, but by taking turns, we all have more freedom. And that basic idea extends much more broadly. People don't like to pay taxes. That that's they often feel kind of coercion. But when those tax revenues are used productively, like they were to invest in the Internet and invest in the m R any platform that led to the vaccine against COVID nineteen, that expands our freedom to do. And so we have to look at this in I would say in a little bit more holistic way.

Well, I want to go to your taxes point, because I'm curious if you could wave a magic wand or implement some sort of tax policy here in the US, what would it be? How could you reinvent it? Would you broaden the tax space, would you lean more on corporate taxes, would you tax wealth more? What, in your opinion would work?

Well, I want to go to your taxes point, because I'm curious if you could wave a magic wand or implement some sort of tax policy here in the US, what would it be? How could you reinvent it? Would you broaden the tax space, would you lean more on corporate taxes, would you tax wealth more? What, in your opinion would work?

Well, I begin by.

Well, I begin by.

Analyzing would are some of the key problems on our society basis, and one of them is inequality. One of the reasons and a second problem is the growth of market power, which has been enormous in the last few decades, and those two are obviously linked. When you have more market power, the fruits of that market power go to those at the top. We also have more economists called monoposity power. Firms have market power over workers and have driven down their wages significantly below a competitive level. So I want to have more anti trust policy, more competitive labor market policies, but that can take time. Meanwhile, there's a lot of monopoly rents, and so part of what I would begin by doing is increasing corporate comfix taxes, which are not a tax on return to capital, they are tax on this monopoly profits.

Analyzing would are some of the key problems on our society basis, and one of them is inequality. One of the reasons and a second problem is the growth of market power, which has been enormous in the last few decades, and those two are obviously linked. When you have more market power, the fruits of that market power go to those at the top. We also have more economists called monoposity power. Firms have market power over workers and have driven down their wages significantly below a competitive level. So I want to have more anti trust policy, more competitive labor market policies, but that can take time. Meanwhile, there's a lot of monopoly rents, and so part of what I would begin by doing is increasing corporate comfix taxes, which are not a tax on return to capital, they are tax on this monopoly profits.

I'd also like to have environmental taxes.

I'd also like to have environmental taxes.

Firms that are engaged, including the environment, ought to pay for the damage that they're doing. Remarkably, America, those at the top pay a lower percentage of their taxes than those down below. Even some of our richest people have commented that they think they're right more be wrong.

Firms that are engaged, including the environment, ought to pay for the damage that they're doing. Remarkably, America, those at the top pay a lower percentage of their taxes than those down below. Even some of our richest people have commented that they think they're right more be wrong.

Well, can I ask you, like on a day when we're looking at a company and forgive me, I'm just singling out because it popped. Shares of alphabet are now a two trillion dollar market cap company this week, you know next week. Last week, we've been obsessed with, certainly what we call the Magnificent seven, the big megacap technic companies. They're very big. Amazon, we talked with an author recently, so entrenched certainly in our world, and you think about their reach. Are these the companies, the individuals, whether it's an Amazon, whether it's a Meta, whether it's an alphabet that you think you talked about. Growth of market power isn't too much at this point in your view that something needs to be done to rain them in or do the benefits outweigh the downside here, Well.

Well, can I ask you, like on a day when we're looking at a company and forgive me, I'm just singling out because it popped. Shares of alphabet are now a two trillion dollar market cap company this week, you know next week. Last week, we've been obsessed with, certainly what we call the Magnificent seven, the big megacap technic companies. They're very big. Amazon, we talked with an author recently, so entrenched certainly in our world, and you think about their reach. Are these the companies, the individuals, whether it's an Amazon, whether it's a Meta, whether it's an alphabet that you think you talked about. Growth of market power isn't too much at this point in your view that something needs to be done to rain them in or do the benefits outweigh the downside here, Well.

They do give benefits, but they have a lot of downsides. They need to be better regulated. Europe has done a better job but regulating that. The digital harms are quite obvious and have been by now well documented.

They do give benefits, but they have a lot of downsides. They need to be better regulated. Europe has done a better job but regulating that. The digital harms are quite obvious and have been by now well documented.

But talking narrowly now about market power, I.

But talking narrowly now about market power, I.

Think we ought to do what we can to limit their market power, but tax the fruits of that market power, the revenues that they get at a much higher rate. You know, if you ask the question, would Jeff Bezos or the founders.

Think we ought to do what we can to limit their market power, but tax the fruits of that market power, the revenues that they get at a much higher rate. You know, if you ask the question, would Jeff Bezos or the founders.

Of Google.

Of Google.

Or Zuperbird stop working if we tax their wealth in a way, say a three percent, So any answer is obvious.

Or Zuperbird stop working if we tax their wealth in a way, say a three percent, So any answer is obvious.

They would continue to work.

They would continue to work.

Do you think that they would leave the United States?

Do you think that they would leave the United States?

Well, we have imposed what we call an exit tax that those with a lot of wealth and don't feel who don't feel loyalty United States.

Well, we have imposed what we call an exit tax that those with a lot of wealth and don't feel who don't feel loyalty United States.

Can lead.

Can lead.

We allowed them to leave, but they have to pay a tax that represents attacks on the groups of the wealth that they've accumulated while they've been in the United States. And that tax is significant, and it is a deterrent, and if it's not, it may be that we ought to consider raising that tax. But I don't think people like Zuckerberg Musk are going to leave the United States. They realize the benefits of American citizenship.

We allowed them to leave, but they have to pay a tax that represents attacks on the groups of the wealth that they've accumulated while they've been in the United States. And that tax is significant, and it is a deterrent, and if it's not, it may be that we ought to consider raising that tax. But I don't think people like Zuckerberg Musk are going to leave the United States. They realize the benefits of American citizenship.

We're speaking right now with Professor Joseph Stieglitz, Nobel Lauriate Economists. He's a professor of economics at Columbia University. He's got a new book out, The Road to Freedom, Economics and the Good Society. Professor, as I mentioned, you are up at Columbia. You've been there for a long time. We've been watching everything that's been happening on the campus there, as well as campuses including USC, Yale, MIT, the list continues to go on here in the United States, as was seen Palestinian protests and encabments take over some of these campuses. Freedom in the academic context, How are you looking at the protest protests and the context of freedom of speech?

We're speaking right now with Professor Joseph Stieglitz, Nobel Lauriate Economists. He's a professor of economics at Columbia University. He's got a new book out, The Road to Freedom, Economics and the Good Society. Professor, as I mentioned, you are up at Columbia. You've been there for a long time. We've been watching everything that's been happening on the campus there, as well as campuses including USC, Yale, MIT, the list continues to go on here in the United States, as was seen Palestinian protests and encabments take over some of these campuses. Freedom in the academic context, How are you looking at the protest protests and the context of freedom of speech?

That's a good question, I mean personal.

That's a good question, I mean personal.

Let me comment that up where my office is, which is the Manhattanville campus, things are.

Let me comment that up where my office is, which is the Manhattanville campus, things are.

Very quiet the business school at the business school there.

Very quiet the business school at the business school there.

But you've been on campus a long time and you've seen different protests over the years, and it seemed to be I was there when there were protests, and it seems like that's what students are should be doing, exploring and pushing back when they don't feel like things are right. But what is what is the what is it those protests in the context of freedom of speech?

But you've been on campus a long time and you've seen different protests over the years, and it seemed to be I was there when there were protests, and it seems like that's what students are should be doing, exploring and pushing back when they don't feel like things are right. But what is what is the what is it those protests in the context of freedom of speech?

So I agree with you very strongly.

So I agree with you very strongly.

I'm actually happy the students are engaged in the world, you know. That's that's one of the things I tribably keept them to be interested in the world and also the reason about the world, to come to understand it and to debate how could or should things be changed. So that's a good thing. And in my own life, protests have played a very important role. Back in nineteen sixty three, I was down there in the march in Washington with Martin Luther King, and you know that speech he gave about I have a Dream has been a lifelong inspiration to me. So even civil disobedience in certain circumstances can be an important mechanism for social change. We have a special responsibility, of course, to make sure on our campus that all views get heard, that we can have civil debates, and on the one end, academic freedom is really important. And I really took offense to Speaker Johnson coming up to our campus and calling for the resignation of our president.

I'm actually happy the students are engaged in the world, you know. That's that's one of the things I tribably keept them to be interested in the world and also the reason about the world, to come to understand it and to debate how could or should things be changed. So that's a good thing. And in my own life, protests have played a very important role. Back in nineteen sixty three, I was down there in the march in Washington with Martin Luther King, and you know that speech he gave about I have a Dream has been a lifelong inspiration to me. So even civil disobedience in certain circumstances can be an important mechanism for social change. We have a special responsibility, of course, to make sure on our campus that all views get heard, that we can have civil debates, and on the one end, academic freedom is really important. And I really took offense to Speaker Johnson coming up to our campus and calling for the resignation of our president.

I hadn't seen anything.

I hadn't seen anything.

Like that, maybe since the HUAC hearings the House on American Activities Committee back with McCarthy in the fifties. I mean, that kind of direct interference in academia is just unheard of. And we know some of the Republicans have been trying to undermine universities because universities teach children how to our young our youngsters, our young men and women, how to think, and a lot of people don't like that idea that they should be thinking for themselves. But at the same time, we have to create on campus a community. We're all voices are heard, and I think we're actually working very much towards that. There were only a few people raising problems, and I think having outside actu takers like the speaker is not helpful.

Like that, maybe since the HUAC hearings the House on American Activities Committee back with McCarthy in the fifties. I mean, that kind of direct interference in academia is just unheard of. And we know some of the Republicans have been trying to undermine universities because universities teach children how to our young our youngsters, our young men and women, how to think, and a lot of people don't like that idea that they should be thinking for themselves. But at the same time, we have to create on campus a community. We're all voices are heard, and I think we're actually working very much towards that. There were only a few people raising problems, and I think having outside actu takers like the speaker is not helpful.

We're going to leave it on that note. We always appreciate hearing you talk about hearing from voices. We always appreciate hearing from you. Professor Stieglitz, thank you so much, Nobell Loride Economist Columbia Professor Joseph Stieglitz here in New York City. Check out his book. His latest book, The Road to Freedom, Economics and the Good Society. Really appreciate us spending some time with you.

We're going to leave it on that note. We always appreciate hearing you talk about hearing from voices. We always appreciate hearing from you. Professor Stieglitz, thank you so much, Nobell Loride Economist Columbia Professor Joseph Stieglitz here in New York City. Check out his book. His latest book, The Road to Freedom, Economics and the Good Society. Really appreciate us spending some time with you.

You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Apple Car Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa Play Bloomberg eleven thirty.

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This next book Tim's pick, also Group fave by New York Times Global economics correspondent and award winning journalist Peter S. Goodman, the book How the World Ran out of everything inside the global supply chain. And to understand the supply chain.

This next book Tim's pick, also Group fave by New York Times Global economics correspondent and award winning journalist Peter S. Goodman, the book How the World Ran out of everything inside the global supply chain. And to understand the supply chain.

Peter visits seemingly every link. He spends time with one of the largest exporters of amends in California and the dock workers who are supposed to get those amends all over the world. He hitches a ride through Kansas with a Brahms loving trucker and visits ports from Los Angeles to Savannah to explain how the world found itself in the greatest supply chain crisis it's ever seen.

Peter visits seemingly every link. He spends time with one of the largest exporters of amends in California and the dock workers who are supposed to get those amends all over the world. He hitches a ride through Kansas with a Brahms loving trucker and visits ports from Los Angeles to Savannah to explain how the world found itself in the greatest supply chain crisis it's ever seen.

He is a journalist that really does his job. Here's Tim Summer read from Peter S. Goodman, his book How the World Run Out of Everything Inside the Global supply Chain? Bill Clinton and China entering the wto the rise of globalization, McKenzie and the Lean Taliban, the decline of unions in the working class, the rise of share buybacks and increasing dividends, monopolistic takeovers, and then the pandemic and the great supply chain crisis.

He is a journalist that really does his job. Here's Tim Summer read from Peter S. Goodman, his book How the World Run Out of Everything Inside the Global supply Chain? Bill Clinton and China entering the wto the rise of globalization, McKenzie and the Lean Taliban, the decline of unions in the working class, the rise of share buybacks and increasing dividends, monopolistic takeovers, and then the pandemic and the great supply chain crisis.

Covering it all. And this complex global system is New York Times Global Economics correspondent an award winning journalist, Peter S.

Covering it all. And this complex global system is New York Times Global Economics correspondent an award winning journalist, Peter S.

Goodman.

Goodman.

He's the author of the new book Just Out how the world ran out of everything inside the global supply chain. And to understand the global supply chain, Peter visits seemingly every link of it. He spends time in one of the largest exporters of almonds in California and with the dock workers who are supposed to get those amends all over the world. He hitches a ride through Kansas with a Brahms loving trucker, feeds cows with a third generation rancher in Montana, and eats breakfast with the commissioner of the Federal Maritime Commission. He visits ports from la to Savannah to explain how the world found itself in the greatest supply chain crisis it's ever seen.

He's the author of the new book Just Out how the world ran out of everything inside the global supply chain. And to understand the global supply chain, Peter visits seemingly every link of it. He spends time in one of the largest exporters of almonds in California and with the dock workers who are supposed to get those amends all over the world. He hitches a ride through Kansas with a Brahms loving trucker, feeds cows with a third generation rancher in Montana, and eats breakfast with the commissioner of the Federal Maritime Commission. He visits ports from la to Savannah to explain how the world found itself in the greatest supply chain crisis it's ever seen.

All Right, he is here in our Bloomberg Interactive Broker studio. We wanted to do the setup because it's really comprehensive, and I do feel like I think it's safe to say that it explains a lot of kind of where we are today. So, Peter, you have such a front row seat to so much that is going on in the world. Tell us about that front row seat and what kind of really you know, stands out for you.

All Right, he is here in our Bloomberg Interactive Broker studio. We wanted to do the setup because it's really comprehensive, and I do feel like I think it's safe to say that it explains a lot of kind of where we are today. So, Peter, you have such a front row seat to so much that is going on in the world. Tell us about that front row seat and what kind of really you know, stands out for you.

You know, it's changed the way I look at any package that lands at my door, or really any product that somebody made somewhere that had to be transported to a store or to a home or a business. We don't tend to think about the supply chain, you know. It's one of those things. It's like the light switch. We're not thinking about the internal wiring. We flipped on the light's work well when.

You know, it's changed the way I look at any package that lands at my door, or really any product that somebody made somewhere that had to be transported to a store or to a home or a business. We don't tend to think about the supply chain, you know. It's one of those things. It's like the light switch. We're not thinking about the internal wiring. We flipped on the light's work well when.

We needed it most. It failed, It.

We needed it most. It failed, It.

Buckled, and we had frontline medical workers dealing with COVID patients without protective gear. We had families unable to find infant formula. I mean, that was an incredible crisis. We have a toilet paper scare, which turned out to not be so much as shortage as a question of hoarding. And we all remember these ships, you know, fifty sixty seventy ships that were floating off the coast of southern California, unable to land, floating for weeks at a time before they could find a slot to load and unload all these factory goods coming in from China. And I think for all of us in the midst of the pandemic, it was so bewildering that it gave us this curiosity about these people.

Buckled, and we had frontline medical workers dealing with COVID patients without protective gear. We had families unable to find infant formula. I mean, that was an incredible crisis. We have a toilet paper scare, which turned out to not be so much as shortage as a question of hoarding. And we all remember these ships, you know, fifty sixty seventy ships that were floating off the coast of southern California, unable to land, floating for weeks at a time before they could find a slot to load and unload all these factory goods coming in from China. And I think for all of us in the midst of the pandemic, it was so bewildering that it gave us this curiosity about these people.

We never think about.

We never think about.

So.

So.

Yes, as you guys pointed out, I climbed into in the front of a truck. I visited with rail maintenance workers who were away from their families for weeks at a time, and I really tried to understand what has gone haywire here.

Yes, as you guys pointed out, I climbed into in the front of a truck. I visited with rail maintenance workers who were away from their families for weeks at a time, and I really tried to understand what has gone haywire here.

Peter, the reason we're talking about such a complex supply chain is because of globalization. Your career has kind of coincided with the rise of globalization, right being a reporter in South Asia in the nineties and then post dot com crash working for the Washington Post. I think it was out of Shanghai. That's you visited a lot of these factories at times when they weren't what they are today. Talk a little bit about how you've seen that your career alongside the rise of globalization.

Peter, the reason we're talking about such a complex supply chain is because of globalization. Your career has kind of coincided with the rise of globalization, right being a reporter in South Asia in the nineties and then post dot com crash working for the Washington Post. I think it was out of Shanghai. That's you visited a lot of these factories at times when they weren't what they are today. Talk a little bit about how you've seen that your career alongside the rise of globalization.

Yeah, I appreciate your pointing that out. So I landed in China in two thousand and one, which was the same year that China, of course enters the World Trade Organization, this landmark, you know, moment for globalization, and it was pretty clear then that China had huge aspirations and that the world was flocking to China in large part because you know, corporate CEOs who were constantly looking for ways to cut costs, availed themselves of this ultimate opportunity to you know, engage Chinese labor as a way of undercutting labor costs at home in the US and in Japan, in South Korea, in Europe. And it was also clear that the Chinese government had very systematically built out the infrastructure that was needed for trade. So you know, visited massive ports factories that were capable of making you know, enough microwave ovens to supply Walmart for a year, you know, and whole towns were you know, set up for single industries. I remember going to the necktie town. There was this one town in one province that was suddenly making more neckties than all of Italy, you know, in the course of a decade. So you could feel that the scale was available. But what I didn't understand, and what I've come to understand through this book, is that all of this was premised on the idea that container shipping would be basically free and reliable. And what I've come to see is that we built this global economy putting ourselves really at the mercy of this international cartel.

Yeah, I appreciate your pointing that out. So I landed in China in two thousand and one, which was the same year that China, of course enters the World Trade Organization, this landmark, you know, moment for globalization, and it was pretty clear then that China had huge aspirations and that the world was flocking to China in large part because you know, corporate CEOs who were constantly looking for ways to cut costs, availed themselves of this ultimate opportunity to you know, engage Chinese labor as a way of undercutting labor costs at home in the US and in Japan, in South Korea, in Europe. And it was also clear that the Chinese government had very systematically built out the infrastructure that was needed for trade. So you know, visited massive ports factories that were capable of making you know, enough microwave ovens to supply Walmart for a year, you know, and whole towns were you know, set up for single industries. I remember going to the necktie town. There was this one town in one province that was suddenly making more neckties than all of Italy, you know, in the course of a decade. So you could feel that the scale was available. But what I didn't understand, and what I've come to understand through this book, is that all of this was premised on the idea that container shipping would be basically free and reliable. And what I've come to see is that we built this global economy putting ourselves really at the mercy of this international cartel.

If you had to pinpoint, was it President Bill Clinton, former President Bill Clinton, and the push to get everybody or to get China in the WTO. That that's why we're having this conversation. That's why when the pandemic hit, we were like, what the heck happened to our global supply chain? Isn't that particular moment in time that got us to.

If you had to pinpoint, was it President Bill Clinton, former President Bill Clinton, and the push to get everybody or to get China in the WTO. That that's why we're having this conversation. That's why when the pandemic hit, we were like, what the heck happened to our global supply chain? Isn't that particular moment in time that got us to.

Hear I think that's a landmark. I mean, there's a lot of moments at time, right.

Hear I think that's a landmark. I mean, there's a lot of moments at time, right.

I mean I write about Ford because I was interested in the rise of mass assembly. I write about the roots of the shipping container because the process of standardizing cargo made it possible to go look for the cheapest place to make anything.

I mean I write about Ford because I was interested in the rise of mass assembly. I write about the roots of the shipping container because the process of standardizing cargo made it possible to go look for the cheapest place to make anything.

You could go anywhere around the world.

You could go anywhere around the world.

But if China wasn't accepted on a global scale in terms of trade, right, there was a big push. There were lots of concerns about human rights. There are still lots of big concerns about human rights, and yet there they were right in the WTO, something they fought for.

But if China wasn't accepted on a global scale in terms of trade, right, there was a big push. There were lots of concerns about human rights. There are still lots of big concerns about human rights, and yet there they were right in the WTO, something they fought for.

Well, here's the part that people are generally afraid to talk about. You know, China gets into the WTO because American retailers lobby like crazy to get China into the WTO, and nobody wants to be affiliated with the story of labor exploitation. Now, let's remember Chinese labor in American history. You know, from the beginning it's about undercutting wages. Right, Chinese workers aren't systematically brought over from China to build the railroads because the mostly Irish laborers say, ah, this is pretty dangerous and we're not getting paid enough. So this is a continuation of that story, you know, a century later, where now we're bringing the production to China and there's this is a sort of seamy, unsavory quality to this story because of course China is controlled by the Chinese commediest Party. There's no elections. You can get access to land, you can bypass workplace and environmental standards by cutting some local party official in on part of the sports. Well, this is not a good story for Bill Clinton, who you know, only a decade before he lobbies to get China into the WTO, is running as the guy who's you know, disciplining George H. W. Bush for coddling the butchers of Beijing. He's very critical of the crackdown against the pro democracy demonstrators in Tianneman Square. Well, I tell the story in the book. You know, it's not even a decade later, and Clinton's in Beijing at a banquet at the Great Hall of the People across the street from Tianeman Square, where he literally picks up the baton and conducts the People's Liberation Army Orchestra as they play this John Phillips southsro March. Now, why is Bill Clinton there? He's there because his party, the Democratic Party, is pulling in massive campaign attributions from retailers, and they're fashioning this story. It's not totally a fairy tale, right, I mean, trade has been the lynchpin of American foreign policy since the end of the Second World War. But there are a lot of reasons to be dubious that. You know, this is really about It's not just about selling Chinese people lots of stuff. It's not just about buying cheap goods from China. This is about democratizing China once.

Well, here's the part that people are generally afraid to talk about. You know, China gets into the WTO because American retailers lobby like crazy to get China into the WTO, and nobody wants to be affiliated with the story of labor exploitation. Now, let's remember Chinese labor in American history. You know, from the beginning it's about undercutting wages. Right, Chinese workers aren't systematically brought over from China to build the railroads because the mostly Irish laborers say, ah, this is pretty dangerous and we're not getting paid enough. So this is a continuation of that story, you know, a century later, where now we're bringing the production to China and there's this is a sort of seamy, unsavory quality to this story because of course China is controlled by the Chinese commediest Party. There's no elections. You can get access to land, you can bypass workplace and environmental standards by cutting some local party official in on part of the sports. Well, this is not a good story for Bill Clinton, who you know, only a decade before he lobbies to get China into the WTO, is running as the guy who's you know, disciplining George H. W. Bush for coddling the butchers of Beijing. He's very critical of the crackdown against the pro democracy demonstrators in Tianneman Square. Well, I tell the story in the book. You know, it's not even a decade later, and Clinton's in Beijing at a banquet at the Great Hall of the People across the street from Tianeman Square, where he literally picks up the baton and conducts the People's Liberation Army Orchestra as they play this John Phillips southsro March. Now, why is Bill Clinton there? He's there because his party, the Democratic Party, is pulling in massive campaign attributions from retailers, and they're fashioning this story. It's not totally a fairy tale, right, I mean, trade has been the lynchpin of American foreign policy since the end of the Second World War. But there are a lot of reasons to be dubious that. You know, this is really about It's not just about selling Chinese people lots of stuff. It's not just about buying cheap goods from China. This is about democratizing China once.

Well, that was the goal, that thinking that, okay, let's open up you know, trade and probably democracy will come and the human rights abuses will go away. And yet it didn't necessarily play out that way.

Well, that was the goal, that thinking that, okay, let's open up you know, trade and probably democracy will come and the human rights abuses will go away. And yet it didn't necessarily play out that way.

Well, one part of it played out. We got really low cost goods from China. The Walton family, the founders of Walmart, for a while became, you know, the wealthiest family on Earth. And anybody who moved production over to China at scale and managed to do the right deals rewarded their shareholders handsomely. That part held to form. Also, not incidentally, the industrialization of China lifted several hundred million people out of poverty.

Well, one part of it played out. We got really low cost goods from China. The Walton family, the founders of Walmart, for a while became, you know, the wealthiest family on Earth. And anybody who moved production over to China at scale and managed to do the right deals rewarded their shareholders handsomely. That part held to form. Also, not incidentally, the industrialization of China lifted several hundred million people out of poverty.

Yeah, and that's highly significant.

Yeah, and that's highly significant.

But the part about once Chinese people get a taste of Kentucky fried chicken, they're going to demand the ballot box, well, that has not worked out as I think everyone is now. Where you know, we're talking about genocide according to the Biden administration in Hinjong, where the Wigers are pressed into forced labor to produce cotton that ends up in lots of apparel. Of course, we still don't have elections. The central government has actually strengthened its role in Chinese society, so we don't hear that talk anymore. And of course now it's become politically fashionable within both parties to attack China as our enemy.

But the part about once Chinese people get a taste of Kentucky fried chicken, they're going to demand the ballot box, well, that has not worked out as I think everyone is now. Where you know, we're talking about genocide according to the Biden administration in Hinjong, where the Wigers are pressed into forced labor to produce cotton that ends up in lots of apparel. Of course, we still don't have elections. The central government has actually strengthened its role in Chinese society, so we don't hear that talk anymore. And of course now it's become politically fashionable within both parties to attack China as our enemy.

Peter, you mentioned concentration in shipping. I believe you called it a cartel, right, I had no idea before reading this that it was basically what three companies.

Peter, you mentioned concentration in shipping. I believe you called it a cartel, right, I had no idea before reading this that it was basically what three companies.

Three alliances that can use a bunch of companies, but think of it like airline allies.

Three alliances that can use a bunch of companies, but think of it like airline allies.

Three alliances that control basically all.

Three alliances that control basically all.

Of shipping ninety five percent of the shipping from China to the West coast of the United States.

Of shipping ninety five percent of the shipping from China to the West coast of the United States.

Some of the companies owned by China or like our are state subsidized organizations. How did it become like that?

Some of the companies owned by China or like our are state subsidized organizations. How did it become like that?

It became like that because there was deregulation pretty much everywhere, including in the US, where you know there used to be this anti trust exemption, but there was regulation on shipping rates, so you had to post what your rates were from one place to another.

It became like that because there was deregulation pretty much everywhere, including in the US, where you know there used to be this anti trust exemption, but there was regulation on shipping rates, so you had to post what your rates were from one place to another.

You couldn't negotiate a deal in secret.

You couldn't negotiate a deal in secret.

It was all above board, sort of like a utility, right, like the governments involved because this is a vital part of the economy. And then basically retailers lobbied. There were a couple of landmarks. The last one was in the eighties. There was no Amazon then, but there was Walmart target. The big retailers thought, well, if we're bringing over lots of these factory goods from China to the West coast of the US, to the East coast of the US, we would like to be able to negotiate a better deal than the smaller competitors. So essentially we've optimized the supply chain for the biggest companies, and the anti trust was essentially deactivated throughout much of American life. Right, you go back to Reagan, although really the story starts with Carter. You know, we're steeped in this idea that scale is the way to serve consumers, and so let's just get out of the way of business and let them provide, you know, that will deliver innovation. But once you take away competition, of course, what we get is pricing power. And for a long time, these mostly well they're all actually foreign companies. In international shipping. There were like extensions of state policy in China, South Korea, Taiwan, so they were content to keep shipping costs low as a way to bolster their exports. But once we get a shock in the great supply chain disruption during the pandemic, we see shipping prices go up tenfold, and we see, you know, you guys were alluding to the fact that I spent some time with Amman farmers in central California. We see amed farmers I visited had an entire crop sold to Dubai to Japanese purchasers, and they were just sitting on all this crop that they couldn't actually get on a ship. Because these shipping carriers were making so much money sending factory goods from China to the West coast of the US, which is the gateway for forty percent of American imports, that they didn't even want to bother to send empty containers up to the Central Valley to load up with farm products like ammons. They just unloaded factory goods in La and sent empty containers back across the Pacific. We're talking about burning diesel fuel to send air back across the Pacific. So they can get twenty five twenty seven twenty eight thousand dollars to move a container of factory goods from you know, a place like Shanghai to LA that used to cost like twenty twenty five hundred during the pandemic. That's largely the story of deregulation.

It was all above board, sort of like a utility, right, like the governments involved because this is a vital part of the economy. And then basically retailers lobbied. There were a couple of landmarks. The last one was in the eighties. There was no Amazon then, but there was Walmart target. The big retailers thought, well, if we're bringing over lots of these factory goods from China to the West coast of the US, to the East coast of the US, we would like to be able to negotiate a better deal than the smaller competitors. So essentially we've optimized the supply chain for the biggest companies, and the anti trust was essentially deactivated throughout much of American life. Right, you go back to Reagan, although really the story starts with Carter. You know, we're steeped in this idea that scale is the way to serve consumers, and so let's just get out of the way of business and let them provide, you know, that will deliver innovation. But once you take away competition, of course, what we get is pricing power. And for a long time, these mostly well they're all actually foreign companies. In international shipping. There were like extensions of state policy in China, South Korea, Taiwan, so they were content to keep shipping costs low as a way to bolster their exports. But once we get a shock in the great supply chain disruption during the pandemic, we see shipping prices go up tenfold, and we see, you know, you guys were alluding to the fact that I spent some time with Amman farmers in central California. We see amed farmers I visited had an entire crop sold to Dubai to Japanese purchasers, and they were just sitting on all this crop that they couldn't actually get on a ship. Because these shipping carriers were making so much money sending factory goods from China to the West coast of the US, which is the gateway for forty percent of American imports, that they didn't even want to bother to send empty containers up to the Central Valley to load up with farm products like ammons. They just unloaded factory goods in La and sent empty containers back across the Pacific. We're talking about burning diesel fuel to send air back across the Pacific. So they can get twenty five twenty seven twenty eight thousand dollars to move a container of factory goods from you know, a place like Shanghai to LA that used to cost like twenty twenty five hundred during the pandemic. That's largely the story of deregulation.

You know.

You know.

One thing I think about, though, in particular in your book is kind of the role of consultanc here. And I don't want to pick pile on anyone in particular. But you do single out mackenzie, I sure do. You do talk about the lean Taliban. You also get into a lot of just in time inventory for anybody's taking accounting cleanses. Played around with this, right, but this idea too, that you don't want to have big inventories, you want to be lean and mean. Right, so, because those inventories are costly to store them, to have them, and all that thing, and so this financial focus on that and this kind of narrative of saying be lean and mean, that's a good thing. We've all played a part of it when we go through the quarterly lean and mean this is a good thing for a company. How big a role did that play in getting us so that when the pandemic hit, nobody had excess supply anywhere?

One thing I think about, though, in particular in your book is kind of the role of consultanc here. And I don't want to pick pile on anyone in particular. But you do single out mackenzie, I sure do. You do talk about the lean Taliban. You also get into a lot of just in time inventory for anybody's taking accounting cleanses. Played around with this, right, but this idea too, that you don't want to have big inventories, you want to be lean and mean. Right, so, because those inventories are costly to store them, to have them, and all that thing, and so this financial focus on that and this kind of narrative of saying be lean and mean, that's a good thing. We've all played a part of it when we go through the quarterly lean and mean this is a good thing for a company. How big a role did that play in getting us so that when the pandemic hit, nobody had excess supply anywhere?

A huge role. We cut inventories to the bone. Publicly traded companies cut inventories to the bone over decades. Now, Just in time is a sensible idea. It was pioneered by Toyota, and of World War two devastation, not a lot of capital, not a lot of land to develop. Taichi Ono, who is running Toyota, pioneers this idea instead of making as much stuff as possible like Henry Ford did at Ford and letting sales people try to figure out how to sell it. Let's just make enough to replenish the cars that we've already sold. Let's get our suppliers to deliver the stuff we need right when we need it, rather than waste.

A huge role. We cut inventories to the bone. Publicly traded companies cut inventories to the bone over decades. Now, Just in time is a sensible idea. It was pioneered by Toyota, and of World War two devastation, not a lot of capital, not a lot of land to develop. Taichi Ono, who is running Toyota, pioneers this idea instead of making as much stuff as possible like Henry Ford did at Ford and letting sales people try to figure out how to sell it. Let's just make enough to replenish the cars that we've already sold. Let's get our suppliers to deliver the stuff we need right when we need it, rather than waste.

Capital on warehouses.

Capital on warehouses.

Hey, that's a good idea, but a long come of publicly traded companies guided by consultants like McKenzie who say, listen, this should apply to everything, and you should not stop until there's basically no inventory. And what you do is, instead of wasting capital on sticking you know, auto parts, you know, a warehouse as a hedge against trouble, just liquidate the warehouse. Take the cash, give it to yourselves to reward yourselves, corporate executives for being smart enough to hire McKenzie, Give it to shareholders and the form of dividends and share buybacks, and everybody's happy until there's a problem. And this pandemic was not the first time we saw a shock to the system. I mean, I wrote my first supply chain story back in nineteen ninety nine. It was about an earthquake in Taiwan, and back then people said, oh, whoops, we've got computer chip shortages. Maybe we shouldn't concentrate all our industry here, Maybe we should have a little more difference.

Hey, that's a good idea, but a long come of publicly traded companies guided by consultants like McKenzie who say, listen, this should apply to everything, and you should not stop until there's basically no inventory. And what you do is, instead of wasting capital on sticking you know, auto parts, you know, a warehouse as a hedge against trouble, just liquidate the warehouse. Take the cash, give it to yourselves to reward yourselves, corporate executives for being smart enough to hire McKenzie, Give it to shareholders and the form of dividends and share buybacks, and everybody's happy until there's a problem. And this pandemic was not the first time we saw a shock to the system. I mean, I wrote my first supply chain story back in nineteen ninety nine. It was about an earthquake in Taiwan, and back then people said, oh, whoops, we've got computer chip shortages. Maybe we shouldn't concentrate all our industry here, Maybe we should have a little more difference.

If we learn our lesson with the computer tip industry.

If we learn our lesson with the computer tip industry.

We sure did not.

We sure did not.

I mean, I tell the story in the book of Henry Ford, who is a problematic figure in history, but knew a thing or two about supply chains and never wanted to be in a position where.

I mean, I tell the story in the book of Henry Ford, who is a problematic figure in history, but knew a thing or two about supply chains and never wanted to be in a position where.

He could be pinched by a supplier constrained.

He could be pinched by a supplier constrained.

Would have been horrified to see what I saw one hundred years later, as on walking the catwalk at his signature River Rouge plant outside of Detroit, where they're making these beautiful f one fifty pickup trucks their most popular vehicle. They've got all the things they need except for the one thing that brings it to life, the computer chip. And I watched them park these cars in the shadow of Ford's corporate headquarters across the street from Henry Ford Elementary School. I mean, he would be spinning in his grave over this. We did not learn the lesson.

Would have been horrified to see what I saw one hundred years later, as on walking the catwalk at his signature River Rouge plant outside of Detroit, where they're making these beautiful f one fifty pickup trucks their most popular vehicle. They've got all the things they need except for the one thing that brings it to life, the computer chip. And I watched them park these cars in the shadow of Ford's corporate headquarters across the street from Henry Ford Elementary School. I mean, he would be spinning in his grave over this. We did not learn the lesson.

I think this is his part, and forgive me if I've got it wrong. But when I read it Detroit had devolved into a poignant example of what happened when middle class factory jobs were replaced by poverty level positions at reach Heller's warehouses and fast food chains. Next to the old Highland Park factory, now forlorn brickshell, a shopping center called modelty Plaza was anchored by a dollar store, a payday lender, and a plasma collection center, awaiting people willing to swap blood for cash. The cards off had become an instrument of white flight. Like that to me says so much of what's going on across America and explains to me politics in a big way. We want to bring in Doug Christeners here. Doug is like this great thinker and like your book just kind of reminds us of the things we talk about with Doug. So we wanted to bring in one of the things.

I think this is his part, and forgive me if I've got it wrong. But when I read it Detroit had devolved into a poignant example of what happened when middle class factory jobs were replaced by poverty level positions at reach Heller's warehouses and fast food chains. Next to the old Highland Park factory, now forlorn brickshell, a shopping center called modelty Plaza was anchored by a dollar store, a payday lender, and a plasma collection center, awaiting people willing to swap blood for cash. The cards off had become an instrument of white flight. Like that to me says so much of what's going on across America and explains to me politics in a big way. We want to bring in Doug Christeners here. Doug is like this great thinker and like your book just kind of reminds us of the things we talk about with Doug. So we wanted to bring in one of the things.

That's interesting, Tim was going to talk about politics. In the nineteen ninety two presidential campaign. Ross Perrot was the lone voice who was kind of cautioning against at that time what was the North American Free Trade Agreement Canada, the US and Mexico. What's stunning is how quickly the conversation became about China. Why did that pivot happen so quickly in your view away from North America manufacturing in China.

That's interesting, Tim was going to talk about politics. In the nineteen ninety two presidential campaign. Ross Perrot was the lone voice who was kind of cautioning against at that time what was the North American Free Trade Agreement Canada, the US and Mexico. What's stunning is how quickly the conversation became about China. Why did that pivot happen so quickly in your view away from North America manufacturing in China.

Well, China, it operates on a whole different scale than Mexico, right, So Rossboro, of course, yeah, famously warned of the giant sucking sound. And we did lose some jobs in the industrial Midwest to Mexico, but we picked up a lot of jobs because the US and Mexico are economically integrated. And I mean it's ironic now to think about Mexico as the solution to some of our supply chain problems. But when we import something from Mexico, forty percent of the value of that imported good was actually made in the United States. So you know, we bring in a car that was made in a Mexican factory, and forty percent of the value of that car was built by American labor in American factories. The component number for China is three percent, so only three percent of the value of imports from China have American value. Add and of course Chinese state policy is really directed to driving that as close to zero as possible. But I think it's really important to note that a lot of these failures that have fueled backlash originally Mexico now China. I argue in the book, I mean this part nobody really wants to talk about. These are homemade failures. I mean, we have benefited from trade with China. We have benefited from trade with Mexico. We've got a lot of low cost goods. In the case of Mexico again, we've boosted our exports. We've got consumers benefiting. A lot of data shows that consumer spending has been juiced by trade with China, and that money ends up, you know, in the hands of American service providers. Our leisure you know, is more robot We have more money here. The problem is we haven't cushioned the people who have lost. And we have seen whole communities, industries, you know, really hit hard by this China shock. That a lot of the data shows we're talking one million direct jobs in the space of a decade lost to Chinese imports.

Well, China, it operates on a whole different scale than Mexico, right, So Rossboro, of course, yeah, famously warned of the giant sucking sound. And we did lose some jobs in the industrial Midwest to Mexico, but we picked up a lot of jobs because the US and Mexico are economically integrated. And I mean it's ironic now to think about Mexico as the solution to some of our supply chain problems. But when we import something from Mexico, forty percent of the value of that imported good was actually made in the United States. So you know, we bring in a car that was made in a Mexican factory, and forty percent of the value of that car was built by American labor in American factories. The component number for China is three percent, so only three percent of the value of imports from China have American value. Add and of course Chinese state policy is really directed to driving that as close to zero as possible. But I think it's really important to note that a lot of these failures that have fueled backlash originally Mexico now China. I argue in the book, I mean this part nobody really wants to talk about. These are homemade failures. I mean, we have benefited from trade with China. We have benefited from trade with Mexico. We've got a lot of low cost goods. In the case of Mexico again, we've boosted our exports. We've got consumers benefiting. A lot of data shows that consumer spending has been juiced by trade with China, and that money ends up, you know, in the hands of American service providers. Our leisure you know, is more robot We have more money here. The problem is we haven't cushioned the people who have lost. And we have seen whole communities, industries, you know, really hit hard by this China shock. That a lot of the data shows we're talking one million direct jobs in the space of a decade lost to Chinese imports.

It is China the bad guy, or is it investors and companies who constantly we're seeking out a low cost provider.

It is China the bad guy, or is it investors and companies who constantly we're seeking out a low cost provider.

The ultimate winners are the investor class, without any question, and there's a lot of labor exploitation in China. So yes, the winners are the people who funded the Clinton campaign and got Bill Clinton against.

The ultimate winners are the investor class, without any question, and there's a lot of labor exploitation in China. So yes, the winners are the people who funded the Clinton campaign and got Bill Clinton against.

Say nothing of environmental regulation, of course.

Say nothing of environmental regulation, of course.

Okay, right, go ahead, Peter.

Okay, right, go ahead, Peter.

I want to talk about labor exploitation in the trucking industry, sure, because a common thing that we heard over and over again during the pandemic and the supply chain disruption that we saw was that trucking companies just didn't have enough drivers. They needed people to go learn how to drive a truck and start driving trucks. You found that that wasn't the case. It's just a really, really bad job.

I want to talk about labor exploitation in the trucking industry, sure, because a common thing that we heard over and over again during the pandemic and the supply chain disruption that we saw was that trucking companies just didn't have enough drivers. They needed people to go learn how to drive a truck and start driving trucks. You found that that wasn't the case. It's just a really, really bad job.

It's a horrible job. I mean, I rode with a trucker in the best possible conditions, guy who actually likes his job, from Kansas City to Dallas and back in the middle of the winter. I slept in the cab for two nights. I watched this man have to worry about caffeinating enough so we wouldn't fall asleep at the wheel, and yet not having to pull over to use the restroom. Truckers are constantly worried about where they're going to park. They're at the mercy of lots of other parts of the supply chain. They have no influence over. They can get stuck at warehouses for hours waiting for somebody to load or unload their vehicle because warehouses have shortages of workers. Now, this trucking industry shortage, this is an industry talking point. There's ten million people in the United States who have licenses to drive long haul trucks, and we need roughly a third that number. We've run out of people we can feed into the mill who are willing to sign off on these predatory lending arrangements by which truckers pay for their certification, by which they end up buying these vehicles at wildly inflated prices from the trucking companies. Then they're forced to go service these vehicles at places that are part of the empires of these trucking companies. And so a lot of people, you know, they get tired of being away from their families. They get tired of hearing that they've missed another chill child's birthday party, they miss people's funerals. It's a tough job. It's always been a tough job. The difference is it's been downgraded to the point that we've run out of takers for this tough job.