293 - Justin Wolfers: AI, Inflation, & The 2026 Elections

28:00Let me say it another way. the country of my birth is Papua New Guinea. It's a shambles. It's one of the poorest countries in the world, grinding poverty. So if you wanted to make the case what this country is doing isn't working, tear it all down, it seems like you might not lose much and you might gain something. But the country I live in right now is the United States, which is the richest country in the history of the world. I mean, actually it's not. There's some oil rich countries out there, but let's just say the richest large country in the history of the world. That sounds like we've been dealt a pretty good hand.

28:34And if that's the case, the argument for tearing down the inheritance of history is really weak. This is a bet where there's a lot of downside. And so a lot of what I worry about now is not what happens to GDP or inflation next quarter, but what are the rules of the game that govern economic life because they'll determine the prosperity and the set of opportunities available for my kids. That was a pretty long answer, and I probably forgot the question somewhere along the way. Well, this actually gives me such a good opportunity to say, I mean, that was just a wonderfully measured, spontaneous response.

29:16To what is often a very difficult question for anybody? Like, what are the arguments for the better side, for the other side? Have you considered them? And I think that's the kind of answer that would have me point our listeners toward, our viewers toward Flatipus Economics. I mean, you do videos all the time on all sorts of topics and give answers like this. But now I'll - Let me say something on that, because it's partly about who I want to be in the world. I'm a teacher. Look, the internet's full of bomb throwers and it's full of hot take havers and it's full of lefties and it's full of righties.

29:53And all of that maybe animates some people. But what wakes me up, we all have different theories about how to make the world a better place. And Robinson, you've got your own views about how to do it. What I do know is if people understood a little bit more economics, they could use that to live better, richer, fuller lives. Maybe just in their own domain or maybe the leadership roles they play in their community or maybe how they vote. But the attitude I try to bring to my public life is that of a teacher. I am less of a teacher. I'm more of a question asker. But we both play our roles. Well, people who ask questions are also teachers.

30:32It's a whole different method. This morning, I spoke to another guest. And one of the things that she kept saying was that foreign policy, I mean, it used to be about forming alliances with other countries, other democracies, but it's now largely about Trump's own personal gain. And we talked particularly about how in Brazil, diplomacy has kind of just bypassed the State Department and gone straight through Mar-a-Lago through unofficial means. And what you said about economists being kind of replaced by business moguls, people who aren't in line for the Nobel Prize kind of reminded me about that.

31:22But what I wanted to ask is you mentioned earlier these three dramatic mistakes in policy, deficits, Iran. And I wanted to ask to what extent you think that these policy blunders, blunders for the United States, are not necessarily blunders for Trump. And they're actually engineered moves to help him and his allies. Right. So it sounds like your guest had a theory that what we could do is form alliances or serve Trump's narrow interest. I'm going to give a different but adjacent interpretation. I don't want to say your guest is wrong. I try not to start from maximum cynicism. I think a different answer that's complementary is whether you think about economic life in terms of the benefits of cooperation or the gains from exploitation.

32:20That's the difference. So we could have long debates about whether international trade is a good or a bad idea. And I have proofs and diagrams and I teach it to my students. And I could give you just enough algebra. you'll tell me that that's not how the world actually works. And I'd probably basically agree with you. So let's come back to something simpler, which is why do two people ever work together? Say I walked into my coffee shop today and I gave them$4 and they gave me a cappuccino back. That's a form of trade, trade between me and the barista. Well, it turns out when I walked into the coffee shop, I was about to teach and I really, really needed some caffeine.

33:00so someone was offering me some caffeine that I valued so much I would have been willing to pay seven dollars for it just to stay awake during class but they sold it to me for four so what I said to them is thank you now that's only half the story turns out when I handed over my four dollars the barista was like I just took some coffee beans some water and some milk and a little bit of time and all of that only cost me$2 and this bloke's given me$4. So what the barista said to me was, thank you. That's an idea economists call the miracle of the two thank yous. I made the barista's life better off and they made me better off.

33:38The fact that I could exchange money in this way meant that we could cooperate and effectively what happened was I'm not very good at making coffee, so he made coffee. He's not very good at delivering economics lectures, but he wants his kid to get a good Michigan education. And so his kid was in my class and I helped pay for his kid to be in my class. And so what we had was cooperation where we could both make each other better off. And so once you understand that all of economic life is about cooperation, every economic transaction involves two people saying thank you. Because if I'm not going to say thank you, I'm just not going to buy the coffee.

34:16You could say to me, I'm going to charge you$20 for the coffee. And I'll be like, I'll go without it. So now I understand economic life is about cooperation. So now I understand any attempt to restrict. Now, I want to add one wrinkle. It turns out the coffee shop was in Ann Arbor. But what if the coffee shop was across the border in Canada? I still would have said thank you. And they still would have said thank you. The border is just an invisible line. The underlying joy created by that transaction isn't changed at all by the fact that there's an invisible line that runs between the buyer and the seller.

34:52What that says is that all trade, including international trade, is about cooperation. It's about enlarging the pie. That in turn means that any tariff is about, the president will tell you about reducing the extent to which we get ripped off. But by my view, it's about reducing trade and therefore reducing the extent of cooperation. So if you see the world as one where we can make the pie bigger by learning to cooperate with each other, then you really want to lean into more of this. You want me to be able to do business, not just with the local barista, but also with the guy who makes paper in Canada, because that bloke makes really good paper.

35:31And you want me to be able to teach that bloke's son, so there'll be students crossing the border and so on. So that's my theory of the world. And it's, by the way, economists don't always do a good job telling our story, but economics, the study of economics views transactions as being about enlarging the pie, as being about cooperation. It's actually a very beautiful field. We just don't tell it very often. The president sees it differently. If I walked into a Canadian coffee shop and I gave them$4 and they gave me back a cup of coffee, the president has been quite literal about that. He says, I lost$4.

36:04I got ripped off. Now, it's so hard for me at this point to tell his story sympathetically because it's based just upon a deep misunderstanding. The deep misunderstanding, the thing the president's correct about is if I walk into a Canadian coffee shop and give them$4, I do have four fewer dollars. The word we'd use for that is a current account deficit or a trade deficit. That's a deficit measured in dollars. But I want you to notice something. When I walk into the Canadian coffee shop, they also give me a coffee. So what I have, yes, I have a dollar deficit, but I now have a coffee surplus. The Canadians just gave me something of immense value, a beautiful hot cup of coffee.

36:47And all I did was gave them some pieces of paper with dead presidents on them. The thing the president calls a trade deficit is also a stuff surplus. And once you understand that simple fact of accounting, then you no longer want to think about this as having been ripped off. And so the president sees the world as a zero sum pie, zero sum game. There's a fixed pie. what I want to do if I win you, Liz. So if I can find a way of stopping the Canadians getting that four bucks for the cup of coffee, that's four more dollars for us. And if we can use American power to get more dollars, that's good enough.

37:21But along the way, what he's going to do is reduce the extent of cooperation. So I think that explains very well the zero-sum thinking, the fixed pie mentality, the failure to understand economics as cooperation. That explains very well the trade war. i think it explains pretty well the iran war i'm just going to go in and take so he's a taker he's an exploiter i want more of the pie um and he's destroyed a bunch of our alliances those alliances are places that create a cooperation uh it may not so much be about the budget deficit that might be closer to where your correspondent is right where um why are we running a huge budget deficit right now?

38:03Well, because running a responsible budget deficit would be no fun. It would mean tightening my belt and it would mean there was more money left for the next bloke. And that's just not how the president thinks. But I think this underlying sense that life is about kill or be killed, exploit or be exploited. That is to my eye what animates much of the president's economic agenda. One thing that it would also help me to understand, you mentioned the inflation numbers. And inflation is something that I can at least viscerally understand. I yearn for the days when a candy bar was 65 cents as somebody who loves candy.

38:50But I don't really understand what has caused the price change and whether or not I'm just really naive to wish that candy bars could be 65 cents again. And when I say I'm not really sure who causes it or what causes it, I also am very curious the extent to which one lone figure like Donald Trump or Biden, I guess that's two people, but to what extent they can be held accountable for inflation. There's actually a lot there. So I want to bite off the most fun part and then invite you to bring me back for the rest that you were interested in. Because at some level, you're like, do I yearn for the 55 cent candy bar?

39:35And I think that's actually a really important question because it gets at what are the costs of inflation and how should we think about it and how expensive is it? So let's do another thought experiment, Robinson. And I apologize, I do sometimes talk about the real world, but you seem like you're also interested in understanding a bit of economics as well. Here's the thought experiment. Tonight, you and I go to sleep and then we wake up tomorrow and every price in the economy is 10 times higher than it used to be. Everything's got an extra zero in it. So the dollar store is now called the$10 store.

40:06When you go and put a quarter in the machine, you now have to put 250 in the machine. Also, I want you to notice that your wage, that's a price. So if you're used to earn$1 ,000 a week, you now earn$10 ,000 a week. When you look up your bank account, it also has an extra zero in it. You used to think you had$2 ,000 in the bank. Now you've got$20 ,000 in the bank. Okay, everything's got another zero in it. Are you better or worse off today? Same. Right. But didn't we just have massive inflation? Yes. So you just told me we could have massive inflation and you're not worse off, which goes against sort of, I think where you were starting.

40:45And by the way, I'm not saying inflation is cost free. I'm trying to help us understand what's going on. Right, right, right. Like the point is. I was oversimplifying. I don't know. A 55 cent candy bar, if I had today's wage would be great. But a 55 cent candy bar, if I had the same wage as people had when candy bars were 55 cents, that's a whole different question. That wouldn't be better. That's like my land of the extra zeros. Right. And so at one level, wow, people are going to hate me for this. If wages and prices rise at the same level and they go exactly one for one, it's like my fall asleep and there's extra zeros experiment.

41:25Nothing changes. I've oversimplified slightly, but that's actually why a generation of economists have been puzzled. Why are people so obsessed by inflation? Why do they care? because if wages and prices rise at the same rate, then what you can afford hasn't changed at all. And what you can afford is what really matters. Let me try and sketch out the best answer I can give you, acknowledging that economists are still trying to figure this out. Okay, so the way this actually works in our world is prices rise and then wages rise to catch up. um and so to an economist that's one action wages and prices rise your purchasing power is unchanged but in reality here's how it plays out my dean wrote me a letter this year it said dear justin um thank you for all your hard work this year because of your hard work i'm granting you a two percent pay rise and i thought to myself when i opened the letter true story i was like It feels good to be seen.

42:31I worked so hard last year and my dean acknowledged me and they saw it and they saw the good work I did and I earned it, goddammit. Push your limits, train with precision, see the results. At Equinox, that's high-performance loving. Everything you need to lock in and unlock your potential at Equinox. Start today at equinox.com.

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43:21And then later on, prices rose by 2%, and all of that wage rise went away. And when prices rose by 2%, I thought, damn it, there's some deep impersonal force that's taking my pay rise away from me. I hate that impersonal force. It's making me poorer. So psychologically, I experienced this as two steps. One, as a gain that I internalized. I earn it. It's me. I deserve it. And then two, separately as a loss, inflation came and ate away what I'd earned and losses are really painful. So psychologically, it was a two-step process, but you'll notice that I internalized the gains and I blamed the rest of the world or the president or the Fed or the money supply for this terrible thing that happened to me, which is prices ate away the wage rise that I really deserved.

44:12Now, let me tell you the truth. My boss knew what prices are rising by 2 % a year. My boss kind of figured I needed a cost of living adjustment. My boss gave me a cost of living adjustment. If she'd been honest, the letter would have said, dear Justin, prices are rising. I guess we'd better make sure that we're paying you roughly the same real wage. So here's a wage rise to keep up. But actually it's not quite going to keep up because prices in fact rising faster than wages. This letter is in fact giving you a real wage cut. You bastard.

44:44But you see how the psychological two-step of I internalize the gains and think they're a response to my hard work and externalize the losses and feel like someone's stealing from me you can now see why I hate external forces that cause prices to be higher but the reality is that's not what happened the reality is that all the prices rose at this roughly the same time and so the psychological way we process inflation makes it feel more painful. Look, another way of saying it is actually where you started. I would love 55 cent candy bars in a world in which I have my 2026 salary. But the reality is 55 cent candy bars existed at the time and a place when salaries were much lower.

45:32And anytime you're wishing for lower prices at the same current salary, you may as well just say, I'd be just as happy if we kept prices where they are and my salary was much higher. And like, if I said to you, Robinson, would you like a higher salary? You'd be like, yeah, that's obvious. Gosh, there's nothing interesting going on here. And in some sense, when you say to me, Justin, I'd like 55 cent candy bars, I'm like, yeah, that's obvious. There's nothing interesting going on here. The question with inflation, and inflation is a generalized rise in the prices, which includes the price of labor.

46:02So it includes, it's when prices and wages tend to rise roughly together. Now, I want to get ahead of one thing. A large number of your audience right now saying yeah yeah yeah but what happens is prices rise and my wages only rise a year later you're right sometimes actually sometimes your wages rise first and your prices rise later but even then if you're eventually going to get made whole if all you're talking about is paying somewhat higher prices for one year that's not that big of a deal you're not really that upset that you're not going to get the you know the catch up for a little while to come, are you?

46:37So, you know, I think this gets to an even deeper question then, as we're thinking about, should we run an economy with inflation? Should it be based, should our policy be based on the reality that, look, inflation's not great, but it's not as bad as stealing candy bars from a Robinson. It distorts things. It makes it harder to figure things out. You know, it does have some negative of consequences that I haven't talked about, but do exist. Should we make policy based on, yeah, it's not great, but it's not the worst thing in the world. Or should we make policy on, oh my God, every time we have inflation, Robinson gets really sad because he can't afford candy bars and him and his mates are all miserable.

47:18Your misery is real. I believe it. It's based on a misunderstanding of the underlying economics, but it's still a real emotion. So how should we make policy given that reality? I don't know the answer. One reason that I asked that question, and it was a part that you didn't respond in my overly verbose question, was I was asking about to what extent Trump is responsible for inflation. And the reason that I asked for the inflation that we're experiencing now and the reason that I ask is that a Reuters poll came out today that in which they just asked ordinary people who felt like intense dissatisfaction with Trump's handling of living costs in the economy.

48:06And it sounds to me like a lot of that is just psychological. We're not really interpreting the data correctly. but your feelings are a reality so now let me let me try and answer your question more seriously because i didn't answer that part of it at all um okay so inflation rose as high as nine percent in the wake of the pandemic there is a school of thought among economists that that was partly spurred by the biden stimulus that he ran the economy hot and when you run an economy too hot you create inflation um i want to concede that's a serious perspective and i want to concede they probably did run the economy too hot.

48:47I would also say that in the wake of an emergency, you never get to choose to be perfect. And the question you get to answer is, in what direction do I want to make an error? And I would rather run the economy too hot and risk a little bit of inflation than risk a whole generation of people losing their jobs and losing connection with the labor market. So it may have been a mistake, but a defensible one. I should also add there's a counter-argument it wasn't Biden's fault, that inflation rose across all industrialized nations, that what happens in the middle of a global pandemic is stuff can't get on ships all around the world, supply chains get clogged up, and that ultimately leads to price rises.

49:25And I think the international evidence actually seems to suggest that's a big part of it. So that would say it happened on Biden's watch. To the extent that it's COVID-related, it doesn't say it's not Biden's fault. It just says the most important mistakes that were made were how we dealt with COVID rather than how we dealt with fiscal stimulus. There were countries, my home country of Australia, who had a much better experience with COVID. America, I don't think, is particularly well built for the sort of centralized control that a disease like COVID requires to deal with it well. um then we get to the trump era the first thing is the um inflation is incredibly persistent so whatever last year's inflation was tends to have a big effect on next year well trump inherited a really big last year's inflation rate um so maybe you don't blame him for everything he inherited a high inflation rate now to the extent that inflation has been caused by tariffs that's a decision of the white house to the extent that it's been caused by the war in iran that's a decision in the White House.

50:30So I think to a degree that's quite unusual, I would be willing to personalize some of the consequences. So some people would be willing to say the Biden stimulus was caused by Biden, he caused that inflation. And I think that's a defensible view. It's not mine, but it's defensible. My view, and I also think it's defensible, is the specific set of economic policies pursued under Trump have boosted inflation. Therefore, I can blame the president for that. Now, having said that, for almost all of my career, when people have said, can I blame the president for this or that when it comes to economic policy, I've said presidents aren't that powerful.

51:07I think that's generally right. And the moment of COVID made them powerful. And the current president, who doesn't appear to believe much in Congress, has made the presidency powerful. And so I think it can be true most of the time presidents are not a big deal. Let me add one more wrinkle because you love wrinkles. I know you love wrinkles. Okay. Inflation's a funny beast. Inflation can be a self-fulfilling prophecy. Here's what I mean. Imagine that you work at the Outback Steakhouse and your job is to print the menus every year. So if inflation's currently pretty low and someone has managed to convince you inflation's going to be low next year, then you'll think to yourself, boy my suppliers aren't going to raise their prices by much and my competitors aren't going to raise my prices by much so therefore maybe I shouldn't raise my prices so much so therefore you'll print a menu with low prices and so therefore because you expected inflation to be low you printed your menu with low prices and then other firms did exactly the same math that you just did so they all have low prices so it turns out the expectation that inflation was low creates the reality that inflation's low.

52:17That's beautiful. That's a virtuous cycle. Here's the funny thing about inflation though. You can get a vicious cycle as well. Imagine that all of a sudden you just wake up and you're like, oh my goodness, I think inflation's going to be high next year. You're still printing menus for the Outback Steakhouse, but now you think the price of steak's going to go up, the price of vegetables are going to go up, the price of diesel fuel and heating gas and cooking gas are all going to go up. And you think the other restaurants are going to raise their prices too so the first thing you're going to do is print a menu with high prices now it's not just you blokes and other restaurants are going to make the same choice so they're all going to have high prices and so now we've had the perception or the expectation of high high inflation creating a reality of high inflation that's actually why you could in some cases personalize performance of inflation.

53:07The most important job, whether it's of a president or the Fed, is convincing people that next year inflation will be low. If you succeed at that, you can create the reality of low inflation. And so that's where it becomes really important to do things like have an independent central bank where the boss is told you got one job. If I tell the boss of the central bank, your only job is to keep inflation low, then everyone's going to look and be like, oh, I bet that bloke's going to keep inflation low. And that's going to be enough to create the reality of low inflation. Instead, the president has installed a guy at the Fed and he said, hey, by the way, I really want low interest rates, no matter what.

53:48That's enough. I'm worried he's going to undo it. So now I'm worried inflation is going to be high. So now I'm starting to think maybe I should print menus with high inflation numbers on them. and so what the president's done to try to undermine faith in the fed may actually end up i don't think it's happened so far but it may actually end up creating a reality where we don't have faith in the fed that it'll keep inflation low and that in turn makes you create the reality of high inflation so there there's an argument you should personalize this trump quite recently and i know you have a video on your site about this or platypus economics about this on youtube But Trump has promised every adult American$5 ,000 if Republicans keep control of Congress.

54:32And if people are already struggling with high prices, is sending everybody five grand sensible relief or could it just exacerbate the problem? I think this is one of the dumbest policy arguments I've ever heard. And I think the strongest argument against it has got nothing at all to do with inflation, although you're absolutely right to say at a moment of high inflation, asking people to spend more would be utterly chaotic and could spur more inflation. I think the argument's even dumber than that. So$5 ,000 per American citizen would cost over a trillion dollars. The budget deficit right now is the highest it's been outside of a war or a recession in the entire post-war period.

55:22Adding a trillion dollars to that is absurd. This is a policy where he hasn't made the case for why it would be helpful, what problem it solves. There's not a white paper anywhere that says here's a bunch of nerds who've done serious economic analysis and this is why we think it's useful. This is a policy where he says you get the$5 ,000 but only if Republicans win both houses of Congress. I wonder what economic policy, what economic problems would exist only if Republicans win both houses of Congress? I mean, is he actually saying if Republicans win both houses of Congress, the world will be so terrible that we'll need an enormous and massive stimulus to prevent a Great Depression?

56:03But if you elect Democrats, then there won't be such a depression and therefore we won't need$5 ,000 checks. The$5 ,000 checks won't happen. How do I know that? Let me give you a couple of answers. One, remember when we were promised a$5 ,000 Doge check from all the savings Doge made? Checked my mailbox on the way in today, still hasn't arrived. Do you remember we were promised a$2 ,000 check for when, as a dividend for all the tariff money they've brought in, even though tariffs have brought in less money than that? I also keep checking my mailbox, still hasn't arrived. So it's a bloke who makes promises but never actually delivers on them.

56:38Do you remember that he said he'd give$1 ,776 to every American military member? What he actually ended up doing is moving money out of the military housing budget towards those checks. So the checks arrived, there was just less money to help for housing. So basically the military families got a check for$1 ,776 that were paid for by military families. You don't make anyone richer by taking their money and giving it to them. But that's what a$5 ,000 check is. And here's the other thing. In order to get the$5 ,000 check, it would have to pass through Congress, two houses. When the president actually started taking some action to create a$2 ,000 check last time, Republicans in the Senate said, this is absurd.

57:18This is irresponsible. No, there is no way a Trump check will get through the Republican Congress. And it definitely won't get through the Democratic Congress. Every word of this$5 ,000 check thing is a lie. And it's a painful lie because it's treating you and me and the rest of the voters as fools. There's actually betting markets where you can bet will a$5 ,000 check arrive? And last I checked, it was something like a 2 % chance of happening. Everyone knows that it's not happening. When the president announced that J.D. Vance gave a different interpretation of the theory than the president had, because no one had actually written anything down other than one line in a speech.

58:00If I sound kind of annoyed and sort of pissed off, it's because this isn't how economics works. There are those of us who've devoted our lives to learning something about it, and if asked, would be willing to identify the problems that America has and be willing to identify the possible solutions and be willing to talk about the trade-offs and have that debate out loud. You can't spend a trillion dollars based on a half-assed thought had in a plan on the way to a campaign rally. It would be the least responsible form of government, even relative to what we've currently got. And in fact, what's amazing about this, I mean, like who doesn't like free money?

58:37it turns out the polling on this is terrible. The American people think this is bullshit. They think it's irresponsible. They think it doesn't make sense. They think it's not going to happen and they think it's not going to work. So to think that you could be giving free money away and the American people say, no, don't. I mean, just imagine the political reality of that. So yes, it's bad for so many reasons, but so many more reasons before we even get to, yes, it would be inflationary. No, it doesn't help the American economy create more stuff. It's basically either it's taking money from you and I as taxes and then sending it back out in a different envelope back to us, or it's taking money from the next generation and giving it to us.

59:20And we should have a debate about whether we think that's what we want to do. Oh, mate, you just made me cranky. Push your limits, train with precision, see the results. At Equinox, that's high performance loving. Everything you need to lock in and unlock your potential at Equinox. Start today at equinox.com.

1:00:07plus. I'm sorry. I'm sorry for making you cranky. So I'll wrap this up with one final question. And what I'm wondering is another thing that Trump has famously said of late is that he implored Republicans to come out and vote as if he were on the ballot. And we can imagine that he's imploring everyone to vote as if he's on the ballot. And how would that affect your vote? I I guess you're in Michigan. I don't want to ask who you're voting for in the Michigan election. But what do you think people should keep in mind going into the elections across the country if they were to really be voting like Trump or on the ballot?

1:00:50Right. So part of that's a political question. I try to stay out of pure politics. Every bloke at a barbecue has got a view about that. But I'm no different than any other bloke at the barbecue. you, you asked a question I do want to bite on, which is what should people think about when it's time to vote? I think one of the untold stories or undertold stories is about, so I get asked all the time, you know, what's going to happen to GDP next month or the unemployment rate or where's inflation going? And the press seems to have a great appetite for what's going to happen over next three months what will gas prices be on election day i think we want to think much harder about much longer run questions so let me go back wearing my economist hat what is it that makes some countries rich and some countries poor and that's you know we started here um that's the rules of the game it's the institutions it's our it's the rule of law it's market competition it's contracts it's engagement with the rest of the world those things are under attack right now to a degree they never have been in my lifetime Ronald Reagan believed in those things by the way and so this is what I mean politics got upside down here I am a center lefty telling you Ronald Reagan was after something but Ronald Reagan believed that the foundations of American prosperity were these institutions and we should argue about other stuff but we should keep those institutions and defend those institutions and basically that had been the agreement among both sides of politics for decades in a row that they understood there were some parts of the american model that were the foundation of prosperity we're going to leave them alone and then we'll sort of argue about who gets which slice of the pie and so what i think a lot about right now is what will be the set of opportunities left for my children and what opportunities may not develop because of the current course of economic policy.

1:02:48Let me give you a very simple metaphor. The CEO of Apple spends a lot of time right now thinking about what does the White House think. They have to because there could be tariffs, there could be immigration restrictions, there could be price restrictions, and a lot of this stuff has already happened. The CEO of Apple flies to the White House every now and then. Tim Cook, the previous CEO, took gold, took a little medal or statue that he gave the president. he does flattery he goes on foreign trips with him the thing i want you to notice is what he's doing is he's paying attention to the president's ego at the expense of paying attention to apple's customers i don't actually care about apple's products that much i mean that as a metaphor and what i want is to create a form of capitalism where trying to create the best product at the best price.

1:03:38So, and that's how you win in the marketplace is what's rewarded. And we've taken bigger steps away from that. You mentioned the idea of corruption earlier. Corruption's definitely a large part of it, but not all of it's corrupt in the sense of I'm offering you$10 ,000 in a brown paper bag. It's clientless. It's, I am, you know, the president has decided that the federal government should own 10 % of Intel. And he just told them that. And Intel just said, oh, you're rights. Sorry, did we forget to give you 10 % of our company? Here, have it. The president is pointing at certain coal mines around the country and saying, I, as the president, know that that should be open and refusing to allow them to close.

1:04:16And so this level of intervention is far greater than we've seen before. The traditional polls in American government, in American politics, were Democrats like bigger government, Republicans like smaller government, less intervention. But the Trump administration is the most interventionist government of our lifetime. And those are things that are not going to show up in next quarter's GDP, but they are going to show up as companies that are not born, successful products that don't succeed, or as lost opportunities our kids never see. And so that's the set of issues I try to keep my eye on. Let me come back at the risk of politicizing it.

1:04:54One of the most important institutions is democracy. Democracy means that when the guys who are running our country start doing a bad job, we can kick the bums out. That's crucially important. Otherwise you get stuck with the bums and get bad governance for generations. By that measure, January 6th was not just an affront to my values. It was an attack on my economy. And I think arguably one of the most important attacks on our economy. And we are seeing a movement to try to restrict voting, to narrow democracy. And I think all of that is an attack on not just something we might believe, given from high school civics class, but something that's one of the foundations of our prosperity.

1:05:37And so those are the things I'm thinking about leading up to election day. On a little bit more of a happy note, my last, last question. I love happiness. Why is your channel called Platypus Economics? Oh, mate, thank you. I love that question. So the platypus is Australian and I'm Australian, but that's not the whole story. It's a fabulous story. when the Brits first discovered the platypus, like they brought one home and the, I forget what you call folks who study animals, but the folks who study animals, they pulled out their scissors to cut it up because they thought it was a hoax. Oh my gosh.

1:06:15Because they thought that the idea that something with a bit of a beaver tail and a duck's sort of a bill, and it was a mammal that could also lay eggs. Well, that's impossible. And so they cut it up thinking it was a hoax. And I want you to understand this is a deep metaphor for how we think about economics or politics or the world. They had a model for how they thought the world worked, that mammals couldn't lay eggs. And they ignored the evidence in front of them. And the evidence was a platypus. And when I think about doing economics, I hope that all of us can see the platypus. The world, in fact, kind of is a platypus.

1:06:54It's odd. It's weird. But it's right there in front of us and we can understand it if we're willing to look the truth in the face and acknowledge those truths. So that's my story. Yeah, well, that story goes really well with this conversation, I think. So Justin, thanks so much for joining me today. It's been a great pleasure.

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