How Crypto Is Turning America Into a Kleptocracy

24:31And I think actually that description is important because while lots of people who talk about crypto, particularly advocates of crypto, talk about it in the future. It will be a currency. It will replace the dollar. It will be a seamless method of transaction. The actual practice today, which you're looking at is exactly right. The actual practice today is people seem to be treating this as a riskier speculative investment. I've got my normal stocks and bonds, and I'm going to put a little money in this wild thing that might sort of arbitrarily make me a huge amount of money. I actually have a colleague who studies crypto investors.

25:06What do they like? What do they know? One of the things that surprises me is even people who choose to buy any kind of crypto asset, whether it's Bitcoin, whether it's a meme coin, know almost nothing about what crypto is. In fact, if you ask them, what is the blockchain? They say, I've never heard of that. Even though blockchain is the sort of underlying technology, it is the heart of all crypto assets. It is that sort of digital ledger that you were describing a moment ago. So people clearly are doing this as some kind of investment scheme, even if the crypto industry would like to characterize it as something bigger and grander.

25:41Look, if you want to buy milk, you want U.S. dollars, euros, yen, whatever they're taking in the country in which you live. If you want to hold wealth safe from the ravages of inflation, you want to buy gold or real estate, or if you have good taste, art. There are all kinds of hard assets that retain value in times of monetary inflation. But what it's really great for, really great for, is if you're an international terrorist group and you want to move money back and forth, or if you are a drug dealer and you want to convert your piles of cash into something that you can put in a bank, it's really useful.

26:15And that's how the people at Binance got into trouble because their platform was used that way. And the allegation against Binance was they knew it and organized their platform to help terrorists and drug dealers. And for that, the head of Binance was convicted and sent to prison because a jury accepted that he knowingly helped terrorists and drug smugglers. That's exactly right. In addition to being this sort of purely digital representation of a thing of value, the crypto industry is very good at bouncing transactions through what we think, what people usually describe as like shell companies.

26:50It's very good at masking transactions. And yeah, you don't even have to say allegations. Binance founder and Binance were convicted of federal crimes, including money laundering. And that money laundering was related to helping terrorist organizations cover up their activities so that they would avoid U.S. regulatory scrutiny. This is deeply harmful to national security interests. This is a profoundly worrisome use of the technology. So if I'm involved in the business of terrorist money laundering, I think I could use a little political muscle behind me and legit of the regular state. So here's where this all becomes tremendously back to our scheme of bribing the corrupt governor.

27:31So we can take some of this crypto money and funnel it to them. Now, my governor has got a problem. which is he's actually quite a shrewd person. And he understands that cryptocurrency moves around a lot in value. What is a million dollars today might be half a million tomorrow. It might be 2 million tomorrow, but it might be half a million tomorrow. He likes US dollars. So he wants to know that he can count on this for his old age. He wants$200 ,000, not Ether or dog coin or cat coin,$200 ,000. How can I get him$200 ,000? So I think this is actually where stable coins become the much bigger sort of public corruption concern and threat.

28:13The basic idea of a stable coin is, you know, if I described a mutant coin as sort of a pump and dump scheme, something whose value fluctuates a lot, stable coins are invented, they're designed, proposed to try to solve that volatility problem. And the way we're going to solve it is I'm going to issue coins and I'm going to say for each coin I issue, you know, you give me$1. I'm going to take that$1. I'm going to put it in the safest investment I know. I'm going to put it in short-term US treasuries. And I'm going to keep it there. And that way, if you ever want to cash your coin back in, you will get it for exactly$1.

28:45And you know that asset is protected. That's great. If I hold to my word, that solves that stability problem, which means you've got a straightforward way to cash out these investments. That's the sort of first move we might make to make your governor feel a little bit more comfortable. So let me say, so if the governor wants to be a more active person in the corruption scheme, he issues a meme coin. It's corruptgovernor.com or whatever the coin, dollar sign corrupt governor. And he says, look, buy my meme coin, pay me$75 per coin. The Supreme Court has said that's fine, no problem. And no one understands it.

29:20So there's no reputational risk. And it'll fall to$5. But what you don't care about the money, what you care about is knowing that I got$75 from you or$75 times however many units you wish to buy. But if the governor is more passive, the stable coins are the way to go. And that he says, I don't have to be a participant here. I just receive the stable coins. And I know I've got$200 ,000 in swag. And I will look favorably upon whatever it is you want me to do. Correct. Receiving the stable coins are going to hold their value over time. So that's sort of an easy passive receipt. And frankly, if the governor wants to go in the sort of more active direction, I think stablecoins are also actually both less risky, less sort of problematic looking.

30:03The governor could issue his own stablecoin, but then he has to buy. But then you're just making the money on the float because the meme coin you can make out of nothing. Whereas at least theoretically with the stablecoins, you have to buy some US treasury bills. That's correct. You're making money just on the float. On the other hand, you are making money on third party transactions that don't necessarily involve you. This adds another level of removal anonymity for your governor, right? So if you have a stablecoin that is out there that you've helped generate, two parties can engage in a transaction that never explicitly involves you at all, right?

30:39It's just two private parties in the market. As long as they make that transaction using your stablecoin, you will then be getting a float off that. And of course, those parties can engage in open market transactions. They never have to say your name or involve you in any capacity, But you know what they're doing. And that is that informal sort of not quite quick pro quo relationship. In fact, we have not just a governor, but a president of the United States and his family engaging in these operations. Do you have any doubt that what President Trump has been doing this year is legal? I would say I can imagine facts coming out that would change my mind.

31:13But at least based on what we know so far, I think that virtually all of the activity President Trump has engaged in around the crypto industry is legal. and I would go further and say some of those things are legal because of changes in the second Trump administration. Okay. So he's made a billion dollars. Part of that money has been selling for $75, things that are today worth$5, and that's legal. And part of that money has been made from issuing these stable coins, which purport to be worth a constant value. Although as readers of my Atlantic article on the subject will know, they are guaranteed to fail sooner or later.

31:46I'm almost certainly guaranteed to fail, but they fail more slowly than the mean coins, which go from 75 to five in a few months. And he's been doing both of these things. And you're saying it's complete, and he's made apparently a billion dollars as president because of the presidency and it's legal. Yes, I believe that all of this is legal unless we were able to find out the exact narrow exacting kind of quid pro quo facts. Unless he got some bad lawyering and made some really unnecessary, because he could make the billion dollars in ways that most people would regard is pretty unconscionable.

32:22And he could make it without, so you'd have to do some pretty, have some pretty bad advice. You'd be very, very greedy and stupid. Exactly. To break a law when you don't need to. You can make the same dubious billion dollars without breaking any laws. Correct. Why don't all the presidents do this? I mean, crypto was invented all the way back in 2012, 13. Why didn't President Obama make a billion dollars this way? So I think that there's a couple things going on here. One is going to be personality driven, right? We've seen Donald Trump, the president, in his first term has a very different sort of attitude about these sorts of presidential self-enrichment practices.

32:56He had a hotel that was right next to the White House. He sold the hotel. He's now bought a publicly traded company in Truth Social that, again, presented all these conflict of interest concerns. So psychologically, he's disposed of these kinds of behaviors. I would say that the crypto industry has evolved in some ways, has become a more stable, reliable platform. The development of stable coins in particular opens up a, frankly, a much safer way for politicians to exploit these things for value. And the last really important thing is that, you know, in addition to changes in corruption law, the federal government has struggled to figure out how it wants to regulate crypto coins.

33:35It has not yet had a sort of consistent answer. It bounces from scandal to scandal. The second Trump administration has pulled back from virtually all crypto enforcement and regulation. So there are some things going on right now that I would be worried about. Let me stop you. I wouldn't describe that as the government can't figure it out. The Biden administration figured out these things are poison. They have no legitimate use. Let's try to discourage people from buying them. And the Trump administration, second Trump administration figured out. I personally can make a billion dollars if I say, let them rip.

34:07So let them rip. It's not that's not like they're baffled by the problem. But both are both Biden and Trump were incredibly unbaffled. Biden said they're poison. They have no legitimate use. Try to stop them. Trump said they can make me rich. Let's go for it. That is not neither president had any kind of intellectual uncertainty about crypto and what it is. They just they've had a big disagreement. That's fair. Yeah. So there are some crypto assets like Bitcoin and Ethereum, where there seems to be some bipartisan consensus of like we see a use for it. Maybe we'll allow it to go. But you're absolutely right.

34:39With respect to the meme coins themselves in particular, the Biden administration took a pretty aggressive view against these. They also took an aggressive stance towards a lot of the exchanges that were letting things float in were maybe sort of the source of a lot of the problems. And those actions have been unwound by the Trump administration. Those investigations have stopped. And Trump has been using his pardon power, again, pretty aggressively to pardon folks convicted of fraud, but especially crypto-related fraud. I think if I said to a lot of people, look, there's this industry, maybe it's crypto, maybe it's cigarettes, maybe it's baseball trading cards, maybe it's asbestos.

35:16And it's got a product that a lot of people think is harmful. Not everybody. Some people think it's good, but a lot of people think it's harmful. And one president tried to control it. And another president has said, let it go. And the president who said, let it go, has made a billion dollars out of the industry in nine months. I think most people would say, I have a pretty clear picture of what happened here. and even if I am inclined to think that the cigarettes or the asbestos is not as harmful as other people do, I don't think the president who said let it rip should make a billion dollars in nine months out of the asbestos or the cigarette, what some people regard as asbestos or cigarettes.

35:48I think you're putting your finger on why we wrote this piece, right? There's this, to us at least, and I think most people agree, there is a big disconnect between what the law allows right now and what it prohibits and what I think anybody on the street would think of as sort of clearly corrupt behavior. Now, you know, look, that's always true. Criminal law does never perfectly map onto our moral intuitions, but here there seems like a really glaring gap. And if anything, the gap has been sort of both steadily and then acutely growing a lot bigger. And our worry is not just this administration, although this is a profound worry.

36:27Our worry is, Is Trump playing the role of entrepreneur where he is showing future politicians exactly the playbook to run if they want to sort of follow in his footsteps? Yes, it would be the answer. I think absolutely, yeah. Yes. I mean, the next president may not literally do it because of publicity, but why shouldn't a governor? Why shouldn't a president of Brazil or a prime minister of Japan, some other world leader? Now, maybe other countries have stricter public corruption laws. Maybe in Japan, if you take the money after doing the favor, they still say, sorry, we're not such idiots. Taking the money after the favor means that we don't see what happened here.

37:06That's only in America. Is that going to be a defense? Right. Everybody's going to have their own ways of working out these details. Although Europe is a great example of a jurisdiction that is very concerned about the crypto industry, that has been doing more in the United States to try to figure out how to regulate it, bring it under control. and there too there's very little attention to this specific problem of how crypto enables public corruption so even an area that is really focused on dealing with crypto has just not started to pay attention to the ways that there's this huge problem well look there's so many ways that crypto is dangerous and i i referred to an article i wrote in the atlantic about stable coins um so stable coins replicate if you saw it's a wonderful life and who hasn't you know the problem of the money, you think the money's in the bank.

37:53It's not really in the bank. It's in all the different houses sponsored by the savings and loan. If everybody shows up at the same time to get their money out, even Mr. Bailey, as wonderful as he is, as honest as he is, can't pay the money back. And now imagine if Mr. Bailey was kind of a crook. So the solution that was found after the events depicted in that movie was to say, okay, first we're going to have quite strict regulation about how the money is paid. We're going to have quite strict attention to the books of the Bailey Savings and Loan. And oh, by the way, we're going to have a federal stopgap so that if everyone, even if it's Bailey and he's honest and the money really is in people's houses, and of course he can't give all the money, turn all the money into cash all in an hour, we've got a federal guarantee back of him that the federal government will provide the cash and Mr.

38:40Bailey will pay us back out of the insurance premiums he's been paying for years of honest behavior. So stable coins are like Bailey's Savings and Loan without the federal deposit insurance and without the proper system of auditing. It's a promise. The money's there. You all show up at the same time. We have no way to make sure that you all get your money at once. And maybe it's not as honest as Bailey's savings at the moment. Well, I love that you bring up this example in part because my co-author, Jeff Zang, and I, we started this project in part because we were polishing off another essay that we'd written all about the return of bank runs.

39:18Silicon Valley, all these sorts of companies, which themselves are being driven largely by sort of speculative crypto assets that cause these problems. And as we were talking, Jeff, who's more of a crypto expert than I am, was describing, we were talking about the Trump meme coin, and then he mentioned USD1 to me. This is the Trump family's stable coin. And in reading about it, I had exactly the same reaction you had a few moments ago, which is, this seems plainly corrupt. How is this allowed to happen? And that sort of kicked off this project. So there is Absolutely. There's a deep tie between a traditional finance system that has seen the problems over time, has learned to address them and mostly ameliorate them.

39:56And then this new thing called crypto that takes itself to be a technological innovation. And so not subject to history, even though we know what happens when you create these kinds of investments, whether you call them cash or crypto. It leads to predictable problems. And right now, the predictable solutions to the predictable problems are not in place. Okay. So let's say we want the next president of the United States not to make a billion dollars in nine months from an industry that is maybe dangerous and that he's regulating. How would we stop this? So there's a variety of different things you might think about doing in this space.

40:33Some are going to apply more specifically to a president versus, say, other politicians. So the first easy thing is just we need to reverse what the SEC has done under the second Trump administration. Go back to the Biden approach and you can tweak it however you'd like, but start with the general instinct that these are securities. They're being traded and treated like securities. We have a whole enforcement toolkit. We need to take advantage of that. Let me put a pause here. Please. Just to explain something. So all over DC, there are people of BMWs and Lexuses that they've acquired by lobbying for the question, is a cryptocurrency, is it a security or not?

41:10Because the rules on security since the Great Depression, the United States government has put in place some very strict rules. You can really go to prison for lying about a security. But if it's not a security, then the penalties for lying are a lot more lax. And so one of the reasons cryptocurrency is called cryptocurrency, even though it's useless as currency. It's mostly crypto, not a security, so I don't go to prison if I lie about it, whatever fill-in word here. So I need to call it something other than a security, even though it really is a security. It's a derivative. It is a security.

41:45But again, if you lie about a security, securities and exchange commission will put you in jail. Whereas if you lie about a currency, the rules are much slacker. That's exactly right. So securities are, we have lots of law, lots of clear understanding of how to enforce them. The SEC, the Securities Exchange Commission, is sort of the first among equals of financial regulators. They're very professional. They know how to bring a lot of resources to these kinds of challenges. And frankly, we've had a definition of what counts as a security going back to the 50s. And when I teach business students, when I teach undergraduates, I give them the test and then I ask them to apply them to what they know about crypto assets.

42:25and they almost to a person agree, oh, well, if that's the test, these are securities. So I think we have a straightforward story about why we need to undo what the second Trump administration has done there. One sec we can take is a pass a lot that says, cryptocurrency shall henceforth be known as crypto securities. They are securities, they're regulated by the Securities and Exchange Commission. And if you lie about them, you do go to prison. Great, easy first step. I think like that's where we should start. The second step would be with Congress. It is true that this technology looks a little different than other kinds of frauds we've seen in the past.

43:02But look, the federal government has lots of fraud statutes. We have a securities fraud statute. We have mail fraud, wire fraud, bank fraud. There is no reason why we shouldn't have a crypto fraud statute that directly grapples with how this technology is different, how it moves, how it enables fraud. The Supreme Court has been pulling back on corruption laws. But in the Supreme Court's defense, the reason that they have been pulling back is because the statutes that exist are often written in fairly broad language. They are subject to wide interpretation. And so Congress should take the lesson, right?

43:40If the Supreme Court is concerned about these generic, vague criminal statutes, we need a crypto fraud statute that is pointed and sharp and actually addresses the problem. What are the things that we most would want to fix in public corruption? I mean, the idea that, like the Tom Hulman, I'm actually a little bit more sympathetic to the Tom Hulman case where say, look, you bribed somebody, you gave somebody money thinking maybe someday they'll be important. And that looks pretty bad in the case of Tom Hulman where he became important some months later. But what if you give somebody money and they become important 20 years later?

44:15um like uh and what if you know these things do get a little uh hard but but the idea that um giving them the money after the official act or broadening the definition of political act so all the wink and nod ways that political corruption is typically done those get a but those seem like things we need to fix faster i think that's right i think um and look i agree with you that we have strong intuitions of what counts as corruption and it is easy to point to obvious cases of bad behavior. And it's also easy to point to cases where you say like, look, yes, that was, you know, my congressman did a favor for my child to let them, you know, get it passed to go to the visit the White House.

44:59And next month, I sent them a card or when I sent in my contribution to the candidate, I wrote, thanks for all the help. Is that really corruption? I mean, I think like, no, that's probably not. And so finding laws that parse those lines carefully is genuinely hard. I don't want to be dismissive of that, but I do think that there's low-hanging fruit. You included a golden watch with a thank you note, however. Right. I think that's exactly right. I think there's a difference between... I don't know. No, no, no. You're totally right. Just because there's dusk and dawn doesn't mean there's not night and day.

45:30We can knock out some low-hanging fruit here by looking at things like dollar amounts, by looking at connections behavior. Instead of trying to make it this deeply formal logical connection. You know, we can just be like constant context, sensitive human beings. You can look at some situations and say, that seems problematic to me, right? Well, you can just generally do a kind of rule of thumb is, do we have a big problem in the United States of people who look like they're mildly careless politicians ending up in prison for mildly careless actions? Do we have a lot of those? I can't think of many examples of that.

46:06And do we have a lot of examples of things that look really shocking that turn out to be not only do they get away with it, but there's nothing to get away with because actually it was legal the whole time. And Obama was just a fool not to do it. Right. The problem is always what is legal or not? What is illegal here? The outlier cases are interesting, but they seem like slam dunks. It's the first Menendez prosecution that gets dismissed. It's the McDowell case. These are the situations where I think any lay person would look at it and said, oh, yeah, that's obviously a corrupt politician who's probably going to prison.

46:38And it turns out, oh, you're so mistaken. That was absolutely legal behavior. Yeah. There aren't a lot of good explanations for a politician having an apartment full of gold bars. That's correct. Or a freezer full of money, I think, was William Jefferson's strategy back in my day. So those are some of the things we want to do on the public integrity side. Let's talk a little bit more about the crypto regulations. So regulate it as a security, put the Securities and Exchange Commission in charge. And what should we do about meme points? If they're a security, would they be considered just so obviously fraudulent that the SEC would crush them?

47:15You know, when we first saw these definitions of securities coming around in the 50s, what we were concerned about were penny stocks. right? And the problem with penny stocks is these thinly traded, highly volatile, very cheap, quote unquote stocks. And the question was, are some of them legitimate investments? And are some of them just scams? And I think that broadly describes where we are with meme coins. I'm open to the possibility that some of these are in fact legitimate investments. I also think that just overwhelmingly, most of them are your sort of pump-and-dub scheme where you're engaged in behavior that if securities law applied, you and I would say, oh, that's insider trading.

47:57That's illegal. But because securities law doesn't apply, that sort of deceptive promotion flagged that thing and run practice is legal. So I think if securities law applied, if the SEC stepped in, what we would see is the category of meme coin would largely disappear, or at least the quantity of meme coins would be dropped as just not worth the risk. And for the stable coins, my solution for them, and tell me if you disagree with any of this, is I think we need to see a stable coin is a deposit-taking institution. If I give you $100 and you say, I'm putting the$100 in a vault somewhere, I'm going to make a little bit of money on the interest arbitrage between the zero amount I'm paying you and the few basis points I can earn.

48:44If I have enough money, if I have enough depositors, then 50 basis points here, 50 basis points there, it adds up to real money. But it's a deposit-taking institution, and that means it needs to be audited all the time. They need to have federal deposit insurance, and they have to pay for it the way other deposit insurance companies do. Oh, and one more thing. It needs to be domiciled in the United States, the way every deposit-taking institution that's called a bank has to be in the United States. And almost none of the deposit-taking institutions that are called meme coins, they're all somewhere in some jurisdiction, you know, which like El Salvador, where they're already very far beyond the reach of US law.

49:23Well, and I will say in very, very limited defense of Congress, because Congress passed a stablecoin-specific statute this year. It does not - The genius. The genius act. Yes. You made me say it. What genius thought of this, we'll say, after the big crash? Right. There is way more that that statute should be doing. It does not do nearly enough. It does at least start to conceive of stable coins as something that somebody like the Federal Reserve should be regulating. It's a mild step towards the general idea you have, which is, look, this is just a version of banking by another name, right? This is, in fact, this should be regulated the same way we regulate other deposit institutions.

50:02Now, the other thing that I would say in this space is stablecoins are often presented as a solution to existing financial problems. The biggest one people point to is the difficulty of engaging in sort of cross-border money transfers. I think we lose track of the fact that that is almost entirely an American problem. Many other countries don't have that problem. They don't need stable coins because they've just solved them internally to their own banking system. So in some respects, what I think is we should address the technology, but we should also address the arguments for its demand by improving some of our financial transaction systems in the United States.

50:43That will take away the reason to want to invest in stable coins. Yeah. And I think I completely agree with you on that. I think it's a bit of a, again, ruse that when you say, why are we making it easier for Hezbollah to move money across continents. And so, well, look at the problem that if you're a day laborer in the United States trying to sell money, send money,$200 back to Guatemala, Western Union charges you$19. And I think, I never heard you care about the day laborer before. And there are a lot of things we can do for that. I agree with you. It shouldn't cost$19 to send$200 to Guatemala.

51:16But he has got many, that's one important problem. But that's not why you're making it easier for Hezbollah to move money around the planet. I fully agree with you. I think that thinking of crypto in that way is it's a trillion-dollar solution to a million-dollar problem. Well, thank you so much for making time and walking us through all these difficult issues. I'm sorry I interrupted you so much, but you operate on such a high mental level. And I have such a cynical mind. And so I'm conscious that I lowered the tone of a lot of the discussion. But maybe I'm even right. No, I appreciate the interventions in part because you're right.

51:53It's a technology. It's a space that I think gets a lot of freedom from the fact that it's complicated, that people are willing to move past and overlook it. And I think at the end of the day, if the technology is complicated, what it is being used for is very simple and what it is being used for is very troubling. And so reigning it in this is helpful. This was a technology invented by science fiction fans and used by fans of The Godfather. and so we just need to bring a little bit more of the read the godfather mindset into read the Isaac Asimov foundation trilogy mindset that created the coins in the first place I love it, fantastic thank you so much thank you sir it's a pleasure to talk to you, bye bye

52:47really after. I'm Natalie Brennan, a producer at The Atlantic. And I'm Julie Beck, a staff writer at The Atlantic. This season, we're exploring the often fraught, always changing relationship people have with technology and examining the ways our devices affect our connection with one another. New episodes of How to Touch Grass come out every Monday. Subscribe wherever you get your podcasts. A few months ago, I invited Atlantic staff writer Charlie Worzel onto The David From show. As podcast hosts, we talked about the pressures and temptations of the medium. Outrage often gets rewarded. Nuance does not.

53:26Charlie doesn't take that bait. On his show, Galaxy Brain, he covers the ways technology is changing how we think and how we live. Not just the obvious stuff, but the subtle ways it shapes what we believe, how we talk to each other, how we see ourselves and our neighbors. If you've ever wondered how smart people end up believing implausible things online, Galaxy Brain is worth your time. It's thoughtful, surprising, and a little unsettling in the very best way. Find it wherever you listen or watch.

54:00Thanks so much to Will Thomas for joining me today to talk about cryptocurrency and public corruption and the challenges to public integrity in the United States. As I mentioned at the top of the program. My book this week is Lord Jim by Joseph Conrad. Now, what brought Lord Jim back to the top of my reading list was a report, and this is not yet a verified report, so I don't want to overtax this, but a report from the horrific anti-Semitic massacre on Bondi Beach that Australian police officers were in the vicinity, were armed, and yet for 20 minutes seemed to have done nothing as the gunmen killed and killed, paused and reloaded.

54:39They were using hunting rifles, not automatic or semi-automatic weapons. So there was a lot of opportunities to stop them. And indeed, one heroic onlooker did rush one of the gunmen and bring them to earth. And this led me to think about courage, what it means, what it is, why people do and don't take risks to protect others. And Lord Jim, which is a novel of the sea written or published in the year 1900, is a great meditation on this question. Lord Jim is the story of a young Englishman named Jim, who grows up in a country parsonage and dreams of adventure. And he especially dreams of being a hero, of rescuing people.

55:17He has images of himself prevailing in a storm, saving people, washing people to shore. And he chooses a career at sea as a way to achieve his dreams. And when I say at sea, he's not in the Navy, he's in the merchant marine, but ferrying goods around the planet. And he is successful. He makes a good name for himself. He rises in the service. And then he has this terrible moment of testing. He is on board a ship, the Patna, and with a kind of crew, a very miscellaneous international crew. And they're carrying 800 passengers, pilgrims, from some port in India on pilgrimage to Mecca. The exact details of this are quite blurry in the book.

56:02Conrad doesn't tell you where they're going or where they're coming from, or even what is the nature of the so-called exacting faith, as he describes it in the novel. But that's obviously what is going on. In the middle of the night, the Patna bumps into something at sea, maybe a sandbar, or maybe some piece of underwater junk. It's not clear. But the boat lurches and begins to take on water. It only has a single bulkhead to restrain the water. And if that bulkhead cracks, and it looks like it's about to crack, the whole ship is going to sink in minutes and they will all be doomed. The officers, seeing the ship doomed, panic and they race without regard for their passengers.

56:41They race to the lifeboats to save themselves. Jim urges them to hesitate, to try to do something to save the passengers. But the rest of the crew decides it's doomed, including the captain. They race for the lifeboats and they call on Jim to follow them to jump into the lifeboat after them and save himself. He hesitates just for a moment And then, motivated by some impulse, he doesn't even really understand the nature in the course of the novel. He jumps and jumps into the lifeboat and abandons 800 people to be drowned. Except they don't drown. Turns out the bulkhead holds. The ship is the next day rescued by a French vessel and pulled into a port.

57:18And a board of inquiry is convened to examine the dereliction of duty of the crew of the Patna who abandoned 800 passengers to apparent death. most of the crew then vanish while the getting is good. But Jim stays to face justice. And that's the beginning of the drama of the story. Because the narrators, and there are a series of different narrators of the story, have to make sense of who Jim was, this apparently decent, honorable person who wants to be a hero, and the neglect of duty that he committed. One of the people who narrate the book, a captain called Charles Marlowe, describes his first encounter with Jim.

58:00I liked his appearance, says Charles Marlowe. I liked his appearance. I knew his appearance. He came from the right place. He was one of us. He stood there for all the parentage of his kind, for men and women by no means clever or amusing, but whose very existence is based upon honest faith and upon the instinct of courage. I don't mean military courage or civil courage or any special kind of courage. I mean just that inborn ability to look temptations straight in the face, a readiness unintellectual enough, goodness knows, but without pose, a power of resistance, don't you see, ungracious, if you like, but priceless, an unthinking and blessed stiffness before the outward and inward terrors, before the might of nature and the seductive corruption of man.

58:47And he goes on to say, this has nothing to do with Jim directly, only he was outwardly so typical of that good, stupid kind we like to feel marching right and left of us, of the kind that is not disturbed by the vagaries of intelligence and the perversions of nerves, let us say. He was the kind of fellow you would sit on the strength of his looks, leave in charge of the deck, figuratively and professionally speaking. Only none of that turned out to be true. In the crisis, Jim broke. He didn't do his duty. He abandoned people to their death, and he was then made to look a fool because his cowardice turned out to be utterly unnecessary.

59:24And Jim is tormented not just by his cowardice, but by the lost chance to shine as a hero when he was, in fact, had he only known it, safe the whole time. And if he had stayed aboard, the one man who did his duty, he would have been an enormous hero. And he misses that appearance of heroism as much as he misses, as feels genuine guilt for the wrong he did. And as another narrator comment of Jim, he looked as genuine as a new sovereign, sovereign being the solid gold coin that was the most prestigious unit of currency in the British Empire. He looked as genuine as a new sovereign, but there's some infernal alloy in his metal.

59:58How much? The least thing, the least drop of something rare and accursed, the least drop, but he made you. Standing there with his don't care hang air, he made you wonder whether perchance you were nothing more rare than brass. Jim will spend the rest of his life trying to get back that moment of failed courage. And one of the interests of the novel is that in the end he does. He has a chance to do something where he has to really think in advance. He doesn't have to rely on his instincts, but he has to make a very deliberate premeditated decision to risk death, accept death, and he does to save others.

1:00:33And so he redeems himself. But along the way, he raises the question of whether courage is one thing, two things, many different things, whether there's a difference between courage in the moment and courage that has to be premeditated, and whether it detracts from our courage if the courage is done because you're conscious of other people watching. Because when Jim goes to his heroic death, he goes viewed by all the people of a village he's come to care about in an unnamed part of the East Indies. He goes under the view of all the people he cares about, whereas when he failed to show courage, he was failing to show alone and almost undetected, seen only by a handful of crewmates who were behaving as he did.

1:01:14It makes you think about those police officers, if indeed the eyewitness is correct and they flinch from their duty. What do they think of themselves in the aftermath? path. I'm thinking today of another sad thing.

1:01:32Rob Reiner, the great director, and his wife, Michelle Reiner, were friends of my wife and myself. We were not close to them. They had 500 close friends, and we were 498 out of 500, maybe. But we received so many acts of kindness and goodness from them. And they seem to have met a very grim, untimely end at the hands of a parent, apparently reportedly possibly a loved one um if true it's hard to think of anything more fearsome and terrible um they are much in my mind today and um to all who admire his movies to all who knew and um loved rob and michelle um we need we need to express our solidarity to each other we have been deprived of of two gracious generous and gentle human beings um i'll tell you one story about Rob Reiner before I go.

1:02:25One of the last times I saw him was, I think in 2021, we were dropping our youngest daughter off at college. And then after we dropped her off at college, she was in Los Angeles. I had arranged a dinner party with Rob Reiner and some other people in the political world whom he was interested to meet. And I made the reservation in my name. But we had been driving across the country. We dropped our daughter, so we were a little late. So the Reiners, embarrassingly for me, got there first. And I arrived just as they were being seated and the look on the maitre d's face at me you didn't indicate that it was rob reiner who is because we gave you the david from table and if only we had known that mr and mrs reiner are going to be here they would be seated at the table where we have hastily moved them uh and you should have warned us because you are nobody and he is everything um and indeed everything he was thanks so much for listening and watching to the david from show today um i hope you will listen listen and watch next week.

1:03:20You can follow me on social media at David from on Twitter or X at David from on Instagram. And you, of course, the best way to support the work of this podcast is by subscribing to the Atlantic. I hope you'll consider doing that. And if you subscribe to the Atlantic, you can sign up for alerts when an article of mine posts. I've, I'm writing a little bit more frequently these days than I have earlier in the fall. So you may want to be aware of those, But in any case, thank you for watching and see you next week here on The David Fromm Show.

1:04:15This episode of The David Frum Show was produced by Nathaniel Frum and edited by Andrea Valdez. It was engineered by Dave Grein. Our theme is by Andrew M. Edwards. Claudine Abed is the executive producer of Atlantic Audio, and Andrea Valdez is our managing editor. I'm David Frum. Thank you for listening. A few months ago, I invited Atlantic staff writer Charlie Warzel onto The David Frum Show. As podcast hosts, we talked about the pressures and temptations of the medium. Outrage often gets rewarded. Nuance does not. Charlie doesn't take that bait. On his show Galaxy Brain, he covers the ways technology is changing how we think and how we live.

1:05:00Not just the obvious stuff, but the subtle ways it shapes what we believe, how we talk to each other, how we see ourselves and our neighbors. If you've ever wondered how smart people end up believing implausible things online, Galaxy Brain is worth your time. It's thoughtful, surprising, and a little unsettling in the very best way. Find it wherever you listen or watch.