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cover of episode Quick Question: WTF Is Going on With the Economy?

Quick Question: WTF Is Going on With the Economy?

2021/12/3
logo of podcast Honestly with Bari Weiss

Honestly with Bari Weiss

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The discussion starts with the confusion around the economy's performance despite various predictions of downturns that did not materialize.

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I'm Barry Weiss, and this is Honestly. Hello, Barry and crew. Hey, Barry. Hi, Barry. Hello, Honestly team. I'm calling today because I've got a question. So my question for you is... So I've been wondering about something for quite a while. Today I'm calling because I have a question. I have a question. I have a question for you. I have a question.

And today we have another installment of Quick Question, where, as the title suggests, I take a burning question, sometimes from listeners like you, that seems really hard to get a straight answer on, and I bring it to someone who actually knows what they're talking about. Today, that's Tyler Cowen. Tyler, thank you so much for doing this. Happy to be here.

OK, so right now it feels really difficult to get a handle on what exactly is happening with the economy. We were told that five years ago when Trump took office, the stock market would tank and it boomed.

Then the pandemic came and people insisted the stock market is really going to tank. But after a short dip, guess what? Boomed again. Then people said that if we elected a Democrat, the market would tank. But we've got Democrats all over Washington. And look at that. The market still booms. So on the one hand, it's like looking great. We're in the money. But things don't feel good for a lot of Americans, especially Americans that aren't invested in the stock market.

The cost of basic goods like gas and food have skyrocketed. We still got so many people in this country living on the edge. Studies say that 40% of Americans don't have $400 of cash on hand to handle an emergency. And it makes it really hard to get a straight answer to the following question. How is the economy doing really?

And so I bring that question to you, Tyler. You are a renowned economist. You're a professor at George Mason University and the author of nearly 20 books on topics ranging from Mexican folk art to the trajectory of the global economy. And more than that, you are a truly independent thinker. I'm a very devoted and longtime reader of your blog, which is called Marginal Revolution. And I love it in part because it is blessedly free of the jargon that I'm used to getting when I read other economists.

So, Tyler, let's have at it. Are you ready? Yes, I am ready. Is the American economy f***ed? Look, we're not used to economies and pandemics because we are not used to pandemics where 750,000 Americans die. I would say relative to that fact, which is truly horrible and tragic, we are doing surprisingly well. But relative to that fact,

I would say if you're trying to understand the current American economy, don't focus too much on the stock market. It is less representative than ever before. It is a relatively small number of very large companies accounting for most of the capitalization. That said, given the horrors, the plunge in GDP, the plunge in employment that started in 2020, we have made an amazing recovery.

So if the stock market's not the right metric, maybe prices are. Right now, gas prices are up 45%. In California, we pay around more than $4.50 a gallon. Milk is up to nearly $3.65 a gallon. Beef is up to around $6 a pound. Name it. Hotels, clothes, used cars. Why is everything right now so expensive?

A lot of those prices are going to go back down again. So there are three key reasons why prices in general are so high. The first is our supply chains have been all screwed up for a number of reasons. That will take care of itself in less than a year. So the price of gas will go back down again by a very considerable amount.

Second reason, we did too much fiscal stimulus. We sent around too much money to people. The Biden administration sent $1.9 trillion around. You can argue what the right number should have been, but that was too much. The good news is they're not going to do it again. So that will slowly become a weaker force.

Finally, the monetary policy of the Federal Reserve has been too expansionary. Now, economists disagree those three factors, supply chain, fiscal policy, monetary policy. We disagree on their relative importance. So your view on the economy may depend on how you assign weights to those three factors. Is inflation here?

Well, the last measured inflation rate was 6.2%. That was higher than people expected, much higher than we've had in decades. So yes, inflation is here, but at least two of its key components will be vanishing and going away. That's the good news. At what pace, we don't exactly know. And those two components are what again? The supply chains being screwed up, which is due to the pandemic, right? So Americans wanting to buy so many durable goods.

Everyone wants to buy something for their house. No one wants to go to the movies or to their dentist. Markets weren't ready for that. But over time, as prices go up, supplies adjust, those prices will come back down again. The Biden mistake of sending around $1.9 trillion, it was a mistake. That will just become part of the normal economy over time. It will cease to be a booster or stimulus. Those two things are going away in their import.

So the White House is insisting that inflation isn't really here or if it's here, it's temporary. Is that accurate or a bit of a fudge? Look, everything's temporary. I would say that's a fudge. It will last longer than they had thought. It is already higher than they had thought. There's a very good chance that to get down that final part of the inflationary burst,

loose monetary policy from the Fed, the Fed will have to contract. Very often that causes a recession. So the chance of a recession has gone up considerably. The White House is trying to spin this. Oh, it's all the monopolistic energy companies, right? That's basically BS.

Tyler, why are MSNBC and Bloomberg and 10 other outlets I can name running articles telling me that inflation is actually a good thing? Well, there's a lot of different articles about inflation. I would say this. When a pandemic comes, you're going to take your lumps one way or another. It's not good that you have to take your lumps. But if the way you take your lumps is to have a burst of inflation and get it over with,

I don't think that is obviously worse than, say, raising people's taxes. That depends. I suspect a lot of those articles are poorly argued and misstated and misleading, however. The one that I have in mind basically says, yeah, you know what? Supply chains are screwed up right now. Yeah, things are more expensive, but it's a good thing. You know, essentially, fat, indulgent, decadent Americans will have to live more like Europeans.

I don't agree with that article. I think American consumption, we all know, is much higher than consumption in Europe, sometimes 2x higher. That is a sign of our higher standard of living. And right now we've been experiencing various privations which are being converted into price inflation, which will mean real wage cuts for a significant percentage of Americans. So it's a bad thing.

Was giving money to Americans during the pandemic, money that helped float a lot of unemployed people, money that's been referred to as Biden bucks or stimmies by some people, was that a mistake fundamentally?

I don't think it was a mistake. Keep in mind, the Trump administration did it also. They did it earlier, of course, but we did too much of it, right? And you see that in the current rate of price inflation. But to do some of it, to tide people over during a true crisis that was not possible to buy insurance against beforehand, think of the government as providing that insurance. I think that was a good idea, but we did too much of it.

Tyler, when I'm reading about the Build Back Better bill, my eyes glaze over a bit. Can you summarize for me what the aim is with bills like this and whether you think they are worth all of the money that the White House wants to spend?

A bill that wide-ranging is hard to summarize. You know, one aim of the bill, obviously, is to reward political supporters. Do I think the United States needs considerably more investment in its physical infrastructure? Absolutely, I do. So there are many parts of the bill I'm sympathetic with. But what I observe is, of all the developed countries, we have about the worst cost record for building infrastructure—

There are too many veto points. We are one of the slowest, most expensive countries for getting things done. And I don't see anything in the bill to improve those problems. What I see is the bill will make those worse. And I don't see the Biden administration getting out there and saying, we need more supply in the economy. We need to make it easier to produce things. We need to deregulate parts of our economy and move away from NIMBY toward YIMBY. I don't see them doing very much to get us there.

So I'm pessimistic about the actual bill. But do I think we need more and better infrastructure? Yes. Experts are saying that the Build Back Better Act would likely add hundreds of billions of dollars to our country's deficit over the next decade. Does that worry you? Well, I worry that the investments won't necessarily be good ones. You know, if you take on more debt and make good investments, that's perfectly fine. So it's not the debt per se that worries me. It's that we may end up wasting the money.

That's one way to put it. So if you take energy policy, there's such a focus on global warming climate change. I mean, whatever you think of that debate,

But to the extent you're worried, you want the price of carbon-based energy to be much higher to induce substitution. What the Biden plan does is it actually tries to keep energy prices down and it doles out a lot of corporate subsidies to do green energy. But we could easily just end up with more carbon-based energy and more green energy and not really address climate change. Tyler Cowen, what is the most underrated food item at the grocery store?

It depends what grocery store you go to, right?

I think just jasmine rice. There's so many wonderful things you can do with Thai jasmine rice. And for my taste, it's much better than all the alternative kinds of rice, better than basmati rice, better than just the plain, boring, not very good American rice. So I would say buy more Thai jasmine rice and you can make almost anything with it. So it's underrated. People just think of rice, white rice, brown rice, but no jasmine rice.

How many credit cards do you have? And also, do you use Venmo?

I don't use Venmo. I'd have to count my cards. It's probably four, possibly five. I think I still have two Visa cards. I'm financially not sophisticated in that manner. What I do is all very simple. I can pay people with PayPal credit cards. Believe it or not, I still write checks. So I don't pay my bills online. And for me, it works just great. I like knowing what I'm paying, when I'm paying, and being aware of it and able to say, hey, that costs too much. I don't want to renew.

Okay, new subject. Let's go to labor. Everywhere I turn, and I've gone to a bunch of states recently, I see help-wanted signs. Restaurants, including McDonald's, are offering signing bonuses. What's going on here? There's the term, the great resignation. So people are quitting jobs and changing jobs at a much higher rate than usual. This was not expected by most commentators.

Some of it has been unemployment insurance, but it's continued past the expiration of the special unemployment insurance deals. I think a lot of it is during pandemic times, people reevaluated their lives or decided they hated their commutes or wanted something different. And now they're looking for that something different. They may or may not find it. And they just don't want to take a normal service sector job where they're, you know, bussing trays or something.

So businesses are reluctant to raise wages because they're not sure if this is a permanent state of affairs, because once you raise people's wages, it's hard to then lower those same wages a year later. So if you go around and you stay at a hotel, like maybe they don't serve breakfast every morning or part of the hotel isn't open, we're in a somewhat different world and that's going to last for a while.

I totally get that. And I've seen a lot of people in my life make a major pivot during the pandemic. You have too, I might add, right?

Exactly. And it's worked out great for you. Although I would not necessarily, it's like a resignation into a job that never ends. But yes, fair enough. You have more autonomy and for the better intellectually and presumably for your life as well. Other people want to do what you've done, but it's not so easy for everyone else. If you have no college degree, you would typically count as quote unquote unskilled and they want to do their version of Barry Weiss. Uh,

A lot of them are still puzzled. I get everything you just said. But how is it, Tyler, that we can have all of these help wanted signs everywhere? We can have supply shortages. We can have so many people quitting their jobs, resigning en masse, the great resignation, but also lots of people who don't feel like they have enough money to pay their bills. Help me make sense of this. And along with this, the stock market continues to set new records and boom and boom and boom. Give me the big picture.

Well, there are some ways in which the pandemic helped one class of workers and hurt the prospects of another. So if you can very easily work from home and you can also look forward to a future where your company or you as manager, you can hire talented people all over the world because you're working, you know, by something like Zoom.

Looking forward financially, you may very well be better off. And as you've noted, stocks have done well. You were probably holding stocks. You probably owned a home. Home prices have gone up to an extreme degree. So those individuals, there's a lot of them, they have more wealth. But if you own no stocks, no home, had a frontline service job, and all you are is in a position where, well, maybe you got sick and what you're going to do is maybe go back to that same service job.

it doesn't look so great. And the inflation is eaten into your wages. So, you know, nominally, maybe they're going to pay you more, but your prices are higher and you're not coming out ahead. So why should you be better off? You're not. How did the stimulus checks affect Americans' motivation to get back to work? I don't think we know yet. So in what you would call economic theory, if someone pays you not to work,

you work less, right? And especially if there's a dangerous pandemic out there circulating, all the more reason to work less. We don't know the size of that effect. And it's striking to me that after the checks are finished, a lot of those people are not rushing back to work. So I think there are multiple causes.

for the not working. More than 100,000 American workers participated in or prepared for strikes in October. What do you make of that and, in general, the current state of the labor movement, which seems to be more energized? I think what's really happened in labor markets is that it's easier for the employer than ever before to measure which are the workers doing a good job and which are the workers not doing a good job. And that tends to make pay structures more unequal

It also means the common interest of the workers isn't actually that common. It's not like the old days where there's sort of 40 people on a task and maybe the task gets done, but you don't really know which of the 40 was doing the heavy lifting. So I don't think we're in for a new era of a super powerful labor movement. I think, you know, during the end of the Trump administration, real wages were going up at a decent clip. I think when all this mess is over, there's a good chance we can get back to that.

But not because of labor unions. Labor unions have mostly become a creature of the public sector. Let's talk a little bit about inequality. In a country where we don't even agree about who won the last presidential election, I think we can all agree that we are living in an era of crazy income inequality and wealth inequality. Will the massive gap between a handful of billionaires and trillionaires and the rest of the country only continue to widen?

I'm not sure I would accept all of those premises. So if you look at inequality of happiness or inequality of consumption, the picture seems a lot less unfair. So as Andy Warhol pointed out, basically, I drink the same Coca-Cola that Bill Gates does. I think my smartphone is as good as his. His laptop, maybe it's a bit better, or he optimizes it in some ways. But

You know, I'm in the running there, so he can fly private and he can buy, you know, a Paul Cézanne painting that I can't. But in terms of actual living standards, there's much more equality than either income or wealth numbers are going to indicate. So is our national obsession about inequality misplaced?

I don't know that we have a national obsession about inequality. We have intellectuals obsessed with inequality because people of high wealth are a kind of alternative status group that have gained an influence relative to, say, academics or people in mainstream media. So there's that kind of intellectual crisis. But I don't see the ordinary American out there, you know, cursing at Bill Gates and Mark Zuckerberg. Quite the contrary. Yeah.

Keep in mind, when Trump ran for president, he insisted, I'm a billionaire. The response of the Democrats was not, you're a billionaire and you're evil. The response was, no, you're not. And then he said, yes, I am. What does that tell you about status?

Fascinating. Okay. I think I hang out with a lot of people who are really bitter at billionaires. You probably do. Why is that? Why do you think that I do? Well, I don't know you personally, but you have a background in the intelligentsia, right? And the intelligentsia in American society typically are the group most upset about billionaires. They're the competing group for status and influence. Right.

It's not really the millionaires, right? It's the intellectuals and the journalists. It's the people who cover the billionaires and then have to take the subway home. Correct. Okay.

Okay. In my lifetime, Tyler, home prices have risen by something like over 400%. In my parents' generation, the assumption was that if you worked, you were generally going to be able to buy a house, and that's just no longer the case. According to Zillow, the median price of a home right now is more than a quarter of a million dollars. What do you make of this? Good news, or is this a sign that homeownership will soon only be a thing reserved for the wealthy? Well, it's both good news and bad news. The good news is

High land prices in top areas mean that the gains from working with other people are really, really high. So that's a sign of our high productivity. That's great.

But what we have not done is allowed builders to keep on building in many of those areas, most notably the Bay Area, and spread those gains to a greater number of people. I don't know if we'll ever win those political fights, but what we are doing is innovating with work from a distance and work from home. And that will enable you to say work for a tech company and live in Little Rock, Arkansas. And many, many more people are doing this already. And I think that is how we will partially solve the problem.

Some parts of the country will be like Texas, where you can build a lot relatively easily in most parts of Texas. Even Austin may be losing this. But that's been the strategy of the Southeast. Allow a lot of building and spread the gains of prosperity.

So as a member of the intelligentsia, let's go back to the question of billionaires. Who is your favorite living billionaire? Oh, well, I'm co-author with Patrick Collison, so I think I have to say he's my favorite since I've written things with him. But I think there's a lot of billionaires doing pretty incredible things for the world right now, either through their businesses or through charity. Who's your least favorite, if you had to pick? Well, it's probably someone I don't know.

So, you know, I'm of the view that drugs and alcohol are in general very bad for people, even worse than the social messages you receive. So whoever are the people you could trace who earned their billions through selling drugs and alcohol, they would be my picks.

What American city are you betting on and what American city are you betting against? Well, if you mean city, narrowly speaking, I would definitely bet against San Francisco. I think there's no reason to put a serious business there anymore. Too much chaos, too many drugs, too much of a problem with homelessness. And the city is sufficiently small. You can do something right outside it if you truly want or need to be in Northern California. So I would short San Francisco, but not short the whole Bay Area.

I was just in Austin. I found the mood there incredibly dynamic, and there's a can-do attitude and a great business class, and a lot of you could call them refugees from California. And Texas is a state that allows things to be done and encourages you to think big.

So Austin is one place I would be long on, but most of the Southeast also. I mean, most of North America I'm reasonably bullish on. I worry a bit about Manhattan. Because of crime or schools or what reason? I would say schools more than crime. But look, New York City is fairly dependent on a pretty small number of taxpayers.

And if even a small percentage of them leave, go to Texas, go to Florida, the city will be starved of revenue. They won't collect the garbage as often. It just won't be as well run a city as it had been. And if you can work from a distance and if going to the amenities, you know, Broadway show or like maybe you're still willing to go, but your friends, you know, would rather do something they perceive as safer. Right.

I think Manhattan could be in some modest trouble and it will become cheaper, more populous, younger, more like Berlin 15 years ago, maybe more fun, but economically speaking, not so healthy. Are you bullish on the new mayor, Eric Adams? I think being mayor of New York is one of the hardest jobs in the known universe and nothing against Eric Adams. But I don't see how we can have the resources to fix the city. There's too many interest groups.

Okay, Tyler, what is the best thing that you've eaten in America?

Ever? Let's limit it. This year. Well, I was just in Austin and on my blog, Marginal Revolution, posted a list of the restaurants I ate at. And they were phenomenally good, including barbecue, but not restricted to barbecue. Also, Nouvelle Mexican, a kind of mix of smoked meats and Asian fusion. So that's fresh in my memory. But, you know, the best food tour you can do, I would say, is in southwest Louisiana, California.

Start in New Orleans, go to Lafayette, but go to more obscure places than Lafayette, where the signs for the food are scrawled by hand and have spelling mistakes. And that will just blow your mind. Okay. So from the food of Louisiana and barbecue to free market economics. Tyler, you're obviously a real free markets guy. So why is that position, which seemed to me, at least until very recently, to be the consensus position,

Why is that position, at least among a lot of young people I know, losing the argument? And I mean that on the right and the left. You've got libertarian, Reaganomics, trickle-down, whatever you want to call it, sort of falling out of favor with some of the Republican base. And according to a lot of people on the left, Bill Clinton signing NAFTA was the worst thing that he ever did. So if you can, make the case to any skeptical listener for free markets.

Free markets are highly imperfect, but they generate incentives for producers to serve consumers. They generate incentives for people to cooperate. Markets are fundamentally voluntary mechanisms that are peaceful.

And whatever flaws markets may have, and those flaws are numerous, but when you compare markets to the operation of government, where you have entrenched bureaucracies, special interest groups, often very poorly informed voters who kind of vote for the heck of it, knowing that their vote doesn't really matter, I think on average the decisions you get through markets tend to be of higher quality than the decisions you get through governments.

Now, that said, in recent times, we have had a number of major problems that really have required more government action than usual. One of those would be the pandemic. For instance, I'm very, very glad that our federal government did Operation Warp Speed to accelerate the production and distribution of the vaccines. We're much, much better off for that.

But it does mean we're going to be in an era where people are more friendly or sympathetic to ideas of government. It's not 1989 where what the world, Eastern Europe, China really needed was much, much more in the way of markets. It's a different picture right now. But I do see the relevant issues shifting more toward the direction of what will favor free market views. Because right now it seems, and I would say it is the case, that our government has been screwing up on many issues.

And people are feeling that. And you see a state like my own Virginia, which had been a Democratic state for numerous elections in a row, in a surprise, not a surprise to everyone, but they ended up electing a Republican governor. So I think that's the sign of the tide turning. What do you think of Glenn Youngkin? I don't know him. I would say from the point of view of living in Virginia, I've lived under Republican and Democratic governors. And if you gave me a blind taste test, so to speak, I couldn't have told you really the difference.

I think for national politics, it's a good thing. It will encourage the Democrats to be more moderate. And it's sending a signal to Republicans that if they nominate a non-crazy person, they have a chance of winning in all kinds of states.

More and more, the sort of elite progressive view is that economic growth is bad. They associate the idea of growth with the destruction of the earth, the warming climate and so on. Can you make the moral case to me for economic growth? We face grave threats from nature all the time. And I don't mean from human made pollution.

Nature itself is fundamentally a hostile force. Climate has changed many times greatly in world history. To protect ourselves against the hostile forces of nature, to feed a large number of human beings, to protect ourselves against what I would call evil foreign enemies, we need innovation, we need technology, we need wealth, we need the United States to be the country where the most talented foreigners all want to come and live. That requires a vision of the future that is positive,

forward-looking, based on economic growth, even just encouraging people who want to be greedy, but do something useful for their fellow citizens. That is the path forward for this country. And the idea that we're going to shrink and we're going to be poorer and we're going to contract and everyone's going to walk across the street to buy some organic kale, that's not the American future. You know, kale's fine, nothing against it. But if that's the centerpiece of your vision, you are going to lose.

Is there any politician out there that you see doing a good job making the case that you just made to me? You know, I don't follow individual politicians very much. I find that doing so often drives people insane.

They start rooting for and against people, and there are so few good ones. I think the problem is the way systems are set up and the general tenor of ideas in society. It is impossible to govern well right now, no matter which politician you are. I would put it that way. So speaking of kale and tiny farmers markets, during the pandemic, Amazon's profits increased more than 200%.

Other giant companies like Walmart and Target have seen their valuations explode. Meantime, in just the first year of the pandemic, an estimated 800,000 small businesses closed. So while giant companies are booming, mom and pop shops, local bookstores, which I know you love, they don't seem to be able to compete. Do you see this as a problem?

Look, a pandemic itself is a huge, huge problem. It's simply a fact of life. The institutions that will be able to handle it will be better capitalized and have more talent and have greater resources. When I stopped going to the supermarket,

in 2020 and ordered food online, who sent me that food? It was Amazon, right? So Amazon was able to do it. No delivery hitches. They always sent me the kinds of food I was asking for. Prices were entirely reasonable. Delivery was absolutely reliable. A tiny company could not have done the same. So that is the world. If you think we should rue the pandemic and be better prepared for the next one, absolutely. But don't curse big businesses for basically having saved our butt.

But pandemic aside, are conditions viable for the little guy? I mean, they were struggling to compete before the pandemic. I mean, look at the lock, let's say, that Amazon holds on books, to choose one of a zillion examples. Do you see this as something that can be reversed or inevitable that Amazon's going to continue to be, well, Amazonian?

It's not inevitable. If you look at bookstores, which is your example, there's been a resurgence in the number of independent bookstores. I was just at Book People in Austin. Great store. It was packed. People seemed to be buying a lot. So that number is going up. It's going up at the same time that Amazon sales are going up. So maybe those two things are complements rather than just always competing against each other. We're going to have a mix of very big

and very small in the economy. There are no universal laws about how that evolves over time. I would say over the last few years, big business has had an especially excellent performance, in part due to the pandemic. But we should thank it for that, not curse it.

So there's a lot of conversation, not just in the political class, but all over about either breaking up or regulating companies like Amazon, Facebook, Google, et cetera. Do you have a overall perspective on this? I wouldn't break up any of those. So

You know, Facebook, Google, Amazon, they're all very different examples. Facebook and Google are free, right? You don't have to use them. There are actually many competitors. Those are amazing products. They're not monopolizing. If they're large, it's because quality is high and price is zero. Amazon, what you buy there is not free, but for selection, reliability of delivery, often prices are

Amazon is pretty amazing. There are very few individual markets where Amazon is dominant. Books would be the closest, right? But if you want a book, go to Barnes & Noble, go to barnesandnoble.com, go to A Books, order from Powell's, go on eBay. Plenty of other things you can do and indeed, which I do do.

So if you want to get a hold of books to own them, 2021, there has never been a better time in the history of our nation. Are you worried about online privacy and the lack of it? Well, I'm worried about privacy more generally. I think the biggest threats to your privacy are the people you know, not the big tech companies, the people who gossip about you, people who slander you in your workplace, people who try to cancel you, right? Those are privacy threats, and it's often based on fabrications.

So if you want, you know, where's Facebook on that list of worries? It's not high on that list. They are at least trying to protect your data. Contrary to what you hear, they don't like sell your name and address to the whole world. They let people send you ads intermediated by them.

If you don't like, you know, I don't use my Facebook page. I have one. It's not that I dislike it, but I'm too busy and I don't use it. I'm fine. I'm not some kind of social cripple as a result. You can just text your friends. You can email them. You can do a Zoom call. You can do a Skype call. You can TikTok. You can go on and on and on. YouTube. So many ways to socially network.

So, Tyler, do you think there's a moral panic over social media, what it's doing to our brains, what it's doing to our social life, and especially maybe what it's doing to teenagers and kids? Well, I think there's a moral panic within much of the intelligentsia. I'm not sure the American public is that morally panicked.

I was just out in Boise, speaking at Boise State. I had lunch with a bunch of undergraduates. I asked them about Facebook, like, are you morally panicked? They're like, no way. Like, I barely use it, they said to me. You know, fine. So why is the intelligentsia so worried about it?

It is a rival source of status and influence, and it elevates the voice of anyone who can write, no matter what their credentials, no matter what their point of view. And if you look at what are the most commonly circulated articles on Facebook, not always, but very often, it's something like from Fox or something right wing or even something centrist. And mainstream media doesn't like that. And Facebook is their main competitor. And often Facebook has been kicking their butt. So they're not going to like it.

Tyler, you say that you're too busy for Facebook, but I imagine that you have a smartphone. Do you find that using the phone and the reliance on it has changed your attention span? I don't know. I read an awful lot still. I think people in general are evolving toward like loving really long things or really short things. Like Harry Potter has been phenomenally popular in the age of the Internet, right? Same with Lord of the Rings, right?

So that we have no patience for the long. I don't know. Look at people. They gorge on Netflix and they'll sit there and watch for hours and hours, you know, totally wrapped up in it. So I think it's somewhat of a hollowing out of the middle, not that we've just lost all patience. Tyler, we've mentioned the intelligentsia a few times. Do you consider yourself a member of that class? Of course I am. So how do you resist the pull to be more like others in that class?

Well, it's not for me to judge whether or not I do, but I do try to stay weird and just to travel an enormous amount and to speak to a wide variety of different people. Like on my podcast, Conversations with Tyler, I interviewed a homeless person. He was a very smart guy, but you wouldn't quite call him a member of the intelligentsia, maybe the homeless intelligentsia. So just if one tries to be different and not to be such a conformist and use tenure for something useful,

I hope one can avoid it. Do you think that living outside of New York or Los Angeles makes that job easier? I love living in the suburbs. Maybe like the villainous areas would be New York and the Bay Area. I'm not sure Los Angeles is the problem. There's incredible diversity in Los Angeles, right? Go to East L.A. What do people there think? It's going to be very different. So it's really just about avoiding Brooklyn.

Well, that's one place to start, not the only one. Boston and Cambridge, right? There's an awful lot of intellectual conformism. That would be one of the main places where that's an issue. Oddly, Washington, D.C. is in many ways the most balanced city because sort of almost half the intellectual class is in some way Republican, right-wing, conservative, libertarian. Is that true of any other American city? I don't think so. More with Tyler Cowen after this. We'll be right back.

Hey guys, Josh Hammer here, the host of America on Trial with Josh Hammer, a podcast for the First Podcast Network. Look, there are a lot of shows out there that are explaining the political news cycle, what's happening on the Hill, the this, the that.

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Tyler, Matt Iglesias wrote a piece recently where he basically said this. Europe has a better social safety net and they pay higher taxes for it. If the Democrats really want to seriously expand the American social safety net, and he thinks they should, they should just be honest about it. They should be honest about the fact that that would mean significantly raising taxes and just make the case for why it would be worth it. Do you agree?

Well, I think both political parties should be more honest. If the Democrats were more honest about that, they would have much less support. So that's not going to happen. I would a bit push back on his premise that Europe, in quotation marks, has a better social welfare state. Clearly, the Nordics do, but Europe is extremely diverse. And per capita, American government subsidizes health care more than any other government does. Now, we don't provide universal coverage.

But we spend more than they do, so maybe we misspend. But my goodness, we have a huge social welfare state. Okay, a few quick questions to round this out, fun ones. Tyler, will we be conducting our next interview in the metaverse? I would say we're conducting our current interview in the metaverse, and we know each other through the metaverse, and the metaverse is already here. The company Meta is working to make the metaverse better, as are many other forces. Good for them.

I'm not personally sure what's going to come of all that. How many books did you read this week so far? I've lost track, but I read a lot of books. How many books in a year? It's quite common that I read several in a day. Let's put it that way. What?

I'm a very fast reader. I was born a hyperlexic. I was just at the Fairfax County Public Library. I took home, you know, five or six books. The one I'm most interested in is about contemporary Chinese architecture, and I'm going to do some reading tonight. We'll see how many I get through. Are you married? Yes. My wife is sitting in the room listening. She grew up in Moscow in the Soviet Union. She was a Soviet Jewish refugee. Can you ask her what Soviet Jewish dissident she admired the most?

Natasha, I'm asked to ask you, what Soviet Jewish dissident refugee do you admire the most? Not recent refugee, but Sinyavsky and Daniel. Oh, she said a name I can't pronounce very well. Sinyavsky de Daniel? And Daniel. And Daniel. They were both writers. They were both writers.

We're also friends with Kasparov, whom I think of as a dissident, and we both admire him greatly. Me too. So that would be another pick. How quickly could Kasparov beat you in a game of chess? You know, I would play somewhat defensively, so I think it would take him over 30 moves, but the final outcome would not be in doubt. Should I stop drinking? Probably at what is likely to be your current age. You've been shown not to be a problem drinker.

But still, the social benefits of alcohol becoming an unacceptable thing to do, I think, are very high. So we should all stop drinking. Yes. Tyler, are you religious? I call myself a non-believer. So I'm a skeptic with respect to all of the explanations I have heard. But I would say that also applies to the secular physics-based explanations. But I don't believe in any particular conception of God that I've heard.

Do you think religion is generally a force for good or a force for bad in human society? Well, I would say in American history, it has definitely been a force for good. I'm not sure that's true in all eras, but that America has strong Christian roots, I think, has been essential to our belief in individual rights and limited government and capitalist enterprise.

And we've had a very fortunate religious heritage. And as you know, a lot of the movements say against slavery came from the religious side of the American character.

Do you think one of the reasons that things feel so berserk right now is the fact that people are less and less religious and less connected to those institutions? This worries me greatly. Just for contrast, take a visit to Utah, a wonderful state. It's pretty well run. Alcoholism, you know, at least for half the state, is not much of a problem. And I think America, yes, should be more religious again. I don't know if that will happen. It doesn't seem to be happening.

What technology that is coming or appears to be coming over the next decade are you most excited about? Well, the one I'm most interested in is crypto. Now, I'm not convinced it's all going to work and fit together. But if it did work, it would be such a strange, bizarre story, right? Bitcoin, Satoshi. And Satoshi is anonymous. And for years, it looks like crazy, bubbly stuff that no sane person would touch with a 10-foot pole.

And now there's a very real chance it becomes the foundation of this thing, Web 3.0, that allows us to create and run fully decentralized systems based essentially on programming and mathematics rather than words. Like, my God, what a human story that would be.

So I follow that closely. But again, I'm cautiously optimistic but agnostic about the final outcome. One of my producers has much of her money in crypto, and she insists that the big problem with everything that we're talking about today is the money itself. She says that the market for money is not a free market, and that's the main problem, and we all should get into Bitcoin. Is she crazy or not? Well, I don't agree with her. I don't know if she's crazy.

Until this year, we kept rates of inflation a little bit below 2%. That worked fine. I don't think the dollar is fundamentally broken. I view crypto, including Bitcoin, Ether, Ethereum platform as a complement to fiat currency. They're not going to be complete substitutes. They're not stable enough in value. They have all kinds of weird features like try rewriting the blockchain, like final is final.

So I think that means they will be coexisting systems competing along different margins, but ultimately strengthening each other. So in addition to being born an incredibly fast reader, do you have any other secrets to productivity that you'd share?

I'm not sure that one is a secret. I think having a long time horizon and working on something your whole life and never giving up and trying to enjoy compound returns and have wonderful small groups that you work with and always look for mentors no matter what your age and just give it your absolute best and always just have the attitude like, when the time comes that I die, will I be able to say I did everything I could toward the causes and values I believed in and just act on that basis.

Do you have a mantra or a single mission that you think of as the goal of your life? You know, I wrote a piece online once saying my moonshot goal was to be the thinker, a bit broader than economics, but kind of read or consumed more than any other thinker out there. And that that's what I was trying to do. So, you know, why not shoot high? Why shoot to be number seven? I don't think I'll end up at number one.

But that's the way of thinking about like my proximate goals. But sort of my real goal is to learn things for myself. I'm pretty selfish. I'm highly curious. I love learning. And if I go through a day and I'm learning a lot, typically I'm going to be really happy about that day. Tyler Cowen, thank you so much for joining us on Quick Question and Honestly. Barry Weiss, it's been a real pleasure. Hope we can meet someday.

Thanks for listening. If you want to read more of the great Tyler Cowen, go to his blog at marginalrevolution.com. And if you've got a question that you're having a hard time getting a straight, honest, forthright answer to, send it our way by going to honestlypod.com. See you soon.