Podcasts about Martin Feldstein

The World Economic Update highlights the quarter's most important and emerging trends. Discussions cover changes in the global marketplace with special emphasis on current economic events and their implications for U.S. policy. This series is presented by the Maurice R. Greenberg Center for Geoeconomic Studies and is dedicated to the life and work of the distinguished economist Martin Feldstein.

Mark McCormick, TD Bank Global Head of FX & EM Strategy, analyzes the Bank of Japan's decision to loosen its grip on government bond yields. John Stoltzfus, Oppenheimer Asset Management Chief Investment Strategist, says the Fed's sensitivity has enabled the resilience of the US consumer. Aaron David Miller, Carnegie Endowment for International Peace Senior Fellow, discusses the latest in the Israel-Hamas war. Stephen Stanley, Santander Chief US Economist, says the Fed has overstated the importance of the recent surge in US treasury yields. Emily Roland, John Hancock Investment Management Co-Chief Investment Strategist, says the US economy hasn't yet felt the sting of the Fed's recent rate hikes.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance      FULL TRANSCRIPT:     This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal and the Bloomberg Business App. We are living it right now. A brief from Mark McCormick, Global Head of Foreign Exchange in EM Strategy TD Securities. Mark, and why don't you to explain to our audience why a super strong dollars from twenty twelve and a super week yen is disturbing? Well, I think of what it does is it just shows the massive divergence you have between central banks. I think one of the things that you can unpack is there are certain currencies that care about growth, there's certain currencies that care about commodities, there's certain currencies that care about different relative central bank functions. The thing that the end cares a lot about is the ten year point to look at euro. Euro cares about the two year point of the curve. More than say the ten year and if you take the combination of what we had, and this is one of the most important things going on effects is the relative terms of trade shift. Japan is also a massive importer of energy and other commodities. So you take the commodity story, you take the great differential story, and now you take the aggressive bear steepening of the US curves this summer, and you've got basically a trifective things that will weaken the end quite considerably unless the BOJ does something well to the trifecta. Let's go to Mondel of Columbia. I mentioned this with Vice Chairman Clara to the other day. He will join US folks for our special FED coverage. Look for that? Is that tomorrow? Yes, it's tomorrow. The FED meeting is too more might people have just briefed me and Mark I'm looking at that. I want to echo what I talked to Professor Clara about, which is something has to give here. When something gives, what is the instability our audiences should be worried about? Well, I think of the context of the end, what needs to give is the actual the currency itself. As you mentioned, there is a very interesting policy mix where fiscal policy is actually quite favorable in forms of in terms of growth, also inflation. You see the BOJ is expecting higher inflation to kind of be a bit more sticky, I think, than markets are looking for. And they've also basically said we don't have a cap anymore. It can go above one percent. So I think what they're trying to do is synchronize themselves a little bit, which which has been US yield rising, which would contain the weakness in the end, But this is not a policy mix that is coherent and it is no longer sustainable. So I think a big thing is what we're going to see is things are going to change. It will change abruptly, but I think the movement that we had overnight where they said there's no longer a one percent cap, is actually quite a significant change. But it will take time for this to work through the market. So again i'd say that the thing that needs to break is yields needs to be higher, yet needs to be stronger. It's just going to take more time because we also need to see a peak in the US yield story, which again is not even about the FED anymore. When we talk about the ten year yield. It's more about supply and demand for ten year bonds. This is a big mishmash. Do you have a sense of what the response mechanism from the Bank of Japan is, what the lines in the sand are, what they're sort of looking at. I mean, we were talking about some of the opacity that they put forward overnight. It's very tricky because I think obviously most central banks it's very common language. At this point, they care more about the currency movements. So the end has not been as volatile. So as you can see, we have not the report came out this morning like they did not intervene last month. So I think I don't think there's a red line per se. I think they're all kind of doing what everyone in the market's doing. They're very confused about the drivers, They're very confused about the actual themes in the market. FX has become very challenged, I think for many people. So I think the line in the sand is you're kind of thinking it's loose fiscal policy, loose monetary policy, weakest currency on record. It deviated from our longer term models by you know, magnitudes, you know, our longer term fair value model and dollar again is in one twenties. So what you're kind of looking for is like the pressure points that will cause these things to break. And again, I think a big part of it is US data needs to roll over, US yields need to come down a little bit, and the BOJ I think the one thing that we're very out of consensus on is we are looking for them to move out of NERP next year because of the wage pressure we're seeing in Japan right around the Shuto wage negoiation negotiations, we should see higher wages and as a result of you know, essentially higher wages and higher nominal rates coming up, we should see real rates in Japan move substantially in their favor versus the US next year. When you take a step back, there's a question of slowly or all at once, And you were saying it will be all at once at some point. How disruptive is this going to be at a time when so many people were talking about Japanese flows underpinning are basically suppressing yields globally and really keeping things a little bit more in sync. Yeah, I think that's a that's a big component because I think since the summer, since the BOJ let the the you know, kind of opened up the yield curve control the suppression they had on it. We have seen term premium rise across the world. We have seen the US ten year rise. So I do think that there is a blowback here that's happening slowly behind the scenes. And again, I think a lot of people will make the point that the ten year yield is now advanced above FED expectations for twenty twenty four. It's above data surprises, it's above US data trends. It's no longer reflecting the correlations we saw in July. So I do think that the BOJ and the fact that they're kind of moving out of it. Obviously quantitative tightening has a component of this as well, but the BOJ does have the ability to kick start, you know, rises in the US ten years. Well, bring up this board again on television and radio. I have to review you this. I didn't do this. Simon did this in the control and he's been reading. Michael Rosenbergen for inn Exchange. Bring up that board again here. Yeah, one fifty one week week week end two year yield finally above zero ten year yield almost one percent. Those are unimaginable numbers to pros mark. Is this going to end stochastically? I talked to Martin Feldstein about this years ago, Like Looney, let's go to Toronto Dominion Bank. Looney goes up one thirty eight, you get up to one forty two and it gets fixed. Is that where we're heading, where the system just fixes itself. No. I think the system's quite dynamic. I think that that's the interesting point. Like we brun out variations of lots of different types of tools and models and different things. We're trying to understand what's going on in the market. As I mentioned, the things that are driving a weaker yen are fundamentally based. They make they make a lot of sense. And again the commodity story behind the scene is quite quite important, especially from the handover to last year, because what it does is it eliminates the trade surplus and the trade surplus plus the current account plus the balance of payments that is FX. You know, essentially everything we talk about every day is trying to think about how do we predict the balance of payments? So for the end, I don't think any of this is stable. I think is very unstable. Equilibrium even the shorter term models that we look at that we use for trading ideas Dollar Interview one five based on redifferentials and equities and risk and these kind of things. So it's even deviated now because you know markets are looking for a trend to trade in dollar again, is the only one that makes any sense right now? Three people just drove off the Garden State Parkway. There's your Global Wall Street Brief and foreign exchange. If you only understood half of that like I did. He's Mark McCormick of TD Securities. John Solstice has been listening to this and wants to weigh out on the Bunker Remo and beyond. And I'll let you get to that, but first I want to start to say how much are you basically saying we've just a run out of time to get to that forty nine hundred mark? Yeah? Really, really is? We We had to right size our expectations. We always suggest that to do investors as they as they consider what happens when markets are are in royal and so to speak. And what we've got to consider here is the calendar is telling us that we're getting close to a year end. The average rallies are positive. You know, we get positive rallies after a dip like we've seen traditionally or historically, but it's smaller amounts and there are still lots of uncertainty that bears and nervous investors and those who are skeptics can use to take more profits out of the fabulous rally that we're still living off from the lows of October twelfth of last year. I feel like one just after another is basically coming on and saying give investors a prozac, because frankly, there is a lot of optimism. They're just not seeing it. How much can you really hinge unfundamentals if the sentiment is just so gloomy and prepared for the worst. The problem is, I think that when you're in a FED funds high cycle, it takes a while before the marketplace gets a sense that the FED is indeed not trying to destroy things, and that the FED might actually succeed at its goals. The Fed isn't it isn't infallible, but the FED has a remarkably simple a mandate essentially, you know, stable economic growth with maximum employment. Of course, what is it. A few weeks ago, I think was the daily quote on the Bloomberg was Martin Scorsese, and it was something that like simple is the best, but it's the hardest to achieve. Well, that's what happens in a FED funds hike cycle. But what happens is eventually the marketplace. And you can see it related to higher prices being accepted by consumers and business in that you were just mentioning before there's a sense, Okay, we can deal with this now and we keep moving forward. The FED has been so set in applying it's mandate that it hasn't knocked a part the resilience in the consumer, in business and the overall economy. That's just an extraordinary John Michael McKee with a brilliant idea on the Magnificent Seven. He's going back to the movie. He's looking at YOU'L. Brenner, Steve McQueen, Charles Bronson, Robert Vaughan, James Coburn, Horse Bucklets and Brad Dexter. I mean they were the Magnificent seven. What do you do with the modern Magnificent seven? Is Apple going to deliver here? And if you're going gloomy forty four hundred, do you sell your big tech Well, I'm not gloomy of four hundred at all. I'm just saying it's more realistic from here to the end of the year. Just wait until we put in our Brice target for next year. That'll be later on. Oh good, and no one's watching here, Come on compliance at opcos not watching. Give me a number. Can you pop a five thousand for next year? To do it? I got, I got compliance breeding down my back. But when we look at things are getting better and we think we're going to see competition return in a lot of spaces, and competition is when all of a sudden you've got everybody is passing on the old higher prices getting away with it. And then some guy in business or gal discovers the idea of well maybe if I give up a little bit what I get in per unit costs, maybe I can make it up big time and volume. And that'll happen across the sectors. But in the meantime, tech is empowering everything, and we don't mean it like in some kind of a moonshot, but it exists. Today. Corporations are doing better navigating very tough environments. Well, it's the financial advices. Whether it was the pandemic, post pandemic, the supply chain stabilization, the getting away from one country centricity in terms of the global supply chain. All of this technology is enabling a lot of things both for the can consumer as well as for business. And it's it's a dramatic change that combined with sensitivity by the FED communication transparency that we think is you know, the branking legacy that is still being practiced by Jerome Howell in his own way. Yeah, you know, positive effect. I keep thinking the economy is not the stock market, and this is not necessarily a stock market that's representative of the broader economy that really is maybe the Russell two thousand or the banking index, the regional Banking Index. Does your optimism bleed over to small caps, to the KBW index? Well, I'd say not necessarily to the k b W. Yet we've got to wait for the economy to show a greater sustainability going forward and not as many concerns in terms of commercial real estate and subbrime auto loans and things like that. But what we would say is when we when we look at this picture where all things are getting better, it's been led by the large caps but if we get to that point where we get to see the sustainability of the economic expansion, of becoming predominant in the picture, you're going to want to own smalls and mid caps, and you probably want to consider, for instance, we're near market cap agnostic in some ways because our goal is beyond we're intermediate to longer term investors, and the valuations are ridiculously low in many quality indices of the small caps and mid caps. Joss Dolphis thank you so much, greatly appreciating this should be a two hour conversation. I can't say enough about the work of doctor Miller. He is Aaron David Miller. He's a senior fellow the Carnegie Endowment for in an national piece. The signal is from the University of Michigan Definitive and International Relations. And he wrote a book in two thousand and eight. It was shockingly, shockingly prescient fifteen years on about the mess we're in in the Eastern Mediterranean. Aaron David Miller, thank you so much for joining us this morning. When you wrote your masterpiece in two thousand and eight, did you expect the tragedy we're living now? I expected John at an unresolved Israeli Palestinian conflict driven by a proximity problem. Israelis and Palestinians are living on top of one another, and frankly, I think it was Mark Twitter said that proximity breachs contempt and children. I figured that this conflict would endure, It would go through periods of accommodation, perhaps as it did, but also periods of conflict that we've seen. But I think I, for one, I'll put myself at the top of the list, never anticipate paid the kind of trigger to this particular phase of the Israeli Palestinian conflict. That is to say, what happened on October seven, with Hamasa's brutal and savage attack and it's wilful and intentional, indiscriminate murder of men, women and children. I did not anticipate that, and clearly, in what probably one of the two greatest intelligence failures in the history of the State of Israel, neither did the Israelis. Aaron David Miller. Robert Gates writes a piercing essay and the New Foreign Affairs magazine. I read every word of it. The former Defense Secretary and head of CIA on a dysfunctional America, a dysfunctional superpower. You are someone that straddled the line. I would say, within the politics of Washington, what's Aaron David Miller's best practice? Now for the Biden administration come to this particular crisis. Remember, we now have an archa crisis. We have a major crisis in the Middle East with the potential of escalade. Even further, if you end up with in Israeli his bull of war, You're going to see, not to mention the prospects of Iranian involvement and direct conversation between Israel and I Ran, which would lead to spiking oil prices and plunging financial markets, and even more uncertainty with respect to the global economy. You've got Russia's invasion of Ukraine, You've got tensions in the Indo Pacific. Look, I long believe you know. I'm a follower reinhold Nebe approximate solutions to insoluble problems. This is a world that cannot be resolved. That is to say, I'm not sure there is one conflict factor you could identify that had a definitive, a comprehensive solution. This is all about smart, smart management and a judicious and very balanced view of the projection of American power in air is that in fact we can, we can and effect. But no, this is not a world to be redeemed or resolved. It's want to be managed if we're lucky and smart. Aaron David Miller Robert Kaplan's new book, The Loom of Time is my book of the year. It's just a sprawling treatise from Morocco all the way over to Persia, indeed on to Afghanistan as well. And what permeates Caplin's real politic is the basic idea that we have a human rights led foreign policy. Is our human rights led foreign policy at risk given what we see in the Eastern Mediterranean region. You know, Caplin's you a really smart guy. Based on my experience John working for Republicans and Democrats over a thirty year period from Jimmy Carter to Bush forty three, I don't think we have a human rights based policy. In fact, human rights democracy promotion, responsibility to protect, the intervention, to to prevent or even respond to mass killings, from the Holocaust at Cambodia to Rwanda to Dartford to Sauth, Sudan to Syria. Where has the United States been with respect to the protection of human rights. I'm not saying that that is a role we need to play and can't play all the time, but I think human rights is a factor. But based on my experience from Carter to Bush forty three, it's rarely at the top of our agenda. There's been shades of isolationism there, even off of the shock of Jimmy Carter and the Iranian hostage crisis. And I believe seventy nine, what does our new isolationism look like. I'm not sure. Well, clearly we're not there now. I mean, I think the America first notion, although I think that largely would translate into putting America last. We've got to find the right balance, John, between doing too much in the world and not doing enough. One of my former VOUSE bosses, medal In Albert, referred to the United States as the indispensable power. You know, and I remember what de gaul said about the cemeteries of France. They're filled with indispensable people. We can't be the indispensable power if indispensability means that we need to be everywhere, to everyone all the time. We have a dysfunctional political system. That's the strength, by the way repairing that is critically important for our capacity to lead, not by the what it was, Joe Biden says, not by the example of our power, but by the power of our example. There is something to that. From where you sit in international relations. Is our pentagon properly funded? And specifically does the Navy have enough ships and submarines? Probably know, and no, I suspect, even though there some will argue that our defense budget is way out of whack, It'll be fascinating to try to see how we're going to resource going forward because each of these problems I referred to what you're seeing in the Middle East right now, Russia's warview against Ukraine which seems to be forever, and the prospects of arising China in the Indo Pacific. All of these things have to be properly resourced. And that's a concern that I have, given the nature of our domestic politics. One final questionnaireon to circle back to your two thousand and eight treaties, there is a much too promised land. What should we advocate to Israel and the Palestinians in this November You know, a lot of people I respect John believe that the so called two state solution has gone the way of the Dodo. I understand the argument, but frankly, it's the least bad solution to this conflict. Israelis and Palestinians need to separate from one another through negotiations. There's no precedent that I can think of of two two national movements, one of state, a nonstate actor seeking to become a movement living happily ever after under one roof. It's Cyprus, Lebanon, Syria, Iraq. I mean, the beat goes on, so it's not it's just a hop, skip and a jump to understanding that if in fact you're going to have anything resembling a conflict ending solution, I'm choosing my words very carefully here. You really do need to have separation through negotiation, maybe into a confederation at some point, but you need to satisfy the political, territorial, emotional, psychological, and religious underpinnings of this conflict. The only thing that does that, in my judgment, is to separate through negotiation state of Israel living peacefully next door to a Palestinian polity. That to me is the only way to even begin to think about fixation. Aaron David Miller, thank you so much for the brief. Hugely valuable with the Carnegie Endowment for International Peace. Stephen Stanley joins us at right now with Santander or US Capital Markets. You are acclaimed for analysis and GDP. How does the bond market affect your analysis? You know, I think the Fed is overstating the importance of this little backup in bonnials that we've seen over the last month. As we talked about the last time I was here, I see it maybe as a little bit more of an excuse than a reason. I think they wanted to hold off, and that provided them with a convenient reason. Financial conditions have tightened a little bit. But look, you know, as you all discuss, the economy is still rolling at this point. So I think it's wishful thinking that the last twenty or thirty basis points on the on the bonyold is going to roll the economy. But the I'll go with this easy, easy question here. It's a cliche, but unfortunately it's apped right now. Are they fighting in the last war? I think it's too soon to say that, because you know, the idea I assume what you're suggesting is well, inflation has already licked well. Dominicq constum in MISSOUI is calling it super restrictive. I got people say in the five percent reality lay on the bond market is a seven percent reality in the economy as well? Are they? Are they working now? They go to the meeting tomorrow in a restrictive milieu. I think policy is restrictive, but is it restrictive enough? I mean, until the economy actually slows down, until inflation really comes off. It's it's hard to say that, and so I think that's why that at a minimum, they're certainly going to want to keep their options open. You know, they they've signaled another pause, but Pallas certainly kept the door open to further hikes. So I'm not throw this question at you what I was asking before, which is how long can the US continue surprising to the upside with economic data and showing momentum at the same time that you see Europe running into recession coming out recession around the world a lot of pain, maybe not to be overly glib, but basically forever. Because the US is a domestically driven economy, and I think economists and particularly the FED, have systematically over the years overestimated the importance of the global economy for the US economy. We're, you know what, between ten and fifteen percent of our economy is trade, whereas for most of the other major economies it's thirty forty percent. Okay, I'll challenge that in one way, And this is something that a lot of people have been talking about, and I would love for you to push back if this is the case, people say that the international transmission transmission mechanism is the US yield is how many international buyers are going to be coming in and picking up treasuries at a time where the Bank of Japan's not going to be buying, where you're going to have or not going to be really pushing investors out of that nation's asset market. Where you have certainly around the world yields going higher and China not buying how much does apply change that narrative and create more of an international transmission mechanism than ever before. Yeah, that's an interesting angle. Actually. I think the root of the problem there, of course, is the fact that we're that we're running such large deficits. If we had a smaller deficit then this would be so much of a problem. But the fact that the Treasury is to borrow on extra to two and a half trillion dollars a year, they need demand anywhere they can get it, so that that actually does bring a good point, which is that the it feels like the international community has pulled back a little bit for various reasons, and I think you know that's that's part of it, a piece of why yields have backed up recently. Well, Mike McKey summarizes for us we've heard this twice today and surveillant Shill Moweko accent Stephen Stanley of Santandra agree the United States is a relatively closed economy. Are we an economy a fiscal stimulus thinking of refunding and all the other debates versus Europe in austerity stimulus? I mean, are we living a fiscal stimus that makes us different? Well, yeah, I mean we as Chris says, we're, as Steve says, we're a sort of closed economy. We don't have to worry necessarily about what's happening in Europe as much as Europe has to worry about what's happening in the United States. And China their biggest trading partner, and so we can stimulate the economy and we can run deficits for a lot longer. Nobody knows exactly how high or how long, but it doesn't have the same kind of effect. Interesting to note where we are with yields these days is where we were in the nineteen nineties when we were growing at four and a half percent a year. So can we live with this? I mean for now we can't, right, Steven Stanley with us, So I'm not going to go higher for longer. But just pick one of them. Are we going to go higher or are we going to go longer? Well, I think the more important thing is the longer part. You know, they may go one more time, but we're pretty to the end, so I don't think the higher part is the more important of the two right now. I think is the more important issue is how long are they going to stay? Can the American economy equilibriate through a higher nominal and real rate or almost equal calibrate? I would said yes, I think We're in the process of that. I think that in my mind, the neutral rate is you know, anywhere from fifty to one hundred basis points higher than it was before COVID. So give me a ten year real rate, which is going to be a run rate. I think it's probably you know, one to one half percent something like that. Okay, when we look right now at the data that we've getting this week, you said that the Fed seems to be looking for an excuse, and it's not really that they're so concerned about what you call this little backup and yields. So what data could make it difficult for them to use the backup and yields as some sort of excuse. Well, boy, we're really testing that right because since the September meeting, we've had a blowout payroll number, a high inflation number, stronger than expected consumer spending, and now we get a firm wage number. So you know, you're pretty much a clean sweep, and yet they're clearly going to pause. So I think it's going to have to be not so much a particular data point, but a duration of a stretch of good data. If we continue to see good data for another month or two, then I mean it just becomes increasingly compelling. So tomorrow, based on what they say and based on the economic data, what are the chances from your view, that they've got to go significantly further than currently markets are pricing. Yeah, so significantly further is a really important part of that question, because, as I said, I mean my base case, I have one more hike. But that's I mean, you know, whether they do one or not, it's not that important. But there is a scenario where inflation reaccelerates and they end up having to go multiple times. That's the I think that's the scenario that you might have in mind. I mean, to me, that's the biggest risk fact. I see that as a bigger risk than the risk that the economy slides into recession and they end up easing much sooner than people expect it. But it's at this point it's for me, it's a risk scenario, not a base case. Are Is it true you're going for Halloween? You're going to dot plot that. That's a room, right? I can't confirm you had bullered up at the tippy top of your head. There you go. Okay, I have a lot of room on my head for you dods. So do some of us is well? Also? John Ferrell, going as you'll Brunner, I don't know if you knew that one of the mania for seven John. It was good to hear Stephen Stanley with his chief US economist of Santander, Emily rolling this morning from Boston here on a Halloween. What's your biggest fear out there besides trigger treating, what's your biggest fear, Emily in this market? My biggest fear is that we're actually in a scary movie right now, but it's not over yet. You know. You think about the villain kind of being wounded but still alive, and the villain is higher borrowing costs and the wake of the FED raising interest rates in the shortest amount of time and the greatest extent in several decades here, and we really haven't felt the sting from that as far as consumers pulling back, you know, as far as earning's getting hurt by that profit margin's getting crushed. So everything's fine right now. We're sort of running to the safe part of the house as we're getting chased by this villain, but we need to remember that the movie simply isn't over yet. Oh my god, Emily, I'm just thinking about you at the sleepover with a bunch of eleven year old saying it's a scary house and the bond villain is coming to get you at some point. I'm wondering, Emily, how much we're looking at a scenario we're yield to kind of reach to a peak, and that really the uncertainty lies. And I keep harping on this, but it lies with the deficit financing and what we get tomorrow from the Treasury Department. What we got yesterday actually underwhelmed with the amount that the US would have to borrow in the third quarter, and arguably that's what's leading yields lower this morning. Yeah, certainly fears around supply have been a key to the narrative around rising bond yields, but it's not like we woke up one morning over the last few weeks and all of a sudden found out that the treasure was going to have to issue more debt. That's been a known issue. So for US, that's not really the primary reason that bond yields have picked up. It's been just this unrelenting strength in the economic data in the US, and certainly fiscal spending has played a role in that. Excess savings have played a role in that. In twenty twenty and twenty twenty one. But really it's been the strength of the data. There's something really really unusual happening in the bond market right now. One, we're facing down potentially the third consecutive year of negative returns for high quality bonds. That's never happened before in history. We're also looking at an environment where if the FED was done in July, and we can talk about that, it's really unusual to see the ten year treasure yield continuing to rise. Typically what happens is that the ten year peaks right around the same time, are just before the FED pauses, very unusual. And then finally the elusive bear steepener another very notable dynamic here that is not consistent with what we've seen in recent history. So our view is that we could be getting close here to the peak and yields. This doesn't sound like a scary story actually. Arguably, and as Gina Martin Adams yesterday was saying, this really speaks to a pain trade of more momentum of gains of a rally and risk assets. Because if yields are rising because of growth, isn't it a good and beautiful thing? Yeah? I mean, I think our standards for growth have seemed to be shifted a little bit. Yes, there's a lot of strength in the labor market, but we all know that that's lagging data and those cracks are starting to form. I think this week's going to be really critical in terms of the jobs report on Friday, initial claims, which have stayed stubbornly low. We've got to remember that that data is subject to heavy revisions, and we're seeing a lot of cracks in the consumer stories starting to emerge. There's a lot of heads out there, the resumption of student loan payments, credit card interest rates at twenty five percent right now, auto loans at seven percent, mortgage rate over eight percent. That's a challenge. How do you get out thirty six months? You're going to tell me part of a carefully managed portfolio is so look out three years, five years, years, maybe when the red SOX go above five hundred again, Emily, the basic idea here is people are scared stiff. How much cash at five x percent should they own? Versus having the courage to reach out thirty six months? Yeah, I think the critical the scary part I guess about being in cash right now is that your subject to significant reinvestment risk. Our view is that the normal relationship with the economic cycle and bond yields remarries as we head into this economic contraction into next year, and in that environment, you want to move out the curve and just really be able to capture the five six percent income that you're seeing in high quality bonds right now. I know we've been talking about this for a while. There's been these significant odd dislocations in the bond market, but if you're in cash right now, you might not get that yield next year. We have an opportunity again to lock that income stream in for years, and I think we're going to look back on this is quite an incredible opportunity to unlock the value in bonds. Thank you, Emily Rowland, John Hancock Investment Management, Boston. Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify and anywhere else you get your podcasts. Listen live every weekday starting at seven am Eastern. I'm Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can watch us live on Bloomberg Television and always I'm the Bloomberg Terminal. Thanks for listening. I'm Tom Keane, and this is BloombergSee 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Casey Mulligan, Professor in Economics and the College at the University of Chicago, joins the podcast to discuss how he got interested in becoming an economist from his days as an undergraduate at Harvard in Martin Feldstein's Ec10 class, being an economics graduate student and professor at the University of Chicago teaching the Chicago Price Theory approach, his experience working in the Trump Council of Economic Advisors (CEA), and the long-term influence of University of Chicago economics figures like Milton Friedman, Gary Becker, and George Stigler.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Casey Mulligan, Professor in Economics and the College at the University of Chicago, joins the podcast to discuss how he got interested in becoming an economist from his days as an undergraduate at Harvard in Martin Feldstein's Ec10 class, being an economics graduate student and professor at the University of Chicago teaching the Chicago Price Theory approach, his experience working in the Trump Council of Economic Advisors (CEA), and the long-term influence of University of Chicago economics figures like Milton Friedman, Gary Becker, and George Stigler.  Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/economics

Will Bachman talks to Tai Wong, a Harvard and Radcliffe class of 1992 alumni. Tai has been a trader for thirty years but  believes that his best trade was asking his high school girlfriend to marry him. They married after she finished business school and they now have four children. Tai shares that his family has been together for 27 years and have had the opportunity to travel to many places together, but one of his favorite locations is Norway.  A Career in Finance as a Trader Tai initially became interested in finance after a summer internship at JP Morgan where he worked on the foreign exchange trading desk. Tai is a sell side trader, meaning he works for a bank and prices and facilitates client business, as well as making bets with the institution's money. He has eight years of experience in currency trading, and five years experience in helping to build a successful large scale client trading platform for currencies at UBS. He has also been trading precious metals like gold, silver, platinum, and palladium, as well as base metals like copper, aluminum, and nickel, for the last 15 years. Being a trader has had a significant impact on his personality, teaching him to be direct, loud, and decisive. He considers his 'real' job to be being a father, husband and son, but he loves his day job too.   Spoofing and Manipulating the Market Tai discusses how the past 10 years have seen a shift away from human trades in markets such as gold, silver, crude, and natural gas. He explains that 80% of trades are now done by machines, which take the human element out of trading and make it more anonymous. He also mentions spoofing, a crime where traders will show false offers or bids to try to manipulate the market. He explains that traders have tried to fool the machines by using techniques such as spoofing, though this has been made illegal since 2000. The shift to machines has resulted in fewer one and two lot trades, as well as fewer requests for quotes as machines can be programmed to execute trades over time. Tai describes his daily routine which involves waking up to check Bloomberg on his phone to see what has moved since he last checked, and then scanning the headlines. Using the Bloomberg Tool for Trading Insight Bloomberg is a remarkable tool which tracks an immense amount of data and is used by 250,000 people per month, making them around $8 billion. When in the office, the Bloomberg tool is used to log in overnight and use pricing tools for options, sheets that show risk, futures and liquidity. It can be confusing for those who have not used it before, and is similar to what air traffic controllers have to do. The conversation then shifted to an example of a moderate potential trade. Bloomberg allows traders to monitor the market and look for opportunities to buy and sell, and can use a variety of tools to determine the best time to enter and exit the market. For example, a trader might monitor the market and look for a particular stock to rise or fall after an announcement, and use technical analysis to determine the best time to enter the trade. The trader can then use limit orders and stop loss orders to protect their capital and maximize their profits. Life as a Trader and The Big Short Tai reflects on his experience as a trader, discussing the rapid decisions that are often made and the importance of developing a thick skin. He talks about traders' skepticism of authority and dislike of arbitrary rules and notes how their experience impacts their personality.  Tai remembers the many crises he has witnessed and the feeling of watching the markets move in response, and he reflects on his experience at Lehman Brothers when it went bankrupt in 2008. He noted that the movie The Big Short did a good job of recounting the episode and was almost 100% accurate except for the empty trading floor scene. He further explained that many people continued to go to work each day after the bank went bankrupt and that the paychecks kept coming.  The Complexities of Trading in the Metals Market Tai  discussed the complexities of trading in the metals market, and the need to understand the nuances of each metal type. He broke metals trading into two parts: precious metals and palladium. He explained that palladium is expensive, and prices rose when Russia invaded Ukraine due to concerns about supply. He noted that the U.S. government did not put it on a restricted list, meaning supply was not interrupted. He concluded that it is important to understand the jargon and nuances of each metal market in order to be a successful trader. Influential Professors and Classes Tai remembers certain classes and professors that he found inspiring include Martin Feldstein and American Economic Policy, John Shearman, Professor of Fine Arts with whom he took a course on Michelangelo, Ezra Vogel who taught Industrial East Asia Foreign Cultures 26, and Richard Pipes who taught about the Russian Revolution.  Timestamps 04:30 Exploring Norway in the Summertime  05:53 30-Year Wall Street Trading Career  11:17 Exploring the World of Metals Trading  18:57 Exploring the Impact of Automated Trading on Financial Markets  24:20 Bloomberg Trading Tools and Risk Management  25:05 Hedging Gold Futures: A Discussion of Trade Mechanics 31:29 Counterparty Reputations in Financial Trading  34:23 Exploring the World of Commodity Trading:  36:31 Colorful Traders and Jargon on the Trading Floor  39:36 Experiences on Wall Street and Regrets of Not Taking Certain College Courses  CONTACT INFO: linkedin.com/in/tai-wong-cfa-9547641 Tai.wong@post.harvard.edu  

Casey Mulligan, Professor in Economics and the College at the University of Chicago, joins the podcast to discuss how he got interested in becoming an economist from his days as an undergraduate at Harvard in Martin Feldstein's Ec10 class, being an economics graduate student and professor at the University of Chicago teaching the Chicago Price Theory approach, his experience working in the Trump Council of Economic Advisors (CEA), and the long-term influence of University of Chicago economics figures like Milton Friedman, Gary Becker, and George Stigler.  Learn more about your ad choices. Visit megaphone.fm/adchoices

The United States federal state and local tax (SALT) deduction is an itemized deduction that allows taxpayers to deduct certain taxes paid to state and local governments from their adjusted gross income. The Tax Cuts and Jobs Act of 2017 put a $10,000 cap on the SALT deduction for the years 2018–2025. The SALT deduction reduces the cost of state and local taxes to taxpayers. It disproportionately benefits wealthy and high-earning taxpayers in areas with high state and local taxes. The Tax Policy Center estimated in 2016 that fully eliminating the SALT deduction would increase federal revenue by nearly $1.3 trillion over 10 years. Definition. For United States Federal Income Tax purposes, state and local taxes are defined in section 170(a) of the Internal Revenue Code as taxes paid to states and localities in the forms of: (1) real property taxes; (2) personal property taxes; (3) income, war profits, and excess profits taxes; and (4) general sales taxes. The Tax Cuts and Jobs Act of 2017 capped the use of this itemized deduction at $10,000 ($5,000 for married persons who file separately). Effects. Tax savings from the SALT deduction flow disproportionately to those with high incomes. According to the Joint Committee on Taxation, in 2014 88% of the benefit of the SALT deduction accrued to those with incomes above $100,000 and only 1% accrued to those making less than $50,000. The SALT deduction primarily benefits those in high-tax states, which tend to be those with consistent Democratic legislative majorities. In 2016, the ten counties with the largest SALT deductions per filer (on average) were in New York, California, Connecticut and New Jersey. These ten counties are in the New York metropolitan area and San Francisco Bay Area, which have high concentrations of wealth and expensive real estate. Since the deduction was capped at $10,000 in 2017, many homeowners have been unable to deduct thousands of dollars that they previously could, beyond what they pay in property taxes, to state, county and local governments in these places. In 2017, only taxpayers in New York, Massachusetts, Connecticut, and New Jersey (the states with the first, second, third, and ninth highest GDP per capita) on average sent more than $1,000 each to the federal government above what the state received per capita. Capping the SALT deduction tends to increase this balance of payments deficit. Economic modeling by the economists Gilbert E. Metcalf and Martin Feldstein suggests that eliminating the SALT deduction would have "little if any impact on state and local spending". The economist Edward Gramlich has likewise concluded that eliminating the deduction would have little effect on state and local spending; he also finds that eliminating the deduction would likely not induce many high-income taxpayers to leave low-income communities. A use tax is a type of tax levied in the United States by numerous state governments. It is essentially the same as a sales tax but is applied not where a product or service was sold but where a merchant bought a product or service and then converted it for its own use, without having paid tax when it was initially purchased. Use taxes are functionally equivalent to sales taxes. They are typically levied upon the use, storage, enjoyment, or other consumption in the state of tangible personal property that has not been subjected to a sales tax. --- Send in a voice message: https://anchor.fm/law-school/message Support this podcast: https://anchor.fm/law-school/support

Panelists discuss the economic consequences of the Russian invasion of Ukraine, the use of sanctions by the United States and other countries, and the rates of inflation around the world. The World Economic Update highlights the quarter's most important and emerging trends. Discussions cover changes in the global marketplace with special emphasis on current economic events and their implications for U.S. policy. This series is presented by the Maurice R. Greenberg Center for Geoeconomic Studies and is dedicated to the life and work of the distinguished economist Martin Feldstein.

A long edition for your leisurely Sunday. Thanks for your patienceIndia Policy Watch #1: Call Of Duty Insights on burning policy issues in India- RSJMany among you of a particular age might remember a familiar trope from old Hindi films. A key protagonist, grievously injured or sick, is wheeled into the operation theatre. There’s a small red bulb on top of the door that turns on. Grim music plays in the background. After a while, the surgeon steps out, take off his gloves and looks at the assorted mix of anxious relatives with resignation. Then he says, “ab inhe dawa ki nahin dua ki zaroorat hai” (he needs prayers now; not umm… paracetamol). That’s how I feel when I hear public discourse in any democracy get tangled up between rights and duties. Not a lot of good has come out of exhorting people to do their duty in the history of this world. So pardon my anxiety when I find constitutional functionaries conflate rights and duties, or worse, seem to privilege duties over rights. But that’s exactly what I have been coming across in the past two months. Two examples will suffice. Last week the PM made these remarks in an event organised by Brahma Kumaris Sanstha:At the same time, we also have to admit that in the 75 years after Independence, a malaise has afflicted our society, our nation and all of us. It is that we turned away from our duties and did not give them primacy. In the last 75 years, we only kept talking about rights, fighting for rights and wasting our time. The issue of rights may be right to some extent in certain circumstances, but neglecting one's duties completely has played a huge role in keeping India vulnerable.India lost considerable time because duties were not accorded priority. We can make up for the gap which has been created due to primacy about rights while keeping duties at bay in these 75 years by discharging duties in the next 25 years.A few days later, the President had this to say in his address to the nation on the eve of the Republic Day:Rights and duties are two sides of the same coin. The observance of the Fundamental Duties mentioned in the Constitution by the citizens creates the proper environment for enjoyment of Fundamental Rights.….Patriotism strengthens the sense of duty among citizens. Whether you are a doctor or a lawyer, a shopkeeper or office-worker, a sanitation employee or a labourer, doing one’s duty well and efficiently is the first and foremost contribution you make to the nation.There are many, and their numbers are probably rising in India, who might wonder what’s remotely problematic with this kind of framing of rights and duties? Isn’t it true that we, Indians, don’t do enough for our country? Or, is this not what JFK meant when uttered those famous lines - “Ask not what your country can do for you – ask what you can do for your country.” Isn’t a call for public service and invoking a spirit of self-sacrifice for nation-building important? This is what leaders are supposed to do, they might say. I won’t disagree so long as there’s clarity on the nature of rights and duties and where they are placed in relation to one another. This is often misunderstood in India where duty or its nearest equivalent Sanskrit term, dharma, has great civilisational and cultural significance. Rights are often seen as some kind of a western enlightenment imposition on our society which otherwise knew its dharma and its karma. Unfortunately, this as we will see, reflects both a shallow understanding of rights and of dharma.Rights Aren’t EarnedThe first notion to appreciate is that regardless of social, ethnic or temporal differences, an individual is born with certain rights. You could call them fundamental or inalienable. That she is endowed with these rights is prior to any other knowledge about her. This privilege of rights is what creates a corresponding set of duties among others. For instance, the right to life places the onus on others to not kill her. This can be of a legal nature which is enforceable by laws of the society. Or, in case of other rights, the onus on others could be a moral one which is then protected by a code of living together that’s understood by all. This onus then is the duty that an individual has towards rest of the community. It stems from accepting that others have rights. In other words, rights are ontologically prior to duties. This is the basis for the creation of any community. You respect individual rights, you create codes to protect them and living by that code becomes the duty of the members of the community. This is how societies are built. Ronald Dworkin, the American philosopher, in his book Taking Rights Seriously, calls rights as ‘trumps’ that can be used to overturn any justification of collective imposition on an individual:“Individual rights are political trumps held by individuals. Individuals have rights when, for some reason, a collective goal is not a sufficient justification for denying them what they wish, as individuals, to have or to do, or not a sufficient justification for imposing some loss or injury upon them.We may therefore say that justice as fairness rests on the assumption of a natural right of all men and women to equality of concern and respect, a right they possess not by virtue of birth or characteristic or merit or excellence but simply as human beings with the capacity to make plans and give justice.”Between Rights And DutiesBut is being a rights absolutist enough to have a functioning and effective society? What’s the kind of interplay between rights and duties? Are there any grounds to limit the definition of a right to serve a larger public benefit? This is particularly tricky territory. A useful framework to think about this is to use what’s called “the Hohfeldian incidents” in jurisprudence. Named after the American legal theorist, Wesley Hohfeld, it explains the internal structure of any right to have four components or ‘elements’, namely, privilege, claim, power and immunity. Understanding this ‘molecular structure’ of a right is key to understanding its interplay with duty.Privilege: You have the right to sleep on a weekend afternoon. This right is a privilege. You have no duty not to do it. No one can say it is your duty not to sleep on a weekend afternoon. Claim: You have an employment contract with your employer and this gives you the right to be paid your salary. This right is a claim. That is you have a claim on your employer to pay you a salary. And your employer has the duty to pay you the wages. So, a claim-right always comes with a duty for someone who is the bearer of that duty (in this case the employer). The direction of the duty is often debated. For instance, you could argue that the employer has the claim-right that you do a certain amount of work based on the contract and you have the duty to do that work. Anyway, claim-right is critical to understand the relation between the citizen and the government as well. Take taxes as an example. The government has the claim-right to collect taxes from citizens to fund its work. The citizen bears the duty to pay taxes. Privileges and Claims are often called the primary rules in Hohfeldian analysis. They define what activities can or cannot be performed by individuals. Power and Immunity are the secondary rules which explain how someone can change the primary rules.Power: Power allows an individual to change his own or someone else’s primary rules (privilege or claim). So, the CEO of a firm may order someone to work on a weekend afternoon and take away the privilege of sleeping. Or, your friend may waive the claim that you do not drive away with his car by allowing you to borrow it during the weekend. This waiver endows you with a privilege that you otherwise didn’t have. Immunity: When you don’t have the power to change someone else’s primary rules, then that person has immunity. For example, you have immunity from the Indian state forcing you to change your religion. Opposites and Correlatives:What Hohfeld did following this was to arrange these incidents in a logical structure of “opposites” and “correlatives”. He also added a few other terms: ‘no-claim’ which is the opposite of claim; and, ‘liability’ and ‘disability’ that correlate with someone having power or immunity respectively. In a simple form this can be shown as:OppositesIf A has a Claim, then A lacks a No-claimIf A has a Privilege, then A lacks a DutyIf A has a Power, then A lacks a DisabilityIf A has an Immunity, then A lacks a Liability.CorrelativesIf A has a Claim, then some person B has a DutyIf A has a Privilege, then some person B has a No-claimIf A has a Power, then some person B has a LiabilityIf A has an Immunity, then some person B has a Disability.As stated here:A privilege is the opposite of a duty; a no-right is the opposite of a right. A disability is the opposite of a power; an immunity is the opposite of a liability.‘Correlatives’ signifies that these interests exist on opposing sides of a pair of persons involved in a legal relationship. If someone has a right, it exists with respect to someone else who has a duty. If someone has a privilege, it exists with respect to someone else who has no-right. If someone has a power, it exists with respect to someone else who has a liability. If someone has an immunity, it exists with respect to someone else who has a disability.A right can be enforced by a lawsuit against the person who has the correlative duty. A privilege negates that right and duty, and typically would be asserted as an affirmative defense in the lawsuit. A power is the capacity to create or change a legal relationship.Simply put, there’s an interplay between rights and duties but in no circumstance are rights and duties ‘two sides of the same coin’ or ‘upholding of duties lead to a downstream privilege of enjoying rights’. Our Civilisation Is No ExceptionLastly, there’s always a call to some kind of civilisational value among Indians where we apparently held our duty above everything else. The idea of maryada purushottam or various kinds of dharma - saadharan dharma, vishesh dharma and swadharma - are invoked to suggest we placed the adherence to our duties as the highest form of self-realisation and as the basis for organising our lives. Is this true? There’s, of course, the usual challenge of understanding the context of Indian scriptures. These concepts are variously described with a lack of coherence because what we are left with fragments of metatexts with no clear interpretation of why and how these ideas have come about. As commonly understood, dharma is about doing the right thing. A simple definition is that it is a code of doing the right things at a universal level that ‘holds all of us together’. It is a necessary condition for a functioning society but is it ontologically prior to individual rights? It is not clear. The fact that dharma is invoked to hold us together already presupposes we are together in some form. And it can be argued that coming together can only be on the basis of respecting the individual rights of one another in the first place. On that, we must have built an architecture of dharma to make sure public-spiritedness and working for the collective is codified in our way of life. In some ways, I can agree we might have figured out Hohfeldian logic in our scriptures much earlier than the West. But it is a far stretch to claim some kind of exceptionalism about being a society where duties came before rights. The Emphasis On DutyThe reason I get anxious when I hear the discourse on duties is that it has a terrible past. Even in India, the founding fathers and mothers in all their wisdom didn’t include the idea of duties in our constitution. The bizarre idea of fundamental duties was included in the Constitution by Indira Gandhi during the Emergency through the 42nd amendment. There it has remained since. And it isn’t as if the post-enlightenment thinkers weren’t taken in by the idea of duties. Mazzini, whose thoughts and essays were instrumental in the creation of the Italian state, wrote about duties extensively. The exhortation to a people to think of themselves as different and better than that of the other and begetting proto-nationalism in the late 19th century Europe were his key contributions. Sample this:…. Wherever you may be, into the midst of whatever people you have been driven by circumstances, fight for the liberty of that people if the moment calls for it; but fight as Italians, so that the blood which you shed may win honor and love, not for you only, but for your Country. And may the constant thought of your soul be for Italy, may all the acts of your life be worthy of her, and may the standard beneath which you range yourselves to work for Humanity be Italy's. Do not say I; say we. Be every one of you an incarnation of your Country, and feel himself and make himself responsible for his fellow-countrymen; let each one of you learn to act in such a way that in him men shall respect and love his Country. Your Country is one and indivisible. As the members of a family cannot rejoice at the common table if one of their number is far away, snatched from the affection of his brothers, so you should have no joy or repose as long as a portion of the territory upon which your language is spoken is separated from the Nation. As you will notice, while Mazzini begins his famous essay The Duties of Man (1844-58) by claiming the first duty of man is to humanity, he gradually sinks into ideas that had terrible consequences for humanity half a century later in the form of two world wars. There’s a reason why there have been no recorded instance in history when people have agitated for their duties. All uprisings and rebellions are about the fights for rights. People understand their duties both intuitively and as part of the social compact. It is part of traditions in communities. Rights are often trampled in the name of duty by establishment and authoritarian figures to perpetuate power. There are temporary occasions when an overemphasis on duties is valid. During a war (like that Kennedy line on country during the peak of the cold war) or during an internal crisis (Gandhi often invoked it). But those exceptions aside, it is otherwise brought in by establishment to explain underperformance or to shift the blame on to citizens from the shoulders of the state. It is equivalent to gaslighting the citizens in a democracy.India Policy Watch #2: Buy Now Pay Later ft. GovernmentInsights on burning policy issues in India- Pranay KotasthaneThe finance minister will present the union budget in Parliament next week. A related news item flagging the rising debt commitments caught my attention:"Interest burden is likely to stay around Rs 9.30 lakh crore for FY23," a finance ministry official told ET.This is an increase of 15 percent on the Rs 8.1 lakh crore which has been budgeted for interest payments in the current fiscal. The amount is also 16.9 percent higher than the revised estimate for FY21.”If government finances don’t interest you, these numbers may sound meaninglessly large. Nevertheless, let me try and explain why you should care.To the question “what is the single largest expenditure item of the union government?”, the two most common answers I get are defence or salaries. Both answers are wrong. The biggest expenditure item is the interest paid by the union government to borrowers on past loans. The chart below from the previous year’s budget tells us that roughly a fifth of the government’s total expenditure is being spent on interest payments. The news report from earlier this week suggests that this interest payment is set to increase further this year. The single most important reason we should care is because of intergenerational inequity — the more that governments live beyond their present means today, the less money they leave for future governments and citizens to decide their own spending priorities. That’s what a real debt-trap looks like. Of course, many governments across the world run deficits and the Indian government is not an exception. Most often, governments take loans to finance physical and social infrastructure. If that is the case, intergenerational inequity is mitigated to the extent that the outputs continue to be used by future generations. However, that is not the case in India. The union government still runs a sizable revenue deficit, meaning that a part of government borrowing is being used merely to keep the government running today. In other words, we are snatching money from future generations to meet the demands of the current generation’s citizens and government employees. This tells us why the rampant expansion of government expenditure is not just irresponsible but also unethical. I’ll end this section with a quote by Martin Feldstein from his LK Jha Memorial Lecture at RBI:“Unfortunately, it is easy to ignore budget deficits and postpone dealing with them because the adverse effects of budget deficits are rarely immediate. Fiscal deficits are like obesity. You can see your weight rising on the scale and notice that your clothing size is increasing, but there is no sense of urgency in dealing with the problem. That is so even though the long-term consequences of being overweight include an increased risk of a sudden heart attack as well as of various chronic conditions like diabetes. Like obesity, government deficits are the result of too much self-indulgent living as the government spends more than it collects in taxes. And, also like obesity, the more severe the problem, the harder it is to correct: the overweight man has a harder time doing the exercise that could reduce his weight and the economy with a large deficit and debt is trapped by increasing interest payments that cause the deficit and debt to rise more quickly. I emphasize the analogy to stress the point that budget deficits need attention now even when their adverse effects may not be obvious.”India Policy Watch #3: The Great Indian ExitInsights on burning policy issues in India- Pranay KotasthaneIndia has long been a leading outlier as a source for out-migration. Further, thanks to a Lok Sabha question in December 2021, we know that more than 1 lakh people have been renouncing their Indian citizenship every year over the last several years.Emigration is an important consideration if not an important life goal for many Indians. At one end of the income spectrum, it is a ticket out of poverty. On the other end, it leads to a step-up in one’s quality of life. But how should we see emigration from the lens of public policy? Beyond facile “brain drain vs brain gain” discussions, how do we understand the impact of emigration on India? Let’s establish the boundary conditions first. Because emigration is a voluntary act by an individual, it is a force of immense good. As emigration is one of the partial answers for achieving yogakshemah, the Indian State must make it easier for Indians who want to leave India. There is no justification in a liberal democracy for moralising Indians on staying back just because, for instance, they received subsidised education in a government college.Going beyond individual choices, what’s the aggregate effect of emigration on India? Turns out, there’s no good empirical answer. While states generally pay close attention to immigrants, the country of origin has little incentive to keep track of the lifecycle of emigration. Consequently, this area of research is not exactly a gold mine. And so, for the last comprehensive assessment of India’s emigration, we have to turn to a 2010 book Diaspora, Development, and Democracy: The Domestic Impact of International Migration from India by well-known political scientist Devesh Kapur. Given below is my annotated summary of the book. Kapur remarks that:“one cannot a priori posit whether international migration is “good” or “bad” for a country. The outcomes depend heavily on the policies of the country of origin—which of course can (and do) change over time.”Coming to India’s case, he contends that the economic effects of emigration have been mixed while the political effects of emigration are largely positive. The Economic Impact of EmigrationLet’s take the economic effects first. The migration of less-skilled labour to West Asia has had a positive effect not just for those who emigrated but also for those who were left behind as the decrease in labour supply has led to more domestic migration and rising wages. Further, incoming remittances have played a big role in stabilising India’s macroeconomic situation.In contrast, the economic effects of the emigration of high-skilled labour to the West are more ambiguous. On the positive side, the success of these Indians has improved the reputation of India and Indians worldwide. Moreover, some of them have acted as bridges for the flow of ideas, technologies, and information back to India. On the negative side, the exit of professionals has contributed to making institutions that were globally competitive at the time of independence, mediocre organisations with low ambition and drive. Kapur also suggests a reason as to why the famed Indian diaspora has not been able to make India a manufacturing hub:“India’s economically successful diaspora has developed a comparative advantage in white-collar skilled services such as information technology (IT) and tertiary medical services. Consequently, the investments they have influenced into India have also been in these sectors, rather than blue-collar labor-intensive manufacturing sectors (the diamond industry is an exception). The Indian example illustrates a broader point about how the sectoral expertise acquired by emigrants overseas diffuses back to the country of origin. Parallels can be draw with the Chinese example, where the economically successful Chinese diaspora (especially in Hong Kong, Southeast Asia, and Taiwan) made its wealth (and acquired relevant capabilities) in labor-intensive manufacturing, and therefore its investments into China were in related sectors as well.”The Political Impact of EmigrationThe political effects of emigration, Kapur argues, are positive in two ways. One, returning emigres and international exposure have helped in strengthening the commitment to liberal democratic politics. Twelve years after the book was published, this claim appears weaker. Liberal democratic politics in the west itself has been battered. Moreover, the role of the Indian diaspora in furthering majoritarian anti-liberal politics has grown at a much faster rate than its antidote.Two, Kapur suggests that the exit possibilities of emigration served an important social function. It acted as a pressure relief valve for the dominant upper-caste elites, making them less opposed to the political ascendancy of the marginalised social groups. In the absence of emigration opportunities, the contestation over job reservations and education quotas would’ve been much sharper. Here again, with the benefit of hindsight, we can say that the possibility of emigration hasn’t been an entirely effective pressure-releasing mechanism, as evidenced by the new legislation for reservations to economically backward but upper-caste sections.The book’s conclusion resonated with me. Ultimately, where diasporas become sources of power or areas of weaknesses principally depends on domestic policy and politics. First, forty years of socialist thinking, directly and indirectly, made emigrants distant. Illustrating this point, Kapur writes:“In those years, when the Indian community was thrown out of East Africa, socialist India pressed the United Kingdom to admit them, seeing little benefit in attracting the community’s commercial skills and capital back to India. And when the British government finally gave in to pressure from India, it was seen as a major foreign policy achievement.”Second, poor policy and business environments continue to make India less lucrative for emigrants:“The well-known infrastructural and policy weaknesses in manufacturing have steered the diaspora’s role in IT more toward the software side, rather than developing the hardware sector. The decades of migration from Kerala have made it a remittance dependent economy, but one that has been unable to capitalize on this any further because of political and policy constraints in the state.”And third, while India and Indians love to celebrate its emigrants who make it big in other countries, it does not allow the same opportunities for its immigrants. In short, emigration from India does have a few negative political and economic effects. But mitigating these effects ultimately requires doing the tough job of improving the domestic social, economic, and business environment. There’s no shortcut. Matsyanyaaya: Who’s Arm-twisting Whom?Big fish eating small fish = Foreign Policy in action— Pranay Kotasthane(Cross-posted from Technopolitik — Takshashila Institution’s High Tech Geopolitics Newsletter)This story has it all: geopolitics, anti-trust, national pride, future of technology, and capital markets.The PreludeARM (mentioned as “Arm” from here on) licenses its CPU designs to customers such as Apple, Qualcomm, Nvidia, and MediaTek. For a long time, it has been trying to break into the data centre CPU market, dominated by Intel and AMD’s x86 designs. Despite an impressive list of customers, Arm’s financial fortunes haven’t been great — revenues through licensing fees and royalties have been on the decline since 2016.Even though Arm is the sole supplier for mobile companies, why would this happen? Primarily due to four reasons. First, the mobile phone market is already saturating. Second, customers such as Broadcom, Qualcomm, Microsoft, Samsung, and Apple have an expansive Arm architecture license (as against implementation licenses), allowing them to design their customised Arm-compatible processors. So, Arm has little leverage over the sales from these companies. Third, Arm’s big bet on another market — datacentres — hasn’t worked out. And fourth, Arm cannot increase its license fee to compensate for sagging revenues because it faces a new challenge in the form of RISC-V technology.The PlayersIn September 2020, Nvidia announced a deal to buy Arm. Since then, Nvidia’s shares have almost doubled. But after months of being blocked by four regulators — in China, the US, the EU, and the UK — reports suggest that Nvidia is planning to abandon the deal.Let’s have a look at all the perspectives first.In the US, the Federal Trade Commission (FTC) is opposing the deal because the deal would “distort Arm’s incentives in chip markets and allow the combined firm to unfairly undermine Nvidia’s rivals.” Unsurprisingly, many high-flying competitors of Nvidia such as Qualcomm and Intel are staunchly opposed to this deal as they feel Nvidia might partially delay or block their access to Arm CPU blueprints. The EU antitrust regulators also have similar objections to the deal.In contrast, the dominant narrative in the UK is that the deal would hurt national pride. In ordinary times, such a narrative wouldn’t have carried far. But when the entire world looks at semiconductors from a strategic lens, this view has policy relevance. So, even though Arm is already owned and controlled by a Japanese investment firm, Softbank, the UK has renewed calls to list it back on the London Stock Exchange.Next, Arm and Nvidia’s joint submission to the UK’s Competition & Markets Authority (CMA) comprehensively captures the two companies' viewpoints. Their main argument is that Arm faces an uncertain future without a takeover. The submission explicitly says:Deal opponents romanticize Arm’s past and either ignore or disparage Arm’s most powerful competition. But if Arm had market power, it would have sizable revenue growth and would be enormously profitable.The submission further claims why this deal would increase competition instead of reducing it.For China, the concerns are entirely different. This deal would mean a more potent lever in the hands of the US to constrain China’s semiconductor sector. The US has already demonstrated that it could deploy wide-ranging export controls to block access to chips to geopolitical adversaries. With Nvidia controlling Arm, China fears that the US can easily prohibit Arm from selling to Chinese customers. As a result, China has been staunchly opposing this deal.To be sure, the US can still pressurise Arm to not sell to customers in the absence of a deal. Just like it prevented the Dutch semiconductor manufacturing equipment star ASML from selling cutting-edge Extreme Ultra-Violet lithography machines to Chinese companies. Nevertheless, getting the UK — for whom this has become a national pride issue — to comply with such restrictions is far more complicated.The ResultThe deal opponents have their unique reasons. There’s no concrete evidence to suggest that the opponents are collaborating. Regardless, the net geopolitical effect is that China would be immensely relieved if the deal fails. At the same time, China would want to get RISC-V further up to speed with Arm so that this geopolitical weakness is taken out of the question over the long term.HomeWorkReading and listening recommendations on public policy matters[Podcast] On Puliyabaazi, Pranay and Saurabh have an in-depth conversation on India’s newly announced semiconductor policies. [Speech] A speech on regulating capital markets by CB Bhave — one of the best takes you’ll find on the subject. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit publicpolicy.substack.com

The World Economic Update highlights the quarter's most important and emerging trends. Discussions cover changes in the global marketplace with special emphasis on current economic events and their implications for U.S. policy. This series is presented by the Maurice R. Greenberg Center for Geoeconomic Studies and is dedicated to the life and work of the distinguished economist Martin Feldstein.

The World Economic Update highlights the quarter’s most important and emerging trends. Discussions cover changes in the global marketplace with special emphasis on current economic events and their implications for U.S. policy. This series is presented by the Maurice R. Greenberg Center for Geoeconomic Studies and is dedicated to the life and work of the distinguished economist Martin Feldstein.

The World Economic Update highlights the quarter’s most important and emerging trends. Discussions cover changes in the global marketplace with special emphasis on current economic events and their implications for U.S. policy. This series is presented by the Maurice R. Greenberg Center for Geoeconomic Studies and is dedicated to the life and work of the distinguished economist Martin Feldstein.

This newsletter is really a weekly public policy thought-letter. While excellent newsletters on specific themes within public policy already exist, this thought-letter is about frameworks, mental models, and key ideas that will hopefully help you think about any public policy problem in imaginative ways. It seeks to answer just one question: how do I think about a particular public policy problem/solution?PS: If you enjoy listening instead of reading, we have this edition available as an audio narration courtesy the good folks at Ad-Auris. If you have any feedback, please send it to us.New Book Out! — India’s Marathon: Reshaping the Post-Pandemic World Order— Pranay KotasthaneI’ve co-edited India’s Marathon — a collaborative effort that brings together bold ideas on India’s place in the changing world order from some of India’s finest young thinkers. (India’s Marathon, book cover by Anirudh Kanisetti)Don’t take my word for it. This is what Ambassador Shivshankar Menon writes in his foreword:“This volume poses questions which everyone wants answered but few dare to reply: how will the world order evolve and how can India deal with it? The Takshashila Institution has brought together some of the best minds to answer this question, and to give an Indian perspective on world order issues. Just for this the book deserves to be welcomed. This volume consists of coherent contributions from these scholars covering how India should manage its external relationships and the reforms that India needs to undertake domestically.… No reader would or should agree with everything in this book. I, for one, am not sure that India’s choice is between alignment and non-alignment any more, or that strategic autonomy is an unattainable goal for India. After all, strategic autonomy by one name or another is what all powers, even superpowers, seek. But this book would have served its purpose if it provokes thought and rational discussion about India’s place in the emerging world, whether it is ‘orderly’ or not. Despite the daunting world that seems likely, and the scale and scope of the necessary domestic reforms outlined in this book, I found it reassuring that so many contributors found it possible to rationally conceptualise these issues from an Indian perspective, and to map out a path through the dimly sensed future that awaits us.”Pranay Kotasthane, Anirudh Kanisetti, Nitin Pai (editors). India's Marathon (Kindle Locations 144-150). The Takshashila Institution. Kindle Edition.This Twitter thread lists all chapter ideas and contributors. It’s a stellar list, I tell you.Get your copy from Amazon India. Do give it a read!Global Policy Watch: Fukuyama (et al) And The ‘Middleware’ Solution To Social Media Monopolies — RSJTwitter India did a first last week. It labelled a tweet by BJP IT cell head as ‘manipulated media’. It claimed the label was based on its Synthetic and Manipulated Media policy. This was a policy launched by it in February this year. The rule for its user states:“You may not deceptively share synthetic or manipulated media that are likely to cause harm. In addition, we may label Tweets containing synthetic and manipulated media to help people understand their authenticity and to provide context.”Curbing Digital ColonialismIt is unclear if Twitter found no such tweets in India since February that satisfied the criteria for manipulate media. Surely, this wasn’t the first instance of false information shared by a blue-tick user in India. In any case, a beginning has been made and it will be interesting to see where and how far it will go with this. These steps are part of similar efforts by other social medial platforms to self-regulate themselves as they come under increasing government and regulatory scrutiny. There is a greater urgency among regulators around the world to curb the abuse of the dominant positions of the big tech platforms. EU pursued antitrust charges against Google for over a decade. In 2018, it fined it nearly $10 billion. But not much has come out of it. Google was left to devise its own measures to offer a level playing field to its rivals. Google continues to dominate the search-engine market in Europe with over 90 per cent market share. The U.S. Justice Department last month sued Google for violating federal antitrust laws in running its search and advertising business. Also, the US Congressional investigation into the power of Big Tech (Amazon, Apple, Facebook and Google) concluded in September this year with a voluminous 450-page report. The report indicts them in no uncertain terms:"These firms have too much power, and that power must be reined in and subject to appropriate oversight and enforcement. Our economy and democracy are at stake.”India hasn’t yet taken a concrete view about the dominance of Big Tech but there are rumblings. Last month, India’s antitrust regulator (CCI) opened an investigation against Google based on complaints from the start-up ecosystem. The practices of ‘forcing’ the app makers to exclusively use its billing system for in-app purchases and for bundling its payments app with Android smartphones sold in the country are under the regulatory lens. Last month, India brought all OTT platforms under the purview of its Information and Broadcasting ministry by changing the GoI (Allocation of Business) Roles, 1961. And it has been considering regulating the social media platforms and their content for a while now.Not The Usual Lens There are three key points that we have made about regulating Big Tech and social media platforms:Antitrust regulators take the old Chicago school view to monopolies. This looks at monopolies through the economic lens of consumers and checks if they are being harmed by the dominance of monopolies. This is difficult to prove in case of Big Tech monopolies who provide most of their services for free and have deep customer loyalty.The nature of these monopolies is quite different from those of the past. These players have appropriated huge amounts of data, run 2-sided platforms, have asymmetrical knowledge and power over their users, and can easily move into newer businesses based on these strengths. The traditional measures to curb the monopolies like breaking them up or stopping a line of business are difficult to implement.    Economic dominance is only one part of their power. It is the political dominance or the dominance of thought that can be more insidious. Like we wrote in edition #74, “the data and attention appropriation done through these platforms constrain our choices: we live in echo chamber of our opinions, we buy things that are suggested to us and we see a version of reality that’s tailor-made for us and that no one else is seeing. Often the term ‘digital colonialism’ is bandied about when talking about Big Tech. This lack of freedom to be oneself, discover things on our own and not be dispossessed of our right to choose is what colonialism is about.” The current antitrust laws have nothing to manage this.In short, our view was the minimum acceptable price of Big Tech businesses to exist wasn’t zero. It was you. Your data and your liberty. In the normal course of events, politics would be about contestation of ideas and narratives in the political marketplace. And the best or the most acceptable idea would surface from this that would guide the polity. But social media platforms engineer a failure in these markets. The ideas that get pushed to your timelines haven’t won their duels in the marketplace of ideas. They have been programmatically fed to you. That program can be gamed. And Big Tech isn’t willing to solve this problem on its own. It took a long time to even acknowledge it is a problem. We had concluded edition #74 with these lines:“These are early days of policymaking in this area. There’s a need for deeper philosophical and sociological work in this space that will enable our thinking in how to legislate this.”A Novel But Half-formed Approach As if on cue this week we had Francis Fukuyama, Barak Richman, and Ashish Goel publish an article in Foreign Affairs titled How to Save Democracy From Technology: Ending Big Tech’s Information Monopoly. The article picks up the core point made by us. The antitrust regulations are using old tools to solve the economic problem. They may or may not be enough. But they don’t even begin to address the political costs of the Big Tech monopolies. The solution offered is not exactly fleshed out in the article, but it is important because it goes beyond the conventional thinking that has dominated this space.They write:“The economic case for reining in Big Tech is complicated. But there is a much more convincing political case. Internet platforms cause political harms that are far more alarming than any economic damage they create. Their real danger is not that they distort markets; it is that they threaten democracy.”It is remarkably similar to the points made by us in the past. The article then picks up the usual solution to break monopoly power – more regulations, breakup, data probability and privacy laws – and dismisses them all before proposing a solution:“If regulation, breakup, data portability, and privacy law all fall short, then what remains to be done about concentrated platform power? One of the most promising solutions has received little attention: middleware. Middleware is generally defined as software that rides on top of an existing platform and can modify the presentation of underlying data. Added to current technology platforms’ services, middleware could allow users to choose how information is curated and filtered for them. Users would select middleware services that would determine the importance and veracity of political content, and the platforms would use those determinations to curate what those users saw. In other words, a competitive layer of new companies with transparent algorithms would step in and take over the editorial gateway functions currently filled by dominant technology platforms whose algorithms are opaque.”The solution comes with its own set of problems. The authors acknowledge it and posit this as the start of a conversation to find a solution:“Many details would have to be worked out. The first question is how much curation power to transfer to the new companies. At one extreme, middleware providers could completely transform the information presented by the underlying platform to the user, with the platform serving as little more than a neutral pipe. Under this model, middleware alone would determine the substance and priority of Amazon or Google searches, with those platforms merely offering access to their servers. At the other extreme, the platform could continue to curate and rank the content entirely with its own algorithms, and the middleware would serve only as a supplemental filter. Under this model, for example, a Facebook or Twitter interface would remain largely unchanged. Middleware would just fact-check or label content without assigning importance to content or providing more fine-tuned recommendations. The best approach probably lies somewhere in between. Handing middleware companies too much power could mean the underlying technology platforms would lose their direct connection to the consumer. With their business models undermined, the technology companies would fight back. On the other hand, handing middleware companies too little control would fail to curb the platforms’ power to curate and disseminate content. But regardless of where exactly the line were drawn, government intervention would be necessary. Congress would likely have to pass a law requiring platforms to use open and uniform application programming interfaces, or APIs, which would allow middleware companies to work seamlessly with different technology platforms. Congress would also have to carefully regulate the middleware providers themselves, so that they met clear minimum standards of reliability, transparency, and consistency.”As a new approach to deal with the problem of fake news and lies circulating on social media platforms and making it sit well with the notion of free speech, this is a useful starting point. The control of what kind of content we want to see should lie with us. Like it has always been in media, the content consumer has to be active while engaging with it and the provider passive. Not the other way around.Matsyanyaaya: The Strategic Consequences of India’s Low Economic GrowthBig fish eating small fish = Foreign Policy in action— Pranay KotasthaneLast week I came across a data story in The Business Standard and I haven’t been able to erase off my mind. Krishna Kant writes:“Over the past 10 years, India’s per capita GDP is up 35 per cent cumulatively from $1,384 in 2010 to $1,877 now. In the same period, per capita GDP in China rose 141 per cent from $4,500 to $10,839, while it doubled in East Asian countries (excluding Japan, South Korea, Taiwan and Hong Kong) from $4,006 to $8,195.Bangladesh saw the fastest growth with its per capita up nearly two-and-a-half times from $763 in 2010 to around $1,900 at the end of this year. And, Vietnam’s per capita rose 115 per cent from $1,628 to around $3,500.”There’s a nice chart showing how the India growth story lost its way over the last full decade. (Source: Krishna Kant, India's 10-year growth one of the biggest laggards in Asia, EM peers, The Business Standard)The humanitarian consequences of low economic growth are obvious. I won’t bring them up here. The questions I have are concerned with India’s engagement with the world: what would be the strategic consequences of this poor economic performance? Does a decade of slow growth foreclose some options for India? Would India’s position on RCEP have been different had the last decade’s performance been at par with other peers? Would the PRC have been just as aggressive against a more prosperous India? The search for answers took me back to Sanjaya Baru’s 2002 landmark paper titled Strategic Consequences of India’s Economic Performance. The paper captures what scholars were thinking nearly twenty years ago, just before the golden growth years between 2004 and 2009. “For India, there is no doubt that the first and most important challenge is that of accelerating the rate of economic growth and development. Economic performance and capability certainly constitute the foundation of national security and power even more so for a developing nation like India. It will define the limits to military capability and alter the relationship between India and its neighbourhood, especially its two major adversaries, namely, China and Pakistan.The paper’s observations on Pakistan have broadly stood the test of time. The Pakistani military-jihadi complex’s self-defeating policies have strangled the economy in ways that even a nuclear weapons status and use of terrorism as a state policy haven’t been able to offset. The dehyphenation between India and Pakistan in international affairs is now self-evident. However, the story of this last decade is humbling. The gap between the two has increased not because India has done well but because Pakistan has done far worse. On China, the paper argued:“The strategic consequences of the economic competition with China are, there- fore, fundamental to India’s future role within Asia and the global system. If India can sustain above average growth (over 7 per cent per annum in the next decade) and if China experiences a deceleration of growth, coupled with domestic political uncertainty, the widening gap between the two civilisational neighbours can be reversed to an extent. If not, China will emerge as the pre-eminent Asian power and force India into accepting its strategic leadership even within south Asia. The key to this strategic rivalry will be the relative economic performance of the two countries. The main strategic challenge for India in the medium term is, therefore, its relative economic performance vis-à-vis China.”Remarkably prescient. Eighteen years on, the gap between the two countries has only widened. China has been able to forge strong economic ties with all countries in the Indian subcontinent. Economic Reforms NeededThe paper identified these macroeconomic targets essential from a national security perspective:Elimination of the revenue deficit, a manageable fiscal deficit, elimination of wasteful subsidies not targeted to the poor;Low and manageable current account deficit; Low internal and external debt, low short-term debt in overall external debt; Profit-generation by public enterprises; privatisation of non-strategic public enterprises; Self-financing public utilities like power, irrigation water and public transport; An increase in the tax/GDP ratio to levels reached by rapidly industrialising developing countries of around 15 per cent of GDP from the current low of 9 per cent of GDP. What struck me was that eighteen years since, many of these targets still remain aspirations. Lessons for the FutureIt is clear now that China’s rapid and sustained economic development over three decades played a fundamental role in transforming its international stature. The bad news for India is that not only did it start on the same path ten years later than China but it also seems to have fizzled out much earlier.Going ahead as well, India’s economic development will underscore its international role. India’s economic trajectory will decide whether it can play the role of a swing power between the US and China or whether it gets relegated to a weak partner of the US, much like Pakistan is to China. The stakes have never been higher.We put this rather simply in a flowchart to conceptualise India’s future options like this:(Source: India in the Post COVID-19 World Order, Takshashila Discussion SlideDoc)Money Quote: Why Care About Budget Deficits?— Pranay KotasthaneDr M Govinda Rao pointed me to this quote by Martin Feldstein from his LK Jha Memorial Lecture at RBI. Feldstein warned about the adverse consequences of large budget deficits thus:“Unfortunately, it is easy to ignore budget deficits and postpone dealing with them because the adverse effects of budget deficits are rarely immediate. Fiscal deficits are like obesity. You can see your weight rising on the scale and notice that your clothing size is increasing, but there is no sense of urgency in dealing with the problem. That is so even though the long-term consequences of being overweight include an increased risk of a sudden heart attack as well as of various chronic conditions like diabetes. Like obesity, government deficits are the result of too much self-indulgent living as the government spends more than it collects in taxes. And, also like obesity, the more severe the problem, the harder it is to correct: the overweight man has a harder time doing the exercise that could reduce his weight and the economy with a large deficit and debt is trapped by increasing interest payments that cause the deficit and debt to rise more quickly. I emphasize the analogy to stress the point that budget deficits need attention now even when their adverse effects may not be obvious.”Enough said. HomeWorkReading and listening recommendations on public policy matters[Interview] Promarket interviews Fukuyama. “A Loaded Weapon”: Francis Fukuyama on the Political Power of Digital Platforms[eBook] Friedman 50 Years Later series. A collection of 28 essays reflecting on Friedman’s essay on shareholder maximisation[Reports] US Thinktanks CNAS and CFR make the case for two different multilateral arrangements between powerful democracies to take on China in the technological domain[Article] Amit Cowshish and Rahul Bedi have a definitive take on India’s defence pensions system.If you like the kind of things this newsletter talks about, consider taking up the Takshashila Institution’s Post Graduate Programme in Public Policy (PGP) course. It’s a 48-week in-depth online course meant for working professionals. Applications for the Jan 2021 cohort are now open. For more details, check here. Get on the email list at publicpolicy.substack.com

The World Economic Update highlights the quarter’s most important and emerging trends. Discussions cover changes in the global marketplace with special emphasis on current economic events and their implications for U.S. policy. This series is presented by the Maurice R. Greenberg Center for Geoeconomic Studies and is dedicated to the life and work of the distinguished economist Martin Feldstein.

The World Economic Update highlights the quarter’s most important and emerging trends. Discussions cover changes in the global marketplace with special emphasis on current economic events and their implications for U.S. policy. This series is presented by the Maurice R. Greenberg Center for Geoeconomic Studies and is dedicated to the life and work of the distinguished economist Martin Feldstein.

Learn about our metals plan bonus offer and Martin Feldstein says debt blowing up time to cut Social Security and Medicare.See omnystudio.com/listener for privacy information.

Bloomberg Surveillance's Tom Keene sits down with Harvard University George F. Baker Professor of Economics Martin Feldstein to discuss his work in Washington with President Reagan, the importance of introductory economics courses, and his time as an undergraduate at Harvard University.

Ashoka Mody is a professor of international economic policy at Princeton University and formerly worked at the IMF and the World Bank. He joins the show today to discuss his new book, *EuroTragedy: A Drama in Nine Acts*. David and Ashoka also delve deep into the history of the Euro, as they discuss its complicated political origins and why its creation may have been a mistake. Ashoka’s Twitter: @AshokaMody Ashoka’s Princeton profile: https://scholar.princeton.edu/amody/home Related Links: *EuroTragedy: A Drama in Nine Acts* by Ashoka Mody https://global.oup.com/academic/product/eurotragedy-9780199351381?cc=us&lang=en& *EMU and International Conflict* by Martin Feldstein https://www.foreignaffairs.com/articles/europe/1997-11-01/emu-and-international-conflict David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

“Ich glaube, der Begriff ist insgesamt zerstört”, sagt Dr. Gerd Kommer zur Finanziellen Freiheit. Wir sehen das etwas anders. Kann “go and grow” von Bondora zum Erreichen dieses Ziels beitragen? Und was hat der US-Ökonom Martin Feldstein (/ˈfɛldstaɪn/ FELD-styne) eigentlich mit der aktuellen…

Martin Feldstein, George F. Baker Professor of Economics at Harvard University, says it's going to be hard to convince Congress to add to the deficit with a significant infrastructure project. Jaret Seiberg, Cowen Washington Research Group Policy Analyst, says cryptocurrencies may become heavily regulated in the U.S. Austan Goolsbee, University of Chicago Booth School Professor, says the hypocrisy among lawmakers in Washington doesn't make any difference anymore. Bhaskar Chakravorti, The Fletcher School Senior Assistant Dean of International Business & Finance, says Facebook needs to come to the reality that they're a major source of news and information.  Learn more about your ad-choices at https://www.iheartpodcastnetwork.com

Martin Feldstein, George F. Baker Professor of Economics at Harvard University, says it's going to be hard to convince Congress to add to the deficit with a significant infrastructure project. Jaret Seiberg, Cowen Washington Research Group Policy Analyst, says cryptocurrencies may become heavily regulated in the U.S. Austan Goolsbee, University of Chicago Booth School Professor, says the hypocrisy among lawmakers in Washington doesn't make any difference anymore. Bhaskar Chakravorti, The Fletcher School Senior Assistant Dean of International Business & Finance, says Facebook needs to come to the reality that they're a major source of news and information. 

Martin Feldstein, Harvard University George F. Baker Professor of Economics, says now is the time for tax reform because the politics are right. Henry Olsen, EPPC Senior Fellow, says President Trump needs to recover his populist mojo. Matt Hornbach, Morgan Stanley Global Head of Interest Rates Strategy, says it's time for the next bond market phase. Michael Chui, McKinsey & Co. Senior Fellow, says there is enough work for people to do, even with the increased use of robots.  Learn more about your ad-choices at https://www.iheartpodcastnetwork.com

Martin Feldstein, Harvard University George F. Baker Professor of Economics, says now is the time for tax reform because the politics are right. Henry Olsen, EPPC Senior Fellow, says President Trump needs to recover his populist mojo. Matt Hornbach, Morgan Stanley Global Head of Interest Rates Strategy, says it's time for the next bond market phase. Michael Chui, McKinsey & Co. Senior Fellow, says there is enough work for people to do, even with the increased use of robots. 

Is it really true that the American standard of living is falling, and that our children will be worse off than we are? Martin Feldstein challenged this view in the Wall Street Journal. Jeff Herbener joins me to discuss it.

Martin Feldstein is a professor of economics at Harvard University, former president of the National Bureau of Economic Research, and was chairman of the Council of Economic Advisers under President Reagan (1982-1984). In this Conversation, Feldstein discusses the financial crisis of 2008, the policy mistakes that led to it, and the risks we face today from a sustained policy of low interest rates. Feldstein then shares his perspective on other important questions of political economy—including the costs and benefits of trade, the impact of technological innovation, as well as the need for tax and regulatory reform. Finally, Feldstein recalls his experiences as chairman of the Council of Economic Advisers and explains what we can learn from how Reagan managed the serious economic challenges of the early 1980s.

Martin Feldstein is a professor of economics at Harvard University, former president of the National Bureau of Economic Research, and was chairman of the Council of Economic Advisers under President Reagan (1982-1984). In this Conversation, Feldstein discusses the financial crisis of 2008, the policy mistakes that led to it, and the risks we face today from a sustained policy of low interest rates. Feldstein then shares his perspective on other important questions of political economy—including the costs and benefits of trade, the impact of technological innovation, as well as the need for tax and regulatory reform. Finally, Feldstein recalls his experiences as chairman of the Council of Economic Advisers and explains what we can learn from how Reagan managed the serious economic challenges of the early 1980s.

Martin Feldstein is a professor of economics at Harvard University, former president of the National Bureau of Economic Research, and was chairman of the Council of Economic Advisers under President Reagan (1982-1984). In this Conversation, Feldstein discusses the financial crisis of 2008, the policy mistakes that led to it, and the risks we face today from a sustained policy of low interest rates. Feldstein then shares his perspective on other important questions of political economy—including the costs and benefits of trade, the impact of technological innovation, as well as the need for tax and regulatory reform. Finally, Feldstein recalls his experiences as chairman of the Council of Economic Advisers and explains what we can learn from how Reagan managed the serious economic challenges of the early 1980s.

In one of his first actions as President, Donald Trump signed an Executive Order that put the final death nail in the proposed Trans-Pacific Partnership (T.P.P.) this week.  My guests today will discuss what was in the T.P.P., what the U.S. will be missing out on by backing out of the T.P.P., and why Trump's decision just opened a window for China to become the dominant player in the Pacific Rim.   I'll talk with the outgoing U.S. Trade Ambassador Michael Froman who negotiated the Trans-Pacific Partnership on behalf of the U.S., and then I'll talk with two leading economists who both served as the Chairman of the President's Council of Economic Advisors. Prof. Austan Goolsbee, served as Chairman of the C.E.A. under President Barack Obama, and Prof. Martin Felstein held that position under President Ronald Reagan, but they BOTH agree that free trade is a net win for the U.S. and the demise of the T.P.P. is a terrible loss opportunity for America. If you enjoyed today’s podcast, then follow Prof. Austan Goolsbee at @Austan_Goolsbee and Amb. Michael Froman at @MikeFroman.  You can read many articles by Prof. Martin Feldstein at www.nber.org/felstein, and articles and research by Prof. Austan Goolsbee are at www.faculty.chicagobooth.edu/austan.goolsbee. Today's podcast is sponsored by Decode DC, the podcast that gives you an honest look into how politics affects your life.  I've been a fan of Decode DC since been before they become a sponsor so I highly recommend checking them out.  Subscribe to Decode DC on iTunes, Stitcher, or wherever you get your podcasts. Please subscribe to Kickass News on iTunes and take a moment to take our listener survey at www.podsurvey.com/KICK. And support the show by donating at www.gofundme.com/kickassnews. Visit www.kickassnews.com for more fun stuff.

The former chief economic advisor of Ronald Reagan on what he expects from Trumps economic agenda, his tax cuts, infrastructure plan and the people behind the next President of the United States.

Diane Swonk, founder of DS Economics, says not being able to have a grown up conversation about long-term fiscal sustainability is a real issue. Prior to that, Martin Feldstein, the National Bureau of Economic Research's president emeritus, says exceptionally high asset prices are a risk to the economy. Then, Pablo Goldberg, a BlackRock portfolio manager, says it's crucial to hedge against dollar moves. Finally, Daragh Maher, HSBC's head of FX strategy, says he's still bearish on sterling. Learn more about your ad-choices at https://www.iheartpodcastnetwork.com

Diane Swonk, founder of DS Economics, says not being able to have a grown up conversation about long-term fiscal sustainability is a real issue. Prior to that, Martin Feldstein, the National Bureau of Economic Research's president emeritus, says exceptionally high asset prices are a risk to the economy. Then, Pablo Goldberg, a BlackRock portfolio manager, says it's crucial to hedge against dollar moves. Finally, Daragh Maher, HSBC's head of FX strategy, says he's still bearish on sterling.

Harvard University Professor Kenneth Rogoff makes the case for eliminating most paper money. Evercore Partners founder Roger Altman dismisses concern over Hillary Clinton's health. Martin Feldstein, president emeritus of the National Bureau of Economic Research, says the Fed has a risky strategy, while Yale University Professor Robert Shiller says the central bank is out of ammunition. Learn more about your ad-choices at https://www.iheartpodcastnetwork.com

Harvard University Professor Kenneth Rogoff makes the case for eliminating most paper money. Evercore Partners founder Roger Altman dismisses concern over Hillary Clinton's health. Martin Feldstein, president emeritus of the National Bureau of Economic Research, says the Fed has a risky strategy, while Yale University Professor Robert Shiller says the central bank is out of ammunition.

It’s the Harvard Experience, Part I. Pete wants to know what it’s really like to attend the world’s premier university and Paul is happy to take him down memory lane. In popular culture, Harvard looms large as the university of choice for the elite and also as a mass producer of Internet billionaires, Wall Street titans and US Presidents. In this episode, Paul traces his experiences leading up to Harvard, the admissions process and the type of people he grew close to in his years on campus. From his struggles with Quantum Mechanics (and the dawning realization that he wasn’t destined to be a physicist) to his classes with Stanley Hoffmann, Helen Vendler, Cornel West, Martin Feldstein, Sheldon Glashow, Stephen Jay Gould and Alan Dershowitz, Paul takes us inside the daily life of a Harvard undergraduate. Pete keys in on two of Harvard’s biggest assets: the student body and the spirit of possibility that infects almost everyone. Paul reminisces about a place of rich diversity, world-class facilities and access to leaders of industry, politics and academia. From the birth of Facebook and Microsoft to the educations of Bush and Obama, Harvard truly is a place where anything is possible. Tune in next time for Part II of this fascinating conversation, when we talk about the downsides of a Harvard Education…

Harvard's Martin Feldstein says the American economy is doing better than financial investors fear. He joins Tom Keene and Michael McKee on Bloomberg Surveillance. Learn more about your ad-choices at https://www.iheartpodcastnetwork.com

Harvard's Martin Feldstein says that recent market turmoil will not be followed by an economic slowdown. He joins Tom Keene and Michael McKee on Bloomberg Surveillance. Learn more about your ad-choices at https://www.iheartpodcastnetwork.com

Dr. Martin Feldstein, George F. Baker Professor of Economics at Harvard University (December 15, 2009 )