I’m Ezra Klein. And this is “The Ezra Klein Show.” [MUSIC PLAYING] One of the pleasures of being at The New York Times Opinion page is, you get to call Paul Krugman your colleague. Just casual conversation, my colleague, Paul Krugman. And so when the Democrats are drawing up a $1.9 trillion fiscal rescue package, rather than just reading what Paul has to say in the paper, you can cajole him into going through the economics with you live on a podcast, or I can. That was the theory of this conversation. But I’m going to be honest. I had an ulterior motive here too. [MUSIC PLAYING] There’s been another conversation I’ve wanted to have with Paul for months now, actually. I don’t think people fully appreciate how consequential the rethinking of debt and deficits is among mainstream, left of center economists. I would go so far as to say it is the single most important conceptual change among policymakers of the last two decades. But it is also revealed that the debt and deficits debate was always built on empirical quicksand. Experts pretended for years to have firm clear answers to the question of how much the government can borrow. But they didn’t have those answers. And they didn’t, in my view, because it turns out, if you dig, they really don’t understand two other things they often claim to understand, interest rates and how they move, and inflation and how it moves. And if I’m right about that, then we should be blunt about this. We are flying a lot blinder than people want to think in economic policymaking. But maybe I’m wrong. Maybe I’m just not catching this one correctly. And who better to ask than Nobel Prize winning economist, New York Times opinion columnist, and as you’ll hear in this conversation, a guy who’s paid a lot of money in an unusual way on Bitcoin, Paul Krugman. My email, as always, is email@example.com. If you’re enjoying the show, please rate or review us in whatever podcast app you favor. Or send this episode to a friend. Here we go. [MUSIC PLAYING] So how do you understand the economic problem right now?
This is and this is weird. I can’t think of anything that has looked like this particular economic crisis before. It doesn’t fit into the normal typology at all. Because we really are not suffering from a standard recession. We’re suffering from an economy which is partially locked down, either deliberately or just because people are afraid to do certain things. And the problem really is not one of how do we boost this economy? Because we don’t want people to be out there eating in indoor restaurants and flying around. So the problem is not insufficient activity. The problem is, how do we get people through this? Since the negative impacts have been really, really uneven, hitting certain groups of people, hitting certain levels of government, how do you get people through? So it’s much more like a natural disaster in many ways than it is like a conventional recession.
So one thing I’ve seen people arguing about in the aftermath of now President Biden releasing his $1.9 billion rescue plan, is whether or not that rescue plan is big enough to fill the output gap. And so I wanted to see, could you explain what the output gap is? And then do you think the output gap is a useful way to think of the problem right now?
Yeah. The output gap is the difference between what the economy is actually producing and what it could be producing, what the level of real G.D.P. would be if we were running basically as hot as you can without starting to have runaway inflation. It’s a little bit of a nebulous concept in practice. But it’s a useful one to think about. But it’s really not helpful in this circumstance, thinking about the output gap. Well, I’m not sure actually that we even have an output gap right now. We’re certainly below what you would expect the economy to be producing if we didn’t have a pandemic. But the reason we’re below that is not that we have some capacity that we should be using but aren’t. There might be some of that but it’s hard to find it. The reason we’re below is because it’s not safe to eat in a restaurant. This is really one of those situations where the conceptual framework that was really, really useful the last economic crisis we had is kind of not very useful in thinking about where we are.
I want to hold on this for a minute because I think it’s very mind bending to people who lived through the last one. In a way, we are trying to create an output gap. There is an argument that would be reasonable to make right now that we actually want more people staying home, particularly as more contagious variants take hold. That there are things people are doing that we don’t want them doing. We are trying to make it possible for people to survive what economically might look like an output gap but from a public health perspective looks like social distancing, quarantine until the vaccines take hold.
Yeah. I use the metaphor very early on of a medically induced coma. You want to shut down certain things because they’re harmful for the time being. You don’t want to shut them down permanently but you want to shut them down to give either normally it’s to give the patient a chance to recover. In our case, it’s to get through this without too many deaths. Originally, the goal should have been to really crush the pandemic so that you could do a New Zealand. You could get the infection rates low enough that you could do test, trace, isolate. We never did that. But now it’s back because now it’s a question of getting us through to widespread vaccination without large numbers of avoidable deaths. So it’s not at all the normal problem. The normal problem is that you have all this capacity, which we’re not using. And the economy is depressed and how do we get it undepressed? The problem now is, how do we get people through a period when we want the economy to be depressed?
I think one way in which it then differs from maybe the way a lot of progressives in particular have become used to thinking about this, is that there is a tendency, going back to the 2009 stimulus, to judge these bills by their price tag almost alone. Is the price tag big enough? Are we going to undershoot again? I think what you’re saying is that, with this kind of problem, the composition of the bill, whatever its price tag, is going to have to be quite different because you’re trying to do different things. So what did you think of Biden’s $1.9 trillion rescue bill? What do you think is most important in it and useful? And what do you think maybe doesn’t need to be there or confuses you and its construction?
OK. Now there’s a couple of levels to that. In terms of the straight economics, the least useful piece, the least useful major piece, is the one that gets the most press, which is the $2,000 checks. But there’s a lot of people out there who are doing OK. They haven’t lost their jobs, their income is not much curved either. They can work remotely or even if they’re not in that, they’re in relatively low exposure occupations which have not been hard hit. And they’ll be getting checks. And on the other hand, there’s a large number of people still, restaurant workers and others, people in high contact sectors of the economy, who have no market income coming in. And in terms of the economics, if you had a fixed amount of money, you’d want to target it on those people. And then also, given the way the U.S. system works, state and local governments are constrained by their incoming revenue. And what you really want to do is avoid drastic cuts in public services, which really make no sense at all. You want to avoid extreme hardship for people who really we don’t want working for the time being. So if you ask, is this $1.9 trillion being spent in the optimal fashion? No, it isn’t. But of course, that’s actually not the question. There are levels to it. It’s not a fixed amount of money that’s available. It’s a political economy issue. And from my point of view, those $2,000 checks are a loss leader that helps make the package something you can enact, or a fair bit of it. And if you think of it that way, then it’s OK. So there’s actually a little bit of a division there. You have to ask, what is the relevant constraint? It’s not enough to just say, what is the best use of a given amount of money.
I want to dig in on this because it’s something I’ve been reporting on a little bit recently. I’ve been talking to a lot of elected Democrats about what do they wish they did differently in the Obama era? What lessons have they learned? And I think one way to shorthand what I’ve been hearing, and I put a fair amount of this into this piece I did on just help people fast, but one bit of shorthand a lot of what I’ve been hearing is that Democrats feel they were too technocratic, they were too targeted. They were too worried about price tags and not worried enough about the politics. They did a lot of stuff that they thought would fit the policy problems and, to some degree, maybe the political problems very tightly. And then in retrospect, they realized, well, this ended up being too complicated. A great example of this is a making work pay tax credit from the stimulus in 2009. Where they built this tax credit, and working off of some of the new behavioral science research of Cass Sunstein and others were very big on, they made it so instead of getting it all at once and really being able to see it, it dribbled out into your paycheck. And the idea was, you might spend more of it if you didn’t get it as a lump sum. But of course then, nobody knew that they got it. So Democrats got no credit for doing it. And it seems to me, Democrats have developed more sensitivity to the idea that good politics is in the long run better policy. Because then you don’t lose the ability to make policy by losing the majority. As opposed to, I think the idea that was more frontal in that period, which is good policy will be good politics even if it doesn’t look like good politics now.
Yeah. Go back to the history a bit. What happened was that by trying to do things smart the Democrats lost control of Congress. And the result of that was that thereafter, they could do nothing at all. And that was an object lesson that just having the best policy in terms of some technocratic criteria is not necessarily the right thing to do. Because when you have an opposition party that it doesn’t share your philosophy at all about how the economy should be run, and in fact, I think we can safely say, is inclined to sabotage your policy as long as there’s a Democrat in the White House, then the question of immediate political impact becomes really critical. And then also, the 2012 election was a bit disappointing for Democrats. They ended up in control but it wasn’t the blowout that they expected. And part of that had to do with the fact that checks went out that had Trump’s name on them, basically. And so they were given a lesson, a schooling from the other side. And then the last part of all of this is that if you were really worried about price tags, then you might want to rein in your political selling issues. You might want to rein in how much you’re willing to do, what is going to have a positive political impact, out of concern that you were spending too much money. But you have this emerging consensus among just about everybody who’s seriously doing the arithmetic that debt and deficits are not an important constraint right now. So building the political coalition that lets you do stuff is a lot more important than minding your pennies.
We’re going to come back to the debt and deficits question in detail in a little bit, so I want to put a pin in that. But I want to look at some of the other political economy parts of the package. So here’s a bit that I struggle with. I think they’ve done a really good job putting together a lot of things that make sense. But in putting all of these things that make sense together, I am worried about when they will pass. And so one of the hard questions of the package, in that $1.9 trillion dollars, they have $400 billion that is direct spending on coronavirus: testing, vaccinations, school retrofitting, so the ventilation is OK, public health workers to do contact tracing. Direct spending on the things we need to do to fight coronavirus right now. Now the rest of it or a lot of it also helps from the public health standpoint, as we were talking about, allows people to stay home, but not as direct. That vaccination spending, for instance, that $20 billion, that needs to have been done six months ago. It needs to pass yesterday. And on the other hand, it’s part of this big bill. And now, I’ve talked to the administration about this. And what they will tell you is, look, we need all these things together so each part adds urgency to the others. And we basically dare the Republicans to block it. We’re not going to get these other things done if we pull out the stuff everybody knows needs to happen. And then just leave the stuff that is controversial for another day. And on the other hand, Republicans will just say no. And you won’t get that vaccination spending out into the economy. You won’t get that $50 billion testing platform built. And people will die. And we will stay in this hole for longer. And it strikes me as a genuinely hard political trade off. And I’m curious if you think they made the right one bundling it all together?
I think they did. We’ll find out. But in the end, I suspect that you’re going to get very few Republicans, if any, on board. And it’s going to be passed with reconciliation. So the question is, what can you do to get Joe Manchin on board, basically? It’s really about just barely holding together this razor thin Democratic majority. And possibly getting one or two — but I’m not even sure about that — Republicans on board. And the trouble is, if you can’t pass this, then if you slice off the really urgent stuff and pass that first, then none of the rest is going to happen. It’s very hard to imagine that you’re going to get anything beyond the most essential coronavirus funding passed if you separate it. If you say, look, this is a Christmas tree bill. But it has to be, which is something actually I’ve been arguing on a number of fronts. In the end, this may be a little moot for now. But when we talk about Green New Deal, or whatever we’re going to call it when we finally do try to tackle environmental stuff, the question of, should you do something that is relatively purist and targeted or should it be a grab bag, which kind of smooshes us together fighting climate change with job creation with lots of good stuff? If you were an econ 101 person, you’d say, let’s do this right. But if you try to think about the political reality, it’s going to have to be a Christmas tree. Otherwise, you’re not going to get even the essential stuff.
One thing that frustrates me about this is that it’s very chosen in a way that senators don’t tend to want to admit. So I don’t know a single member of the Senate who doesn’t lament these giant Christmas tree bills. It isn’t a good way to legislate. Programs aren’t thought through enough. We should be able to debate. And you say, OK, well, you have to do it this way because you get so few bites at the apple because you have this filibuster rule that forces everything to pass with 60 votes. And the only way to get around that is to use this rule budget reconciliation, which you can only use once a fiscal year. And there are some ways of getting around that but there are not many. You can maybe use it a couple of times in a presidency. And you can do some things in it. And so you say, well, why, instead of legislating so poorly and getting so little done and abusing all these other rules to make the place work at some bare minimum level of function, don’t you just get rid of the filibuster itself? And some of them now will say, yeah, we actually should do that. This has gone on too long. But a lot of them won’t. And this kind of madcap legislating is the result. And it forces all these very weird and quite awful choices. In a world without a filibuster, Democrats could pass what it has to pass really quickly. And then work on what needs a little bit more work for a little bit longer. And they don’t need everything to drive its momentum into one must-pass bill because they’re only going to get a couple of bills that they can pass at all during a session in which they won a very big victory and took over the Senate, and the presidency. And yet, somehow still can’t govern in any reliable way.
Yeah. I haven’t given any deep thought, and certainly have no independent expertise on organizing the legislature. But it’s multiple things. It’s not just the filibuster. It’s also the weirdly unrepresentative nature of the Senate. And on top of all of that, underlying everything is the brutal partisan divide. We could go on about — that’s a whole other topic. But basically, we have one of our two major political parties has gone rogue. And so all of these things that were not so much of a problem in the ‘60s and ‘70s, when you could actually get a group of people together to work stuff out and do technocratic policies, are enormous problems now. And we’re just doing these kludges to get past the screwed up nature, not just of the legislative process, but of our politics.
As a note on the non-representative nature of the Senate — and I say this sitting in California — my former “Vox” colleague, Ian Millhiser, ran these numbers. And the 50 Senate Democrats represent 41 million more people than the 50 Senate Republicans. So even split in the chamber, 41 million more people represented by the Democrats, it’s a genuinely crazy way to run a system. It is far and away the most undemocratic upper chamber, or frankly chamber at all of any advanced democracy. It’s a bad system. But let’s go back to stuff you have distinctive expertise on. So Biden put a $15 minimum wage proposal in the rescue bill. That is something that five years ago was controversial among Democrats from, I would say, the Biden wing of the Democratic party. Now it’s not. It reflects the organizing labor and the left have done on that issue. The worry I hear from a lot of people there is that while the $15 minimum wage might make sense in a place like San Francisco or L.A. or Seattle, there are a lot of places, like say, Joe Manchin’s West Virginia, where they’ll have a lot of employment loss if you make people pay that much. How do you read that literature?
It’s much more binding, much more problematic in low income, low productivity parts of the country. But on the other hand, if you were really trying to keep up with average wage growth since the 1960s, it would be considerably higher than $15. And, yeah, there’ll be some problems. But maybe, possibly — although for what it’s worth, the late Alan Krueger once tried to find evidence he was sure that the federal minimum wage had to be a problem in Puerto Rico, which is a low productivity area. And even though he had pioneered the work showing that minimum wage hikes didn’t seem to cost employment, there has to be a limit. And he thought that Puerto Rico should be beyond that limit. And he couldn’t find really any solid evidence even for Puerto Rico. So I think we’re maybe trying a little bit too hard to say, OK, this needs to be tailored and that we need to worry a lot. It’s not a foolish concern but probably something we overstate. There’s going to be some negatives in places that start with low wages anyway. But it’s probably going to be a lot less severe than a lot of people would have imagined 10 years ago.
So you don’t think the trade off of moving to some kind of regionalized minimum wage, where it operates at some percentage of the median wage in a particular area is worth it. That while there is some technocratic appeal to it, you would get a better grade on it in an economics class, that the come down from a clear, simple policy that people can really see is helping them and that can be packaged and messaged is not the right trade off.
Yeah. If fight for $15 had been fight for 53 percent of the local minimum wage, I don’t think it would have required as much support as it did. Life is short. People are very distracted. Sometimes you really do want to just go for the simple thing. And this is not as good at cases as some other things, where you really want to go for clear, simple solutions. But I’m not sure that it’s worth trying very hard to tailor this to regional differences.
Yeah. I had asked Data for Progress to poll two versions of the minimum wage. Basically, it was something I was just interested in. And a $15 minimum wage, raising the federal minimum wage from $7.25 to $15 an hour, that gets 65 percent support, 40 percent of it strong. It was interesting. I also asked him to look at it if you describe that in annual income. So that $7.25 minimum wage, that’s $15,138 a year. And the $15 minimum wage would be $31,320 a year. So if you say it that way, should somebody working in the federal minimum wage full time get that boosted from $15,000 to that $31,000 and change, strong support goes down just a little bit. It’s 37 percent strongly support, 26 percent somewhat support. It’s not a huge difference. But I was struck to find that there was a small shift in Republican and Independent support upwards, which at least implied to me that there are folks who are Republicans or are who Independents who think a $15 minimum wage is a higher wage than it actually is. And when they hear it in terms of the current annualized income and the potential annualized income, it doesn’t sound all that high. Because, of course, it isn’t in any way very high.
Yeah. I saw somewhere that someone was arguing, hey, this would raise minimum wage workers almost up to the starting salaries of some teachers in Texas. Which is actually basically saying, hey, you’re underpaying your teachers.
Yeah. That one’s quite wild. Let me tack on to one of the other big disagreements here with the bill, which now comes from the Republican side. Which is, executing I think the quite predictable move as soon as Donald Trump has left the building into rediscovering a concern for deficits. And I’ll use maybe the more plausible version of it, which is let’s say Mitt Romney here. Mitt Romney says, the $1.9 trillion package is not quote, “well-timed” because Congress recently passed another $900 billion package. There’s already some more economic support going into the economy. This is too much, too soon, too fast. What would you say to that?
This actually very much ties into where we started, which is the nature of the problem. I was a little startled, though, on reflection, not surprised to see Mitt Romney saying well let’s wait and see how the package from the fall affects the economy. Because it shows that he, after all this time, still hasn’t taken on board that this is not a conventional recession. And what we’re doing is not economic stimulus. It’s a disaster relief package. And we’re not going to judge it by whether G.D.P. grows. That’s not the point. The point is about alleviating hardship while we wait for the vaccinations to come through. And the fact of the matter is that we know, as surely as you can know anything in these matters, that we’re not going to be back to anything like normal employment for a number of months. That we’re not going to be able to start behaving anything like the way we used to behave until late summer or fall at the earliest. And that means that we need a lot more money. That we need to extend unemployment benefits, we need to provide the state and local aid, and all of these other things. So what’s happening there is that Romney is just operating in the wrong mental space. Thinking about this as if it was about juicing the economy, when in fact, it’s about making people’s lives tolerable until we can go around having a well juiced economy again.
To steel man the Romney position for a minute. One of the things that I do think causes confusion right now, is that people who judge economy based on markets, markets are very strong. The stock market is very strong. There is pretty surprising data at this point. Our colleague at The Times, Neil Irwin had a great piece on why markets boomed in a year of misery, as he put it. And he wrote, “When it’s all tallied up, American’s cumulative after tax personal income was $1.03 trillion higher from March to November of 2020 than in 2019.” So incomes actually went up in this terrible year. And that a lot of that came from people who didn’t lose their jobs, getting stimulus money they mostly just saved. A lot of it came from people doing fine and then getting some help they didn’t need. And so doesn’t that suggest we have done too much untargeted help? And maybe some people need a little bit more help. But overall, the economy is doing fine. And this thing the Democrats want to tell you, which is that there’s mass misery out there, isn’t true because if there was, we would see it in headline economic statistics.
But that’s exactly the point is that that’s not how it works. The averages are deeply misleading here. I was actually I think the person who first came up decades ago with the, I guess would now be, if Jeff Bezos walks into a bar, the average wealth of people in the bar suddenly exceeds a billion dollars. But It doesn’t mean that all the other people in the bar are in fact billionaires. And the fact that average incomes are high, that on average, people have done OK totally misses what’s going on. What you have is millions of workers are still unable to work, still laid off. You still have extreme stress on state and local fiscal situations, which is forcing cutbacks in public services and also leading to further layoffs. And the fact that some people have done really well is sort of [inaudible] . Now it is an argument that says that if money were the object, that we should have focused on targeted relief. That it should be more unemployment benefits and no $2,000 checks. But since the political economy doesn’t work that way and since we’re not really worried about the debt, that’s also of missing the point. So, no, it’s a non sequitur to say, oh, but average incomes are up. That’s not the point. [MUSIC PLAYING]
So then I want to go to where I think this whole argument is going. And if you watch the Janet Yellen confirmation hearings, you began to hear Republicans talking about this again. So during the Obama years, Republicans got very concerned for a period of time about debt and deficits. And then, of course, Donald Trump got elected and that ended. And Republicans voted for trillions of dollars in tax cuts and also for lots of unfunded spending, by the way. It wasn’t just that they didn’t care about this on the tax side. And then, of course, now that the Joe Biden is president, you’re hearing a return of debt and deficit fears. But one thing that does seem really different to me now is there’s been a sea change in how Democratic economists, mainstream Democratic economists understand debt and deficits. You pointed at this a little bit earlier. So can you tell me a little bit about what’s changed and how the intellectual history on this has played out over the past couple of years?
Yeah. I believe if you were to go back to 2009, 2010, that mainstream Democratic economists would have said debt is not something to worry about right now. I would have said, well, this is a very secondary concern. But they would have talked a lot about, well, if you press them, that we’re going to have to retrench eventually. And then we had this whole debate about austerity versus stimulus and debt, which was very much still even the people who were big spenders, like myself, tended to say, well, debt, of course, is eventually going to be a problem. But it shouldn’t be top of the line. What’s happened since then is largely just the fact, which is that interest rates, which fell a lot in the aftermath of the financial crisis, didn’t really come back up very much. We seem to be living in a persistently low interest rate world. And then the facts changed. But then also, the fact that the interest burden of debt seems to be so low I think led people to rethink the whole logic. And say, well, in fact was it ever the case that we should have worried about debt as much as lots of people did? To which the answer seems to be no. So if you’re from an insider on these things, if you’re reading the economics literature, there was this seminal lecture by Olivier Blanchard. I think it was in January 2019, saying, hey, really there’s very little evidence that debt has been a problem any time in the past several decades. That the interest rate on debt is just consistently below the growth rate of the economy, which means that debt tends to melt away. And you know, if it had obviously been building for a while. But that was the signal. If Olivier, who is the most sensible person, says that we shouldn’t be worried about debt, well, we really shouldn’t be worried about debt. And of course, a lot of other people have been drifting towards the same conclusion. But there you have a situation where the mainstream of the profession just moved to a view that said, we certainly shouldn’t be worrying about debt now. And we probably shouldn’t have been worrying about it for a long time in the past.
So I want to go through this part real slowly because there’s a bunch of this that I am trying to grok myself. I actually think this is the single biggest, most important change in mainstream Democratic policy thinking of this era. So I really want to try to pin it down. And Olivier Blanchard, for those who don’t know him, is former chief economist of the I.M.F. and just an international economist of some renown. But who is also part of an organization that was very worried about debt and deficit issues for a long time. And so him making this reversal was important. But let’s go back to interest rates. So when people worry about debt and deficits, they’re almost always worried that high debt or high deficits over time will end up hurting something else. It will snap into the economy in some other way. And the thing that they’re often worried about is that it will lead to high interest rates, which are in this case, the cost of borrowing money for the government, but not only. So particularly in the Clinton era, there was this idea of crowding out, which is that if the government is running high deficits, the government is by definition borrowing a lot more money. In borrowing a lot more money, there is some relatively fixed pool of money, unless the government is just going to print to cover its own debts, which will we could talk about in a minute. And that’s going to crowd out private borrowers. And private borrowers are more productive. So you’re raising the interest rates because the government is taking up this available capital. That means private borrowers can’t fund their businesses. And that means the entire economy is going to grow more slowly. And so the idea was, there’s a pretty mechanical relationship between high debt and interest rates. And then that relationship just does not come to pass over the past 10, 20 years when it’s being talked about a lot. I think it’s one term I’ve heard for it is untethered, that debt and interest rates untether. And so one question I have is, was that ever right? Or was it simply a theory that was wrong? Did the world change or did the world simply disprove the theory?
OK. We need to make a distinction between debt and deficits. So deficit is the rate at which you add to debt. There was never any particularly good reason to think that debt, the total amount that the government had borrowed in the past, had much to do with interest rates. The idea that having a lot of government debt outstanding was going to crowd out. That actually didn’t follow. Because if there’s a bunch of pieces of paper out there that are promises from the government to pay the holder of the piece of paper money, well, that requires that that money be found somewhere. But it’s not actually competing for new savings. It’s not competing with the private sector for money that’s going to go into new investment. So that never made sense. There used to be — there really was a time when higher government borrowing seemed to drive up interest rates. So in that case, when the government is out there issuing a bunch of fresh, new debt to raise funds, that money at some level has to come from somewhere. And so the idea was, well, it’s going to squeeze out private investment that would have taken place anyway. Probably never as strong a relationship as lots of people wanted to believe but still, there was something. If you go back to the 1980s, you could actually see that government borrowing appeared to be driving interest rates up. This is where the world has changed. We seem in a number of ways to be now a world that’s awash in savings that have no place to go. The fact that interest rates are so low, it’s not just telling you that the government can borrow very cheaply. It’s telling you that the private sector doesn’t seem to have any good uses for the money. Interest rates are a little bit higher for business borrowing than they are for government borrowing but not much higher. And with all that money available at very low cost, you would think that businesses would be going out there and building lots of factories and buying lots of software, and whatever. But they aren’t, which is saying that they don’t actually see great investment opportunities out there. Which means that, really, we have a overhang of or an excess supply, to use the jargon of savings. And the government isn’t really competing with business for a pot of money. It’s really giving a pot of money that is looking for someplace to go, something to do with itself. And that’s way the world has changed.
One thing Olivier Blanchard says on this, which I thought was very interesting, is that the 1980s are actually an economically aberrant period. He talks about what’s really important here is being the relationship between how rapidly a country is growing and the interest rates it’s paying. And so long as growth is above the interest rates over the long term, that debt is going to be fine because you can have more debt and end up paying less on your servicing costs. And that in general, countries grow more rapidly than their interest rates are high.
Yeah. I like to think of it in terms of snowballing. The popular image is that you have debt, you have to pay interest on the debt. And if you don’t tighten your belt then the debt will be higher. You’ll have to pay even more interest. And so it grows out of control. So you better not get too much debt in the first place. But governments preside over economies that grow. And even if the debt snowballs, if it snowballs much more slowly than the economy grows then in terms of the relevant measure, which is really the ratio of debt to G.D.P., the ratio of debt to the size of the economy, the snowball actually melts instead of growing. And what Blanchard pointed out was that if you go through the data, by and large over a fairly long stretch of history, the interest rate on U.S. government borrowing has been below the economy’s growth rate. And there’s really an anomaly during some of the Reagan years when that wasn’t true. But by and large, it’s always the case that debt melts instead of snowballing.
So here then is what I’m leading up to in this. I think the way people imagine debt is that we are concerned about it because too much is dangerous. And as you’ve pointed out many times, they have a household analogy in their head and we have moralism around debt. But actually, if you talk to economists during this period, they worried about debt because they worried about interest rates. And they thought debt, or deficits to be more precise, as you say, had a reasonably predictable effect on interest rates. And one of my takeaways from the past couple of years is that economists don’t understand interest rates. That the predictive model people were using was wrong. Now you have Larry Summers and doing a lot of co-authoring with Jason Furman, they’re both in the Obama administration. Summers and Furman are now back at Harvard. They say that we’re now in this period of secular stagnation, which is, as you say, a period where there’s a lot of savings out there, not great investments, aging populations. So there are reasons to think interest rates are going to remain low. But one thing I just take away that may be right or it may be right until it’s not right anymore, is that there might be a little bit of a black box here, where economists are pretending to have an understanding of what drives interest rates that they don’t really have. Am I being unfair to economists or is that correct?
A little bit. It’s a little bit unfair. At some level, supply and demand still happens. And I don’t think there’s any real question that if the U.S. government just started running deficits of 10 percent of G.D.P. that interest rates would in fact rise. But the idea that there’s any kind of tight link, and particularly, if I might say, the idea that countries with high levels of debt have to pay high interest rates. There was never good evidence for that. So partly it was that people, even economists engaged in a fair bit of, if I can say, motivated reasoning. And not in this case, necessarily a political motive. There was that too. But because it sounds like a bad thing to have a lot of debt. And people went looking for reasons, evidence to think that that badness somehow manifests itself in reality. But it was never the case. There was a period — I remember back in the austerity debates when some people came out with what they claimed were strong, positive relationship between the indebtedness of countries as a share of G.D.P. and the level of the interest rate that they had to pay in borrowing. And it turned out that if you just said, let’s separate the Euro area countries from the rest. Without the Euro area it all disappeared. And basically, it was all about Greece and Spain and Portugal. And even there, that turns out to have been just a panic. I think one of the things that probably nobody knows about but is also relevant to this debate is that we had what everybody believed was this severe debt crisis in Southern Europe in the early 2010s. And then Mario Draghi, then the president of the European Central Bank, said three words, whatever it takes. Which suddenly ended the panic in the markets. And the whole relationship between debt and interest rates disappeared in a matter of weeks. So that’s also was another historical event that has moved people’s views quite a lot.
So that gets to an argument that’s made by the Modern Monetary Theory folks. And that’s a group who’ve arisen I think in the period, in part because a lot of the predictions that mainstream economists made on deficits and interest rates didn’t come true, to offer a more aggressive explanation on this. And one thing they will say is that interest rates are fundamentally a policy variable. That they’re not a reflection of the economy, they’re not a mere supply and demand question. They are a question of, as you noted there in Europe, of Mario Draghi saying whatever it takes, of, in this case, maybe Jay Powell saying whatever it takes. And that so long as a country that has sovereignty over its own currency is willing to print that currency in order to fund its debt, there’s really no amount of debt that you can’t absorb so long as you have enough real resources, people, buildings, factories, machines, et cetera to do what you need to do. You can still overheat an economy by asking it to do more than it has the physical capacity to do but that interest rates are irrelevant. It’s just the Fed has to decide to print enough money. How do you take that story?
Yeah. M.M.T. is a very strange thing. It’s like the old, academic put down that there is much that’s new and there’s much that’s true. But what’s new isn’t true and what’s true isn’t new. I can’t find any predictions from M.M.T. that have been borne out that are actually any different from what’s somebody doing standard Keynesian economics would arrive at. It doesn’t seem to actually add anything. And the other thing is, if you try to talk to the M.M.T. people, and say, so OK, so what you guys are saying is x, they say no, you just don’t understand. You’re a dinosaur. You don’t get the point. And then they say something or other. And you say, OK, so what you’re saying is y. And they say, no, you don’t — it’s really impenetrable. And I don’t think that they’re contributing much to this discussion. The point about interest rates is, of course, there’s economics. They’re not just a policy variable. Because if you try to push the interest rate too low normally — now we’re in a situation now where there seems there is no interest rate that’s too low because the economy wants a zero or negative interest rate. But in previous periods, we’ve had situations of where we have in fact pushed interest rates too low in the pursuit of either trying to make it easier to finance the government’s debt or just trying to goose the economy, often for political purposes. The Arthur Burns 1972 reflation to help Richard Nixon did in fact lead to an inflationary outbreak a little bit later. So it’s not the case that there’s no economics to it. But the idea that there’s a simple mechanical relationship between government borrowing and interest rates, we never should have believed that. That was never what the models actually said. It was more a moralistic projection that people then scrambled to produce justifications in terms of a more formal economics. But it was never actually where the analysis said you should be going.
So I put some time to sitting down with the M.M.T. folks to try to understand some of what they’re arguing. In a previous incarnation of the show, I had Stephanie Kelton, who’s I think one of the leading M.M.T. folks, and then Jason Furman, representing the Keynesians, on to talk about where they disagree and how these played off of each other. And like you, I find some of it pretty difficult to parse. But one thing that I did take away from that is that the Keynesians say the right thing to look at here is interest rates. And then the M.M.T.ers say no, no, no. The right thing to look at here is inflation. And one thing that I tried to do in that conversation is try to pull this apart by saying, OK, if we do Medicare for All, do you need to pay for it? And something Stephanie said a few times in that discussion was, well, you need to calculate its effect on inflation through its effect on real resources. And when I would talk to Jason about deficits, he would say, well, you need to think through what it will do to the interest rates. And one thing I took away, and you’re pushing me usefully here that maybe I’m being unfair, is that the Keynesians are saying you need to look at interest rates, which we understand to some degree but often seem to surprise us. And the M.M.T.ers are saying, well, just don’t worry about the interest rates because the Fed can deal with that. But of course, you have to worry about inflation. But then I would say, well, how do you predict inflation? They’d say, well, it’s very, very complicated. And what would Medicare for All do? Maybe it would deflationary. Who knows? And so there is this way in which the debt debate seems to resolve down to other things in the economy that people get very handwavy about when you try to predict them. Which just puts it on way less solid empirical or maybe even ontological footing than I think people sometimes admit it is.
Actually there’s a famous thing. And this is something we really don’t want to try to explain in a podcast. Where there’s a question about interest rates. Do we think of interest rates as being determined by the economy’s capacity? The interest rate has to be low enough to produce full employment but not too low or that will lead to inflation. Or do we think of interest rates as being determined by the balance between savings and investment? And the answer to that question is yes, both. And those are in fact blind men and the elephant things. If you think about them carefully, they’re actually asking the same question. And I think that may be what’s going on here. That we’re actually telling the same story. And the question about Medicare for All is whether you think of that as saying, OK, look, that’s taking quite a few percent of G.D.P. that have to come from somewhere. It’s either if it’s not funded then it’s going to put a lot of increased demand on the economy, which is going to be inflationary. Or if you think about it in terms of where is the money going to come from. That’s going to be taking a lot of money that has to be diverted from other uses, which is going to require a rise in interest rates. It ends up being the same answer. And the answer to it is, do we have to pay for Medicare for All as a practical matter? The answer is yeah. We can do 1 percent or 2 percent of G.D.P. on infrastructure spending without worrying about where the money is coming from. We probably can’t do that when it comes to something like Medicare for All, which is a much bigger deal.
I want to ask about inflation here. Because the other side of this conversation, something we’ve talked about here, is that we were too afraid of interest rates for a long time. And I think the case is pretty strong, and you’ve made this case, that the Fed has been way too afraid of inflation for way too long. Between 2016 and 2019 alone they raised interest rates a number of times in anticipation of low unemployment rates leading to rising inflation. That inflation never materialized. Alexandro Ocasio-Cortez asked Federal Reserve Chair Jay Powell whether or not they’d been too afraid of inflation? And he said, absolutely. But I don’t really get the sense — I feel like this is a continuous conversation. And the Fed is always, always, always erring on the side of worrying too much about inflation and too little about full employment. So either economically or maybe, if this is a better question, sociologically, what is going on there?
Yeah. I think it’s sociological is the issue. Look, the economics — we rely a lot or have tended to rely a lot on estimates of the non-accelerating inflation rate of unemployment, the NAIRU, which is a potentially useful concept but maddeningly hard to pin down in practice. And we’ve just seen that. I actually was looking at Fed projections from 2015, where they were reasonably sure that unemployment couldn’t go much lower than it was then, which was 5 percent, without being inflationary. And then unemployment steadily declined all the way to 3.5 percent and there was still no inflationary take off. Which just shows you that we don’t have a good measure of all that. So there is an issue of the economics being elusive and having too much confidence in what are really very flaky estimates of stuff. But there’s also a huge sociological aspect. Central bankers are bankers. They tend to worry about sound money. It kind with the territory. They tend to not know people who are unemployed. It takes a real effort for them to change those priorities. And I’ll also say that there’s a selectivity in history. I’ve always been struck by the long shadow cast by the 1970s. Even now you have people who talk as if the stagflation of the 1970s was the worst thing that ever happened to us. Whereas in fact, no, actually, not only was the aftermath of the 2008 financial crisis the worst thing that’s happened to us since the Great Depression, but even the severe slump of the early 1980s was in many ways worse than anything that happened in the ‘70s. But the way the history gets written, the things certainly that the Fed, but also I’d say a lot of our political system, the things it emphasizes tend to be the evils of the ‘70s. Because I think that’s partly reflecting a conservative bias. You want to talk about what a terrible President Jimmy Carter was and not talk about all of the suffering that took place under Reagan in his first couple of years. And certainly not talk about the suffering that followed the excesses of the banking system more recently. But there is a selectivity. And so we end up being tyrannized in some ways by inflationary episodes, even though it’s been a long time since we had one.
Is part of this simply that every Fed Chair wants to be Paul Volcker and heroically crush, using the tools of the Fed, the danger of the moment? And the one where Volcker did it was inflation. It is the most mythological story about the Fed, the one I hear them tell about themselves the most. That Paul Volcker came in after the country was dealing with this very, very hard to kill economic problem. And he just crushed it by being tough on interest rates for a while. And of course, there was a big recession he triggered. And there was a lot of pain from that. But it really is a heroic story inside the building in a way that I think very few other episodes in Fed history are. And I just wonder how much that stalks people’s imaginations?
Well, maybe. Although, I would have said that was more a negative. They don’t want to be Arthur Burns, who was too concerned with stimulating the economy because he wanted to help his friend Richard Nixon. And so that’s a legend that’s seared in the Fed’s memory. That was a politicization that they feel really bad about. It’s an interesting question why people would want to be Paul Volcker and not Ben Bernanke? Ben, really, with help from Mario Draghi and Mervyn King at the Bank of England, really saved the world. So why would Volcker be the towering heroic figure? And I think it has a lot to do with the, well, Volcker was tough. He was accepting pain. Not actually his own pain, but still accepting pain to do stuff. And that fits the image of what central bankers like to think of themselves as doing. Whereas, printing lots of money and going out there and stimulating, even though in fact has required some pretty heroic actions on the part of recent central bankers, just doesn’t have the same ring. [MUSIC PLAYING]
We’ve been talking about money creation in different ways for some time now in this conversation. Where are you on cryptocurrency right now? Seeing some crazy numbers around Bitcoin and then crazy drops. And people who lost a password and don’t have huge amounts of money they would have had otherwise. What do you think of Bitcoin or cryptocurrencies as a broad category?
It’s a solution in search of a problem. I’ve done this. I’ve made quite a lot of money on Bitcoin.
Not by investing in it, which I would never do. But by being the designated enemy at Bitcoin conferences and getting paid speaking fees. [LAUGHTER]
So you found a way to short bitcoin.
Yeah So Bitcoin’s been lucrative for me. That gives me an opportunity to ask people, what is it you think we’re going to do? What’s the point of this? And what you get is this weird mix of libertarian derp and technobabble. It’s all, well, somehow or other, governments are going to inflate away currency. Fiat currency is inherently doomed to collapse even though we’ve had it for well over 100 years and nothing really happened. But any day now, it’s going to collapse. On the other hand, the blockchain is this miraculous invention that solves the problem of something or other. And I think the romance of the technology combined with this free floating governments are not to be trusted stuff is what sustains it. And look, at some level, you could say that gold is peculiar also. There really isn’t much use for monetary gold and hasn’t been for generations. But it preserves its value because people think it’s a valuable asset. And it’s possible that that will be the story of digital currency over the long run. But it’s a very peculiar thing. But it is definitely — there’s a cult aspect to it. I was looking at responses after the inauguration. And there was a fair bit showing up, certainly in my inbox, of people saying, oh, my god, it’s Biden. By Bitcoin. Fiat currency is going to collapse, which was total non sequitur. But there are certain people for whom everything is a reason to buy cryptocurrency.
I think if you’re already pretty invested, then you want everything to be a reason to buy cryptocurrency because then your investment keeps going up. A lot of the work you did that led to your Nobel was on trade economics. Biden has taken office in a time when I think the politics of trade are more unsettled than they have been before. Donald Trump and Bernie Sanders put a stake in the heart of the politics of the previous era. And then Donald Trump did some stuff. But I don’t think it’s considered to have worked out that well. Renegotiated N.A.F.T.A. a little bit. Got into a trade war with China. And so now I think there’s a lot more room for Biden and Democrats to rethink what is the Democratic Party’s, or what is their position on trade and trade deals? What would you tell them to do? How should you think about trade in this era?
Oh, I think there’s really not very much room to achieve major improvements. It is one of those things, again, where the political economy and the straight economics may be quite different. If you ask, how much can the United States gain from a revamped — Trump’s trade wars were just poorly conceived. They didn’t really have any coherent view of what he was trying to achieve. He didn’t actually use the tools in any systematic way. And it was pretty much doomed to be a failure as a policy. But you could imagine — in fact, the little bit we’re hearing suggests that the Biden people are going to try to keep some of this going and try to put pressure on China on intellectual property, and industrial policy, and so on. If you actually ask how much can the United States gain from that? The answer is probably not much. But if you ask, should we just go back to the status quo ante. If I were giving any kind of political advice to the Biden administration, I would say, no. That would actually be very risky politically and you don’t want to go there.
You wrote a really, wonderfully optimistic column recently about a potential boom in the next couple of years. And one piece of it I think will be familiar to folks. Which is, if we get vaccination right, that’s going to unlock a huge amount of economic activity. People are going to be able to go to restaurants again, take vacations they’ve been putting off. And that’ll be great for the economy. And it really would be. But you also talked about being optimistic on the technological front. That this being an age when after a period of pretty low productivity growth, comparatively, a lot of things seem to be coming online. From the advances in biotechnology to potentially driverless cars and A.I., to all kinds of other things that I don’t understand and can’t correctly explain, that really could lead to the kinds of growth that people feel should have happened earlier but keeps not showing up in the data. Can you talk a bit about what’s made you optimistic there?
Yeah. The two areas that I’m tracking at least a little bit — let me back up and say that if we think about for the past couple of decades, it’s been all I.T. It’s all been pushing bits around and doing stuff with them. And that has mattered. And there’s been an enormous amount of hype. So every relatively small further development is heralded as the next big thing. But in fact, there hasn’t been that much fundamental change in that area for quite a while. In fact, I’m talking to you over a 2015 vintage MacBook. And no one seems to be having any problems with using computer hardware that old. There just hasn’t been that much change lately. But the areas that I’ve been following where there really is a change are, first of all, energy. This is a really miraculous change. I’m old enough to remember, and it wasn’t that long ago, when solar power was a hippie fantasy. Serious men been talked about burning fossil fuels. But now we’re actually in a situation where solar power is or soon will be cheaper as a source of electricity, at least, than any kind of fossil fuel. And wind is coming along. That’s big stuff. Energy is still a big part of what we do economically. It’s a big driver of investment. So big change on the energy front. And biotechnology. I have to admit, I wasn’t paying that much attention to it. But again, I’m old enough to remember when we had a biotech bubble way back when and people were all enthused about it. And then nothing much seemed to come of it. But hey, look at the vaccines. The age of physical technology innovation, the age of smart ways to do more stuff with stuff probably has not passed. I’m hearing a buzz around this stuff. Just the talks you have with business, talks you have with people who are actually tracking technology. And you’re starting to feel that there is a sense that big things are happening. And I’ve learned, from having been wrong about these things before, to take that kind of buzz seriously.
One of the things that I’ve been wondering about this is whether Democrats and governance progressives in general have a theory of their politics in relationship to technology. When I think of the problems that need to be solved that I care very deeply about, so global warming, the politics of that are extraordinarily easier if you get continued technological advances. I care a lot about animal suffering issues. And as much as I might like it if everybody went vegan, they’re not going to. But the advances in cell-based meats and plant-based meats are extraordinary and seem possibly you could really get healthier environmentally cleaner and non-harmful kinds of meat on the market that are cheaper. Already you’re getting some, like Impossible and Beyond. But over the next 10 years it could be really big. I care a lot about health care. The way we make health insurance worth it to people is we have advances in what that health insurance can buy in terms of medical technology. And yet there’s a strain of progressivism that is skeptical of technology, doesn’t like that it’s all run by like billionaires who take it for themselves. It seems to me that one place where the Biden administration can probably make somewhat more headway is just spending a lot of money on innovation, if it knows what kinds of innovations it wants to get. But that isn’t something I think Democrats think about in a systematic way. And I’m curious if you think there is a politics of technology out there that would be viable? Or if this is something that is best left to the market and there’s not a huge role for government in it?
Well, actually government has always played a huge role in innovation. And we are spending quite a lot less on government R&D than we used to. Creating knowledge is not something where any of the usual arguments for market efficiency work. It’s one of those things where we actually rely to justify it on legal things, like patents that create monopolies, which are supposed to be a bad thing. But we rely on screwing up markets as a way to induce markets to develop new technologies. So I don’t think there’s any fundamental reason to think that that government shouldn’t be playing a bigger role here. The trouble is, of course, figuring out what. And it’s got to be a little bit of a broad based approach where you try stuff. I guess what the question for me, there’s obvious room. If you look at energy, again, which is the thing I’ve studied. I can’t say I’ve studied any of these things really carefully. But if you think about energy, we have a reasonable idea of where government funding of research ought to be directed. Not just research, but also actually development because it’s turning these things into scalable, viable enterprises is a good part of it. What I’m not sure about is whether we are past the Solyndra thing, where if the government is going to be spending money on innovative stuff, some of it’s not going to work. In the private sector, there are probably multiple failed attempts of innovation for every one that actually succeeds. Are we mature enough now to be able to accept that? To say that, OK, the government’s going to have some things that didn’t play out. But add them all up and it’s OK. And I don’t know the answer to that. But it certainly is something that we should try. And if we actually ever get to the Build Back Better, or whatever, get past the pandemic relief to then the investment program for the future, a good part of that investment is going to be in technology.
Yeah. It’s much better known that that loan program funded Solyndra than that it played a crucial role in stabilizing Tesla so Tesla could become the company it is now. What even seems worse in this part is that, as you say, this is a place where you want the government stepping in where markets may fail. But the thing markets, in general, don’t fail to do — they do sometimes but it’s not a primary problem — is funding things that are likely to make a lot of money. What you want the government to do is fund a bunch of things that are not likely to make a lot of money because some of them have a really high chance of paying off. But you don’t know which ones. You want it to be a public venture capitalist but with different incentives than actual venture capitalists, more public oriented incentives. But to do that well, you want most of what it funds to not work out. Either for it to be very basic or for it to be quite risky in a way where it’s playing a role the private markets won’t. This idea that a government program is good if it makes money in this way or it’s good if it’s not taking risks. It keeps government from playing the exact market-saving role it should. Let the markets make money. Let the venture capitalists make money. The government should come in when things might pay off but have a good chance of not. And then we have to accept failure. Failure has to be very much part of that program. And in some cases, celebrated.
As it turned out, remarkably, most of the coronavirus vaccine efforts seem to actually be working. But suppose that we financed a whole bunch of coronavirus vaccines and most of them had not panned out. But we can come up with two or three that actually saved millions of lives. That would be a success not a failure. But you can easily imagine the endless hearings in Congress about why was money wasted on this vaccine project that didn’t pan out.
Yeah. That’s, I think, that’s a very good way of putting it. All right. I’ve taken up a good amount of time here. The final part of the show now is what we call recommendation engine. So I’m going to ask you a couple of questions for recommendations of things you’ve loved that have influenced you. Ready?
I guess so.
All right. What’s your favorite work of science fiction published in the last 10 years?
In the past 10 years.
You can’t recommend to Asimov to me again.
Right. I’ll recommend an author because I like just about everything he writes. Charlie Stross. He has these series that do date back beyond the past 10 years but there have been new installments. And I would really recommend his “Laundry Files” novels, which is about a secret British agency that deals with the occult. But that makes it sound like it’s much more James Bondy than it is. It’s actually hilarious and very insightful about society along the way. Or his “Merchant Princes” novels, which are science fiction but they’re also actually about development economics. Because there are these alternate worlds and some of them have access to ours. And you’d think that, well, they could just use our technology but they can’t. So anyway, Charlie Stross would be my current science fiction go to. And there are others. There’s lots of great stuff being written these days.
What work of mid-aughts indie rock do you find yourself listening to most often?
Gosh, who am I listening to now? Larkin Poe, Reina Del Cid. Both indie groups that do a lot of covers but also some original music. And they’re very, very different but both really good.
Who’s someone who hasn’t won an economics Nobel Prize but you think should?
Oh, wow. Well, I have a personal thing, which is, I was actually a little bit upset that the Nobel committee honored the new trade theory, namely me, while skipping over the old trade theory. And Jagdish Bhagwati, my old teacher, did really insightful work in a more old fashioned framework. It’s was long time ago. But if I had been the committee, I would have given it to him before I got it. And I think he could still get it. Avinash Dixit. Joe Stiglitz, who is a very great economist, did get it. But some of his most important work was done with Avinash, who has done other things that are just really mind opening. Oh, and sooner or later, unfortunately, I guess, we can’t do Alan Krueger because of a tragic death. But the people who remade labor economics, there’s a bunch of them. But we really should have. The minimum wage and all of that, labor economics has been a really revolutionized field. And there ought to be some big prizes coming out of that.
And here’s my final one. If Joe Biden, President Joe Biden came to you and said he wanted one book recommendation, one thing you thought he should read, what would you recommend?
Oh, I would actually say that this recent book — and now I’m having a senior moment. I don’t remember the author’s name. But the recent book, “The Price of Peace,” the intellectual biography of John Maynard Keynes has been very widely praised and rightly so. It gives you some context and some notion about the how ideas and events interact and the struggle it takes to free yourself from preconceptions. And I’ve been finding it revelatory. I thought I knew a lot about the Keynes story. But I’m learning a lot that I didn’t know.
Zach Carter is a good friend of mine. He’s the author of that book. And he’ll be thrilled to hear that recommendation. And I second it.
A few minor tone and quibbles on how to describe some of the developments in economics that are really not important. It’s actually an awesomely informative book.
And very finally. I’m now your colleague on the Opinion page. Do you have any advice for me?
Yeah. Well, I think you know this already. But always remember that you have a very intelligent audience. But they’re coming at any issue you’re going to write about from a standing start. So write in English. I always try to write — and it shows you something about how I think — in Sonata form. You introduce a theme. You do some stuff with it. Then you return to it at the end. And you’ve got to draw them. And you have to leave with a stinger. And don’t worry about repeating yourself. And you don’t want to write the same column over and over again. But you’re going to have to hammer any given subject many, many times. If you want everything to be brand new each time, then that’s an impossible burden you’re placing on yourself. And you’re never going to get the point across because people take a while to get it. [MUSIC PLAYING]
Paul Krugman, thank you very much.
Thank you. [MUSIC PLAYING]
Thank you to Paul Krugman for being here, to all of you for being here. My email is firstname.lastname@example.org. If you’re enjoying the show, please rate or review us in whatever podcast app you favor. This “Ezra Klein Show” is a production of The New York Times Opinion. It is produced by Roge Karma and Jeff Geld. Fact checking by Michelle Harris. Original music by Isaac Jones and mixing by Jeff Geld. [MUSIC PLAYING]