America’s Addiction to Easy Money, with Ruchir Sharma

Capitalisn't

University of Chicago Podcast Network

Stigler Center, Chicago Booth, Socialism, Antitrust, University Of Chicago Podcast Network, Growth, 087667, Policy, Monopoly, Professors, Distortion, Research, Competition, Capitalisnt, Inequality, Promarket, Politics, Policymaking, Special Interest, Economics, Efficiency, Regulations, Chicago, Business, Markets, University Of Chicago, Kate Waldock, Capitalism, Friction, Bethany Mclean, Government, Macroeconomics, News, Education, Waldock, Georgetown, Microeconomics, Luigi Zingales, Zingales, Finance, Ucpn

4.5 • 584 Ratings

🗓️ 19 December 2024

⏱️ 49 minutes

🔗️ Recording | iTunes | RSS

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Summary

Are bailouts the new “trickle-down” economics? Have government debt and deficits caused capitalism’s collapse—thus ending the American Dream? Ruchir Sharma is a well-known columnist for the Financial Times, the author of bestselling books Breakout Nations and The Rise and Fall of Nations, and an investment banker who worked as Morgan Stanley’s head of emerging markets for 25 years. His new book, What Went Wrong With Capitalism, traces the roots of current disaffection with our capitalist economy to unabashed stimulus and too much government intervention. Take an example: Sharma writes that the United States federal government has introduced 3,000 new regulations in the last twenty years, and withdrawn just 20 over the same span. He likens the Federal Reserve’s constant bailouts—under chairs appointed by presidents from both parties—to the opioid crisis, in which the solution created more problems than the pain it was designed to treat. Sharma joins Bethany and Luigi to explain how constant government intervention leads to inefficient “zombie” firms, higher property prices, housing shortages, massive inequality, and a historic government debt and deficit crisis. Together, they discuss the first step to a cure—a correct diagnosis of the problem—and how to approach the treatment without exacerbating the problems. In the process, they leave us with a renewed understanding of how “pro-business is not the same as pro-capitalism,” a distinction that Sharma says “continues to elude us.”

Transcript

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0:00.0	The reason you have the opiate crisis, many people argue, is because of this culture where
0:04.7	at the slightest hint of any pain, you administer people drugs and medicine, oxy cotton or whatever.
0:11.2	That same societal approach has now come to be as far as economic policymaking is concerned,
0:15.7	which is at the slightest hint of any pain, you just administer stimulus or have government intervention to try and
0:23.7	deal with the symptoms, whereas you may be making the underlying cause of the problem
0:28.9	even worse.
0:32.3	I'm Bethany McLean.
0:33.7	Did you ever have a moment of doubt about capitalism and whether greed's a good idea?
0:39.2	And I'm Luigi Zengalis. We have socialism for the very rich, rugged individualism for the poor.
0:46.1	And this is Capital Isn't, a podcast about what is working in capitalism. First of all, tell me,
0:51.5	is there some society you know that doesn't run on greed?
0:54.5	And most importantly, what is it?
0:56.5	We ought to do better by the people that get left behind.
0:59.4	I don't think we should have killed the capital system in the process.
1:03.1	So if the audio is a little bit off, I need to apologize with my listeners
1:08.1	because the desire to produce timely episodes of capitalisans
1:13.1	make me work even when I'm traveling. So our podcast is dedicated to discussing what's working
1:18.4	in capitalism and what isn't. So we could not pass up the opportunity to discuss a new book
1:23.4	titled What Went Wrong with Capitalism, especially when the author, Richouscher Sharma, is a well-known FT commentator,
1:30.6	has written a New York Times bestseller, The Rise and Fall of Nations,
1:34.0	and has worked at Morgan Stanley for 25 years as the head of emerging markets.
1:38.2	Most importantly, Bethany could not resist the fact that the book blames the Fed for all the
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