0:01

This episode is brought to you by

0:03

Accenture. A better you starts with better

0:06

hydration. Accenture is on a mission to

0:08

inspire people to do what matters most.

0:10

Their proprietary ionization process transforms water from

0:13

any source into ionized alkaline water, providing

0:15

water that's 99.9% pure with a pH

0:17

of 9.5 or higher. Accenture

0:23

overachieving H2O, the number one

0:25

ionized alkaline water. Shop

0:27

now. When.

0:30

Was the last time I tucker Welsh? How

0:32

many national parks can I hadn't? Two weeks.

0:34

What about hotels? Wait A Erica. Manage my

0:36

spending on travel. When your questions about why

0:39

turn into questions about money, there's Erica the

0:41

virtual financial assistant to help you spend, save

0:43

and plants. Modern only from Bank of America.

0:45

What would you like? The power to do?

0:47

Erica is only available me English language. You

0:50

must download the latest version of the mobile

0:52

banking. I'm only them learn from it Mobile.

0:54

Devices Gortat may be recorded a monitored for quality. Assurance

0:56

message and data rates in additional told me it might make

0:58

of America and a member of the icy. When.

1:09

No matter what tasty choice you make, you'll

1:11

enjoy our everyday low prices. Plus, extra ways

1:13

to save, like digital coupons worth over $600

1:16

each week. You

1:18

can also save up to $1 off per gallon

1:20

at the pump with fuel points. More

1:22

savings and more inspiring flavors. The.

1:41

Hello Welcome to the rest is

1:43

money with me Robert Peston staff

1:46

will be back very soon process

1:48

but for today it's may not

1:50

quite all my own. The great

1:53

thing about this show is I

1:55

get some Meet my business and

1:57

economic heroes Fellow nerds. fellow

2:00

geeks, fellow nerds. And I'm absolutely

2:03

thrilled to be joined by Tim

2:05

Harford. A few years ago we

2:08

were colleagues at the BBC. I

2:10

mean from memory, the first time

2:12

we met was, or bet properly,

2:15

was when I came

2:17

on your amazing more or

2:19

less show to talk about

2:21

how many trillions of dollars

2:24

of British and sort

2:26

of government money across the world

2:28

had been allocated to propping up

2:30

the banks. Oh, those days. Those happy

2:32

days. Yes, exactly. What I

2:35

really remember, Robert, I remember two things.

2:37

One is that I once walked into

2:39

the PM studio when you were being

2:41

terribly insightful about something or other. I

2:43

forget exactly what. And I was wearing

2:45

a wet t-shirt because I had just

2:48

done the ice bucket challenge. And

2:50

I think you were polite enough not to mention

2:52

that I was just dripping over the microphone. And

2:54

then the last time we saw each other, you

2:56

gave me a great big hug. I hope this

2:58

interview is going to finish with a great

3:01

big hug. And the reason you gave

3:03

me a great big hug is I

3:05

think you were overwhelmed with emotion because

3:07

you had just sung Bohemian Rhapsody with

3:09

my local community choir, which is extremely

3:11

challenging and brave thing to do. And

3:13

you did a very good job. Maybe

3:15

not quite as good as the guitar solo, but you did a

3:17

wonderful job. And then you came off stage and I think I

3:19

was the first thing you saw

3:21

and you just grabbed onto me and held on for

3:24

dear life. It was a beautiful moment. I'd forgot that

3:26

you were sort of to blame.

3:28

I think

3:31

I have a nasty feeling it's still

3:34

available on YouTube, but I'm sure nobody will want to

3:36

find it. Just tell us a little bit. I've

3:39

entered the, or I've been in podcast world for a

3:41

bit. You're in the podcast world. I am. I am.

3:43

So my day job is undercover economist at the Financial

3:46

Times, write a column for the FT Magazine. How long

3:48

has that been going on for now? I mean, it

3:50

must be, is it 20 years? Very nearly 20, 18

3:52

years. Yeah. More than 18. Goodness me.

3:57

They'll sack me eventually. But I Also, yes.

4:00

I have a courthouse to have put

4:02

cause called Cautionary Tales with Tim Harford

4:04

which is all about things going terribly

4:06

wrong and also the lessons that we

4:08

should learn. and think fans of the

4:10

rest is money may like to know

4:12

that some of the stories are about

4:14

money. So we had a Aretha moan

4:16

about a spectacular ponzi scheme involving the

4:18

Cia except not really and a global

4:20

conspiracy except not really. an awful lot

4:22

of drugs are they really really were

4:24

involved that walk on par from Donald

4:26

Trump. It is hop see astonishing. So

4:28

am courses house with Tim Harford. Haven't

4:30

noticed some podcasting some isn't it now

4:32

so he about things going wrong that's

4:35

kick off. We've had a number of

4:37

questions and we to do blah jesus

4:39

discussions that and we had a number

4:41

of listeners questions on G D P

4:43

when I was at the Bbc and

4:45

I still do this on my Tv

4:47

you can't ever just say Gdp an

4:50

Arab news report because I sleep with

4:52

a Bbc poll people on this almost

4:54

nobody knows what Gdp is as so

4:56

I was at the come up with

4:58

a power fries and so. I would

5:00

always say Gdp all national income the

5:03

value of already we produce staccato. Say

5:05

I'm not actually hundred percent certain that

5:07

even that makes much sense to people

5:10

know about advice that cystic of we

5:12

which olds and he says why to

5:14

economists talk about grows, why is it

5:16

important? What does he do Should we

5:19

be happy with the status quo? So

5:21

when economists talk about growth say are

5:23

talking about growth in this thing Gdp

5:26

gross domestic. Product. And the

5:28

right with an endless hold on

5:30

Gdp per second is fascinating. Seats

5:32

weird is weird. It is basically

5:34

saying we're going to just measure

5:36

the economy. We're going to miss

5:38

all the stuff. Everything. So everything

5:40

from people sweeping floors, to people

5:42

making calls, to people performing bowel

5:44

cancer surgery to podcast advertising that

5:46

which was would just and will

5:48

add it all up in some

5:50

way. And I'm going to interrupt

5:53

just one second because column people

5:55

including my sister will be named.

5:57

Probably shouting if I point this out. There are quite

5:59

important things. One in the economy that are

6:01

measured like you know. she does a lot of

6:03

unpaid caring for my mother which is obviously valuable

6:05

and that is not included in Gdp. Yeah no

6:07

you sleeping with holes is included in Gdp if

6:10

you get paid to see the floor. but if

6:12

you don't get paid foods or it doesn't getting

6:14

sued, well it depends exactly to have a different

6:16

attempts to measure these things. But yeah but I

6:18

think that's how did I hear of when I

6:20

combo it's not, it's not to him so it

6:22

is this magnificent bonkers com I to mentioned yet

6:25

to just add everything up. To

6:27

say okay how much is all of that

6:29

And a hundred years ago Tdp was was

6:31

not invented. There was no such thing as

6:33

if you had asked person in the street

6:35

know how is the economy doing the quest

6:37

is kind of into haven't I mean you

6:39

could say well you can you find a

6:42

job or knows his stuff. Too expensive but

6:44

Gdp is. It is a study. Weird seeing

6:46

something we should we should a goes up

6:48

from the saw. An excellent lucky one. Ah

6:50

the classic. There are cultural factors here. One

6:52

of things I've always been struck by his

6:54

we as a nation ah, obsessed with. Gdp,

6:56

I leaves the bullet zones. You

6:59

know, if as a recession, which

7:01

is two successive courses of shrinking

7:03

Gdp, it's a lot. was. we've

7:05

got a question from an accessory

7:07

a young about that, which is

7:09

she's a wise Gdp. still a

7:11

measure of policy political success. But

7:13

the reason I'm so looking at

7:15

this sort of national obsession is

7:18

because of I Look at America.

7:20

they are much more traditionally interested

7:22

in employments. yeah, unemployment, still more

7:24

Isis, which seems sort of actually

7:26

intuitively. More sensible because the points about

7:28

the economy is it should be to make

7:30

a prosperous and therefore what the things you

7:33

wouldn't we should be solely more is today

7:35

days at he got a job, what you

7:37

being paid and what semi to prices Yara

7:39

I'd makes more sense to Miami. Gdp is

7:41

of course connected towards those things but it

7:44

is a slightly abstract way of going about

7:46

it. And I'm Anna Katrina Young's question is

7:48

good says he says why why is Tdp

7:50

still a measure of policy political success? You're

7:53

right. Well but it does lead to news

7:55

puts his I'm not sure. that is

7:57

is such measures policy success we

7:59

sink the policies of the current government,

8:01

whether people think they're good or

8:03

bad. They're clearly not targeted at maximising

8:05

GDP. So Brexit was explicitly, this is

8:07

not about GDP, it's not about the

8:09

economy, it's about taking back control. I

8:12

do sort of have to take effect

8:14

to what was actually said at the

8:16

time. And let's be clear,

8:19

significant leaders of

8:22

the two campaigns to take us

8:24

out of the EU did say

8:26

it would make us richer. It

8:28

was always economic nonsense to claim

8:31

it was going to make us richer. Or an

8:33

ITV night after night said it's going to make

8:35

us poorer. There may be other reasons why you

8:37

want to leave the EU, but for goodness sake,

8:39

don't vote to leave the EU if you think

8:41

you're going to be richer as a result. They

8:44

did claim that. Losing argument though, because nobody cared.

8:46

Losing argument. But I mean, other examples, if you

8:48

wanted more GDP, you'd build more houses. If you

8:50

wanted more GDP, you'd have more immigrants. I'm not

8:52

saying we should build more houses, we should have

8:54

more immigrants. Well, I mean, we could discuss whether

8:56

I could say that. But the point is those

8:59

things would obviously increase GDP

9:02

and the government is not arguing

9:04

for them, broadly speaking, the opposition is not

9:06

arguing for them. So I'm not sure it's

9:08

really true that GDP is the policy target

9:10

or whatever has been. And do you think

9:13

that it's that GDP per

9:15

head has ever

9:18

been actually more importantly, should

9:20

be a sensible policy target? Because

9:22

the point about GDP per head

9:25

is in theory, it

9:27

should tell us something about what

9:29

we can pay everybody, what resources

9:31

are available to fund public services

9:33

that are then a benefit to

9:36

individuals. It sort of should give

9:38

you a slightly better

9:40

measure of what we can sort of

9:42

afford. I mean, do you think that's

9:44

right? Yeah, if GDP grows, it's easier

9:46

to pay the bills,

9:48

it's easier to fund public services,

9:50

it's easier to pay debt. If

9:52

GDP per person grows, then that's

9:54

connected in a fairly direct way

9:56

with living standards with materially

9:59

what people can afford. I think one

10:01

of the reasons why the UK is obsessed

10:03

with GDP and trying to get growth in

10:05

GDP up is because we haven't had much

10:07

growth in GDP. Just to remind people, we've

10:09

been a basically a period of very

10:12

lackluster growth since about 2008, since the financial crash

10:14

we were just talking about. 92 to 2007 growth

10:16

was more or less 3% a year. It's been

10:18

nearer 1% a year since

10:23

then. So the collapse in GDP growth has

10:25

been really astonishing. Yeah, and that difference of

10:27

2% points a year for 15 years,

10:30

getting on for 20 years, that really adds

10:33

up. We could be a quarter richer or

10:35

a third richer. If you had a third

10:37

more money in your pocket, you would notice.

10:39

But it all sounds very abstract. What does

10:41

it basically look like? Well, at the moment,

10:43

taxes are high in the UK and public

10:45

services are, according to most people's perceptions, pretty

10:48

poor. We're worried about everything from

10:50

potholes to transport to the NHS,

10:52

but we're also having

10:54

a big debt burden and we're still running

10:56

a deficit, and yet taxes are high. That's

10:58

really what low GDP growth looks

11:01

like. If GDP growth was higher, there might

11:03

be all kinds of problems connected with that.

11:05

It would just be easier to cut

11:08

taxes while at the same time improving public services.

11:10

That's what we've not been in a position to

11:12

do for 15 years. You, like

11:14

me, probably talked to an economist

11:16

called Richard Layard from time to

11:18

time. He says... That's Lord Layard,

11:20

you and me. He

11:23

doesn't insist on it yet. Professor

11:26

Layard. Anyway, Richard says that we

11:28

should be measuring something else entirely,

11:31

which is how we feel, our happiness. And

11:34

that in the end, GDP

11:37

is about, we

11:39

think, the underpinnings of

11:42

a stable, coherent, happy

11:44

society. Actually, if you

11:47

look across the world, the

11:49

connection just between GDP growth and

11:51

happiness is not a particularly... Plainly

11:55

very poor countries are

11:57

often very miserable, but once you reach...

12:00

a certain level of prosperity,

12:02

the rate of growth doesn't

12:04

seem to be that directly

12:06

related to how happy

12:08

you feel. So there are quite a

12:10

lot of rich countries in Europe which

12:12

appear to be happier countries than a

12:14

country like the US where the

12:16

growth is much faster. So can

12:19

we measure happiness in any kind of scientific

12:21

way in your view? And

12:23

should we, should governments put more

12:25

emphasis on happiness rather

12:27

than this aggregate

12:29

level of how much we

12:31

produce, GDP? So it's such an interesting set

12:33

of questions that emerges from this. I mean,

12:35

first of all, yeah, of course you can

12:37

measure happiness. It's very simple. You ask people

12:39

how they're feeling. There are different ways to

12:41

do it. You can ask people how they

12:43

felt about the things they did in their

12:45

day, or you could just say, well, how

12:47

are things going for you overall? And you

12:50

get pretty sensible, unsurprising results. I mean, I

12:52

wouldn't put too much weight on them. Can

12:54

you imagine measuring national income by going to

12:56

a sample of 10,000 people and

12:58

asking each of them, how rich

13:00

are you these days on a scale of one

13:02

to 10? And people would say, well, I'm a six

13:04

or I'm an eight. It's

13:06

not good that you'd get a coherent answer,

13:09

10 years on, 20 years on, 100 years

13:11

on, the definition

13:13

of what rich means is going

13:15

to change. But that is how we measure happiness. We

13:17

say, how satisfied are you with

13:19

your life or how happy are you? So I'm

13:22

not that excited by the finding that

13:24

happiness is not super correlated with, with

13:26

say GDP, but I do think it's

13:28

very useful to measure happiness. I think

13:30

we should be measuring all kinds of

13:32

things. It's crazy to imagine that there'd

13:35

be this one policy indicator that you could

13:37

measure that would tell you how to run

13:39

the country or what to target. We need

13:41

to measure jobs. We need to measure prices.

13:44

We need to measure how well the

13:46

transport system is functioning. We need to

13:48

measure sewage discharges. We need to measure

13:50

NHS waiting lists and sure also measure

13:52

happiness. And for me, the most interesting

13:54

stuff that's come out of Lord Layard's

13:56

work and the work of other happiness

14:00

related directly to treatment for

14:02

mental distress. So cognitive behavioral

14:04

therapy, for example. Talking

14:06

therapy is a treatment for people who are

14:08

suffering periods of mental distress. Does it work?

14:10

Looks like it probably does. That's really useful.

14:13

To say, oh, the country as a

14:15

whole is an 8.2. No harm in

14:17

gathering the data, but I don't think

14:19

it's going to revolutionize anything. And broadly,

14:21

what you learn about the macro economy

14:23

is, well, people don't like inequality. People

14:25

don't like being jobless. People

14:28

would rather have some money than less

14:30

money. People don't like being ill. I mean,

14:32

these are not- So I think we could sort of

14:34

summarize that as insecurity definitely

14:37

makes people feel less happy.

14:39

And indeed, if you look

14:41

at the kind

14:43

of insecurity that we

14:45

all faced during COVID,

14:47

it undoubtedly also contributed

14:49

to a very

14:52

significant rise in mental ill

14:54

health. So plainly, growth matters,

14:56

creating a sense of direction

14:59

and confidence in where we're

15:01

going economically, plainly very

15:03

important. And to loop all the way back

15:05

to Rich Alderton's original question, which we have

15:07

not quite answered, which is why do economists

15:10

talk about growth? Can't we ever be happy

15:12

with the status quo? I mean, I think

15:14

there's clearly nothing wrong with this slightly weird

15:17

abstract thing called the economy growing. That's fine.

15:19

It's kind of a natural process. People get

15:21

smarter. They develop new things. Education gets better.

15:23

Humanity makes progress. But behind

15:25

the question when this is asked is

15:28

a concern about the environment. We're worried

15:30

about the consumption of natural resources. We're

15:32

worried about CO2 emissions. And my

15:34

argument there would be, well, just as we need

15:36

to measure this stuff directly when we're talking about

15:38

happiness, or we need to measure jobs or inflation

15:40

directly when we're talking about the economy, when we're

15:43

talking about the environment, we need to measure environmental

15:45

damage directly. And if you want to make things

15:47

better, you need direct policies to target environmental damage,

15:49

rather than just some vague sense of if only

15:51

we could stop growing, the environment would be okay.

15:53

Well, it wouldn't. And by the way, in the

15:55

UK, we kind of have achieved the goal of

15:58

stopping growing for a while and it's not. been

16:00

very pleasant. So I think you and I probably

16:02

agree that GDP is important, but it's too crude

16:04

a measure of success.

16:07

I should also mention Andrew Wilson, what does

16:09

it talk about happiness? Which we have. We

16:11

have. It's a good question, Andrew. But there

16:13

is a sort of interesting related question here

16:15

from Ola Kelly. And she points out, I

16:17

mean, I read a very interesting piece about

16:20

this actually in The Economist recently, how

16:23

Gen Z, particularly in the

16:25

States, is doing a lot

16:28

better than I think they probably think

16:30

and most people think. I mean, broadly, if

16:32

you meet any young people, what they do

16:34

is they moan that the older generation has

16:36

destroyed everything for them, mucked it up. It's

16:38

all our fault. I've put my hands up.

16:40

Yeah, it definitely is all my fault that

16:42

so many young people aren't

16:45

having such a great time. Sorry

16:47

about that. But statistically, it looks

16:49

like Gen Z, those are people,

16:52

if you like these naming conventions, these are people born between

16:54

1997 and 2013. It looks as though actually that generation in

16:59

terms of employment and income

17:02

is doing pretty well. In fact, I think the

17:04

argument of The Economist was they're

17:07

doing better than pretty much

17:09

every preceding generation, including

17:12

I'm a boomer. I don't think you are a baby boomer. I

17:14

imagine you're a... You look so young, Robert. I'm Gen X. I

17:17

was going to accuse you of being an

17:19

exer. I'm 50 years old, 50 years old

17:21

and proud. But anyway, I'm a late boomer

17:23

and most people think everything is our fault.

17:26

But apparently, the Gen Z, who are apparently

17:28

known as Zoomers, are doing pretty well. And

17:30

there is evidence in America that they're doing

17:32

pretty well. I suppose two things follow from

17:34

that. Why are they doing well in America?

17:36

You've never sounded more like a grandfather, Robert.

17:38

That's fantastic. I wish I was,

17:40

Robert. But if I haven't yet fulfilled that, very

17:42

important ambition. Anyway, the question is, why

17:45

are Zoomers doing well in America?

17:47

Are Zoomers doing okay in the

17:49

UK? I think

17:52

probably not doing as well in the UK, but you have

17:54

a go at it first. Very

17:56

first thing to say, we're talking about a

17:58

group of people who are between the ages

18:00

of 11 and 27. And so

18:02

to ask how they're doing economically, you know,

18:04

it's pretty early days, half of them haven't

18:07

even left school. So let's look at that

18:09

22 to 7 cohort. How

18:11

are they doing? I think the reason people

18:14

assume that Gen Z or Gen Z must be

18:16

doing badly is because I think the scars of

18:18

the financial crisis are still with us. Under the

18:20

scars of Covid. Yes, but we're used to this

18:22

idea that everything kind of went to hell in

18:24

a handcart about 15 years ago.

18:27

And it's been bad ever since. And

18:29

that is broadly true, sadly,

18:31

in the UK, less true

18:34

in the US. It comes back to this conversation

18:36

we're having about growth. I mean, it's not everything

18:38

but it does matter. The US has been growing

18:40

a lot more over the last 10, 15

18:42

years than the UK. And that just means that

18:45

the average person in the US is richer. And

18:47

they're going through a very strong period of growth

18:49

at the moment. And they've got an employment shortage

18:51

problem, a bit like we have. And so lots of

18:54

these young people not only have jobs,

18:56

but it's quite interesting. They're getting really large

18:58

pay rises when they've got a job. Yeah.

19:00

I mean, that's kind of the natural order

19:02

of things. We've had this experience for a

19:04

century or more of each generation is richer

19:06

than the previous generation. And I think the

19:08

millennials waking up and going, hang on, it's

19:10

not clear that we are richer than Gen

19:12

X. That was the shocking thing. That was

19:14

the exception. It was true. In the US, it's

19:16

kind of back to business as usual. And I

19:18

think less so in the UK. I mean, I

19:20

don't think we've got really good data,

19:23

but I've got some numbers in front of

19:25

me from the resolution foundation who do it.

19:27

They call it intergenerational audit. And they

19:30

say that millennials born in the

19:32

late eighties, and on average,

19:34

8% less at age 30

19:36

than members of Generation X born 10 years

19:38

prior. So they're looking at a slightly older

19:41

cohort, but I think that we see

19:43

a different pattern in the UK. I think it is important

19:45

to mention here, a sort of set

19:47

of statistics that are really troubling, which

19:49

is the significant rise.

19:52

I sort of alluded to

19:54

this general problem earlier, the

19:56

significant rise in mental ill

19:58

health among that younger. generation,

20:00

people in their early 20s, which

20:03

appears to be worse in the

20:05

UK than in other

20:07

similar countries. Again, I think

20:10

some of that will be related to a

20:12

lack of a sense of opportunity because of

20:14

low growth. Yeah. I

20:16

mean, it's really hard to measure. Some of it is

20:18

likely to be changes in conventions, but some of it

20:20

seems to be very real, real measures

20:22

of distress are arising. And yeah, and it's

20:25

not clear why, but I'm sure economic insecurity

20:27

is part of it. I mean, the pure

20:29

growth thing matters. So again, the Resolution Foundation,

20:31

they point out income growth. So this is for

20:33

everybody. This is average income growth. Income

20:35

growth in the US between 2007 and 2021, median household incomes grew

20:37

by 17%. So

20:42

if you were earning $20,000, now you're earning

20:44

$23,500. Nice

20:49

improvement. In the UK, 2%. So

20:52

if you're earning £20,000, you're basically still earning

20:54

£20,000. And against

20:56

that backdrop, of course, it's

20:58

harder for each generation to make progress.

21:00

And there's a related issue or a

21:02

related disparity, shall we say, between the

21:04

US and the UK, which

21:07

is they don't have the

21:09

kind of shortage we have in

21:11

this country of decent

21:14

housing. And prices

21:16

are not so far out of

21:18

the reach of younger people who

21:20

want to get on the housing

21:23

ladder. A sort of related issue

21:25

to the one about whether incomes

21:27

are growing is whether you've got

21:29

the opportunity to own a home. And

21:32

plainly, opportunities to own homes in this

21:35

country, in the UK, I mean,

21:38

they're inadequate. Yeah. It's almost

21:40

a uniquely British thing. I think it's

21:42

worth underlining what an exception the

21:44

UK is to much of the rest of the

21:46

developed world in terms of our constriction on house

21:49

building. Whether you like, whether you think it's a

21:51

brilliant idea, whether you think it's a terrible idea,

21:53

I think it's a terrible idea that we make

21:55

it so hard to build houses. It is unusual

21:58

In Japan, for example, very, very. To

22:00

build your house is in in the U

22:02

S much easier to build new house it's

22:04

there were few there were some cities are

22:06

it's hard San Francisco, it's hard but generally

22:08

was easy to build new houses and if

22:11

it's he's to build you houses. Whatever the

22:13

downsides of that fundamentally the cost of buying

22:15

a new house is basically the cost of

22:17

building a new house cause you know if

22:19

you've what some of us to buy a

22:21

house where you build them a house can't

22:23

happen in the Uk and I've I remember

22:25

meeting Caped Barca who had this review for

22:28

Blaze Government must beat beat he sounds and

22:30

maybe to as she was producing these these

22:32

estimates of how many houses we need spill

22:34

and governments keepsakes. Oh yeah yeah yeah, we

22:36

will build more houses or will let the

22:38

private sector build more houses or will provide

22:40

incentives to build houses and we fallen short

22:42

of Caped Baucus target fluid. He had a

22:44

problem. in the year two thousand houses were

22:47

already expensive in the a two thousand been

22:49

nearly a quarter of a century and this

22:51

has been getting worse and worse and worse

22:53

at a cost that plays in hugely to

22:55

intergenerational problems. Because if you feel old enough

22:57

to bought a house in the early nineteen

22:59

nineties, than. Your phone and if you're

23:01

not been you know know it is.

23:03

As you point out, one of the

23:05

most stock sources of inequality in this

23:07

case intergenerational the ah Anna and then

23:09

between people of the same generation. If

23:12

your parents bought a house and then

23:14

when they die they can give you

23:16

the house or they can maybe removes

23:18

the house in and help you out.

23:20

it starts to introduce a week is

23:22

a convenience. Talk about all. This is

23:24

what generates a doing. This is what

23:26

the millennials are doing. This is what

23:28

Gens added doing but actually am. often

23:30

you got very privileged members

23:32

of each generation and very

23:34

underprivileged members of each generation

23:36

and the housing market helps

23:38

to transmit that privilege down

23:40

the generations i mean it

23:42

is certainly the case that

23:44

we don't yet understand the

23:47

social consequences of this extraordinary

23:49

generational inequality in asset ownership

23:51

and we would bow to

23:53

embark on this cycle great

23:55

transfer of wealth from older

23:57

people as i die to

23:59

their children And

24:01

if you are unlucky enough

24:03

not to have well-off

24:05

parents, I mean, that's going to

24:08

feel pretty rotten. Yeah. Yeah. And

24:10

it's entirely random. I mean, it's also things like, are

24:13

you an only child with well-off parents or

24:15

are you one of six with well-off parents?

24:19

Selling off the family home and splitting it five or six ways

24:21

is going to make a big difference compared to

24:23

whether you get all of that into generational

24:25

wealth. And none of this is earned and none

24:28

of this encourages entrepreneurialism,

24:30

productivity, all the kind

24:32

of things we want to see in a

24:34

healthy economy. I think at this point, a cheerful

24:37

note, let's go to a break. Welcome

24:43

back to the Rest is Money with me,

24:45

Robert Peston. Startlingly

24:47

Tim half-earth and run away. So

24:50

I thought we might have a

24:52

chat that flows from

24:54

a special podcast we did

24:56

comparatively recently about the crisis in the

24:58

water industry and in particular the financial

25:01

mess that Thames Water is in. One

25:03

of the points I made is that

25:05

I didn't personally believe

25:07

that water should ever have

25:09

been privatized. Part of

25:12

the reason for that is that I

25:14

think it is a natural monopoly and

25:17

that privatization only really works when you've

25:19

got the scope for competition. Now

25:22

Robert King says, and this

25:24

is a probably intelligent point, he said, why

25:27

isn't gas a monopoly?

25:30

And the short answer to that

25:33

is even though

25:35

gas and water

25:37

rely on pipes

25:40

and anything that has

25:42

an infrastructure element to

25:44

it obviously has monopolistic

25:46

qualities because in practice

25:48

they'll only be a single owner

25:50

of a network of pipes. The

25:53

difference between gas and water is

25:56

there is a global market in

25:58

gas. The

26:00

buy gas from different suppliers

26:02

at different prices you could

26:05

buy on the spot market.

26:07

You could make a bet,

26:09

buy gas for delivery and

26:11

a year or two time

26:14

you can heads and that

26:16

allows buyers of gas to

26:18

compete with each other and

26:20

solve the gas through those

26:23

pipes in competition with each

26:25

other in a way that's

26:27

not possible with water because.

26:30

There is. No. Market or

26:32

is not of the that. there was

26:34

overseas market in bottled water but there

26:36

isn't a markets in the note of

26:38

us reservoirs of water the guys who

26:40

are pipe so in that sense it

26:42

is. the structure is just very different.

26:44

I do remember I said the nineties

26:47

talking to you know the sort of

26:49

brainiacs at the treasury with her in

26:51

favor of privatization of that. They hope

26:53

that one day that would be a

26:55

market him more sir in the way

26:57

that there is for gas and electricity

26:59

but it has never materialized. Ah yeah

27:02

what we've ever gone is a suction

27:04

water industry that it only works if

27:06

regulation is is any good and quite

27:09

frankly I think in recent is that

27:11

regulation has been lousy. That was a

27:13

your thoughts about which services work better

27:15

or worse when privatized. Here is such

27:18

an interesting question and people do tend

27:20

to just was auto ideology my obviously

27:22

we should nationalized them or obviously the

27:25

private sector will do it better myself.

27:27

Look around the world turns out will

27:29

be a little bit more complicated. Than

27:31

that I think in addition to the

27:34

police you've made Robert about gas vs.

27:36

water. Guess it's just easier to regulate

27:38

was it seems he said meets the

27:40

water regulators have made him look difficult

27:42

to regulate Sports with water you've got

27:44

people semi environmental issues as the question

27:46

of discharge what you do with is

27:49

the sewage storage of water. gas just

27:51

seems to be an uneasy a business

27:53

or the That said there was a.

27:55

Wonderful! Offshore as storage

27:58

facility The Ruff. Storage

28:00

facility that we closed rather but

28:02

I think have British Gas or

28:05

Centrica whatever the hell is shut

28:07

down shortly before gas prices spiked

28:09

when Russia invaded Ukraine. So either

28:11

it's possible to make mistakes in

28:14

gas as well. but it is

28:16

a simpler problem he just says

28:18

you, that's all of these utilities

28:21

are in a sense much more

28:23

susceptible Serb. not any regulators decisions

28:25

but government decisions and therefore does

28:27

get us back to this whole

28:30

question. Of do we really

28:32

believe. That. Privatization.

28:35

In. All cases. Delivers

28:38

benefits to consumers and the air. The

28:40

obvious answer is no a wig So

28:42

much better assess competitions if you look

28:44

for example at the privatization of British

28:46

Telecom which at the time you much

28:49

said well this looks a little bit

28:51

like and monopoly right? There were only

28:53

so many telephone wires and only one

28:55

company can own the telephone was splashy

28:57

that privatization really unlocked the you to

29:00

the coming potential of mobile telephony. We

29:02

should not be little bit solve Bt

29:04

that require regulation on that because they

29:06

have a huge network. In the ground

29:08

of was and fiber and all the

29:11

rest of it. So there's a network

29:13

element the required for so far as

29:15

you say, it is an industry where

29:17

innovation has created enormous competition. Absolutely One

29:19

other example I find interesting and and

29:21

I'm no expert this is really just

29:23

a based on on com personally periods

29:25

and asking a few terrorists questions while

29:28

traveling. but German railways? Let's think of

29:30

the Germans and staff. You know they're

29:32

on top of everything. They're brilliant. Everything

29:34

we have this site inferiority complex. I

29:36

love Germany, but the. Children Railways of

29:38

a mess and my understanding I think Toy

29:40

Chip on his own by the gym government

29:43

could be wrong about that. The sent dramatically

29:45

under funded, the infrastructure is under funded and

29:47

it's all falling apart in contrast Japanese my

29:50

which on and legendarily our astonishing. I was

29:52

once in in a Japanese city and a

29:54

train with two minutes late and the person

29:56

I was with waiting for the train was

29:59

convinced that. Try must have come

30:01

up with a light rail service metro

30:03

rail service. He was convinced the same

30:05

must have come and gone and with

30:07

didn't been so intently talking to each

30:09

other that we'd missed it. Couldn't conceive

30:11

that he could possibly be and have

30:13

been stupid estate and was genuinely satan

30:15

when it was a Japanese Railways that

30:17

privately owned since I these or private

30:19

companies February. Interesting structure that I have

30:21

yet to fully understand. The point is

30:23

it's very easy to adopt an ideological

30:25

perspective or we should prioritize. you should

30:27

nationalized at see that the local institutional

30:30

details. History, tradition, culture. they all

30:32

matter perhaps more than we economists

30:34

like to think of. Very fortunately

30:36

the trains that I came to

30:38

the studio on was delayed by

30:40

twenty minutes, but the previous train

30:42

twenty minutes earlier was also delayed

30:44

by twenty minutes. So I was.

30:46

My journey was completely uninterrupted and

30:48

only delayed on paper for this

30:50

is a great metaphor for this

30:52

country I think we do some

30:54

our model for it's now we

30:56

might just very brief seekers as

30:58

connected Issue: Nick Floyd. Says

31:00

themselves as accountable to several stakeholders

31:02

and they stakeholders to which is

31:04

is accountable all consumers, regulators, government

31:06

of course shelled as he simply

31:08

says, why not? Sums a business

31:11

like Thames Water by borrowing rather

31:13

than issue says. I mean one

31:15

recess topical is because their shelters

31:17

are refusing at the moment. Stump

31:19

up more money. The Thames water,

31:21

which is why people think it

31:23

might get past that has to

31:25

be nationalized. I mean the simple

31:27

answer is, financial structure is very.

31:30

between companies are are times when a

31:32

bit more debt is appropriate ice in

31:34

the case of these water companies because

31:36

their earnings are supposed to be reliable

31:39

that they tend to have a same

31:41

way more debt than other sorts of

31:43

restating companies where the earnings are more

31:45

volatiles the point about equity to put

31:47

too much as it also the neck

31:50

is simply that you need a cushion

31:52

of money that can protect you against

31:54

shocks the point about shares his daddy's

31:56

money at risk that you need in

31:59

all businesses to absorb the bad

32:01

times. The problem with relying

32:03

too much on debt is

32:06

when a lender faces losses,

32:08

they have the right to

32:10

simply take control of a

32:12

business, wind it up and close it

32:14

down. And the thing about shares and

32:17

shareholders is shareholders get the

32:19

upside when things are going incredibly well,

32:21

but the corollary of getting the upside

32:23

is they are there to absorb the

32:26

losses when things go badly and they

32:28

prevent a company from going bust

32:30

and being wound up. So in answer to

32:32

Nick, it would not be a great idea

32:34

even for a business as reliable

32:37

a flow of earning as Thames

32:39

Water to have no equity whatsoever, unless that

32:41

is, get back to our original point, it

32:43

were owned by the government because the government

32:45

is there to absorb all losses in the

32:47

case of nationalized

32:49

businesses. Another way to put

32:52

what you've just said Robert is that if

32:54

a company is funded by mostly by debt,

32:56

it's more likely to go bankrupt. If it's

32:58

funded mostly by equity, it's less likely

33:01

to go bankrupt because fundamentally, when you

33:03

borrow money as debt, you're promising to

33:05

pay a particular amount at a particular

33:07

time. And if you don't, you could

33:09

be forced into bankruptcy. Whereas with equity,

33:11

you're just promising to pay shareholders. Well,

33:13

whatever profits happen to be available,

33:15

no particular amount, no particular

33:17

time. And that is a

33:20

structure that is more robust, which is why

33:22

during the banking crisis, we were talking to

33:24

all these orphans who I think were quite

33:26

right, who were saying the banks should have

33:28

raised more money from shareholders and less money from

33:32

debt. Now let's get on

33:34

to a subject that

33:36

always gets people really excited. I don't

33:38

know if you've noticed this, but whenever

33:40

I go around the country and give

33:42

talks to people, we always get on

33:45

to, there's always somebody in the room

33:47

who's obsessed with something called modern monetary

33:49

theory. And the people who

33:51

believe in modern monetary theory think that

33:54

it is a theory that if

33:56

put into practice will make all of

33:58

us richer forever. So

34:00

the question from Ian King is, do

34:03

you think any British political party would

34:05

ever consider modern monetary theory as a

34:07

policy to follow? What do you think?

34:09

By the way, send all your complaints

34:11

about what I'm about to say to

34:13

Robert. Don't email me. I've had all

34:15

the emails about this. Probably

34:18

not. Worth asking what difference would

34:20

it make if a party did

34:22

adopt modern monetary theory? The basic

34:24

idea, I hope I'm not

34:27

oversimplifying, I would try to do it

34:29

justice. The basic idea is when

34:31

you think about the economy, we think about governments have

34:33

to borrow money and then they have to pay the

34:35

money back or they have to pay interest on the

34:37

debt if they don't pay it back. They

34:40

fund their spending by collecting taxes or by

34:42

borrowing. That's our framework. Modern monetary theorists say,

34:44

well, actually there's a different way to think

34:46

about it. I think it's true. There is

34:48

a different way to think about it. You

34:50

can just forget for a moment. Forget taxes,

34:53

forget debt, forget all of that and just

34:55

say, look, the economy is a whole bunch

34:57

of people doing things. It's your people with

34:59

skills, there's capital, there's factories, there's

35:01

buildings, there's all of this stuff and

35:03

the economy can produce a certain amount

35:05

of output. Sometimes there's slack in the

35:08

economy. It's underutilized. At that point, you

35:10

need to do something to engage those

35:12

slack resources. Modern monetary theory basically

35:14

says, look, if there's slack in the economy,

35:16

you could just print money. They have a

35:18

more clever way of doing it, but fundamentally

35:20

you could just print money and that will

35:22

bring those slack resources online. Print money, employ

35:24

the people who are unemployed, you know, occupy

35:26

those factories, get them back to work, all

35:28

of that kind of thing. That's

35:30

basically true. There's all kinds of ways you

35:33

can account for it. Modern monetary

35:35

theorists are right about that. The trouble is,

35:37

it only really is a radical idea if

35:39

there's a lot of slack in the economy.

35:42

Right now, there's no evidence of any slack

35:44

in the economy. We've got very high levels

35:46

of employment. We'll be more precise

35:48

about that. We've got very low levels of

35:50

unemployment. We've got high levels of inflation. So

35:52

no matter how you account for it, whether

35:54

you do some fancy modern monetary theory policy

35:57

or whatever, there's not a lot of slack in

35:59

the economy. out there. And I think

36:01

that the advantage is that the modern

36:03

monetary theorists say that they can offer

36:05

only work when the economy is running

36:07

with a lot of slack. Why do

36:09

you think, because this is the bit

36:11

that always confuses me about some proponents

36:13

of modern monetary theory, I

36:16

would not be somebody who says

36:18

that inflation is wholly a

36:20

monetary phenomenon. I do think,

36:22

however, that there is

36:24

always a monetary element to inflation.

36:26

The more money there is in

36:29

the economy relative to a certain

36:31

level of output, the

36:33

cheaper, in a sense, that money

36:35

is, in which case the higher

36:37

prices will be. And that's

36:40

just sort of basic. But

36:42

what I don't understand about the proponents, genuine,

36:44

modern monetary theory is quite often they say

36:46

in a period of inflation, and

36:49

they did say that in the recent period of inflation,

36:51

there's no problem with creating a lot more money it

36:54

won't make inflation worse. And that just feels

36:56

a very odd thing to say, but do

36:58

you have any understanding of why they say

37:00

that? No, I don't understand why that would

37:02

be true. And so maybe I am blameworthy.

37:05

I don't understand the theory to that extent.

37:07

I certainly understand how printing money would work

37:09

in a slum. I could certainly understand

37:11

how if George Osborne had

37:13

had a modern monetary theorists whispering

37:15

in his ear in 2010, 2011,

37:18

we might well have had better economic policy

37:20

back then. But right now, I would have

37:22

thought that the modern monetary theorists would be

37:24

saying really exactly what conventional economists would be

37:27

saying, which is you need to be very

37:29

careful of stoking more inflation. And I'm surprised

37:31

to hear that they don't. I mean, one

37:33

of the things that I think is quite

37:35

interesting in the case of recent

37:37

economic history, we sort of started

37:39

talking about how I think we

37:42

first met during the financial crisis. And

37:44

I remember immediately, well,

37:47

as it looked like the financial crisis was going

37:49

to lead us into a

37:51

very serious slump, and then we became

37:53

it became clear the economy

37:56

was going to be stagnating for years and

37:58

years, some of that as a result. of

38:00

that banking shock, some

38:02

of it as a result of austerity.

38:05

We did see at that

38:08

point the beginning of a debate

38:10

about this concept called helicopter

38:12

money and there were perfectly serious people,

38:14

remember talking to a boat you'll know

38:16

as well called Adair Turner who was

38:18

one of the regulators at the time

38:20

and he was talking publicly about the

38:22

idea of essentially whether the Bank

38:25

of England should simply create a ton

38:27

of money and it should

38:29

just be distributed to people in some

38:31

shape or form or given to the

38:33

government to fund public service spending. Either

38:36

way it would be pure money creation

38:38

of the sort that we have just

38:41

discussed. We didn't get that. What

38:43

we did get was quantitative easing and

38:45

quantitative easing is related but not quite

38:48

the same thing. It is the Bank

38:50

of England creating very significant

38:52

amounts of new money which started

38:54

after the financial crisis, started quantitative

38:56

easing after the financial crisis and

38:58

then buying government debt that did

39:01

increase the supply of money but

39:03

it didn't have quite the same

39:06

stimulating effect because the Bank of

39:08

England was not writing off the

39:10

government debt. The

39:13

government was still on the hook to

39:15

pay off all those hundreds of billions

39:17

of pounds. One of the things

39:19

since the start of QE that has been debated

39:21

a lot is whether it

39:23

would have been or would still be

39:25

rational to write off the debt and

39:27

just have this pure money creation rather

39:31

than insist that this is still a

39:34

real debt that the government has to

39:36

repay. Again, I just wondered if you

39:38

had thoughts about any of this. One

39:42

economist said, it's a bit like you've got this

39:44

giant vacuum cleaner that you can use to hoover

39:47

up all the money. You've thrown all the money

39:49

out of a helicopter and then you can hoover

39:51

it up with this giant vacuum cleaner. Cancelling the

39:53

government debt is basically destroying the hoover. You

39:56

can throw the money into the economy but you can't take it out again. that

40:00

was risky. But sometimes you need to take policy

40:02

risks, sometimes you need to tie your own hands

40:04

and say, look, we're cancelling this, we can't actually

40:06

go back. Maybe that would have been

40:09

a bit more stimulative. So I suppose the question is,

40:11

when I talked to former Governor Bank

40:14

of England, something like Mervyn King, an

40:17

older generation of economists, still

40:19

felt not only scarred

40:21

by the inflation that

40:23

this country went through in the

40:26

60s and 70s, but equally, people

40:29

would talk openly about what they

40:31

felt was the risk of a sort

40:33

of German style hyperinflation. And we

40:35

already haven't seen anything like

40:37

that as a result of QE, but do you think

40:39

that was a real risk? I don't think so. It

40:41

never struck me as very plausible given how what

40:44

stress the banking system was under printing

40:46

a bit more money didn't seem like a

40:48

risk to me. I guess fundamentally, there are

40:51

two fears that different sides of

40:53

this debate have. And I think the fears are

40:55

well justified on both sides. So there is a

40:57

fear, the whole kind of modern monetary thing or

40:59

the helicopter money thing or all this idea that

41:02

you know, actually, maybe there is

41:04

a magic money tree. There's some

41:06

real truth behind that. But there's always

41:08

a risk that governments lose their discipline.

41:11

They see it as an easy way out,

41:13

they print money, and then you've got growing

41:15

inflation and the whole thing is Weimar Germany,

41:17

the whole thing becomes a mess. That's

41:19

always the risk if you give politicians

41:21

that temptation. Then on the other side

41:23

of the debate, there's this risk that

41:25

the Treasury is just too much a

41:28

slave to the debt figures and

41:30

doesn't think imaginatively enough about

41:32

ways of spending money to stimulate the

41:34

economy to increase productive potential. And that's

41:36

a risk too. And at different points

41:39

of British economic history and different points

41:41

of world economic history, different risks have

41:43

been more salient. But they're both fair,

41:45

they're both potential policy errors. And

41:47

you know, we're just trying to steer a middle way. So we've

41:49

got time for one more question. This is from Peter.

41:53

And it's about tariffs. And

41:56

he asks how much of an impact will US

41:58

tariffs have. So what

42:01

we've seen from Biden is

42:04

the introduction of really very

42:06

significant tariffs on imports from

42:08

China, everything from electric vehicles

42:10

through the semiconductors, through to

42:13

solar panels. I mean it's a great raft

42:15

of goods worth billions and billions and billions

42:17

every year. I suppose it sort

42:19

of brings us on to this question about when

42:22

there are restrictions on trade, when

42:24

you put taxes on trade, who

42:27

suffers? Is it the seller of

42:29

those goods or is it the

42:31

buyer of those goods? So the way

42:33

to think about this is to imagine

42:36

that instead of China, you just have

42:38

this great big factory on the American

42:40

coast making all of these amazing cheap

42:43

EVs, semiconductors, digging up all these rare

42:45

earth metals, producing solar cells and so

42:47

on. And you've got this amazing factory

42:50

that's producing all this fantastic

42:52

stuff and it's great

42:54

for the American consumer because they

42:56

just, they can just go take

42:58

their dollars to the factory, buy

43:01

all this stuff. And then one

43:03

day an intrepid investigative reporter, Robert

43:05

Peston for example, breaks into the factory

43:08

and reveals to a shocked world that

43:10

there is no factory there. It's just

43:12

docks and all that's happening is ships

43:14

are coming from China and bringing this

43:16

stuff. Now we think very

43:18

differently about the stuff being made in

43:20

China versus the stuff being made in

43:22

a US factory full of robots. But

43:24

fundamentally the economics are very similar to

43:26

the stuff being made in a factory

43:29

full of robots on the coast of

43:31

California versus the stuff being made in

43:33

China. And the impact of the tariffs,

43:36

broadly speaking, is going to be to

43:38

make stuff more expensive for American consumers

43:40

at the same time. And that makes

43:42

American consumers poorer. Makes them poorer.

43:44

At the same time, it's very good for

43:46

American producers of EVs, anybody who's trying to

43:49

make this stuff who's protected

43:51

from a Chinese competition is going

43:53

to do well. Now, the classic

43:55

economic models basically say overall this

43:57

is a loss. So America is

44:00

poorer because of these tariffs. In

44:03

reality, there's all kinds of other stuff going on. One

44:05

of the things that's going on is politics.

44:07

These tariffs are going to make Joe Biden

44:10

more likely to be reelected. Donald Trump's attack

44:12

on them should have happened sooner. There should

44:14

be more. Both sides of the political aisle

44:17

in the US want these tariffs. This is

44:19

basically nakedly political on the part of the

44:21

Biden administration. In the medium

44:23

term, it's bad news for the environment

44:25

because you just get fewer electric vehicles,

44:27

more expensive electric vehicles in the US.

44:29

In the long term, who knows? There

44:31

is an argument. I don't think it's

44:34

an absurd argument. There is an argument

44:36

that these tariffs will protect a nascent

44:38

American industry. America is still switching over

44:40

to electric vehicles. They haven't quite got

44:42

there yet, despite the market leader, Tesla.

44:44

They need to produce solar panels. They

44:46

need to produce all of these green

44:48

goods. If you let all

44:50

this cheap competition from China, which has heavily

44:53

subsidized all this stuff, if you let that

44:55

flood in, it'll destroy all these American industries

44:57

before they've really got off the ground. In

44:59

the long run, America's worse off. The whole

45:01

world's worse off. I wonder. That

45:04

might be true. Obviously, it's also pretty

45:06

self-serving for all of these domestic US

45:08

industries. It just sort of gets back

45:10

to the origins of modern economics. Modern

45:12

economics is founded on Smith and Ricardo.

45:15

They would say that what America is

45:17

doing is really bad for America and

45:19

really bad for prosperity everywhere. I suppose

45:23

what I would say to them, and doubtless

45:25

they will be in this room one of

45:27

these days on the rest of his money,

45:29

what I would say is you can't take

45:31

politics out of this. For

45:35

me, the really interesting question is we did

45:38

live through decades of

45:41

saying globalization is a good thing.

45:43

It was raising living standards all

45:46

over the world. Actually, the numbers

45:48

lifted out of poverty in China

45:50

in particular was astonishing. I think

45:52

we sort of hoped that that

45:54

would be associated, that globalization would

45:57

be associated with democracy.

46:00

policy, also taking greater

46:02

root all over the

46:04

place, in particular in China. And

46:07

therefore we thought prosperity would be

46:10

associated with what we think of

46:12

in our liberal economies as progress.

46:14

But it hasn't been. Precisely

46:17

the reverse has happened in China. It's

46:19

become a much more autocratic state. And

46:22

it seems to me therefore simply

46:24

turning a blind eye, which we

46:26

did for years, to the enormous

46:28

subsidies that were going into Chinese

46:30

industries, the way that they were

46:33

deliberately depressing the value

46:35

of their currency to make

46:37

their exports cheaper was

46:40

a bit naive. I should always take perspective where we

46:42

started. There is more to our

46:44

security than just our short-term living standards.

46:46

Yes, our living standards improved for

46:48

a period as a result of that globalization.

46:51

But arguably the world is a much

46:53

more dangerous place, having a

46:56

very powerful, autocratic,

46:59

incredibly now well-resourced China.

47:01

Yeah. It's hard

47:03

to know what the alternative would have been

47:05

and how things would have played out. I'm

47:08

not quite as pessimistic as you, Robert, about the progress

47:10

of democracy. Clearly things in China

47:12

are pretty frightening. On the other hand, they were

47:14

also pretty frightening in the early 1980s, the late

47:16

1970s, before all

47:19

of this started. North Korea has

47:21

made wonderful progress towards not

47:23

only richer but vastly more democratic than

47:26

it was in the 1970s. And

47:28

North Korea, which is cut off from

47:30

democracy, isn't. Eastern Europe has

47:32

made – there are some exceptions, but it's

47:34

made amazing progress towards freedom and democracy. So

47:36

there are definitely some dark spots, but we

47:38

shouldn't forget the bright spots too as to

47:41

how much of any of this is

47:43

connected to the process of globalization. I

47:46

wish I fully understood. What I do

47:48

know is it's always easier when you're making

47:50

an economic choice to blame

47:52

the foreigner than to spend

47:54

domestic money. Biden's

47:56

doing both. He's spending a lot of money

47:59

boosting. The U S A good

48:01

green industries try to create set up

48:03

the screen that that year these green

48:05

technology hubs and build or eve ease

48:07

but he's also. Blaming. The Chinese

48:09

and and. A kind of wish

48:11

he was. Circus. More on the

48:13

spending money and less on the layman the

48:16

Chinese. But as you say, politics is, politics

48:18

is and isn't. That seems to be a

48:20

good moment to say thank you very much.

48:22

Indeed, that was terrific. Ah much as I

48:24

had. I hope you're happy back Robert This

48:26

has been such fun! Thank you so much

48:29

for asking me. You'll. Definitely. I.

48:31

We've had five episodes of Liz Truss.

48:33

Say what episode of Tim Harford is

48:35

simply not enough? Absolutely. I just remind

48:38

us. but you're amazing. Book us yes,

48:40

Cautionary Tales with Tim Harford wherever you

48:42

get your podcasts and more or less

48:45

his back on the Bbc very shortly

48:47

as well. So said goodbye

48:49

for me to buy for me

48:51

and importantly step will be back

48:53

for our next episode. Thank goodness

48:55

for the rest is money!