2337: Asset Inflation Vs. Consumer Price Inflation | Lords of Easy Money: FED Broke the Economy by Christopher Leonard

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It is my pleasure to welcome Christopher Leonard to the show. I was fascinated when I found one of his books because I really like the title and that is the Lords of Easy Money, how the Federal Reserve Broke the American Economy. He's also the author of two other books, one on the Koch brothers and the other on the meat industry and the monopolistic practices there. He's a journalist and reporter and it's glad to, it's great to have him on. Christopher, welcome. How are you?

I'm great, man. Thanks for having me.

It's good to have you. And you're coming to us from Kansas City.

That's right.

Good stuff. Well, the Lords of easy money, I suppose that is maybe a dig on Keynesianism.

A dig on Keynesianism and the highly accelerated version of that we saw in the Fed under the modern era of the last 10 years of just truly unprecedented money printing.

Yeah, yeah. So, so when we, when we talk about easy money, you know that's more than just the money supply. Right. Do you want to kind of unpack that for us? When you, when you say easy money, what does that mean?

Absolutely. Okay. And I'm not going to dive into the history, but I mean, we created the Federal Reserve bank to manage the currency. That's what it does. The Fed releases US Dollars, it is the sole source of US dollars. And the Fed's job is to manage the supply of dollars, among other jobs, but it manages the supply of dollars. And, you know, more or less, for decades, the Fed did that within this, these lanes, these boundaries. You know, interest rates would never get really much above 5%, except for a few periods lower than 3%. Ballpark. Okay. What I'm talking about is that since 2009, the Fed really engaged in a set of unprecedented policies. And it did two things. First of all, it kept interest rates at zero for years. So, I mean, that is foot on the pedal in terms of what we call easy money, which is very low lending rates, lots of borrowing. But at the same time, while it was keeping interest rates at zero, the Fed printed unprecedented amounts of money through this program we can talk about called quantitative easing, where the Fed was creating tens of billions of dollars out of thin inside the Wall street banks. And just to put it in perspective, between 2008 and about 2012, the Fed created $3 trillion through quantitative easing. As comparison, it had created essentially only $1 trillion in the first 90 years of its existence. So that was like 300 years worth of money creation in four years.

Okay, and what four year period is that? Let's just run that again.

08 to 2012.

Okay, so great Recession. And coming out of the Great Recession, toward the end, the Fed literally created triple the amount of money in that short four year period than it did in the entire history since 1913. Right.

Completely accurate. Which is why I wrote this book, because someone explained that to me and it was just mind blowing. And I want to make an important point. You know, during the Great Recession, of course, that's what we all think about when we think about 08, the Fed printed about a trillion dollars. And wow, that was a big deal. And we can all understand that because the Federal Reserve is like the firefighter during times of emergency. But the programs I'm really looking at started after the Great Recession. And that's really important. This stuff, quantitative easing as we know it today, really started in 2010. And that's important because that's like the Fed stepping in to do the job that Congress used to do. Quantitative easing, this money printing was like a jobs creation program done through money printing.

Yeah. Wow. It's crazy. So you're saying maybe you're even comparing it back to the New Deal programs. Instead of giving people jobs, just give money a job.

That's exactly right. I joked about printing a T shirt that said, my grandfather got the New Deal and all I got was quantitative easing.

Yeah, right. And the thing, I don't think most people would get that, but okay, I.

Would get it, I would enjoy it, but that's exactly right. And so the book really walks through the policy making. And this was all under the chairman, Ben Bernanke, at the time, he was the godfather of quantitative easing, literally basically invented it. And Congress was pretty stalled out at the time. This was right during the rise of the Tea Party. That was like, we're going to stop the Obama administration. And so Bernanke really took it upon himself to do a jobs creation program. But the thing about the Fed is the Fed cannot build a dam like the Hoover Dam. It can't do these New Deal programs like the Conservation Corps where you're hiring people and putting shovels in their hands. All it could do was create money inside 24 big banks on Wall street called primary dealers. And that's exactly what it did to an unprecedented extent.

Yeah. So the effects of this obviously are inflationary. Let's go kind of in order if we can. Let's just talk about Greenspan a little bit. Everybody called Alan Greenspan the Maestro. I think that was ridiculous. To me, he was an easy money guy too. Remember the dot com crash and 911 and all of that. Do you, do you criticize Greenspan at all or do you think he did the right thing?

No, I do criticize Greenspan. I mean, I criticize him first of all for, you know, you've heard the, the phrase about Greenspan speak or Fed speak, where he tried to mystify and complicate everything to make it sound like he was this wizard.

Right.

When in fact the primary tool he used was easy money. Cutting interest rates, keeping them low for a long period of time. And you're exactly right that that led to the dot com bubble and eventually the housing bubble, which was largely under Greenspan's term. But when we talk about this, it's really important to talk about inflation. Greenspan was called the Maestro because price inflation really remained under, under control during his term. Now, I think in retrospect, we must realize that like the entrance of China into the global supply chains played a big role in that. It was, it was about more than the Fed. But for my purposes, it's important to remember there are really two kinds of inflation that we should be talking about. One is price inflation, the CPI indicator. That's what we hear about all the time. But then there's inflation in the asset markets.

Right. So I would call that consumer price inflation. Versus asset price inflation.

Perfect.

Okay.

And under Greenspan, price inflation stayed low, but asset inflation rose dramatically. That's the dot com bubble.

Right. So what wouldn't it be fair to say that, you know, Greenspan had most of the advantage, if you call it an advantage of the globalization of the economy where you had all this cheap imports coming in and so that blunted the effect of inflation which would have been higher had that not been the case.

Exactly.

Okay, so you know, Greenspan got lucky, right? That happened under his, the major part of his tenure. I mean he was in for a long, long time, of course, 26 years or something. It was really long. But, but you know, that was like at the pivotal time, at least is the time I became more aware of the Fed and what they were doing and so forth. So he had the advantage of globalization which maybe blunted the effects, you know, he was producing in the economy with easy money. Right?

That's exactly right. It was a perfect moment in history to keep interest rates low because of this deflationary effect of the, what we really do now call the China shock, which was just a massive deflationary effect on consumer prices. But he, he also got lucky because of a, an intentional policy inside the leadership at the Fed where they, they, they decided during the 1990s we are only going to focus on price inflation and we are not going to worry about asset inflation.

Right there. That's the Cantillon effect, isn't it? The asset inflation is how the rich just get so much richer and keep the price inflation down. So the voters and the major part of the electorate doesn't complain too much. Right. And they don't get the pitchforks out. It's a money transfer. It's a wealth transfer, isn't it?

It's a massive wealth transfer and that's a huge part of what happened to our country in the 2010s when they hyper accelerated the money printing.

Okay, so now let's move into the Bernanke era. Okay. And you know Bernanke was an easy money guy, right? I think they're all easy money guys. I mean since Volcker everybody's easy money it seems like. But talk about Bernanke and your thoughts there.

Well, so, so yes, Bernanke came in after Greenspan and I think the thing I want to say about asset inflation is Bernanke was in the same school as Greenspan, that we're not going to worry about this. And you know, you just described it as a massive wealth transfer, but there was this, this idea put Forward, not just by the Fed, but by Wall street that, you know, rising stock prices are an unamiliorated good for everybody. It makes.

I'm so glad you said that because ever since Friedman did that op ed in the New York Times and like early 70s, that just kind of ruined the world, honestly. You know, I mean it seemed like, it seemed good at the time, it seemed like a legitimate idea. But you know, companies have more stakeholders than just shareholders. Okay. And you know, that's when the, all the employees, they started to just treat them badly and you know, right. Sizing and downsizing. And then the automation trend came along and the, you know, the way like Amazon just spies on its workers all the time, you know, it's just these are people, they're not cogs in a machine, but that's the way they're treated, sadly.

And all those activities you described can be really bad for a lot of people's economic lives. If you're shut down factories, slashing the jobs, but it can boost the stock price.

Right.

So in that way it is disconnected. But there's another way too, which is that, I mean, this is almost a cliche, but it really is true. At this point, the top 1% of the population owns the vast majority of stock. And so when the value of stock goes up, that benefit is captured by a really, really small group of people. You know, the bottom half of Americans, the bottom by income. The bottom half owns something like 5% of the assets in this country. So asset price inflation really is a huge driver of income inequality in this country. And if you think that's a problem, income inequality, then you would not pursue a policy of driving up asset prices above other things, you know.

But is there any chance that's going to change?

Well, I'll tell you what, everything's changing now. Everything does feel on the table. But you know, obviously our politics is being driven right now from the White House. I mean, this is really President Trump's world at the moment. And even he puts forward this point of view that, you know, stock market up good, stock market down bad, although the tariffs have complicated that. Trump did put forward the idea that like we can take some short term pain for long term restructuring, but you know, in terms of the deep structures changing in the sense of like asset ownership in this country and income inequality, I mean, these are really long brewing problems, decades old that won't be solved quickly.

No, they sure are. You know, we've, we've decided somehow as a society that like food service people shouldn't get Paid anything. Right? And they should be, you know, really low paid. Yet baggage handlers who are unionized at an airport that are getting high wages plus tips, plus benefits, they should be paid a lot. I don't know how that happened. You know, like, there's so many, like, imbalances. Listen, capitalism is better than any alternative. But this whole idea of shareholder value, though, really, really, that just was a tectonic shift in the way things work. And it didn't really take hold for a while. But it all started in the early 70s with Friedman, which I like Friedman, I mean, generally.

But you're exactly right. And what is it, the Business Roundtable, that group of CEOs that puts forward this point of view that shareholder value is the most important thing above all things, and shareholders are the only stakeholders. And so this is really important when we talk about what the Fed did in 2010, because you've got this guy who comes in, Ben Bernanke. And the economy in 2010 was really limping out of the Great Recession, which was no surprise. Everybody knew this would take a long time to get rid of that debt hangover. But job growth was really weak at this time in 2010. And Bernanke really did take it upon himself to expand. The Fed's mandate is really how I put it. And to say, okay, we don't see Congress acting enough, we're going to act and we're going to do it. We've got interest rates at zero, which, by the way, was like an extraordinary emergency measure that they thought would last for maybe months or a year. But Bernanke says we're going to keep rates here going forward, which was extraordinary in itself. And he said, now at the same time, we're going to print tens of billions of dollars to quantitative easing.

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That's such a great question because, you know, Operation Twist was essentially like an. And also, I've been working on another book in a totally different field, so I apologize if I'm a little fuzzy on a few details. I could have talked for an hour about Operation Twist a couple of years ago. But like they did all these things in the heat of the global financial crisis that were seen as extraordinary emergency measures. And one of those things was going out and purchasing assets like mortgage bonds and Treasuries, which is when we talk about quantitative easing, that's what it is. And if I could please quickly say this, here's how the Fed creates money out of thin air. It calls up a bank like JP Morgan and says, hey, can we buy a million dollars of treasury bills from you? JP Morgan gives the treasury bills to the Fed and the Fed creates a million brand new dollars inside JP Morgan's special account. So you just had $1 million of cash, created a thin air, but the Fed bought an asset to do that. So what I'm saying Is, is during 08 and 09, the Fed did these emergency measures like purchasing mortgage bonds with cash. It created a thin air. But once you do those things, they become a tool in the toolkit. So that leads us to 2010 where, where Bernanke does this huge plan in late 2010 where he says, okay, the emergency is over, but we're going to keep rates at zero. And to try to stimulate job growth, we're going to purchase $600 billion worth of assets, definitely treasury bills, I think some mortgage bonds, and create $60 billion of new cash. In Wall street. That was the first non emergency round of quantitative easing. And that's how it all started.

Yeah. Yeah. Okay. So the levers the Fed was pulling at that point and were any of Bernanke's levers, I mean, he did new things that other Fed chairs did not do before. Right?

A variety of new things no one had ever done before. Yes.

Yeah, talk to us about those.

Well, Operation Twist was one. Keeping interest rates at zero was one. And this whole notion of purchasing assets to the tune of tens of billions, then hundreds of billions and eventually trillions of dollars, that was the biggest one. It really has changed the Fed forever. When the Fed. You can measure how big this program is by measuring the so called balance sheet of the Fed or how many assets it owns. It owned about a trillion dollars worth in 08 when the crisis started, but then it owned $4 trillion worth by 2012, 2013.

I used to say during that period, the Fed is the biggest investor in.

The world and remains so. I mean, now, you know, we're not even at Covid yet. They purchased like 6 trillion in assets. That's 600 years worth of money printing that they did in like a matter of months now. The balance sheet's somewhere around 8 to 9 trillion. I don't know the exact number today. But I also want to bring this back to the point of Bernanke's thinking. And I need to point out that when he was talking about doing this stuff in 2010, it was extremely controversial within the Fed itself, where you had a lot of people saying, didn't we learn our lesson from the housing crisis? If you do this, it's going to drive up asset prices, it's going to lead to asset inflation, which is going to lead to bubbles that are going to explode. And furthermore, to the point we just made, quantitative easing only stimulates economic growth by driving up stock market prices, junk debt prices, real estate, asset prices. And he was arguing, well, first of all, it's the only thing we can do. But second of all, that'll boost economic growth through the wealth effect, where everyone sees the stock market going up and they feel more wealthy so they'll spend more money. That was the theory of doing this and why it would help.

And that's pretty much the theory of trickle down economics. Yeah. So is it invalid?

It's profoundly invalid, in fact, I mean, completely.

Because look, I struggle with this, honestly. You know, I was a fan of Reagan, okay? If there is a wealth effect and people feel richer, I mean, they're going to spend more. You can't deny that. And when they spend that money into the economy, you know, that goes to people at all different levels. And even if they don't spend, you know, money doesn't sleep, they've got that money invested and it's driving up the stock price to create someone else's wealth effect. I don't know, you know, I mean, it's just complicated, you know, it definitely, it definitely doesn't trickle down all the way, you know, I can say that for sure.

And you know, I'm a card carrying, happy capitalist myself, for sure. This, this is a great system. I do think it needs to be have rules around it to benefit the most prosperity for the most people. Here's why I say I think it's profoundly invalid is when you look at it used to the degree that it was used, between 2010 and 2020, that decade, the value of the stock market doubled. That's huge. Asset prices went way up.

In 10 years.

In 10 years, yeah.

And real estate went through the roof, obviously.

Real estate went through the roof. Corporate junk debt market roughly doubled, I believe. I know the stock market doubled. All these asset prices float way up. But job growth is anemic. Overall productivity growth in the country is anemic. Income gains among working people who, who make their living from a paycheck instead of owning assets, income gains are profoundly anemic. Even though we didn't have a lot of inflation during that decade, we had the price inflation really did not show up. But to my mind, what that shows is a real economy treading water. Really low productivity gains, really low wage gains.

Right. But of course, there are external factors, right? Namely shipping jobs overseas. This whole free trade. Listen, free trade is great if, if the trading partners are equally yoked, okay? That's why I'm in favor of the tariffs. I mean, you know, generally, like, philosophically, I'm not really in favor of tariffs. But from a practical point of view, unless China is going to implement minimum wage, epa, OSHA and all this other crap that our companies have to deal with, then they'll be equally yoked, okay? Otherwise, we have to balance the playing field with tariffs. I mean, you know, it's just, and look at all the investment that's coming back in the US And Trump is not getting, you know, like the other side of the aisle is not giving them any credit for any of this. You know, I mean, Apple, half a trillion dollars that wasn't going to be here, you know, getting some of this manufacturing out of China. It's going to be good for American workers.

In response, what I want to say is all that stuff you talked about, you know, tariffs, shipping jobs overseas, we could talk about collective bargaining rights of workers and how that plays into wages. All these things are outside of what the Fed can really affect. All it can do is push money into the system and drive up asset.

Prices or take money out of the system and drive them down or take money out, which you could argue that Powell, maybe he hates Trump so much that, you know, he's, he's playing that game now and just doing it despite him, you know, with it, with the rates. I mean, I don't know, do you, do you disagree with me? Like, do you think rates are, need to come down a bit?

Let's talk about that. But I do, to conclude, you know, I felt like this policy of quantitative easing, money printing 0% interest rates was profoundly wrongheaded because it supercharged the asset economy. It did not address any of the problems in the real economy. And what we saw was dramatic increases in inequality over the period without much growth, and it injected a lot of instability into the financial system. Okay, Jay Powell, the Fed inflation. We now fast forward ahead after a decade of these policies to Covid the shock, the inflation. You know, what Powell did in the summer 2022 was also pretty unprecedented when he hiked rates to 5%. I think that was the highest velocity rate hike easily since Volcker slammed the brakes on and killed the inflation in the early 1980s. And Powell has kept them there. And as you just mentioned, the big fight is there are a lot of people saying that Powell is too late. He should be cutting rates now because inflation has slowed a lot dramatically. I mean, inflation was at like 9% in the summer of 2021.

It was at 9.1. We got to.

Yeah, I mean, that's huge. And now what is it? It's under three, isn't it, like, in the high two?

Well, listen, the CPI doesn't tell the whole story anyway. But if we go with the official stats, yeah, we're hovering in a reasonable rate of inflation. I mean, it's time to cut, okay? It's, you know, I mean, I'm not saying radical cuts, but, you know, we got to see mortgage rates 1% lower, okay? It's got to, you know, I mean, I'm the real estate side of the market, so it's just too painful out there for everybody.

Yeah, our mortgage is at like 7% now.

It's ridiculous. I mean, it's just too. You know, Powell, he just hangs on to an idea way too long, just like George Bush, okay. You know, he's like consistency to a fault, okay? He said everything was transitory for way too long. Now he's doing the opposite, and he's keeping the rates too high for way too long. He just doesn't get it. He's just late to the game every time.

So I have zero insight into what he's thinking right now. I haven't interviewed anybody, but I think I could say what's driving him to keep rates high right now.

All right, we all want to hear this. I'm on the edge of my seat, okay?

And I'm basing this assessment on having reported the book and looked at the Fed's own research and their own studies and how they view this stuff. There's a huge fed study in 2004 that talked about this, and it goes back to the great inflation of the 70s. And the Fed actually blames itself largely for that. We had the OPEC oil shock. We had all that stuff. But during the late 60s and early 70s, when that inflation really got a hold and started growing, the Fed engaged in this pattern of hiking rates to fight inflation. And then seeing that it was hurting the economy or the inflation was falling. So then the Fed in the late 60s under Arthur Burns would cut rates again before it had really licked inflation. And so then the inflation would come back stronger, the Fed would hike, but then they would cut too early, and it allowed inflation to really gain steam within the economy. I think Powell is afraid of that happening, that he's going to cut too soon before they've really tamped down inflation, and that it's going to regain a foothold in our economy and regrow grain. To my mind, that's like the best explanation for why you'd keep rates this high for this long. The flip side is the argument you exactly just made. They're hanging on too long and they're behind the curve. That's certainly what Trump is saying right now.

Yeah. Yeah. It's a complicated game, and maybe this is why we shouldn't have a centrally planned economy and there shouldn't be a Fed, but I don't know. That's a radical idea.

I mean, you're not alone. And you bring up a good point. I mean, this is a big part of what we're talking about is just the extraordinary power, power that's vested in the Fed.

It's way too much. Yeah.

And its leadership is not elected. Their theory is that it needs to be insulated from democratic influence because they need to do the hard thing when it's painful. But that's what's, in my mind so risky about what Bernanke did, is when you increase the Fed's footprint and start doing these huge interventions in the economy. Well, now you're doing major economic policy, creating winners and losers, and you're still outside of democratic control.

Yeah.

And so it's only increased this kind of criticism that. That there needs to be more control over the Fed.

Yeah, I agree. So, one thing I want to make sure you touch on, and I want to ask you about a couple of your other books for just a moment, but we did not mention Janet Yellen in her brief stay. What do you think? And then I want to ask you also about Scott Bessette and these attempts to go around the Fed and pull some of the levers without the Fed thoughts on those?

Well, Janet Yellen was very interesting as a Fed chairwoman. She was essentially a Ben Bernanke acolyte. I don't mean to diminish, but she came in and continued the policies, had the same mindset. And what was interesting to me about Jay Powell is when Yellen was chairwoman, he was on the board of The Federal Open Markets Committee at the Fed. He was a board member and he came in as a staunch critic of these easy money policies, but eventually changed his tune and got in line and went along with it. But he does seem a little bit cut from a different cloth than Bernanke and Yellen, who I think are in the same school.

I agree.

And you know, Yellen was cut short under the Trump. Well, cut short by the standards of, you know, long, long standing chair people of the Fed, which we've had when Trump let her go and brought in Powell.

Can the treasury and the Trump administration go around Powell and, you know, manipulate the economy in the way the Fed does, or at least part of the way the Fed does?

It's just so difficult. And obviously to state the obvious, they seem really frustrated with what the Fed is doing. And I mean, the tariffs are an enormous economic policy conducted outside of the Fed. Huge, high impact policy. But the Fed's power is so immense that it seems very difficult to me to end, run around it as long as the Fed still has the powers that it has in every market. I mean, the US treasury obviously issues debt, and the Fed is deeply intertwined in those debt markets and affects everything that treasury does. We talked about quantitative easing. They print that money by purchasing treasury bills. And for many years, the Fed was the biggest purchaser in the world of treasury bills. So, I mean, the Fed has an enormous influence over the interest rates we have to pay on debt and so forth. So I think if you want to go around it, you can do things around the edges, but it just has so much power that it seems like it would swamp any of those attempts if it decides to take a different course.

Yeah, yeah, I agree. The Fed. The Fed is way too powerful. Okay, so tell us about the Koch brothers for a moment. And what's the title of your book?

Okay, that book is called Coke Land. One word. Koch Land. And you know, as a reporter, what I really like to do is write about very, very powerful institutions that can teach us something about how power and money works in America. Because money is power actually is one of my big contentions in life, of course, you know, and the Koch brothers are just f fascinating in the sense that they've built the second largest private company in America. They're involved in everything from oil trading to high finance to manufacturing. And it was a great company to profile to write about all these different elements of the American economy. And of course, when you look at the debates in our country over how much power the government should have versus Corporations. The Koch brothers are way over on one side of the spectrum on that. They're hardcore libertarians who think the government should basically like, like enforce contracts and not much else. I mean, you could kind of get into the debates about the, the balance of power between corporations and government through them.

Yep, you definitely could. So the thesis of that book is what? Koch brothers are too powerful, Corporations are too powerful?

I would say so. I would say the thesis of that book is that the balance of power between corporations and our government is tilted in the favor of corporations to a level we haven't seen since the early 1900s. Really? I mean, one of the parts of that book I got into was corporate lobbying and you know, literally corporate lobbyists and law firms are writing laws.

I know, it's absurd. It's totally absurd. Look, this is the age old battle between capital and labor, right. Which one gets more power in the equation? I'm not in favor of unions, I'm definitely a capitalist. But I gotta tell you, this system is not working quite right. And especially with the tech companies, I think they are way out of control. Like the way they enacted censorship during the COVID era. And it's just obnoxious what they're doing and what they're able to get away with. It really goes back to the way capital formation works in this country. You know, why there are these. It's this winner take all world where, you know, I basically can't find another coffee shop besides the main one that we've all heard of, the poisonous food. You know, it's just not right. The pendulum has to swing a little bit back toward labor.

Well, and that's what interests me so much as a reporter is that swing of the pendulum over time and how we've seen it through history and then using that to kind of evaluate where we are today. And the first book I wrote that not to bring it up, the Meat Racket is about what you.

Well, that's what I wanted to ask you about next. Yeah, and so when you talk about the meat racket, that's literally meat, the food. Okay.

Yes.

And the way that that industry is monopolized by Tyson. Right?

Yeah, but it's exactly everything you just talked about, which is the power of monopolies in economic systems. And what happens, you mentioned tech, you mentioned the coffee company that controls so much. What happens to a market when ownership is concentrated in the hands of a few small firms. And my contention is that when a company can gain monopoly power, it kind of, it kills the laws of supply and Demand, it suppresses market forces, it starts to gouge people. And the meat industry was just such a perfect example of what happens when two companies get control of half of the market, as is the case in our national poultry market.

Yeah, it's awful. And you know, ever since Reagan, who. I was a fan of Reagan. Ever since Reagan though, you know, there's really been very little appetite for the DOJ to prosecute antitrust. You know, we've forgotten we have all these old laws like the Sherman Antitrust act to protect the market from this and balance it out. And you know, these companies are just these rent seeking behemoths that got regulatory capture in their favor. You know, corporations are not people. We've got to stop treating corporations like people. They shouldn't get to lobby with the same rules that, I mean, you know, lobbying is like a legit thing, right? Our founding fathers wanted us to be able to, you know, address the government, right? But when Meta and Google and Amazon have these armies of lobbyists, you know, this is not people getting a say. This is not you and me. I mean, I did a field trip to Capitol hill once, maybe 14 years ago or something where I was a lobbyist for a day. So I kind of got to see how the thing worked, you know, But I can imagine all these professionals that have made it their whole career that get paid probably millions of dollars a year coming into the office of these congressmen with bags of money. Basically. It's. There's no way we're going to compete with that.

Well, no, that's exactly right. And I mean, you, Jason, lobbyist for a day can go in and petition your lawmaker for this and that, but then there's 15 full time staffers working for Tyson, for example, that are there every day when you go home.

They have PR firms, they have money, they have influence peddling. It's awful. But the whole thing is a disaster.

I don't know. I do kind of want to bring up though, antitrust law, which you just mentioned, is such an interesting paradox to me because on the one hand we wouldn't like it because it's regulation and it really does constrain companies, it can hurt profits of big corporations, but it's regulation with the intent of increasing competition in the economy and keeping the playing field more flat so more people with good ideas can get in, plug in, start a business, bring a new idea to market. And antitrust law is just this crazy space where people can make the argument that, you know, this is the big hand of government. But when we really imposed these antitrust reforms back in the 40s, it opened up markets and opportunity.

Of course it did.

You know.

Yeah. I always ask people this question, why is it that there, there's almost no startup culture in the banking business and on Wall street, yet there's tons of startup culture in the tech world, right? Because tech is not very regulated at all, okay. It's very unregulated. Okay. But of course, banking, stock brokering, there's like a million regulations and little players can't afford to comply with those regulations. They have no way of hiring batteries of lawyers and accountants to comply. They just can't afford it. And so there's just. It just squelches startup culture. Yet you have all these great innovative new companies that come out in the tech world now. Sadly they all just get bought up by the big ones and so the money flows back in the same direction again. But at least it's a game of whack, a mole for the big players, right? You know, some new company comes along and then some great thing, you know, and then Google's worried and then they'll buy them. Okay, but at least they gotta pay, you know. But who's competing with Goldman Sachs?

Exactly. And you know what's interesting? I do think the more complicated legislation is, the less effective it is. And it becomes a barrier to competition and it becomes then a benefit to giant companies that can hire the lawyers and lobbyists to negotiate it and deal with it. You see that again? And I've got to say, I thought when I was writing about the meat industry that, wow, I was writing about some big monopolies. It is nothing compared to the big banks. Yeah, nothing.

I'll just tell you something. These like the one big beautiful bill, right, that was like a thousand pages, which is actually pretty small compared to the Obamacare, which was like 2700 pages or Dodd Frank, you know, I'm on the real estate side that regulated banks. The real estate stuff, which was like 2300 pages, I think, you know, Glass, Steagall and some of these giant bills that changed the world that we had years ago, that was like 27 pages.

Yep.

I mean it was, you know, there ought to be a limit to the size of bills. Okay. And the one big beautiful bill that was actually not that big, okay, he called it a big beautiful bill, but it really wasn't that big compared to some of the others. Okay. It was half the size, less than half the size of Obamacare. So if you can't make it short enough for the average person to just read it and understand it. It shouldn't be allowed without question.

And Glass Steagall is the perfect example of this law that basically broke up banks. And it said if you're going to speculate, you got to be one kind of bank. If you're going to hold deposits of people, you're going to be another of bank and you shall forever be separated. And it had a level of simplicity that I call like a biblical edict. The two shall not meet. End of story.

It was 37 pages long. I just looked it up.

There you go. Okay. Compare that. How long was Dodd. The Dodd Frank financial reform?

I think that was like. That was 2300 pages. Yeah, I'm looking at it right now. It's 2300. Yeah. Obama was 2700. Dodd Frank was 2300, I believe. Yeah.

And I am telling you, Dodd Frank is an enormous pain in the rear end for JP Morgan. But it didn't do anything to affect the fact that we have too big to fail banks. It didn't do anything to affect their share of the market. Didn't do anything affect their lobbying power.

It consolidated their share of the market. There are way fewer banks now than there were back then.

Yeah.

Okay. You know, it just gives the big players regulatory capture. Yeah. That they, they just own the world. So that's, that's the problem. It's kind of like back to what you said at the beginning. It's asset inflation versus consumer price inflation. Right. It all just benefits the established entrenched rich players.

Yep.

That's what it does.

And I am a critic of the easy money policies of the 2010s at this point. I honestly did not start that way when I started writing the book. But having looked into it, read the debates at the Fed and so forth, I've gotten to that place. And the way I see it is you've got this economy that has all these structures. You and I just discussed all these easy money policies did was open a spigot of cash into the banking system. It didn't do anything to change its structure. Didn't do anything to change any of those issues. Just flooded it with new money. And we saw the asset prices rise. And none of this structural stuff change in our economy. And I don't care if you're a hardcore libertarian or a New Deal Democrat or whatever structural change was necessary after the great financial crisis. And we did not do that.

Yeah. Well, what do we do? Leave us with an action step. Right. Your congressman. That won't matter.

But yeah, My goals are very minimal at this point, and this sounds so stupid, but the more people think about the structures, all this stuff you and I have been talking about, and really keep the conversation rooted in the structures of power in our country.

The Federal Highway act of 1956 was 38 pages long.

Yeah.

Okay, go ahead.

These are the issues we need to pressure our lawmakers to deal with. And democratic power, obviously, in the United States needs to be in the hands of the people. You know, it's very hard. I'm stammering here because it's hard to say what to do because the problems are very complex. But just to the degree we can educate ourselves more and more on the structures of power in our country, the way things work, who has power and how they use it, we can start to have a better grasp of what we need to be doing democratically to solve the problems.

I think the first one, in my opinion, is if corporations get all the rights of people, of natural people, then they should get to go to prison like natural people do. You know, until we have that playing field leveled out. These corporations, they just have too many rights. They're not people. They should not have the rights of people. They don't die. They can't be imprisoned. They're not people. Okay, we've got to just change the way that works, and that will be a big step in the right direction, but we shall see. Christopher, give out your website. Tell people where they can find out more. And when's your new book coming out?

Well, My website is www.christopherleonard.biz. all my books are on there. The new one I'm working on is about the defense industry, which is right in the middle of all these stories of American power. It's going to be a while. I'm cranking away. I'm out reporting, so it'll. It'll be a few years, I think.

Good. Good stuff. Yes. The military industrial complex, we got to hear more about that one, too. Absolutely.

It's a lot happening there.

Sure is. Christopher Leonard, thanks for joining us.

Thank you for the time.

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