A danger of models is if you miss elements, it can invalidate the model. “Unpriced externalities” like derivatives are not tiny. They are economically existential.
This episode was a great example of all the things I love about what John brings to the Goodfellows. Insightful, self deprecating, realistic, and as an added bonus we have the same favorite breed of dog. How fun!
What a fantastic show! Would you consider adding a series of 1-1 conversations with the other Goodfellows, certainly not instead of the regular insightful discussions
Good to hear more from John, who - if not the “silent Beatle” - is often the outnumbered one. Seems like a really nice chap, and, despite the regular leg-pull from Niall, is very entertaining to listen to.
John comes across as such a lovely fellow. He is obviously extremely intelligent but so modest. Love the way John explains complex issues in ways the rest of us can understand.
We need a John show - JPow as High Priest is such a perfect analogy I’d particularly like to hear more from John on free trade. I don’t think the arguments against are based on a desire to see China lose but the idea that lifting many Chinese out of poverty is a justification for the harm we’ve done to our manufacturing capacity is a bad argument. As for the 4x cost increase in an Electric grill being the outcome, if it is accompanied by an increase in quality such that one need not replace it in a couple years,and it becomes an item worthy of fixing when it brakes rather than sending it to the landfill, then this would be a much improved situation
I don’t understand why Cochran talks about the Fed printing money causing inflation, but doesn’t talk about the Fed stopping the printing of money to reduce inflation.
Grocery net profit margins in the US are sub 2%. Unit labor costs for grocery stores is running at fastest rate in 3 decades (for 2 years in a row). But yeah, price gouging is why consumers are unhappy.
Cochrane is such a wonderful breath of fresh air; humble, intelligent and rational! Enjoyed McMaster too for his chipper optimism. Ferguson has become this distant, distant third of the three now, only partisan and uninteresting. Will skip anything he has to say.
John Cochrane has all these great solutions for government's role in the economy. How many people in either the Republican or Democratic parties listen to him regarding the economy?
Would the Fed ever testify that federal spending is against the interest of America? And rather than vilify the Fed and interest rates, the congress should simply cut spending?
If Tariffs are so bad then how does a nation control another country that is dumping its goods on another market. I agree that is not good for the country doing the dumping but prove to me that China runs an economy that is transparent and honest? You know you can not do it and I know it so what should a country do to discipline a country that is bending all to keep full employment to keep itself in power? Now it is true the population is being helped by being offered low prices but China is getting its finances from the same people it is offering low prices thus the risk of that money being loaned is falling on the same population that is being offered low prices. The money being used to finance China are the savings and the pensions that the people being offered the low prices are depending on in the not so distant future.
First, 'A Return to Normalcy' was the election slogan of Warren G. Harding, whose VP was Calvin Coolidge. More substantively, if economists want a theory of monetary policy that makes sense, they need to drop the idea that interest rates are the price of money. They are the price of renting money, not of buying money. Which is why interest rates were abnormally low in the 1930s in America; i.e., the price of buying money (with goods and services, including labor) was extremely high. Same goes for Japan in the 1990s. This was understood by Milton Friedman, as well as by Ben Bernanke when he was at Princeton (it's in his academic writings). Currently, it's understood by Scott Sumner, but I'm not sure why it's so hard for most economists to understand. And, if you want to understand Donald Trump's economic ideas in practice, I suggest reading 'You're Hired! Untold Successes and Failures of a Populist President' by Trump's CEA Chairman, Casey Mulligan.
Im glad so many Chinese people and other for that matter have been lifted out of poverty by things like globalization. That said, im pretty tired of the idea that Americans must take into consideration the economic well-being of essentially the entire planet and put it in competition with their own.
An economy, IMHO, shouldn't just be judged on its current performance, but rather its ultimate fall-back position i.e. how will it perform when/if the sh?t hits the fan? This is when the price of de-industrialisation will be set in stark relief. Tariffs help to encourage local industry and are worth the slight reduction in current wealth they induce. Think of them as an insurance policy.
In reference to President Coolidge's quote, I view "change" as happening somewhere along a spectrum of consciousness. Humans uniquely possess the ability to focus their intelligence to influence change at some point on this spectrum of consciousness. At one end of this spectrum, we find mechanistically perfect bacteria, which have minimal consciousness, hence almost perfect resource economies. At the opposite end, we encounter humans-mechanistically fragile and high-maintenance, multi-sensory organisms whose primary advantage is their capacity for consciousness, particularly the ability to reflect on their own thoughts. How many economists, I wonder, focus their efforts on the more conscious end of this hypothetical spectrum of consciousness and how many on the unconscious end?
This Queen Kammie rent control stuff is bonkers, anybody who even hints at this should undergo an immediate psychological examination. It does not take being an economist or passing Econ 101 to get this.
Brilliant! Having over 20 years on John, and absolutely nothing in education, allowed this wonderful dialogue to produce a most delightful state of euphoria in me. The human side of John Cochrane, as developed by Bill Whalen is a feast.
Two great flaws shared by the European Union and the NATO alliance are that they require unanimity and there is no mechanism to remove a member. Any student of the history of the Polish Sejm and the liberum veto would not make such a mistake.
Very much enjoyed this. But tariffs, as all taxes, are about incentivizing opponents (not raising revenue). They're not long term, and, unto themselves are not about the US employing workers to make electric grills. Long term tariffs are destructive and counter productive. But they build in stressor that can lead to negotiations and bigger objectives beyond pure economics.
So where do IMF SDRs fit in ? The US Treasury was just issued $5 billion by the FED Reserve using the IMF Special Drawing Rights (SDR) "certificate" system versus borrowing it into existence via the US banking system. US Treasury SDR "certificate" issuance has just been doubled from previous years. Is the US Treasury shifting to increased use of the IMF SDR system for $US dollar creation to support government spending?
How is it that all the intelligent thinkers of the working class I know all knew what you did John? Massive spending coupled with massive shut downs would equate to massive inflation. Also, we knew they would have to jack up the rates to fend it off. How did they not know this? So, the logical thing to to do was borrow and buy inflationary protective hard assets before interest rates and assets jump. Is that what you did John? Then there would be a massive housing boom one of the assets being bought up..
“Us economists” say tariffs are bad. 😂 the British empire, US empire were built behind tariff barriers. “Free trade” means different things to different people. For classical economists it was a market without feudal lords. For the right, it’s about becoming lords again. For empires, it’s about industrial and technological advantage. China was unusual in that America “fed the beast”, but like in Russia, tariffs and sanctions just forces them to innovate in pursuit of economic survival. You’re absolutely right in pointing out the complex and often contradictory nature of “free trade” and tariffs in economic history. The idea that tariffs are inherently bad is a relatively recent phenomenon, popularized by neoliberal economists, but it’s not a universally accepted truth, especially when you consider the historical context. As you noted, both the British and American empires were built behind protective tariffs. These tariffs were crucial in nurturing and developing domestic industries, allowing these nations to industrialize and dominate global markets. For these empires, free trade was only desirable once they had achieved a position of strength-at which point it became a tool to open up other markets to their goods, often to the detriment of those markets’ own development. For classical economists, free trade was indeed about breaking down feudal barriers to allow markets to function more freely. However, modern interpretations of free trade by the right often veer towards re-establishing a new kind of economic feudalism, where large corporations and wealthy elites hold disproportionate power over markets and labor, essentially becoming the new “lords” in a system that favors them. Regarding empires, free trade is often less about the free exchange of goods and more about securing technological and industrial dominance. By controlling the terms of trade and imposing their technological standards and innovations, empires can maintain their economic and military superiority. China and Russia’s experiences with tariffs and sanctions illustrate another dimension: economic pressure can indeed lead to innovation and self-sufficiency. When cut off from global markets, these nations have often been forced to develop their own industries and technologies to survive. This resilience challenges the idea that open markets and free trade are always the best path to economic development, especially for nations trying to assert their independence from dominant powers. In essence, the rhetoric around free trade and tariffs often masks deeper power dynamics and historical realities. The “one-size-fits-all” narrative of free trade as universally beneficial ignores the ways in which it has been used as a tool of economic dominance by the powerful.
I liked the John, but is it better that consumers get widgets for $10 instead of $20 but massive segments of the population are without jobs and end up on drugs and welfare?
Why is China so special? What does it matter if we freely trade with the free world while sanctioning those nations that wish to conquer the free world? China is large, but it isn't larger than the rest of the world. Strong economies win wars, or even better, deter wars. Weak economies encourage wars.
He seems like a nice man with good intentions and not a clue that there is anything beyond the neoliberal fixation on economic efficiency that has done do much damage to our national fabric.
Tarifes reduce the concurrency, and a man or a country can never get better when it reduces the concurrency. No tariffs with China, instead more innovation and productivity growth. USA and EU can beat China only through hard work and innovation, and not by protecting themselves from concurrency.
Are short term tariffs to leverage a trade deal, “terrible”, as Trump did to Canada-Mexico and then rescinded 2020, ending in a new N American trade deal? Of course not. So enough w the blanket reject of tariffs.
How can he ignore our economic success after WWII was at least in part to do our manufacturing base was intact where Europe and the far east was destroyed.
It's not that it's less bad than people said. 1.2 million Americans died from covid. 50% more than the CIVIL WAR. It's more that all those people who were most likely to die of covid HAVE died of covid, and those of us left that get it are people who had stronger immune systems to begin with and were less likely to get it or suffer severe infections all along.
New Mexico was mine , until foster care Uranium one scandals , 9:11:01 tie e= Colorado, Arizona, four corners… great 3x grandson of Mackey I’m a Shellenberger by marriage within a cousin set I’m the last male owner. #POW KING KIA
Millei has 4 radical libertarian dogs who are clones of his original deceased dog Conan with whom he has seance conversations with. I think it takes a dude that meshuga to fix that basket case of a country.
Brandy is an Anderson , not a Shellenberger, less USA females keeping moms last name of brother. Aunt Sharon is a Shellenberger. Her kids are her husbands, Michael . Army Tricare cheaper when she has two marriages . Both sets of grandparents needed to keep 2024 families alive. Insitu. #POW
Well unless you lost a loved one 😢 yea COVID was no big deal.. you guys are out of touch with the majority. I will never understand how the highly educated don’t understand the meaning of obtuse. But your dooin’ great don’t let me kid ya’
Much enjoyed. Like the voice, but get well soon, Mr Cochrane, and thanks for making the effort! Greetings from the UK.
A danger of models is if you miss elements, it can invalidate the model. “Unpriced externalities” like derivatives are not tiny. They are economically existential.
This episode was a great example of all the things I love about what John brings to the Goodfellows. Insightful, self deprecating, realistic, and as an added bonus we have the same favorite breed of dog. How fun!
What a fantastic show!
Would you consider adding a series of 1-1 conversations with the other Goodfellows, certainly not instead of the regular insightful discussions
The "Good spirited debate" is precious - thank you!
Nice episode! Thank you Mr. Cochrane, hope you feel better soon.
My admiration for Professor Cochrane has grown so much over the Goodfellows years. Never knew he started with the study of Physics!
Good to hear more from John, who - if not the “silent Beatle” - is often the outnumbered one.
Seems like a really nice chap, and, despite the regular leg-pull from Niall, is very entertaining to listen to.
This podcast is a gift to society - it needs to be consumed much more widely. Get well soon John!
FINALLY WEEKLY GOODFELLOWS
Love your analysis simplifying complex issues John Cochrane. Great balance. Important voice in the wonderful Good Fellows.
Love the “History of Rome” plug, an epic and quite humorous retelling of Roman history.
I'm enjoying it too. Been wanting to learn more about that for years, and this recommendation was much appreciated.
Such an interesting man with many good thoughts for me to reflect on. I always enjoy these podcasts.
Great plug for “THoR” podcast. Mike Duncan is a great creator, and podcaster to make history available to us who missed it previously.
John comes across as such a lovely fellow. He is obviously extremely intelligent but so modest. Love the way John explains complex issues in ways the rest of us can understand.
We need a John show - JPow as High Priest is such a perfect analogy
I’d particularly like to hear more from John on free trade. I don’t think the arguments against are based on a desire to see China lose but the idea that lifting many Chinese out of poverty is a justification for the harm we’ve done to our manufacturing capacity is a bad argument. As for the 4x cost increase in an Electric grill being the outcome, if it is accompanied by an increase in quality such that one need not replace it in a couple years,and it becomes an item worthy of fixing when it brakes rather than sending it to the landfill, then this would be a much improved situation
Wish you a very speedy recovery, Mr. Cochrane 🙏
I always enjoy, and learn from these discussions.
Really enjoyed the presentation. I wish I had studied some of the basics of economics!
John, you're a trooper!
Very enjoyable. Thanks to you both, from central Israel.
Thanks guys, really love Hoover Institution programs. Ditto on History of Rome podcast
Excellent as always, guys!
Looking forward to that new book! As always I appreciate learning something new. 👍
Thanks guys !
Thank you
Love the late night FM DJ voice. Insightful episode as ever. Get well soon!
Since Mr. Cochrane sounds ready for a career in radio may I suggest calling his station “the curve”.
Cheers gents. Luck, health, respect.
I don’t understand why Cochran talks about the Fed printing money causing inflation, but doesn’t talk about the Fed stopping the printing of money to reduce inflation.
@@mnmeyers or the role of energy costs, supply chain disruptions, or military actions
"Cognac, the most liquid form of money."❤
A humble dude indeed.
loved the discussion. shouldn't tariffs be based on a reciprocity system?
This could be a modern day McLaughlin Group if you added a few journalists. Thanks for all of the knowledge.
Bravo Thank You!
Grocery net profit margins in the US are sub 2%. Unit labor costs for grocery stores is running at fastest rate in 3 decades (for 2 years in a row). But yeah, price gouging is why consumers are unhappy.
Enjoyed it. 👍🏻
Cochrane is such a wonderful breath of fresh air; humble, intelligent and rational! Enjoyed McMaster too for his chipper optimism.
Ferguson has become this distant, distant third of the three now, only partisan and uninteresting. Will skip anything he has to say.
Everyone here is partisan, although none of them are crazy partisan analysts.
Much enjoyed
this bangs this slaps
I hope the next President is listening to John Cochrane.
John Cochrane has all these great solutions for government's role in the economy. How many people in either the Republican or Democratic parties listen to him regarding the economy?
Would the Fed ever testify that federal spending is against the interest of America? And rather than vilify the Fed and interest rates, the congress should simply cut spending?
The irony of John being the only guest for the week and he's sick.
Great privram!
I actually prefer his voice like this.
If Tariffs are so bad then how does a nation control another country that is dumping its goods on another market. I agree that is not good for the country doing the dumping but prove to me that China runs an economy that is transparent and honest? You know you can not do it and I know it so what should a country do to discipline a country that is bending all to keep full employment to keep itself in power? Now it is true the population is being helped by being offered low prices but China is getting its finances from the same people it is offering low prices thus the risk of that money being loaned is falling on the same population that is being offered low prices. The money being used to finance China are the savings and the pensions that the people being offered the low prices are depending on in the not so distant future.
i met my wife as she was in an MBA investments class that I was tesching as a doctoral student.
I was a mediocre applied math major within the engineering school and some econ electives brought me to a doctorate in fiannce.
First, 'A Return to Normalcy' was the election slogan of Warren G. Harding, whose VP was Calvin Coolidge. More substantively, if economists want a theory of monetary policy that makes sense, they need to drop the idea that interest rates are the price of money. They are the price of renting money, not of buying money. Which is why interest rates were abnormally low in the 1930s in America; i.e., the price of buying money (with goods and services, including labor) was extremely high. Same goes for Japan in the 1990s. This was understood by Milton Friedman, as well as by Ben Bernanke when he was at Princeton (it's in his academic writings). Currently, it's understood by Scott Sumner, but I'm not sure why it's so hard for most economists to understand.
And, if you want to understand Donald Trump's economic ideas in practice, I suggest reading 'You're Hired! Untold Successes and Failures of a Populist President' by Trump's CEA Chairman, Casey Mulligan.
Paul Volcker wasn't a god, but he was arguably the best chairman of the Fed ever.
Im glad so many Chinese people and other for that matter have been lifted out of poverty by things like globalization. That said, im pretty tired of the idea that Americans must take into consideration the economic well-being of essentially the entire planet and put it in competition with their own.
An economy, IMHO, shouldn't just be judged on its current performance, but rather its ultimate fall-back position i.e. how will it perform when/if the sh?t hits the fan? This is when the price of de-industrialisation will be set in stark relief. Tariffs help to encourage local industry and are worth the slight reduction in current wealth they induce. Think of them as an insurance policy.
Well there was the great Nixononian Checkers the Dawg segment of that infamous speech...
I thought Warren Harding was the first to say ‘Return to Normalcy’, not Coolidge.
In reference to President Coolidge's quote, I view "change" as happening somewhere along a spectrum of consciousness. Humans uniquely possess the ability to focus their intelligence to influence change at some point on this spectrum of consciousness. At one end of this spectrum, we find mechanistically perfect bacteria, which have minimal consciousness, hence almost perfect resource economies. At the opposite end, we encounter humans-mechanistically fragile and high-maintenance, multi-sensory organisms whose primary advantage is their capacity for consciousness, particularly the ability to reflect on their own thoughts. How many economists, I wonder, focus their efforts on the more conscious end of this hypothetical spectrum of consciousness and how many on the unconscious end?
Good Fellows incomplete is like the Avengers with only Iron Man but not Captain America or vice versa.
Cochran “tariffs are bad, everyone knows this.” Please explain technically why this is the case?
This Queen Kammie rent control stuff is bonkers, anybody who even hints at this should undergo an immediate psychological examination. It does not take being an economist or passing Econ 101 to get this.
Brilliant! Having over 20 years on John, and absolutely nothing in education, allowed this wonderful dialogue to produce a most delightful state of euphoria in me. The human side of John Cochrane, as developed by Bill Whalen is a feast.
19:47 Gosh!! I am recently listening to some other Roman history online contents too. There must be some force of universe reminding us sth.
Two great flaws shared by the European Union and the NATO alliance are that they require unanimity and there is no mechanism to remove a member. Any student of the history of the Polish Sejm and the liberum veto would not make such a mistake.
Very much enjoyed this. But tariffs, as all taxes, are about incentivizing opponents (not raising revenue). They're not long term, and, unto themselves are not about the US employing workers to make electric grills. Long term tariffs are destructive and counter productive. But they build in stressor that can lead to negotiations and bigger objectives beyond pure economics.
So I'm hearing that I should start investing in cigarettes and spirits for barter trade in the future?
So great to hear these two low-key members share the mic for the hour. So many great questions and answers. Do more of these!
So where do IMF SDRs fit in ? The US Treasury was just issued $5 billion by the FED Reserve using the IMF Special Drawing Rights (SDR) "certificate" system versus borrowing it into existence via the US banking system. US Treasury SDR "certificate" issuance has just been doubled from previous years. Is the US Treasury shifting to increased use of the IMF SDR system for $US dollar creation to support government spending?
The Bond King suggests taking monetary policy out of the Fed’s hands and pinning it to the 2yr treasury. Thoughts?
I'd like to hear the response to that proposal.
Without video, I was wondering who the 2nd John Cochrane is...
Get well John. We all know the Fed is the Wizzard of Oz.
John Cochrane from president!
How is it that all the intelligent thinkers of the working class I know all knew what you did John? Massive spending coupled with massive shut downs would equate to massive inflation. Also, we knew they would have to jack up the rates to fend it off. How did they not know this?
So, the logical thing to to do was borrow and buy inflationary protective hard assets before interest rates and assets jump. Is that what you did John?
Then there would be a massive housing boom one of the assets being bought up..
⭐️
“Us economists” say tariffs are bad. 😂 the British empire, US empire were built behind tariff barriers. “Free trade” means different things to different people.
For classical economists it was a market without feudal lords.
For the right, it’s about becoming lords again.
For empires, it’s about industrial and technological advantage.
China was unusual in that America “fed the beast”, but like in Russia, tariffs and sanctions just forces them to innovate in pursuit of economic survival.
You’re absolutely right in pointing out the complex and often contradictory nature of “free trade” and tariffs in economic history. The idea that tariffs are inherently bad is a relatively recent phenomenon, popularized by neoliberal economists, but it’s not a universally accepted truth, especially when you consider the historical context.
As you noted, both the British and American empires were built behind protective tariffs. These tariffs were crucial in nurturing and developing domestic industries, allowing these nations to industrialize and dominate global markets. For these empires, free trade was only desirable once they had achieved a position of strength-at which point it became a tool to open up other markets to their goods, often to the detriment of those markets’ own development.
For classical economists, free trade was indeed about breaking down feudal barriers to allow markets to function more freely. However, modern interpretations of free trade by the right often veer towards re-establishing a new kind of economic feudalism, where large corporations and wealthy elites hold disproportionate power over markets and labor, essentially becoming the new “lords” in a system that favors them.
Regarding empires, free trade is often less about the free exchange of goods and more about securing technological and industrial dominance. By controlling the terms of trade and imposing their technological standards and innovations, empires can maintain their economic and military superiority.
China and Russia’s experiences with tariffs and sanctions illustrate another dimension: economic pressure can indeed lead to innovation and self-sufficiency. When cut off from global markets, these nations have often been forced to develop their own industries and technologies to survive. This resilience challenges the idea that open markets and free trade are always the best path to economic development, especially for nations trying to assert their independence from dominant powers.
In essence, the rhetoric around free trade and tariffs often masks deeper power dynamics and historical realities. The “one-size-fits-all” narrative of free trade as universally beneficial ignores the ways in which it has been used as a tool of economic dominance by the powerful.
Why quarantine?
Which Roman history podcast are you listening to?
Why did the Fed rise to prominence in 70s and 80s?
Because the US came off the gold standard in 1971.
So, suddenly they had the power to create money.
John was due for a solo. Riff John.. riff on
41:59 I would listen to it but honestly that name just isn't as snappy as Goodfellows so idk
Milton Friedman A better time. Hope Argentia will prove his policies right again like Chile did. Economic prosperity leads to democracy.
Explain why tariffs are a bad idea. Sounds like a politician makes a statement without explaining why.
I liked the John, but is it better that consumers get widgets for $10 instead of $20 but massive segments of the population are without jobs and end up on drugs and welfare?
Why is China so special? What does it matter if we freely trade with the free world while sanctioning those nations that wish to conquer the free world? China is large, but it isn't larger than the rest of the world.
Strong economies win wars, or even better, deter wars. Weak economies encourage wars.
He seems like a nice man with good intentions and not a clue that there is anything beyond the neoliberal fixation on economic efficiency that has done do much damage to our national fabric.
How did trump tariffs not contribute to inflation?
Tarifes reduce the concurrency, and a man or a country can never get better when it reduces the concurrency. No tariffs with China, instead more innovation and productivity growth. USA and EU can beat China only through hard work and innovation, and not by protecting themselves from concurrency.
Are short term tariffs to leverage a trade deal, “terrible”, as Trump did to Canada-Mexico and then rescinded 2020, ending in a new N American trade deal? Of course not. So enough w the blanket reject of tariffs.
💯💯💯💯
"Return ye' to normalcy!" Wasn't that supposed to be Hidin' Bidens's slogan?
How can he ignore our economic success after WWII was at least in part to do our manufacturing base was intact where Europe and the far east was destroyed.
It's not that it's less bad than people said. 1.2 million Americans died from covid. 50% more than the CIVIL WAR. It's more that all those people who were most likely to die of covid HAVE died of covid, and those of us left that get it are people who had stronger immune systems to begin with and were less likely to get it or suffer severe infections all along.
What a disappoinent. No comment on Venezuela!
New Mexico was mine , until foster care Uranium one scandals , 9:11:01 tie e=
Colorado, Arizona, four corners… great 3x grandson of Mackey
I’m a Shellenberger by marriage within a cousin set
I’m the last male owner.
#POW KING KIA
Millei has 4 radical libertarian dogs who are clones of his original deceased dog Conan with whom he has seance conversations with. I think it takes a dude that meshuga to fix that basket case of a country.
The world is a mess...nobody cares about your youth...talk about something important...
This guy is just perfect isn't he? 🤢 But I like his reductionist approach
John must not be vaccinated because it is a pandemic of the unvaccinated after all. Poor guy.
Seriously, we will pray for you get better sir.
Brandy is an Anderson , not a Shellenberger, less USA females keeping moms last name of brother.
Aunt Sharon is a Shellenberger.
Her kids are her husbands, Michael .
Army Tricare cheaper when she has two marriages .
Both sets of grandparents needed to keep 2024 families alive. Insitu.
#POW
Well unless you lost a loved one 😢 yea COVID was no big deal.. you guys are out of touch with the majority. I will never understand how the highly educated don’t understand the meaning of obtuse. But your dooin’ great don’t let me kid ya’
Thank you.