Podcast Summary: Trump, Markets and The Greatest Crash in U.S. History, with Andrew Ross Sorkin (Part Two)

Podcast: Intelligence Squared
Host: Gillian Tett (Financial Times)
Guest: Andrew Ross Sorkin (author, New York Times columnist, CNBC presenter)
Date: December 3, 2025
Location: Live at Conway Hall

Episode Overview

This episode revisits Andrew Ross Sorkin and Gillian Tett’s discussion on the lessons from the 1929 financial crash, exploring the echoes of past economic manias in today’s turbulent age of AI investment, high leverage, burgeoning debt, and rising political populism. The pair debate the likelihood of a modern crash or Great Depression-like event, drawing parallels and distinctions between historic and present-day conditions. Audience Q&A delves into generational uncertainties, the future of jobs, the role of gold and private equity, the appeal of financial storytelling, and the interconnected impacts of technology.

Key Discussion Points and Insights

AI Mania and Historical Parallels

• Frenzy in AI investment:
  • Gillian Tett notes that major tech companies are pouring money into AI (especially large language models), often believing only their firm will survive the shakeout. She likens it to the historical “Betamax vs VHS” scenario and rails at the assumption that current AI tech will remain dominant forever. (03:37)
  • “They each think that they're going to be the one company that wins and everyone else will lose ... but they're all betting on the same type of AI.” – Gillian Tett (03:37)
• Tech bubbles compared to past manias:
  • Andrew Ross Sorkin draws analogies to the 1929 RCA bubble and the dotcom bust. Even though technology persists, speculative excess leads to painful corrections:
    • “There was a hiccup or more than a hiccup in '99, 2000, and it wouldn't shock me if a similar thing happened.” – Andrew Ross Sorkin (04:47)
  • Tett adds the “railroad bubble” as another example—speculators lost money, but the infrastructure remained.

Market Personalities and Historical Figures

• Who’s the “Elon Musk” of 1929?
  • Sorkin draws contrasts between Charles Mitchell (a famous banker, more like Jamie Dimon or Michael Milken) and John Rascob (whom he likens to Elon Musk: visionary and ever-optimistic).
    • “He has a smile on his face. He talks about the future. And the future is always bright. Always.” – Andrew Ross Sorkin on Rascob (06:19)

Unemployment, Political Response, and Populism

• Difference in blame after crashes:
  • Sorkin explains that after 1929, individuals mostly blamed themselves (even when ruined), unlike the 2008 crisis where finger-pointing targeted Wall Street and capitalism. Not until unemployment reached 25% did blame shift to the system.
    • “People back then ... blamed themselves, which is such a different approach than the sort of finger pointing that went on after 2008.” – Andrew Ross Sorkin (08:10)

The Winston Churchill Anecdote

• Sorkin narrates Churchill’s speculative losses in New York during the 1929 crash, his unexpected defense of American risk-taking, and even his being hit by a car in New York—an “astonishing side” to his story.
  • “He actually writes in defense of this American experiment and suggests the British should have a more speculative nature themselves.” – Andrew Ross Sorkin (10:59)

Modern Risks: Currency Faith, Debt, and Tariffs

• Is the dollar at risk?

  • Tett raises the prospect of a “crisis of confidence” in fiat currencies, with more investors turning to gold and crypto.
  • Sorkin pushes back:
    • “The catch is there's not a lot of places to go ... to move money out of the dollar so quickly.” – Andrew Ross Sorkin (12:23)
  • But he concedes that a loss of faith could spark a cycle of instability.

• Debt levels and “end of empire”:

  • Sorkin references Niall Ferguson’s “Ferguson Law”: if debt-to-GDP ratio exceeds defense spending, it's a historical precursor to imperial decline. The U.S. might reach this in 2049.
    • “We are on course, the United States is, I think, to hit that in about 2049. So you can mark your end of the empire calendar now.” – Andrew Ross Sorkin (13:33)

• Tariffs and Populism:

  • Both discuss the resurgence of tariffs, now often justified as “national security.” Sorkin doubts the political will exists to remove tariffs, especially as they raise substantial government revenue.
    • “It’s going to be very hard to turn back the clock on the tariff story ... I think we are going to live with this ... for at least another decade or two irrespective of who is running these various countries.” – Andrew Ross Sorkin (14:56)

Is a Great Depression II Imminent?

• Poll and Conclusions:
  • Both Sorkin and Tett say a major crash is possible, but a repeat of the Great Depression is unlikely unless there’s a total collapse of faith in fiat currencies and bond markets. (18:09)
  • Audience poll: 52% now consider a depression “unlikely,” up from before the talk.

Human Nature on the Markets—Jesse Livermore’s Story

• The tale of Jesse Livermore, the notorious short seller who made (and lost) fortunes, ending in suicide, is recounted as a morality lesson.
  • “If you've managed to play the markets right once. Stop. Walk away from the table, folks.” – Andrew Ross Sorkin and Gillian Tett (19:22–19:40)

Audience Q&A Highlights

(23:04) “How screwed is my generation?” – Janice, age 20

• Tett: Today’s youth face uncertainty; recommends flexibility, multiple passports, and learning coding (with the caveat that coders too can be replaced by AI).
• Sorkin: Curiosity trumps all—encourage relentless questioning. Recommends young people become power AI users, even if schools discourage it.
  • “What I worry about is there's a lot of people who are saying right now you shouldn't be using it. And the folks who are going to win ... are going to know how to use [AI] better than just about anybody.” – Andrew Ross Sorkin (24:13)

(25:54) US Unemployment: Crisis Sign?

• Sorkin: No—at 4%, current U.S. unemployment is nowhere near historical crisis levels (25% in 1929) or even the post-2008 peak.

(28:17) Gold Standard—A Return?

• Sorkin: The gold standard was a historic error; ending it would have shortened the Depression. No practical way to return to it now.

(28:56) Private Equity and Systemic Risk?

• Sorkin: PE isn’t the core risk, but transparency is a problem. Concerns with democratization of private asset investment for retail investors—semi-liquid funds can “gate” exits, exacerbating crisis risk.
  • “They look like a stock ... but you can't sell it on any day. If too many people try to sell ... they can actually put up gates and say, you cannot sell.” – Andrew Ross Sorkin (30:34)

(31:44) Why are financial disaster stories so compelling? (“Billions” question)

• Sorkin: People are drawn to “gray” characters; Billions works because it pits complex, morally ambiguous people against each other, like a procedural with blurred lines of good and bad. He aspires to make readers think for themselves rather than prescribe clear heroes/villains.
  • “I think, for me, as a storyteller, I love characters that are gray. Really, really gray.” – Andrew Ross Sorkin (32:01)

(36:10) Hidden Leverage—A Red Flag?

• An experienced fund manager notes the dangers of hidden leverage and retail investor behavior. Sorkin agrees these are “significant flags” for risk, but warns that unknown unknowns (“flags we don’t know about”) are just as worrying.
  • “We haven't talked about the politics in the United States. Could some geopolitical event happen? ... I think there's a hundred things that put us on the knife's edge.” – Andrew Ross Sorkin (37:18)

(38:04) After the AI Bubble: What’s Next? (“Blockchain, Robotics ...?”)

• Sorkin: Robotics, quantum, blockchain, health care—most future “bubbles” will be entangled with AI, which is likely to touch all facets of life. Science innovation is driving today’s market mania much as in the 1920s.

Notable Quotes & Moments (with Timestamps)

• On the Next Crash:
  • “There was a hiccup or more than a hiccup in '99, 2000, and it wouldn't shock me if a similar thing happened.” – Andrew Ross Sorkin (04:47)
• On Tariffs as Political Reality:
  • “Even if you were a politician in the future, it would be hard to raise your hand and say, I don't want tariffs ...” – Andrew Ross Sorkin (15:44)
• On AI as a Mask for Growth:
  • “This AI economy is almost papering over or masking what is otherwise a flat economy at best.” – Andrew Ross Sorkin (16:35)
• On Career Advice for the Young:
  • “It's going to be more like a jungle gym where they go up, down, swing around the sides and try and forage.” – Gillian Tett (23:37)
  • “I think you should become a ninja at [AI] so that you know how to do it better than everybody else.” – Andrew Ross Sorkin (24:13)
• On Billions and Morality in Finance:
  • “I love characters that are gray. Really, really gray ... I don't like being too prescriptive. My view is to tell you what happened and then hopefully to make you think.” – Andrew Ross Sorkin (32:01, 34:09)

Conclusion

A riveting episode, rich in historical analogy and contemporary insight. Sorkin and Tett argue that while bubbles remain endemic to markets—now powered by extraordinary technological advances—a cataclysmic crash of Great Depression scale is unlikely unless triggered by deep structural failures, like a collapse of faith in fiat currency. The lessons of the past, however, remain an imperfect guide in a world reshaped by AI, politics, and global warnings around debt and leverage. Audience interaction added nuance and urgency, especially from younger generations anxious about their futures in this unpredictable economic landscape.