Podcast Summary

SNAFU with Ed Helms

Episode: From Here We Go Again With Kal Penn: Another Economic Crash with Michael Lewis

Release Date: December 5, 2025
Host: Kal Penn (Calpen)
Guest: Michael Lewis

Episode Overview

This episode dives into the ever-present anxiety about the next economic downturn. Host Kal Penn is joined by best-selling author and financial journalist Michael Lewis (known for The Big Short and Moneyball) to discuss the possibility of another 2008-style financial crisis, the nature of financial SNAFUs, what’s changed since the last crash, and whether everyday people can trust financial institutions, the media, and even street tacos.

Key Discussion Points and Insights

1. Economic Anxiety & Personal Perspective

• Kal Penn opens by sharing his "son of immigrant energy"—he's naturally cautious, a saver, and worried about signs of an economic downturn. (00:01)
  • "There are a lot of signs pointing to the economy taking a potential left turn here." — Kal Penn (00:04)
• He references worrying trends: falling economic indexes, warnings from big banks, and an affordability crisis.

2. How the 2008 Financial Crisis Happened—A Refresher

• Michael Lewis unpacks, in story-driven fashion, how the crash unfolded and why so few were held accountable.
• Subprime Mortgage Anecdote: Kal relates an old friend who worked selling subprime mortgages—admitting he knew he was harming people, but it was just too lucrative to stop. There were "zero consequences" for him and his colleagues. (05:21)
  • "He and everyone else knew that what they were doing was wrong all along. He couldn't resist all the bonuses..." — Kal Penn (06:40)

The Systemic Problem

• Incentives over Ethics: Originators of risky loans weren’t exposed to risk—so had every incentive to make more bad loans, not fewer. (11:07)
  • "The person making the loan is not exposed in any way." — Michael Lewis (11:07)
• Complexity Hides Risk: These loans would be packaged and repackaged, morphing into opaque bonds sold globally; few knew just how toxic they were.
  • "The risk gets disguised... packaged into these big black boxes." — Michael Lewis (11:30)

Human Element

• Lewis vividly describes the shock among those who predicted the crisis—wandering Manhattan "like ghosts," knowing most people had no idea what was about to hit them. (16:00)

3. Responsibility & Accountability

• Kal questions: Why wasn’t anyone prosecuted if so much irresponsible behavior happened? (18:53)
• Lewis: Most activity was “scandalously legal.” Prosecution was rare, and complex cases failed to persuade juries.
  • "The scandal isn't what's illegal, it's what's legal… it was immoral, but the fine print got you off the hook." — Michael Lewis quoting Michael Kinsley (19:03)
• Regulatory failure—a combination of complexity, legality, and public confusion enabled culprits to escape serious consequences.

4. Is Another Crash Imminent?

• Cal asks if new systems are in place to avoid a repeat.
• Lewis: Banks have been made more boring and risk-averse, but “the juice went outside”—risk has migrated to largely unregulated private equity giants (Blackstone, Apollo, etc.).
  • "They're essentially doing banking outside the banking system... now too big to fail." — Michael Lewis (27:04)
• Shadow banking, regulatory arbitrage, and misaligned incentives persist; trouble may now be harder to see and regulate.

5. Incentives and Cycles of Risk

• Lewis: Cycles repeat because incentives to take short-term profits by hiding risk always re-emerge; memory fades, new loopholes are found. (28:19)
  • "People follow their incentives and a really complicated system starts to generate screwed up incentives and people do screwed up things." — Michael Lewis (29:38)

6. Trust in Institutions Today

• Cal: Do we now have less trust in government, media, and social pillars than in 2008? (38:59)
• Lewis: Major difference now is eroding trust in institutions, especially the Federal Reserve. The last crisis was contained because "trusted grownups" stepped in. Today, those institutions are weaker and under attack.
  • "What happens if there’s a financial crisis without a trusted adult? That’s what feels different." — Michael Lewis (35:26)

7. Where Does Michael Lewis Place His Trust?

• Media: Michael doesn’t share the total distrust of media, but recognizes its limits—he gets his info from a range of papers, including international ones for perspective. (41:00)
  • “Assume the person is more or less trying to do their best... mainly, it's just the nature of news gathering is pretty shallow.” — Michael Lewis (41:00)
• Money: He keeps money with conservative institutions (Schwab, JP Morgan), a little overseas, and in index funds/Berkshire Hathaway. He owns some gold, spooked by an old friend's warnings.
• On Gold: It holds value because of social trust, not intrinsic worth. (44:35)

Notable Quotes & Memorable Moments

• On Wall Street Incentives:
  “The best way to get paid more for taking more risk is to disguise the risk you’re taking and not actually take the risk yourself.” — Michael Lewis (25:36)
• On Private Equity Risk:
  “They’re essentially doing banking outside the banking system... These are the institutions that are now too big to fail.” — Michael Lewis (27:04)
• On Structural Change:
  “When investment banks went from private partnerships to public corporations... they started taking catastrophic risks for short term return because it wasn’t their own money.” — Michael Lewis (31:04)
• On Trust in Social Security:
  “Six and a half, seven. It's going to be inflated away... you can always print more dollars.” — Michael Lewis (47:39)
• On Street Tacos vs. Hot Dogs:
  “Street tacos in Los Angeles? Four. I have a very sensitive stomach.” — Michael Lewis (46:42)
  "Hot dogs at Yankee Stadium? Five. The appeal of the hot dog has declined.” (46:57)
• On Gold:
  “Gold has no, really, it’s not worth $3,600 an ounce, its use value... it has social trust. You can’t explain why or how it got this, but it is ingrained.” — Michael Lewis (44:35)

Rapid-Fire Trust ‘Ratings’ (45:37–49:35)

• Front page of NYT: 8/10
• NYT Style section: 10/10
• Street Tacos (LA): 4/10
• Yankee Stadium Hot Dogs: 5/10
• Social Security: 6.5–7/10
• Congress: 3/10
• Gold: 8/10
• His weed guy: No experience—defaults to 10/10

Timestamps for Key Segments

• Kickoff & economic anxiety: 00:01–02:51
• Story of subprime mortgage friend: 05:21–09:58
• How the system works — Explaining the 2008 crash: 09:58–14:12
• Accountability after the crash: 18:00–21:46
• How the risk moved and might crash again: 25:33–29:51
• Shadow banking and trust in institutions: 31:04–35:52
• Rapid-fire trust questions: 45:37–49:44

Takeaways

• Financial crises are rooted in perverse incentives, complexity, and the ability to hide risk. Though banking is more regulated, risk has simply shifted into shadowy corners of the financial sector.
• The relative “immunity” from consequences among perpetrators of the last crash persists, largely due to the scandalous legality of their actions.
• Today’s greatest vulnerability may not be just in risky institutions, but in America’s eroding trust in the institutions designed to stop panics.
• Michael Lewis, despite deep expertise and a little gold under the bed, still holds a kind of cautious optimism, guided by skepticism, diversity of sources, and a clear-eyed view of what actually matters in times of crisis.

A must-listen for anyone wanting to understand why financial fiascos keep happening, what could trigger the next one, and what (if anything) you should do about it.