The Rundown – “Can You Govern the Economy Like a Reality TV Show?”
Host: Zaid Admani
Guest: Kyla Scanlon
Release Date: January 25, 2026
Duration: ~27 minutes
Overview
This episode of The Rundown brings back Kyla Scanlon, economist, writer, and recurring guest, for a wide-ranging discussion about the increasingly unpredictable global economy and the U.S. government’s “reality TV” style of governance. Drawing on Kyla’s latest essay “The Great Entertainment,” the conversation explores the end of the Great Moderation, the rising power of markets (especially bonds) as unofficial checks on government, international reactions to U.S. volatility, gold’s resurgence, and why Japan’s bond market matters to everyone—even if you don’t realize it. The episode’s central question: What happens when economic policy starts to feel more like an episode of The Apprentice than sober statecraft?
Main Discussion Points & Insights
The “Great Moderation” to “Great Entertainment”
Timestamps: 00:43 – 03:38
- Kyla’s essay, “The Great Entertainment,” argues American governance now resembles a reality TV show, especially under Trump’s second term.
- She traces the shift from the Great Moderation era (~mid-1980s to 2008) of economic stability—grounded in central bank independence and global order—toward persistent, spectacle-driven volatility.
- Central bank presidents Mary Daly and Tom Barkin spurred Kyla’s reflections, pointing to “the exit of the Great Moderation” and a new age where “uncertainty” itself is constant.
- Kyla connects America’s tradition of “entertainment-first” leaders from Reagan to Trump:
- “I tried to trace the beginning of the United States as an entertainment-first country … and then tying it into what is now, you know, the second Trump presidency, where he is a reality TV star.” (B, 02:59)
Markets as the “Fourth Branch of Government”
Timestamps: 04:38 – 07:27
- The bond (and to a degree, stock) market now acts as a powerful feedback loop on government actions, almost a “fourth branch”:
- “The bond market … is like the only thing that’s kind of putting a check on Trump’s decisions in power. Right? Like whenever he sees the bond market freak out … he kind of reversed courses.” (A, 06:13)
- The “taco trade”: A term for market sell-offs triggered by political drama or erratic policy, followed by a rebound when threats/subsequent policy are walked back. Critics worry this pattern is now “priced in,” making the market harder to shock—and emboldening even riskier decisions from leadership.
Memorable Moment:
- On the cycle of ever-escalating drama:
- “In reality TV you have to get, like, crazier and crazier to keep the audience engaged. … For Trump, like, he’s looking around, he’s like, okay, fine, I can just keep pushing and pushing.” (B, 07:34)
Risks of Prolonged “Great Entertainment”: Economic, Reputational, and Geopolitical Fallout
Timestamps: 08:14 – 11:28
- Erosion of Trust: Allies and investors regard the U.S. as increasingly unpredictable; Europe in particular is reconsidering its relationship.
- Shift to Alternatives: Countries and investors (notably China) are moving to gold and seeking alternatives to the dollar.
- Market Fatigue: As drama is normalized, markets may only respond to truly extreme events, raising the risk of real policy overreach.
Notable Quote:
- “Mark Carney, Prime Minister of Canada, gave a speech at Davos … all of this is kind of over. … Nostalgia is not a strategy. Like, US middle power countries have to move on from the United States because they’re being really weird and aggressive. And that will come at great cost to the United States in the long term for sure.” (B, 05:37)
The U.S. Bond Market and the Threat of “Sell America”
Timestamps: 10:48 – 12:15
- Foreign governments, especially in Europe and Japan, own a vast amount of U.S. Treasuries—if they sell, it could drive up America’s borrowing costs.
- Kyla believes threats to reduce U.S. holdings are credible, but difficult to execute:
- “Europe owns 40% of all US treasuries. … But I do believe them when they threaten it. I think they kind of have to. Especially when another country is threatening you with invasion.” (B, 11:34)
Why Japan’s Bond Crisis Matters to Everyone
Timestamps: 13:28 – 18:58
- Japan is the world’s largest holder of U.S. debt; turmoil in their bond market can ripple worldwide.
- Kyla describes Japan’s move away from ultra-low rates, the election of a fiscally risky prime minister, and the “yen carry trade” unwinding:
- “[Japan’s] prime minister has announced unfunded tax cuts, snap elections … a little bit of political risk. And the bond market is not so happy about all of that … It’s also a good lesson for the United States.” (B, 14:28)
- The collapse of the yen carry trade means Japanese investors may liquidate U.S. assets—creating “a great sucking sound in US assets” (Albert Edwards, cited by Kyla).
- This could raise U.S. yields, boost government deficits, and create a dangerous feedback loop: “You have to raise yields to entice people … more issuance into a market where nobody really wants to buy.” (B, 18:22)
The Global Shift to China and Gold
Timestamps: 18:58 – 23:05
- As uncertainty grows around U.S. policy, other nations gravitate towards China and gold:
- “China is developing like a gold backed dollar alternative through their reserves of gold.” (B, 09:57)
- China is rising in both soft power and technological edge (notably AI and energy/nuclear), enticing global partners like Canada and France.
- Kyla points out China’s unique strengths but also their challenge in domestic consumption:
- “They have outpaced American [AI] models … China has built out 40 nuclear reactors … and the U.S. has zero. … They would be a different partner to other countries just because they've had such a tough time stirring domestic consumption.” (B, 21:02)
A Note of Realistic Optimism
Timestamps: 23:05 – 25:29
- Host Zaid finds hope in the U.S. economy’s resilience amid turbulence, with strong GDP and unemployment at historic lows.
- Kyla tempers optimism with realism, highlighting the stabilizing influence of steady leaders (like Jerome Powell at the Fed) and the impact of local community efforts:
- “There’s a lot of people doing really amazing stuff all over the country. … If anybody ever gets like bummed out or super sad … go out into your local community ... people who are really making a big difference with how all of this works.” (B, 24:49)
Rapid-Fire: Next Fed Chair Odds
Timestamps: 25:29 – 26:09
- As speculation swirls about Jerome Powell’s successor, Kyla notes Rick Rieder’s rising market odds and appeals:
- “Rick is on the rise. I actually really like Rick’s analysis … it'd be interesting to have somebody so market centric in Fed chair position.” (B, 25:49)
Highlighted Quotes
-
“It just really all feels like we’re a part of some version of The Apprentice … some version of, like a show that he's had, having a lot of fun, and not a lot of people are other than him.”
— Kyla Scanlon (B, 02:56) -
“The rules-based order is probably gone. Nostalgia is not a strategy.”
— Kyla, citing Mark Carney (B, 05:41) -
“In reality TV you have to get, like, crazier and crazier to keep the audience engaged.”
— Kyla Scanlon (B, 07:34) -
“Europe owns 40% of all US treasuries. … But I do believe them when they threaten it. … It makes sense if they do approach something like that.”
— Kyla Scanlon (B, 11:34) -
“Japan bonds are really important to the functionality of the total U.S. bond market, stock market. And it’s kind of getting really delicate at the exact moment that the US needs it most to remain stable.”
— Kyla Scanlon (B, 15:58) -
“There’s a lot of people doing really amazing stuff all over the country … there's people who are really making a big difference with how all of this works.”
— Kyla Scanlon (B, 24:49)
Key Timestamps
- 00:43 – 03:38: Kyla Scanlon introduces her “Great Entertainment” essay; end of Great Moderation
- 04:38 – 07:27: Markets as a “fourth branch”—the limits and dangers of this check
- 08:14 – 11:28: Does reality TV governance do lasting damage? Foreign investment risks
- 13:28 – 18:58: The importance of Japan’s bond market and global knock-on effects
- 18:58 – 23:05: Rise of China and gold; shifting global alliances
- 23:05 – 25:29: Realistic optimism about the US economy and community efforts
- 25:29 – 26:09: Odds, stakes, and insights about the next Fed chair
Conclusion
In this lively, insightful discussion, Kyla Scanlon explains how the “reality TV” approach to U.S. economic governance is eroding confidence both within and outside the United States—shifting the balance of power to markets, emboldening global rivals, and making shocks more likely or more severe. At the same time, both host and guest highlight the resilience of the U.S. economy, the stabilizing role of skilled central bankers, and the everyday efforts of people at the local level—offering a guarded, realistic optimism for the future.
For more from Kyla Scanlon:
- Instagram: @kylascan
- Newsletter: kylasubstack.com
- Book: “In This Economy” (with updated edition forthcoming)
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