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- [00:00]
Justin Wolfers
A Better help ad Matching with my therapist was very quick and easy. I just filled out a couple of questions. Before you know it, I was matched with a therapist. I just felt like a weight just
- [00:08]
Charlie Sykes
was lifted off of my shoulders and I felt like it was a good
- [00:11]
Justin Wolfers
match from the first time we talked. BetterHelp is there to meet people at their needs, giving them a space to feel safe. There is a stigma about therapy, but with BetterHelp, I meet people where they are. Wherever you are, that's where BetterHelp begins. Visit betterhelp.comrandompodcast to get started.
- [00:32]
Charlie Sykes
Your call has been forwarded to an automatic voice message system.
- [00:35]
Justin Wolfers
Running a business means you're always reachable. Until you're not. And the moment you miss that call, a competitor picks it up. That's why this episode is brought to you by Quo, spelled Q U O the business phone system built so you never miss an opportunity. All your calls, texts and voicemails live in one place. Anyone on your team can pick up a conversation, see the full history and respond fast. Quite quo is the 1 rated business phone system on G2, trusted by over 90,000 businesses. Set up in minutes on any device. Keep your existing number, add teammates as you grow. No it, no hassle. Quo's built in AI agent, even handles after hours calls and books appointments so you're covered around the clock. Money is on the line. Always say hello with Quo. Try Quo Free plus 20% off your first six months at Quo.com Tech that's Qu-U O.com Tech this podcast is brought
- [01:34]
Charlie Sykes
to you by Thomson Reuters. The best don't just do their work, they change what's possible. Cases won, audits completed, jobs saved. Behind every one of those moments is a professional who needed to get it right and did. Thomson Reuters builds the technology that sharpens insights, speeds up decision making and powers the outcomes that matter. So when professionals act, the impact is felt by everyone. Be a changemaker. Visit tr.com changemakers I'm Charlie Sykes. Welcome back to the Contrary Podcast. Lindsey Graham dies at the shockingly young age of 71. Shocking for given the given the demographics of the US Senate. Mitch McConnell however, is saying that he is still alive and puts out a proof of life picture. This is the world that we live in. Meanwhile, the Strait of Hormuz is a complete mess and the war nobody wants is back on again. We have a lot to talk about this week. And joining us on the podcast today, our good friend economist Justin Wolfers who runs both the YouTube video the YouTube channel. Let me get this right. Our good friend Justin Wolfers, who runs Platypus Economics on substack and YouTube. Professor, welcome back to the podcast, mate.
- [02:58]
Justin Wolfers
Lovely to see you. And I'm coming to you from summer vacation. That's why the backdrop looks a little different and I look a little happier.
- [03:04]
Charlie Sykes
It looks like a little summer vacation. In fact, Sue, I have my French family visiting, and so we're actually going to be going to Lake Michigan later today to sort of get us in the mood for tomorrow's World cup with France and Spain. Big, big, big around the house. Just. Just want you to know we could devote, by the way, the entire podcast to. To FIFA and officiating and whether or not there's a fix in for Argentina and why everyone in the world hates Argentina right now. We could actually spend the entire don't you think Podcast talking about that.
- [03:36]
Justin Wolfers
I'm gonna defend Argentina. I think it's good that we don't have all Europeans in the final. Lionel Messi is. I asked my nephew, who's 14 and football mad, I said, is he great or the greatest ever? And he said, not even close. Pele never played against the Europeans. Messi is the greatest ever. That comes from my nephew.
- [03:58]
Charlie Sykes
I am not going to dispute that. Actually, what bothers me is just the weird officiating. I mean, look, we kind of have known about FIFA for some time, but the way they completely jobbed Switzerland the other night was just absolutely ridiculous. For people who didn't see this, you had one of the Argentinian players who got a yellow card, and then they did the video review, and actually, my grandson was joking, like, yeah, they're probably gonna turn it around and give the Swiss player the yellow card, which, in fact, they did. Okay, so they not only took away the yellow card from the. Okay, People don't want me to spend this time, but understand that this is the world that I live in right now, which is actually more mentally healthy than talking about Donald Trump all the time. So I don't.
- [04:44]
Justin Wolfers
Charlie, I just want you to know, in the rest of the world, the idea that an American would have complaints about officiating at the World cup would be met with uproarious laughter, given our country's behaviour.
- [05:00]
Charlie Sykes
Yes, I understand that, but. But I. I'm not responsible for all of that behavior. You do understand that? I'm. I'm just. I'm not. I'm not willing to. To take all of that burden of. Wait a minute. Wait, wait, wait, wait.
- [05:13]
Justin Wolfers
Who. Who was it who complained to FIFA?
- [05:17]
Charlie Sykes
Who? Oh, oh, Donald Trump. Yes, I understand.
- [05:20]
Justin Wolfers
What is his partisan affiliation, Charlie?
- [05:22]
Charlie Sykes
Well, was he here? But here's the thing, is that the fact that FIFA gave in to him was certainly just another reminder of how completely corrupt FIFA is. I mean, the FIFA Peace Prize, by the way, do you think there'll be another coveted FIFA Peace Prize, particularly after the war in Iran? Kind of drips with a little bit of irony and suckage.
- [05:43]
Justin Wolfers
You know, I think they're probably going to suspend the FIFA Peace Prize for a year until we get out of Iran. That's apparently what FIFA does now.
- [05:50]
Charlie Sykes
And then it'll be okay. So we have a lot to talk about today. You had a great piece about, you know, one of the themes that I try to push is it is the corruption stupid. And, you know, we had the story of how much money Donald Trump made on crypto while his fans, his marks, lost even more money. I want to talk about what's going on with oil prices, but so let's just talk about where we're at here with the Middle east, because it wasn't that long ago that Donald Trump himself was saying that he didn't want to be Herbert Hoover, that if this war went on, it risked global economic catastrophe. And yet here we are as you and I are talking, you know, we don't know what's going to happen on Taco Tuesday. But, you know, the two sides are exchanging threats. Donald Trump is back to, you know, these, you know, bleats where he's talking about absolutely destroying all of Iran and saying, you know, praise be Allah and that kind of thing. So just give me your sense. So far, the markets don't seem totally rattled by this, but it was Trump himself who said, if we don't end this war, I might be Herbert Hoover, we might have global economic catastrophe. So where are we?
- [06:57]
Justin Wolfers
Let me just start with the reminder that the administration originally told us this would be a four to five week war and they amended that to four to six weeks. So I want us just to not lose sight of that because that was incompetence on its face either back then saying that or how they've run it subsequently relative to their own measuring st. This is one of the most consequential forecasting errors in the Trump administration, which is really saying something. So, you know, you can't. It' swar's a serious business. Just to state the blindingly obvious and to say we're in and out in four to six weeks and to find ourselves there months later is there's a term that Begins with cluster, and it's not a cluster bomb. And I think there should be real accountability. I'm not suggesting there will be. But if we think about how governance ought to work, if you tell the President we're in and out in four to six weeks, and the President tells the American people, and that fails to occur to a tragic and grotesque degree, whoever said that ought to be offering their resignation and in a functional democracy would be. Now, of course, it's a long line of follows a long history of people leaders understating and underestimating the duration of war. This is one of the most reliable things in the world. Anytime a leader tells you how long a war will take at a zero, it's certainly doubling. And American history is replete with examples. You asked me a lot of other things there, Charlie. Remind me what they were.
- [08:31]
Charlie Sykes
Well, okay, so given the fact that the Strait of Hormuz is now closed again, are we risking global economic catastrophe? And when will the markets react to this? Because I think the markets have so far, basically. I mean, when there was peace, they would go up. When there was not, they would go down. But then at a certain point, they kind of decided, okay, this is going to end. We're not going to go through this kabuki dance. But so just in terms of the economic fallout, how big is it going to be? And when are the markets going to realize that this is maybe more dangerous than they had been assuming?
- [09:05]
Justin Wolfers
Yeah. So look, the first thing is the economic risks here are absolutely real. The Strait of Hormuz, I believe, is currently clopin or open ozed. I'm not quite sure what the right word is. It's neither. But really, trade is not flowing, and so that cuts off the rest of the world from stuff that's on the other side of the strait. Most importantly, things like oil and fertilizer. The impacts on the United States are real, but they're small relative to those in the rest of the world. And so, you know, it still hits the front page of the paper over here, but elsewhere it's an absolutely central driver of the economy. Particularly in Europe, there's very much something of an energy crisis coming up. Remember, the US Produces energy. Now, that's not true in Europe and much of Asia. We have fertiliser problems still, and that in turn becomes food problems. And I just want to remind folks that, yes, it hurts. And I can't tell you how many times I go on cable TV and they say, oh, more pain at the pump. And I fear that that misses the deep moral issue here, which is food and energy are the primary products that the world's poorest buy. And so, yes, this is a war that's hurting Americans. And yes, it's also directly doing damage to people in the region who are living in fear, in some cases seeing relatives die or get injured. But also realize there's the collateral damage of folks in the very poorest parts of the world whose quality of life is going from terrible to miserable. So the economic consequences are real for the United States, but not huge for many, many other people in the world. Actually, really very, very dramatic. You then ask the question about what's going on with markets here. And it's a very difficult dance to keep track of, because the Trump White House is a very difficult dance to keep track of. So there's exactly one stylized fact that's 120% true. And I heard you say it out loud, but I want to repeat it again. Every time the President escalates, American markets fall. Every time the President de escalates, American markets rise. That is the stock market saying, we believe the value of large American businesses is higher if we de escalate. Really important that people understand that markets believe this is bad for American businesses. And so that in turn is your 401k. But it's not just your 401k. They're betting that it's bad for American businesses, presumably because they're betting that this is bad for the economy. And there's the simple story there, which is about oil, but there's the more complex stories, which I think are those that you would get at Charlie, which are America's place in the world, future defence expenditures, future security, things that are, Look, I often will talk about the economy, but when it comes to these questions of international relations, when it comes to questions of war and peace, I gasp when I think about the consequences. And if we make the world a little bit more dangerous, the number of young Americans whose lives will be on the line at some point in the next many decades, the number of billions or trillions of dollars we invest in military infrastructure, the instability that we see around the world, which colors the lives of so many and their interactions with the United States. So markets judge that everything that I just said, which sounds dramatic, Markets. That's a judgment of markets, not some blonde center left professor. And then you said, well, is that happening as much? And it sort of is, actually so. And it sort of isn't. Let me give you both sides of this. When the ceasefire ended, the US stock market fell by 1%. Okay. My guess is markets had already priced in that possibility. Like, we understand what a chaotic Trump administration is. We also understand that we did not have an agreement with Iran. We had a memorandum of understanding, which was an agreement that we wanted an agreement, but we didn't yet agree on the things we agreed on, which is to say we didn't have an agreement. And it turns out, you know, if you've got friends who are divorced, they usually agree with their spouse at the beginning. We would like this to be amicable. And they both end up running up tens of thousands of dollars in divorce lawyer debt. It turns out an agreement to have an agreement is not an agreement. And things often go off the rails, particularly when you've got high stakes like in a divorce or war in the Middle East. So my guess is markets had priced a lot of this in. Let's say markets had thought this was a 50% chance of happening. That means markets would only react half as strongly when it actually happened. Then that says markets are saying that stocks are worth 2% less under DE escalation than de escalation. If they thought that it was 80% chance of happening. And Charlie, that's not crazy. Then that says, actually the real effect is five times larger. 5%. Now, let's come back and remember the value of the US stock market is $60 trillion. A 2% effect of 60 trillion. 1% is 600 billion. Therefore, 2% is 1.2 trillion. So we're talking about trillions of dollars were taken up. Markets are still judging that the future profitability of American businesses is trillion over a trillion dollars lower as a result of this escalation. But it doesn't look like that because markets are priced in chaos. When you're priced in chaos and you get chaos, it doesn't look so dramatic. But that doesn't change the underlying judgment that markets believe this is a very, very bad war for American business.
- [14:46]
Charlie Sykes
It'll be interesting to see how long this goes on, because this is the one thing that Donald Trump does pay attention to. Okay, so switching gears to something else big and consequential. You and I have talked about this
- [14:57]
Justin Wolfers
before
- [15:00]
Charlie Sykes
where we're at with artificial intelligence, including the obviously the massively large question of will AI destroy us all? No, actually, the big question I was gonna ask is, do we have an AI bubble? There's a story this morning, and I wanna give credit to Andrew Ross Sorkin, you know, talking about a decision that Anthropic is making. And I'm assuming that you follow this more closely than I do. Anthropic is extending access to their program known as, which is the consumer version of the really, really, really powerful Mythos model. So they have extended this axis for another week. And because Fable requires so much computing power, the assumption is that Anthropic is probably taking a big loss on the move. They're losing money. And there had been huge internal debate within Anthropic about this. And apparently they're really, really afraid if they don't extend this that consumers would go to OpenAI's new GPT 5.6 model, which some people find it's pretty much as good. So here's the economic question, and he describes it as the perfect prisoner's dilemma with tech giants burning cash to take market share before their massive IPOs. Huge question with enormous consequences. Are these AI giants becoming low margin commodities or can they find a way to make huge profits? So here you have, you know, it seems like kind of a zero sum game and they're kind of afraid to charge for it because it's moving so fast. So give me your sense. This has kind of a bubble adjacent aura to me. What do you see?
- [16:39]
Justin Wolfers
I see glorious, beautiful market forces at work, making all of us better off. Charlie, this is one you're going to love. Look, so often the business press poses things in the negative, like, oh, isn't this terrible that OpenAI and Anthropic won't make trillions of dollars? No, it's wonderful. What they're talking about is price competition between two rivals in which what they keep each doing is cutting their prices so that you and I, the consumers of a good, get it at the lowest possible cost. I love it.
- [17:18]
Charlie Sykes
I mean, what if they start losing money? What if it turns out with this massive investment, everybody goes, wait, these guys are burning through cash they're not generating.
- [17:29]
Justin Wolfers
Look, this is an easier conversation if it's not about AI. Right, let's say that we're talking about apples. If apple farmers are engaged in vicious competition, we all get cheap apples. That's magnificent. An apple a day keeps the doctor away. We'll be healthy, we'll be well fed. It'd be terrific.
- [17:46]
Charlie Sykes
So I'm going to put down farmers go bankrupt. Unless they go bankrupt and close up and sell to a conglomerate who's going to build a big data farm instead of an apple orchard.
- [17:59]
Justin Wolfers
This is markets working how they're meant to. And so often you and I have talked about them not working how they're meant to. When the White House gets in the way and says pay tribute and we'll make sure you don't have to compete against the government him. This is fantastic. Now it's not very good if you're the shareholders of Anthropic and OpenAI. Absolutely. But I'm not cheering for them. I cheer for the American people. And so what you have is markets working perfectly. And if this turns out to be. And so what that might mean is we have this. There's two ways this can go. Three I'm going to say. One is this is not a transformative technology. I'm just going to put that aside as uninteresting. Not that it won't happen, but if it is transformative, either we get multiple suppliers who compete with each other and push the price down, which is good for the American people, or we get one of them who monopolizes it, jacks up the price and becomes super rich by itself and it basically becomes its own oligarchy and runs the future of the American economy. Americans face high prices, we underuse this amazing new technology, blah, blah, blah, blah, blah. If this becomes a commodity, that's the best possible case because they're competing, prices are low and we don't all end up owing our, you know, our tech overlords anything. They're competing for us rather than us working for them. I love everything about this.
- [19:23]
Charlie Sykes
Well, I hope that's, I hope that's the case because I do, I do worry about the tech oligarchs and whether or not, I mean, do you, do people in the industry or in the markets understand that there is the real potential for a backlash against AI you're seeing this on a number of different levels, including some rather significant political pushback on these massive data farms. By the way, they're building a massive data farm probably about 15 miles north of where I am up in Port Washington, Wisconsin. It looks like something out of, like out of science fiction. It is so massive. It is so huge. And all around the country people are going, we don't want those things anymore. And they're massively expensive. Take a massive amount of energy. So what happens if there's a political, cultural, social backlash while all of this money's flowing around? Is that a danger?
- [20:17]
Justin Wolfers
I just want to make one rhetorical aside, which is, you know what else is massively expensive and uses a lot of energy? Air conditioning.
- [20:27]
Charlie Sykes
I'm not giving that up.
- [20:28]
Justin Wolfers
Right. That seems of some relevance to me now. Look, the political backlash is real. I have a 14 year old son, 13 year old son, sorry, he'll be 14 soon. That wasn't me being a bad dad.
- [20:40]
Charlie Sykes
He's anticipating.
- [20:42]
Justin Wolfers
He's part of the backlash. He and many of his friends think this is a terrible thing. They didn't ask for it. It's gonna create an immense upheaval in their lives. And the thing is, when I listen to him, nothing he said is wrong. It will cause immense upheaval. He didn't ask for it. It's also true that what economists often point to, which is it's going to grow the pie. That's also true. And so there's a very difficult trade off there. And I want to acknowledge the wisdom of my son and his friends and the people who are really deeply worried about this. There was another article in today's New York Times, a letter from 200 leading economists, or I should perhaps say 199 leading economists plus me, suggesting that this is an immensely powerful technology. I understand not all of your viewers are going to agree with me, but this letter comes from folks who are in very close dialogue with the technologists and the folks who are closer to the technologists believe that this is an immensely powerful technology. And then this is the economists here who are like. And our current set of labor market institutions, the way we deal with unemployment insurance, our ability to deal with change of the magnitude we think might be happening, issues about competition versus monopolisation. The claim in the letter is not that we're certain that everything's going back crazy, but there's a substantial risk that the degree of economic change is running well ahead of our capacity to deal with it. And I think that leads to a conclusion that is at once obvious. Secondly, sounds excessively wishy washy. And third, may be deeply important, which is this is 200 leading economists saying, holy cow, this is happening. And you people are off talking about reflecting pools and that the circus that we're focused on is not the most important development. And we really ought to be in town halls and communities talking and thinking and, you know, we're going to have the next presidential election in not too long. And if that's a presidential election, that's about how much we hate immigrants rather than the most important economic change that's coming in our generation. That's the American people setting itself up for failure yet again. So, Charlie, what I want to convince you of, I know you're, you know, I spend my days knee deep in AI. You're probably less so. But what I want to convince you of is this is one of the most important policy issues of our Time. And if we're not talking about it, we're wasting our time.
- [23:32]
Charlie Sykes
Well, I agree with you completely. In fact, you know, I, I thought that if you look back on our history, like say 150 years from now, people are gonna look back on. And the political stuff that absorbs us right now may actually be a footnote, may actually be an asterisk, because the entire story of our age may be this incredible technological transformation leading to this. You know, for example, who are the leading political figures in Great Britain during the Industrial Revolution? I'm sure that people have their minds, but we don't. We talk about those eras not in terms of the politics, but in terms of just the transformation of culture. And this certainly could have that kind of a transformation. So I do wonder whether we're focused on the news cycle and even the next election, which is incredibly important. But I completely agree that our time may be, you know, our age may be defined by all of, all of this. So let's switch back to the. Since that was pretty big picture and my head's already hurting about this, let
- [24:37]
Justin Wolfers
me just pick one thing up here, which is the anxiety. My guess is you don't wake up feeling immense anxiety about this. Most days you have to go out, you know, you have to wake up, put on that very well tailored suit of yours, sit at this microphone and talk to boyishly handsome economists. And so the existential threat, the existential threat here may not feel so big. I'm a Labour economist and I frequently will have a parent say, oh, you're a Labour economist. My kid's starting college next year. What should they study? Really good question.
- [25:10]
Charlie Sykes
It is a good question.
- [25:12]
Justin Wolfers
The problem is I don't have a really good answer. I can tell them what their kids shouldn't study. I can say, well, there are going to be very few jobs for interpreters in the future. So if you're studying a foreign language with the aim of going into becoming an interpreter, just don't do it. If you're doing it for the love of language, some people tell me that's useful. I'm not going to have a view one way or the other. I would say the set of skills required to. I'm not going to say don't become a coder, but I am going to say the set of skills required to be a successful coder is going to be completely different. It's not going to be coding, it's going to be management. You're managing a set of agents. So I can tell you in some Sense what not to do, what I struggle with. I can't tell you what to do. I don't have a good answer. And I think that in itself is very interesting. And I talked to my better half, Betsy Stevenson. Betsy used to be chief economist at the Department of Labour. So I would think of Betsy as being one of the most qualified people in the world to answer this question. And we have a 17 year old who's doing college tours right now and we don't know the answer. And that anxiety, if you talk to the parents of anyone whose kids are going to college next year, you'll feel that anxiety. It's very real because the kids futures and the possible returns to an education and on and on and on are very much on the line.
- [26:38]
Charlie Sykes
Well, and there's a slightly contrarian take on this as well, which is that we've gotten so used to thinking of college as basically vocational training. Like you go to college to study what your job is going to be as. You know, maybe this is one of those times to step back and go because we don't know where that's going. Make yourself a liberally educated person, actually learn to be a better citizen, learn to be a better person, go back and read about fundamental principles and ideas. Because actually if you think of college as vocational training, you're going to be disappointed because nobody knows where that's going. Right.
- [27:18]
Justin Wolfers
I think in my bones I two thirds agree with you and the 1/3 is I can't be sure. Right. So it sounds like you want me to go tell my kid to go and read great philosophers and great books and have that well rounded American education. I know, you know, you and I know for sure that the demand for translation services is going down.
- [27:44]
Charlie Sykes
Yeah.
- [27:44]
Justin Wolfers
Is knowledge of early enlightenment philosophy, is the demand for that going to go up or down? I don't know. You have an intuition. Everything else is going down. So therefore this will still stay.
- [28:00]
Charlie Sykes
I don't know. Okay, I wasn't actually. I mean, I take your point and I'm not talking about learning, I'm actually talking about what we used to think of as liberal education, where you learned how to think, you learned how to be a human being. You learned all of those things. Yes. You don't need to actually, you know, be able to pass a, you know, a test on the thought of David Hume or something like that. That's not what I'm talking about. But maybe reading some of those to realize that, you know, I want to agree with you. Being a human being is important. Okay. So this is risking becoming too philosophical. And I'm saying this, by the way, as a way of.
- [28:37]
Justin Wolfers
Can I share with you a very
- [28:38]
Charlie Sykes
justifying the fact that I was an English literature major, which was the least practical major in life, and I don't regret it at all. I'm sorry, go ahead.
- [28:46]
Justin Wolfers
Can I share with you a personal side? So you and I had very, very different educational experiences. So it sounds like you had the freedom to explore what you love. I felt under pressure to explore a vocation. I was really lucky. My calling in life was economics. And in Australia, you take. When you. Your degree is not a B.A. it's a bachelor of Economics. So I took microeconomics, macroeconomics, statistics and computer science. And then the next year I would add international trade, and the next year I would add labor economics and public economics and so on. So all I studied was economics. So I'm the opposite of having that liberal arts education. And for a long time, because I'm a very practical fellow, I thought that was terrific. And it really did me to become an economist. Then I had my midlife crisis. And to the young folks out there, it's going to happen. Brace it, right? This is your chance to write a second act and change. And so what happened was, you know, I tried to succeed in my career and get ahead and be a better economist. And I thought, is there more to it than that? And Charlie, I have done the goofiest things over recent years. I spent last summer learning how to sing. I hired a singing teacher. I'd never sang in my life. I'd always been taught that was not a thing boys do. And that wasn't in Australia. I currently am part of an improv team and I every Wednesday go to a little basement in Ann Arbor and I study and I learn improv with my friends. And I've been thinking, what? And I've been doing these left brain experiences. And I'm like, wow, is this what it means to be human? And it's been beautiful. I've loved it. And then I thought to myself, this feels really important. We should have a whole field of study devoted to it, to being truly human. And then someone pointed out there was actually this thing called the humanities.
- [30:41]
Charlie Sykes
And I think Zach's been around for a while
- [30:46]
Justin Wolfers
now. Let me offend half your audience. I just told you that I'm all in on the humanities. All in. I love it. I wish I'd gotten there. Younger humanities as it's taught on modern campuses. Right? I think we agree. I want lessons.
- [31:04]
Charlie Sykes
This breaks my Heart, by the way,
- [31:06]
Justin Wolfers
I want lessons in how to be more human. I would be a better economist if I were more human.
- [31:12]
Charlie Sykes
Yeah.
- [31:12]
Justin Wolfers
So your project, it took me 50 years to understand it, though, Charlie. And so I wanted to share that because some of your audience, maybe 49 and a half and have not figured it out yet. And I just want to be there for you, like, express yourself, whatever it is. I was so scared the first day of my singing practice. I can't sing. What does it mean to sing? And it turns out it was beautiful. Not my voice, but singing is a thing humans have done for centuries. And I could literally feel coursing through my veins this constant of humanity.
- [31:48]
Charlie Sykes
This is fantastic.
- [31:49]
Justin Wolfers
Generations.
- [31:51]
Charlie Sykes
I want to talk to you about the US deal with Iran and the coverage of that story. Look, obviously everyone, including me, has lots of opinions about this deal, but if you also want to get down to the facts of the story rather than getting lost in the hype of the headlines, there's an app and a website that can help you do that. It's called Ground News, and they have great tools to help you avoid getting caught in a bias bubble and avoid blind spots. For each story, they'll show you how the left, right, and the center covered it. The Nobel Peace center even called Ground News an excellent way to stay informed, avoid echo chambers, and expand your worldview. Take, for example, this story, a judge denied Joe Biden's bid to block release of transcripts linked to a special counsel inquiry. On the left, you'll see headlines like us Judge rejects Joe Biden's lawsuit asking to withhold memoir recordings. And on the right, you'll see headlines like what is the former president trying to hide? But then you can go to each source and see who's funding them and their factuality rating that shows how subjective or objective the source is. Ground News also has a blind spot feed that shows stories disproportionately covered by either side of the media. So if you want access to stories you may otherwise never see and the necessary context to make up your own mind, visit groundnews.com tc to get 40% off their unlimited access. That's groundnews.com tc so they know that I sent you. I believe that if you like this podcast and what we do here, you'll like their mission. Visit groundnews.com tc today,
- [33:28]
Justin Wolfers
a better help ad matching with my therapist was very quick and easy. I just filled out a couple of questions. Before you know it, I was matched with a therapist.
- [33:35]
Charlie Sykes
I just felt like a weight Just was lifted off of my shoulders and I felt like it was a good
- [33:39]
Justin Wolfers
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- [34:02]
Charlie Sykes
You know, this is one of the. By the way, you may or may not know this. In my early career I actually wrote a series of books about the humanities in higher education and everything. And one of the points I made was first of all having come from that background and then watching the insidification of the humanities as it became more and more disconnected or one of the experiences that I frequently had with friends who wanted to study philosophy, they wanted to learn philosophy and then they found out that the philosophy that's taught in American higher education has nothing to do with the philosophy of life or any of those things. So. Excellent, excellent point. Okay, so shall we return to the mundane for a moment?
- [34:42]
Justin Wolfers
We shall, but I didn't mean to mansplain to an expert on this. I didn't realize that was part of your first act. Was.
- [34:48]
Charlie Sykes
That was one of my first acts. And I feel, you know, again the watching the. And I think that a lot of the damage in higher education to the liberal arts and the humanities is completely self inflicted. They all wanted to grow up to be scientists. They didn't want to be stoic philosophers. So they wanted to. And this tendency, and this is not a. I'm not trying to diss the academic profession in general, but the desire of English professors and humanities professors to sound as jargon laden as any other profession where let's make ourselves as incomprehensible and academic as possible. And then of course they bemoan the fact that they are dying on the vine. Okay, so let's get back to the mundane world.
- [35:37]
Justin Wolfers
No, I'm going to pause you here, Charlie. What do you do to give voice to that more human side of you? What's your equivalent of improv?
- [35:48]
Charlie Sykes
You know, I actually have some that I'm reluctant to mention because it may completely destroy, you know, our viewers image of me.
- [35:58]
Justin Wolfers
This is leadership. When you show your vulnerability, Charlie.
- [36:03]
Charlie Sykes
Well, I will say that I have done some things that I find as soon as you start talking about singing, by the way, I do not sing. I will never sing. But I can write. And I do enjoy writing both poetry but also lyrics to things that I am using. AI to create actual. And I understand that people are gonna be really upset about this because of the danger that AI poses. And yet it does open a completely new creative. And I'll go to my wife and I say, you have to understand, I made this. I actually wrote this. And her answer would be, I hate AI. You're draining the lakes and everything, and you're insidifying the world. And I'm going, but wait, I have done this poem and I'm really proud of it. And this is a great break from what I'm doing here. And I'm, for all of you, shocked that I actually do that. Sorry. That's the truth. Justin made me confess this. He just reached right in and pulled it out of me, mate.
- [37:08]
Justin Wolfers
That's your art. And if one of your instruments that you play in art happens to be called Claude, I'm okay with that. But the point is, you have your art and it's beautiful, and I love that story, and I really want to thank you for sharing.
- [37:20]
Charlie Sykes
Yeah. And by the way, we're also. Well, anyway, I won't get too much into this, but people who will follow me know that I've also, you know, I also collect art in a way which I'm really enjoying doing. Okay, so let's get back to the mundane.
- [37:33]
Justin Wolfers
I can sell you a very expensive piece. I might make one.
- [37:38]
Charlie Sykes
You might?
- [37:39]
Justin Wolfers
Yeah, maybe I'll do a painting and I'll sell it to you for what's a fair price these days? 38,000?
- [37:45]
Charlie Sykes
Yeah, something like that. But we'll have to talk some other time. Okay. So speaking of buying overpriced things, you wrote a great piece about the Trump crypto scam, which I don't think we. It gets lost in all the other scams and all of the other corruptions, but we found out in the last couple of weeks, Trump made, what, billions of dollars on this crypto scam at the same time that his fans actually lost even more money than he made. Can you just give me your. Just a brief summary of this? Because it's so egregiously corrupt and it's right there in broad daylight.
- [38:20]
Justin Wolfers
Right. So the President has had to disclose what's happened to his wealth over the first year of the Trump presence. And there's. It turns out, you know, if you were a typical president, it would be a one page disclosure where you would say, my old book keeps selling copies. The end. That's not. This president. It was. Maybe it was a thousand pages, maybe it was less, maybe it was more around that and it turns out, of course, the President has many, many lines of business, including selling bibles, selling hats. I don't think he sells stakes anymore. Suing, suing people, suing the media, minimising accountability. Add it all up and it adds up to about $2 billion in his first year to the President alone. Notice that we're not including Don. Don, we're not including Eric, we're not including Melania, we're not including Baron, we're not including any. What's the daughter's name? He doesn't seem to care for her either.
- [39:14]
Charlie Sykes
No, I think he's forgotten about her.
- [39:16]
Justin Wolfers
Yeah, so have I. Sorry about that, young Ms. Trump. So it's just 2 billion to his account. I think there's two points worth making. One directly on how the President does business, and the other, broadly about democracy as it stands on how the President does business. There are two ways of doing business in the world. You can add something to the world, add some beauty, like Charlie's songs, but like Charlie's podcast, right? You're adding something that makes people. Helps people make sense of the world, helps them feel calmer, helps them feel informed, they feel smarter. You just made the world a better place. The other thing you can do is find a way of stealing other people's money. One makes the pie bigger the second. When I say stealing, I don't literally mean stick them up. I mean finding ways of transferring your money into my account to find.
- [40:13]
Charlie Sykes
Fleecing them. Fleecing them.
- [40:15]
Justin Wolfers
Fleecing. That's right. And that's. And so it's really important, as you look around the world at different forms of ways in which people get rich. Traction, I think. Have a think about this. So Bill Gates invented Windows. Windows is terrible, but it's better than what came before it. So therefore, Bill Gates made the world a better place. Elon Musk, as much as I dislike the character, Elon Musk, made an extraordinary set of electric cars, which both the drivers like and we all enjoy less pollution as a result. He made the pie bigger. The President's lines of business, post real estate, Trump University, was about partying people from their money and giving them a binder full of dumb stuff. Crypto is literally, if the price goes down, if you pay me a lot of money for crypto, and then it goes down, that's literally what happens.
- [41:05]
Charlie Sykes
Happened.
- [41:06]
Justin Wolfers
I get rich, literally. By taking money out of your wallet. I created no extra dollars. What's utterly stunning about the President's line of business is they're all in that transfer side, rather than growing the pie. This is not a creative. When someone like Charlie says they're in favor of capitalism and the virtues of business, they're talking about the creative act. They're not talking about pure transfer. If you're in the game of transfers, like you're not making the world a better place, you're taking it from one family and giving it to yours. I don't think there's anything particularly moral about that. If it's taking from working class, working middle class supporters of you in order to enrich your already enriched family, I would call that immoral. On its face. It's a line of business I would never be in.
- [41:55]
Charlie Sykes
It is extraordinary coming from the populist president who ran on that populist, you know, I am the voice of the little man. I will fight for you. And he has spent an extraordinary amount of time and energy fleecing those people where people are paying him a great deal of money for cryptocurrency that has dramatically lost its value. I mean, it's straight up, right? There's no created product. The world is not a better place. There's no value added. It's just he's richer and they are quite literally poorer.
- [42:29]
Justin Wolfers
And to those in your audience who say, well, so what? Of course he has the right to, or they say, well, his following is very valuable. He's just cashing it out. Yes, I agree he has the right to. I don't agree that it's moral. It's just a very different statement. It's not my set of values. It's not the set of values I'd inculcate in my kids. And it's not a set of values as I ever admire in another person. That's one half of the story. The second half of the story is, let's now step back. I want to now put my economist hat on more firmly, or social scientist hat. What we learned is in the first year of a four year presidency, the president is $2 billion richer. Charlie, I know you're an English major, but I'm still going to ask you, if you kept up at that rate, how much richer would he be over four years?
- [43:20]
Charlie Sykes
Yeah, Assuming that it's at the same level as opposed to escalating, I mean, so we're looking at what, eight to $10 billion that he's able to put in his pocket in one term as president. You know, by the way, adds up
- [43:35]
Justin Wolfers
to real money to folks at home. That's why you don't want your kids to become English majors. You say what is four times two? And they say eight to 10, which is literally correct.
- [43:44]
Charlie Sykes
I think it's going to grow. I think it's going to grow is what I'm saying. I'm saying it's not steady state. I'm guessing that if he figures out I can make two my first year, what's gonna stop him from making three the next year or four the next year? Because, you know, his famous quote is, and then I found out nobody cared and I could get away with this stuff, so why stop at.
- [44:03]
Justin Wolfers
I think you're right. I think you're right. So I take back my teasing about your extraordinary English ability, but it's not wrong.
- [44:12]
Charlie Sykes
You're not wrong about the fact that as an English, I chose being an English major because not because I was great at math. Okay? Let's just say that you're onto something there. Okay?
- [44:22]
Justin Wolfers
Okay. So let's say the President's on track to make 8 billion. So we've agreed under Charlie math, that's actually conservative. The entire spending by the Republican Party in the last election was 2 billion. The entire spending by the Democratic Party was 2 billion. It's clear, therefore that if you were to buy a presidency, put the front the whole 2 billion yourself, add an extra billion to make sure you win. So put in 3 billion. If you can get 8 billion out at the end, that's an extraordinary profit opportunity. This is a different argument than the one that there's too much money in politics. Too much money in politics is people can come and bribe the politician to serve their interest. This is a completely different argument. It is that buying the presidency is inherently profitable because not how you'd enrich others, but by how you can enrich yourself. Our democracy is not built with enough. It's not built to function in a world in which buying the presidency is profitable. And in fact, we didn't have problems through history. We had the other problems of money and politics. But no one ever got rich off the presidency before.
- [45:44]
Charlie Sykes
They got rich in other ways, but also at a much lower level. I mean, they made. They sold a book or something or they were speaking. And there were other ways of monetizing it, but not quite this way.
- [45:57]
Justin Wolfers
America has the strangest way we pay our public servants, which is, if you become a president, we're going to pay you about a quarter million dollars a year for four years. And then at the end you will write a book that will get an 8 to 10 million dollar advance and then you'll be able to give and you'll Be able to give speeches around the world for about 2 to $300,000 a pop. And that therefore means that you will be poor in the four years. But it doesn't matter. You're eating at the White House, so they always have enough food there. If not, you go to the dining room, you get. You get the free M&Ms. You can live off that. And after, you're going to be probably not always flying private, but wealthy enough, you never have another worry. You can afford a nice house on Martha's Vineyard or Kenny Bunkport or wherever it is that you want. And that's essentially our deal. So we'll allow you to earn millions with an M after. Yeah, this bloke's earning billions with a B during. So it was never profitable to buy the presidency for $200 million so that you get a $10 million book deal. Right. Even the English majors understand that.
- [47:09]
Charlie Sykes
Yes, it's brutal. But go on.
- [47:13]
Justin Wolfers
Did you say true?
- [47:15]
Charlie Sykes
No, Bruce. Ace of. I said brutal.
- [47:17]
Justin Wolfers
Yes.
- [47:19]
Charlie Sykes
You know, our next podcast is going to be on the Sonnets of William Shakespeare. And I just want you to be prepared for that.
- [47:25]
Justin Wolfers
I love that.
- [47:26]
Charlie Sykes
We're just gonna go through that. We're gonna go through Shakespeare and Milton and the leading poets of the late Victorian era. Okay. And I'm gonna press you on that. Okay. So. But go on, keep dissing. Keep dissing. English literature.
- [47:40]
Justin Wolfers
No, no, it's fine. But the one after that, can we. Do, you know, statistical methods?
- [47:47]
Charlie Sykes
Yeah, it'd be a very short podcast if you included me. Let me just put it that way.
- [47:51]
Justin Wolfers
Well, that might be the Shakespeare sonnets, too, but if you've got a favorite that I should. Maybe we should do a podcast, Charlie, where you and I each just pull out a few favorite poems and just read them to our audience and reflect on what they mean. You could use your education. I could use my post midlife Christian crisis to get this done. Anyway, I think we're talking about politics. Were we?
- [48:14]
Charlie Sykes
I have some in mind. No, we're talking about the selling of the presidency and just the incredible greed and the fact that you're talking about the $2 billion in just one year. And this is just the crypto, right? I mean, the $2 billion. Or am I wrong about that? Is it.
- [48:31]
Justin Wolfers
So basically, the whole shebang adds up to 2 billion. It might be 2.2. There's a whole lot of other profitable lines of business, but they only make, say, 50 million or 70 million. But it turns out when you get 2 billion in crypto, everything's small compared to that. And just in case anyone missed the memo on this, the president got rich investing in the precise industry that he regulates.
- [49:01]
Charlie Sykes
Well, and we've seen this over and over again. I think the headline in the Washington Post, just like moments before we began taping this, was how the Trump and we're not even talking about the Trump sons, the Trump sons investing very heavily in defense tech at a point, you know, at a time when daddy is pumping massive amounts of money into this. And again, the fact that they're not going to extraordinary steps to cover it up. And I think in part it's because the system is broken in terms of accountability that I would like to be able to say that at the end of this, when this is all over, there will be some accountability. As you point out, our institutions are not really set up for this. He's immune from acts that he undertakes as president, but he can pardon himself. He can pardon anyone around him. He can pardon anybody that came within 200 yards of the Oval Office or 200ft of the Oval Office. And you know that that's the plan. So just in terms of the normal checks and balances and rule of law, they are going to get away with this, aren't they? Or are they not?
- [50:08]
Justin Wolfers
I don't know the future, I look, I think the more defeatist we are, the more we say that's going to happen as opposed to we the people have the power to shape our future, which is also true. And so let's not lose sight of that. Look, I care less about the Truth and Reconciliation Commission, less about who goes to jail and more about defending the institutions that are going to make sure that the United States is still here to deliver for the next generation.
- [50:36]
Charlie Sykes
Well, none of us can predict the future. I mean, it's a major disadvantage that we have to suffer under. Justin Wolfers, thank you so much for all your time this morning and all of your insight. And I cannot wait to hear you sing Proud Mary on one of our future. It will be beautiful, like Amazing Grace. Maybe we could do something like that.
- [50:58]
Justin Wolfers
I love that song. I will say, do you remember when President Obama sung Amazing Grace?
- [51:03]
Charlie Sykes
I do. I do remember that. Very moving.
- [51:05]
Justin Wolfers
It was beautiful. It was gracious, it was vulnerable. And it was a moment of extraordinary leadership. And I've never heard that. I mean, it's just an extraordinary song.
- [51:14]
Charlie Sykes
And we will never hear Donald Trump sing that song. Thank you all for listening to this episode of to the Contrary podcast. I'm Charlie Sykes and we continue to do this because, well, we want to make everybody smarter, including ourselves, and to remind everybody that we are not the crazy ones. Thank you. This podcast is brought to you by Thomson Reuters. The best don't just do their work, they change what's possible. Cases won, audits completed, jobs saved. Behind every one of those moments is a professional who needed to get it right and did. Thomson Reuters builds the technology that sharpens insights, speeds up decision making, and powers the outcomes that matter. So when professionals act, the impact is felt by everyone. Be a changemaker visit tr.com changemakers hey,
- [52:15]
Justin Wolfers
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Charlie Sykes
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Justin Wolfers
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Charlie Sykes
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Charlie Sykes
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Charlie Sykes
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