What Happens Next in 6 Minutes: Recent Episodes
Larry Bernstein
What Happens Next offers listeners an in-depth investigation of the most pressing issues of the day. Visit https://www.whathappensnextin6minutes.com/ for all the links and to subscribe
Our speaker to day is Patrick Allitt who is a Professor of History at Emory where he teaches courses in the American Revolution and the Industrial Revolution. Patrick also lectures for the Teaching Company with the Great Courses. I have taken six of Patrick’s courses and they are absolutely fabulous that are available on their website.
I want to learn from Patrick about why the British government demanded that American colonies pay their fair for their own defense, and why the Crown chose war instead of reconciliation. Americans learn in school why the patriots fought against taxation without representation, but we didn’t consider why many American colonialists preferred King George’s rule.
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Our speaker is H.W. Brands who is a Professor of History at the University of Texas at Austin and the author of the biography American Patriarch: The Life of George Washington.
I want to learn from Hal about why Washington was chosen to be commander in chief of the revolutionary forces, the head of the constitutional congress, and our first president.
I want to hear about Washington’s leadership style and why it was appropriate for his times. I also want to learn about what happened in the Room Where it Happened.
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The original Rocky film was released 50 years ago, and today we are going to review the entire Rocky series. Our discussion will be led by the What Happens Next Culture Critic Darren Schwartz with us is a special guest Scott Holstein who is one of my oldest friends.
My objective of this podcast is to discuss why Rocky won best picture and why you need to rewatch it. This series is a Stallone production: He wrote it, directed several of the films, and acted in it. He is the real hero that made this franchise successful, and my plan is to talk about how he did it.
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Our speaker is Michael Kahana who is one of the world’s leading experts on memory. He is a former Professor of Psychology at Penn, and he is now the founder of Nia Therapeutics which is a company seeking to bring a medical device to patients that can radically improve memory for individuals with a brain injury, dementia, or Alzheimer’s.
I want to hear from Michael about how memory function works and how a medical device can improve human memory retrieval to improve cognitive abilities.
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Our speaker is Patrick Ruffini is a pollster and the author of his own Substack entitled The Intersection that includes frequent analysis on topics like gerrymandering, realignment, and polling errors. He is also the author of a book Party of the People.
I want to learn from Patrick about who will win the midterms in the House and Senate. My plan is to get into the weeds and find out what the issues will be, what the state of play looks like now, and who will win the close races.
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Our speaker is Paul Rozin who is a Professor of Psychology at the University of Pennsylvania.
This discussion was held at a conference that I hosted in Philadelphia so the questions will be asked by me as well as my friends.
I want to learn from Paul about why our future may have substantially less meat because of cost, health and moral reasons despite the fact that many of us find it delicious.
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Our speaker is Seth Cropsey is the President of the Yorktown Institute and the author of a new book entitled Breaking the New Axis: A US Grand Strategy for Eurasia.
I want to learn from Seth about why the Eurasian land mass is critical to American security. In addition, I want to hear about why the lack of ideological coherence of our adversaries is a weakness that we can exploit.
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Our two speakers are Eyal Azoulay and Ellie who are the founders of an Israeli Not-for-profit called ColEven. Terrorists successfully move money from their Western supporters to the Middle East to fund their nefarious affairs. This happens despite the best efforts of American and European banks who spend billions of dollars trying to stop it.
ColEven uses the latest technologies in coordination with a staff of former Israeli intelligence professionals who inform the banks that bad actors are using their institutions.
I was introduced to Coleven at the Miami Beach Impact Forum. This organization has an annual Jewish charity shark tank event. At the dinner, four different charities explained what they do and then the audience picks charities to support. I was super impressed by Coleven’s mission and accomplishments and donated to them.
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Our speaker is Daniel Diermeier who is the Chancelor of Vanderbilt. I want to hear from Daniel about how the administration can build a culture of political neutrality on campus. I want to learn about creating a university culture that encourages free speech and allows for debate without shaming the opposing perspective.
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Our speaker is Ari Ciment. Ari ran the Covid Ward at the Mount Sinai Hospital in Miami Beach and is the former president of the hospital’s medical staff. He is probably best known for being my doctor.
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Our speaker is Polk Wagner, who's the deputy dean of Penn Law School, who has been charged with figuring out how to adapt the law school curriculum to the AI revolution. I want to hear from Polk about how law schools will adapt as their graduate's jobs will no longer focus on document creation, but instead more complex legal analysis.
This podcast was taped at a conference that I hosted so many of the questions will be asked by my friends. And in the audience was David Stellings, who's the managing partner of law firm Leif Cabreze. I want to learn from David about how AI would change the structure of law firms as the work process will need to change and I want to find out if the by the hour billing practice will end and what will replace it.
I also want to hear from my friends who use legal services about how they plan to use AI to negotiate contracts, to understand complex legal agreements, and to draft documents that previously would have been delegated to their attorneys.
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Our speaker is Josh Gottlieb who is a professor of Economics at the University of Chicago’s Harris School of Public Health and Co-Director of the Becker Friedman Institute’s Health Economics Initiative.
I want to learn from Josh about what the barriers are to getting more doctors and what we can do to solve seemingly intractable problems to increase the quality and productivity of our healthcare.
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This podcast was taped at a conference where I hosted several Penn Professors on a variety of topics. The audience included my friends who will join me in asking questions.
Our speaker is Phil Tetlock who is a Professor at Wharton and the author of a book entitled Superforecasting. Often, we get our news and analysis from experts who make predictions that are terribly wrong. Phil has analyzed methods of forecasting and has found individuals and groups who are fantastic predictors of politics, war, and sports.
I want to learn how AI and superforecasters working together will revolutionize the prediction process and why that is helpful to markets and mankind.
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This podcast was taped at a conference where I hosted several Penn Professors on a variety of topics. The audience included my friends who will join me in asking questions.
Our speaker is Karl Ulrich who is a Professor at Penn specializing in Industrial Design and has written a book entitled Product Design and Development.
Karl will speak about designing an ice cream scooper that is beautiful, sexy, and more useful than any that had been manufactured before.
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This podcast was taped at a conference where I hosted several Penn Professors on various topics. The audience included my friends who will join me in asking questions.
Our speaker is Cesar de la Fuente is the Director of Penn’s Machine Biology Group. His team uses AI with biology to create new antibiotics that hopefully can save millions of lives.
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This podcast was taped at a conference where I hosted several Penn Professors on various topics. The audience included my friends who will join me in asking questions.
Fritz Breithaupt is the speaker, and he is a humanities scholar as well as a cognitive scientist at UPenn where he is studying the relationship between narratives and empathy. Fritz is the author of a new book entitled The Narrative Brain: The Stories Our Neurons Tell.
I want Fritz to talk about how we experience fictional stories in our daydreams to achieve personal growth.
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This podcast was taped at a conference where I hosted several Penn Professors on various topics.
The audience included my friends who will join me in asking questions. Our speaker is Stan Goldfarb who was previously the Dean at UPenn responsible for the medical school curriculum.
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Our speaker is Peter Grace who is a New Zealand based academic who has a recent book entitled The Intelligence Intellectuals: Social Scientists and the Making of the CIA.
I want to learn from Peter about how just after World War 2 and at the height of the Cold War, American academics worked inside the CIA’s research and analysis department to forecast enemy activity, and how they set up methods and processes that have been applied by the CIA ever since.
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Our speaker is Eitan Shamir who is a Political Science Professor at Bar Ilan University, and he previously the head of the National Security Doctrine Department at the Office of Israel’s Prime Minister.
I want to find out from Eitan why we attacked Iran and have we achieved are primary war aims.
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Our first speaker is Geoff Baird who is a very close family friend. Geoff recently co-wrote a book entitled The Signal Solution: How Smart Colleges Stop Chasing Applications and Start Converting Students.
Geoff is a consultant working with higher ed institutions to help them persuade accepted student applicants to attend their school. Geoff is particularly excited about using AI to figure out who the admissions committee should focus on in their marketing efforts.
Our second speaker is Bob Zemsky who is a Professor of Education at UPenn and the university’s chief planning officer. He is also the Co-Founder of College-in3- Exchange and is the author of 14 books including The College Stress Test.
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Our speaker is Mark Penn who was a senior advisor to President Clinton and was Hillary’s chief strategist for her senate and presidential campaigns. Mark is now the CEO of Stagwell which is a advertising and marketing company.
I want to learn from Mark why the press thinks that the military campaign in Iran is failing and why the Democrats are not supporting arm sales to their Israeli allies at this critical juncture.
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I’m joined by John McGinnis, a constitutional law professor at Northwestern.
The Court has decided that about $165 billion will be refunded to importers—money that, in many cases, could be seen as a windfall. I think there may be room here for a bipartisan solution, and John helps us think through what Congress can—and can’t—do.
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Today’s topic is Iran’s Rope-a-Dope Strategy.
Our speaker is Anthony King who is a Professor of War at Exeter University in the UK.
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Today’s topic is How the Rich Improve Our Democracy.
Our speaker is John McGinnis who is a constitutional law professor at Northwestern Law School.
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Today’s topic is Allies Fighting Together. Our speaker is Yaakov Katz the former Editor in Chief of the Jerusalem Post and the author of While Israel Slept about the 10/7 massacre.
I want to learn from Yaakov about how the US and Israel are fighting together and how it is significantly different from our previous wars.
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Our speaker is Hal Brands who is a Professor of Global Affairs at Johns Hopkins and former Special Assistant to the Secretary of War for Strategic Planning.
I want to find out from Hal what are our objectives in the war in Iran, how effective American and Israel’s military has been in destroying its adversaries, and what we should expect Iran to do to try to do to improve its negotiating position.
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Our speaker is James Holmes who is a Professor of Maritime Strategy at the US Naval War College. He is also the author of the book Red Star over the Pacific.
I want to learn from James about what strategies the US Navy has to open up the Strait of Hormuz including the use of convoys, area defense, tactical offense, and arming the tankers to beat back the influx of drones.
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Our speaker is Brig. Gen. (Res.) Eran Ortal is a former Israeli Defense Forces officer who previously served as the Commander of the Dado Center for Interdisciplinary Military Thinking in the IDF Operations Directorate. Today he is the Head of the Military Program at the Begin–Sadat Center for Strategic Studies (BESA Center) and a visiting scholar at the American Foreign Policy Council (AFPC). Eran is the author of the book “The Battle Before the War.”
I want to learn from Eran about how the American and Israeli military have moved their command center to the battlefield so that the target can be destroyed before the Iranians have time to react.
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Our speaker is Amir Avivi who is a retired Israeli Brigadier General and the Chairman of the Israel Defense and Security Forum – ISDF. Amir is the author of a recent book entitled No Retreat: How to Secure Israel for Generations to Come.
I want to learn how Israel was able to achieve surprise with its initial attack of the Iranian leadership. I plan to discuss the implications of a compromised Iranian command and control structure and why Iran is attacking its neutral neighbors.
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Welcome to What Happens Next. My name is Larry Bernstein. What Happens Next is a podcast which covers economics, politics, and history. Today’s topic is Bolton on the War in Iran.
John Bolton was the National Security Advisor in Trump’s first term. I want to know from John if attacking Iran is a good idea? Whether it is legal under international law and is constitutional? How he would handle the diplomacy with our allies if he were back in charge, and how this will end up?
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Our speaker is Nick Griffin who is the author of The Year of Dangerous Days: Riots, Refugees, and Cocaine in 1980, and he spoke about that book on a previous podcast. Today, Nick is going to speak about his new play English Only which had its opening run at the Colony Theater in Miami Beach.
In 1980 125,000 Cubans arrived in Miami in two months and many of these new Spanish speakers were not fluent in English and that frustrated many native Miamians. I want to discuss with Nick the importance of English being the lingua franca in the US and whether the government should encourage its use by recent immigrants.
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President Trump recently nominated Kevin Warsh to be the next Chairman of the Federal Reserve Board. In October 2022, Kevin spoke on What Happens Next along with my old boss Myron Scholes who was the recipient of the Nobel Prize in Economics.
In this episode I include excerpts from that previous meeting as well as an additional interview with John Cochrane who is a Professor of Finance and Economics at Stanford’s Graduate School of Business and a Senior Fellow at the Hoover Institute, and he will discuss the challenges that Kevin will face in his new job.
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Our speaker is Henry Olsen who is a senior fellow at the Ethics and Public Policy Center. Henry studies American politics with a focus on populism.
I want to learn from Henry about why Trump is successful with his non-traditional and outrageous speaking style. No other world leader talks like Trump with the use of threats and hyperbole. Is that going to change if there is a perception that it is successful? I want to find out if Henry thinks that we should expect other politicians to mimic Trump’s methods in social media and public speaking in the 2028 presidential campaign.
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Our speaker is Giles Tremlett who is the author of several books on the Spanish civil war and his most recent work is entitled El Generalisimo: A Biography of Francisco Franco.
I want to hear from Giles about what triggered the civil war, why did it become a proxy war between Hitler and Stalin, and what happened to Spain after Franco’s nationalists won the conflict.
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Our speaker is Francisco Rodriguez who is a Senior Research Fellow at the Center for Economic and Policy Research and the author of the recent book The Collapse of Venezuela: Scorched Earth Politics and Economic Decline, 2012-2020.
I want to learn from Francisco about the importance of sanctions to explain the catastrophic performance of Venezuela’s economy for the past 20 years. I also want to hear about whether the US should encourage a negotiated settlement between members of the regime and its opposition to create a functioning civil society.
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Our speaker is Amir Avivi who is a retired Israeli Brigadier General and the Chairman of the Israel Defense and Security Forum – ISDF. Amir is the author of a recent book entitled No Retreat: How to Secure Israel for Generations to Come.
I want to learn from Amir about why he thinks that Israel should encourage the Palestinians to govern themselves using city states instead of a single state sovereign. In addition, I want to discuss why Amir believes that Israel’s previous negotiating position was flawed and that going forward that Israel should focus foremost seeking borders that can be easily defended with its neighbors and with the Palestinians.
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Our first speaker is Seth Jones who is the president of the Defense and Security Department at the Center for Strategic and International Studies – CSIS. Seth is also the author of a new book entitled The American Edge: The Military Tech Nexus and the Sources of Great Power Dominance. Our second speaker is a very good friend of mine and golf partner David Susser who is the President of HEICO Distribution Group which is a leading company in commercial and defense aviation.
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Our speaker is Abby Pogrebin who is the author of My Jewish Year: 18 Holidays, One Wondering Jew. Abby was previously the President of the Board of Central Synagogue where I am a member. Central’s head rabbi is our friend Angela Buchdahl who has managed Central to be the leading reform synagogue in the world.
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Our speaker is William Howell who is the inaugural Dean of Johns Hopkins School of Government and Policy. This is a new academic division located at the Hopkins Bloomberg Center in DC that plans to develop innovative, evidenced based public policy solutions. William is the co-author with Terry Moe of a new book entitled Trajectory of Power: The Rise of the Strongman Presidency. I want to learn from William about why he opposes the will of a popularly elected president and why he thinks that congress is incapable of controlling expanding presidential power.
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Our first speaker will be a very dear friend of mine, Rory MacFarquhar, who previously was a member of Obama’s National Security Council. Our second speaker will be Emma Ashford who is a Senior Fellow at the Stimson Center, an Adjunct Professor at Georgetown and the author of a new book entitled First Among Equals: US Foreign Policy in a Multipolar World. I want to learn from Emma about Trump’s realist approach to foreign policy and what that will mean in its application.
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Our speaker is Roger Moorhouse who is the author of a new book entitled Wolfpack: Inside Hitler’s U-Boat War. I want to hear from Roger about the relative importance of convoys, radar, and breaking the Nazis codes to the allied victory in the Battle of the Atlantic. Our second speaker will be the What Happens Next Culture Critic Darren Schwartz. We are going to discuss World War 2 U-Boat movies including Das Boot and the recent Tom Hanks film Greyhound.
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Our speaker is William Easterly who is a Professor of Economics at NYU and the author of a new book entitled Violent Saviors: The West’s Conquest of the Rest. I want to hear from Bill about whether foreign aid has been a source for good in the developing world. I also want to understand the role of experts and whether the World Bank’s programs has been successful.
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Our speaker is Richard Breitman who is an Emeritus Professor of History at American University and the author of a new book entitled Calculated Restraint: What Allied Leaders Said About the Holocaust. I want to learn from Richard about whether the allies should have bombed the rail lines to the concentration camps and if Roosevelt and Churchill should have said more to warn the Jews of Europe to the Holocaust so that the Jews could have gone into hiding.
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Our speaker is Nicolas Veron who is a Senior Fellow at Bruegel in Brussels as well as at the Peterson Institute in DC. He is also the author of the book entitled Europe’s Banking Union at Ten: Unfinished Yet Transformative. I want to learn from Nicolas about the resilience of the European Union and how it has been affected by the European banking crisis, Brexit, the war in Ukraine, and fears of increasing immigration.
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Today’s topic is Convicting Ex-Nazis: the 80th anniversary of the Nuremberg Trials. We have two speakers Jonathan Bush who is a Law Professor at Columbia and a former US Prosecutor who pursued war criminals, and Eugene Kontorovich who is a Law Professor at George Mason.
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Our speaker is Howard Husock who is a Senior Fellow in Domestic Policy Studies at the American Enterprise Institute and the author of a new book entitled The Projects: A New History of Public Housing.
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Our speaker is Joel Pollak who is the Senior Editor at Large for the website Breitbart. I want to learn from Joel about the future of conservative media.
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Our speaker is Karen Elliott House who is the former Managing Editor at the Wall Street Journal, and the author of a new book entitled The Man Who Would Be King: Mohammed bin Salman and the Transformation of Saudi Arabia. Karen previously won the Pulitzer Prize for her reporting in the Middle East.
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Our speaker is Ricardo Hausmann who is a Professor of International Political Economy at Harvard’s Kennedy School, and he is also the Founder and Director of Harvard’s Growth Lab. I want to find out from Ricardo why know-how is so important and why additional capital and labor isn’t valuable if workers don’t know what to do.
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Our speaker is Daron Acemoglu who won the Nobel Prize in Economics. Daron is a Professor at MIT and is also the co-author of Power and Progress: Our Thousand-Year Struggle over Technology and Prosperity. I want to learn about how AI will improve productivity as well as its effect on inequality. We will compare AI’s impact with the industrial revolution to understand better how the choices that we make will alter work and our society.
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Our speaker is John Sides who is the Chair of the Political Science Department at Vanderbilt and the author of the book entitled The Bitter End: The 2020 Presidential Campaign and the Challenge to American Democracy.I want to find out from John what he learned by analyzing the data from the 2024 presidential election that explained Trump’s outperformance. I also want to hear what John thinks will be the key metrics to predict the outcome of the midterm elections.
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Our speaker is John Bolton who is Trump’s former national security advisor. This podcast was taped at a conference that I hosted in DC. So, you are going to hear questions from my friends as well as me. I want to learn about whether the events in Gaza will lead to peace. In addition, I want to hear about what will happen next in Ukraine.
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Douglas Holtz-Eakin is the President of the American Action Forum and the former Director of the Congressional Budget Office. Douglas will discuss the implications of the impending explosion in entitlement spending, and the coming crowding out of discretionary and defense spending.
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John Haltiwanger is a Professor of Economics at Maryland and a specialist in new businesses. I want to hear from John about the growing importance of new firms to increase productivity and provide job growth. In addition, I want to learn about how the movement towards self-employed and 1099 independent contractors will influence the job market.
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Betsey Stevenson is a Professor of Economics at Michigan. Betsey is also the former Chief Economist at the Department of Labor.
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Patrick Ruffini is a pollster with Echelon Insights and he is also the author of the book Party of the People: Inside the Multiracial Populist Coalition Remaking the GOP.
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Batya Ungar-Sargon is the author of the new book entitled Second Class: How the Elites Betrayed America’s Working Men and Women. I am going to ask Batya to focus her comments on why Trump appeals to Working Class Americans.
Corey Fields is a Professor of Sociology at Georgetown and the author of a book entitled Black Elephants in the Room: The Unexpected Politics of African American Republicans. I want Corey to explain why the Republicans have historically been unsuccessful in attracting Black people and if it will be different in the upcoming presidential election.
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Marty Eichenbaum is a Professor of Economics at Northwestern. Marty wrote an Op-Ed in the Wall Street Journal last week where he argued that the focus on American manufacturing jobs is misplaced, and that our economy has moved on to services. Manufacturing jobs were good jobs in the 1950s but no longer.
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John Sullivan was formerly the US Ambassador to Russia during the Trump and Biden Administrations and previously Deputy Secretary of State. John just published a new book entitled Midnight in Moscow: A Memoir from the Front Lines of Russia’s War.
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Maurice Samuels is a Professor of French at Yale and the director of their Program for the Study of Antisemitism. Maurice is the author of a new book entitled Alfred Dreyfus: The Man at the Center of the Affair.
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Neil Shubin is a Professor of Biology and Anatomy at the University of Chicago and the Provost of the Field Museum of Natural History. He is the author of a new book entitled Some Assembly Required: Decoding Four Billion Years of Life from Ancient Fossils to DNA.
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Jay Greene is a Senior Research Fellow in The Heritage Foundation’s Center for Education Policy and previously was the Department Chair at the University of Arkansas’s Department of Education Reform. Jay is probably best known as my debate partner at New Trier High School.
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Peter Moskos is the author of the books Cop in the Hood as well as In Defense of Flogging. Peter is a Professor in the Department of Law and Political Science at the John Jay College of Criminal Justice. I want to find out from Peter what it is like policing in the Eastern District of Baltimore when he was a police officer and why he thinks we need to reconsider physical punishment in lieu of incarceration.
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Michael Walzer is an Emeritus Professor at the Institute for Advanced Study. He has previously taught politics and government at Princeton and Harvard as well. Michael has written the leading book in his field entitled Just and Unjust Wars. I want to discuss with him his moral philosophy of war and then apply it to the current conflict in Gaza.
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Scott Turow is the author of the novel Presumed Innocent which has recently been adapted into an 8-part Apple TV miniseries. I want to learn from Scott about adapting his novels to film. I also want to hear his views on copyright and whether it serves public policy to give authors control over their books and derivative work for their lifetime plus 70 years. And most importantly I want to hear from Scott about what he thought about the new radically different Presumed Innocent miniseries.
Darren Schwartz is the What Happens Next Film Critic. I plan to ask Darren to compare the miniseries with the novel and the 1990 Harrison Ford movie. I would also like Darren to comment on how the change in our social mores forced a change in its plot and characters.
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Kurt Schmoke is the President of the University of Baltimore. Kurt served 12 years as the Mayor of Baltimore and 8 years as a prosecutor, and he came to oppose the Federal War on Drugs. I want to find out from Kurt if drug legalization has reduced violence and made our communities safer?
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Daniel Diermeier is the Chancellor of Vanderbilt. I want to discuss with Daniel what caused the current chaos on college campuses and whether universities would be better served by remaining neutral on controversial political matters. I want to understand what the objectives of the university are and how free speech and civil discourse on campus fits into that.
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Gerald Posner is the author of Case Closed: Lee Harvey Oswald and the Assassination of JFK. You may recall that Gerald and I recorded a two-part podcast series on Oswald and JFK that could be found here and here. I want to discuss with Gerald what we have learned so far about Trump’s alleged assassin, what was the extent of the security failure, and why we Americans gravitate so quickly to conspiracy theories on both the right and left.
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Dean Adler co-founded Lubert-Adler 27 years ago and focuses on investing in institutional real estate. Dean’s firm has over $17 billion of assets under management. Dean is an expert in investing in residential and office buildings across the capital stack.
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Richard Fontaine is the CEO of the foreign policy think tank The Center for New American Security. Richard is also the co-author with Ambassador Blackwill of a new book entitled Lost Decade: The US Pivot to Asia and the Rise of Chinese Power. I want to find out from Richard about how to contain Chinese economic and military power. I also want to hear about the trouble China is causing with international organizations and what we can do about it.
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Michael McConnell is a Stanford Law professor and today we will discuss the Chevron Doctrine. The Supreme Court has just repealed the Chevron Doctrine in one of the Supreme Court’s most important rulings of the year. This decision ends judicial deference for interpretations made by bureaucrats in the Federal agencies. For the past 40 years, the Supreme Court has allowed bureaucratic experts to interpret ambiguous statutes if their analysis was reasonable. No more. Now decision making goes back to the judiciary on how to interpret the law.
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Eric Kaufmann is a Professor of Politics at The University of Buckingham and the author of the book entitled, The Third Awokening: a 12 Point Plan for Rolling Back Progressive Extremism. Eric uses a different title in the UK for the same book, which is Taboo: How Making Race Sacred Produced a Cultural Revolution.
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Luke Nichter is the author of the new book entitled The Year That Broke Politics: Collusion and Chaos in the Presidential Election of 1968. After LBJ decided not to seek another term, the election was wide open for the candidates Richard Nixon, Hubert Humphrey and George Wallace.
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James Holmes is the J.C. Wylie Chair of Maritime Strategy at the Naval War College. Naval technology is changing rapidly, and I want to learn if the US fleet is capable of repelling a Chinese invasion of Taiwan, and what that conflict would look like.
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Eugene Kontorovich is a Professor of Law and the Executive Director of the Center for the Middle East and International Law at the George Mason Antonin Scalia Law School. He also works with the Israeli think tank The Kohelet Policy Forum.
Greg Townsend is a former prosecutor who worked for the ICC tribunals in Rwanda, Yugoslavia, Kosovo and Lebanon. He is also a lecturer at The Hague University of Applied Sciences, Professor of Practice at Brandeis University, based in The Hague, and advisor on the International Criminal Court’s Advisory Committee on Legal Texts.
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Greg Townsend worked for the ICC tribunals in Rwanda, Yugoslavia, Kosovo and Lebanon. I want to learn from Greg what the next steps will be in the ICC judicial process for the Israeli officials. Why they are being charged? And how this will all eventually play out. I also want to figure out whether these international institutions are in the Western democracies interest or if they have been co-opted by bad actors. I want to find out if Israel can legally defend itself if Hamas uses human shields.
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David Bellos is a Professor of Literature at Princeton. David has a new book entitled Who Owns This Sentence: A History of Copyrights and Wrongs. I am interested in learning from David the rationale for Copyright. Is the term of 95 years for most copyrights too long? And should we be looking to extend copyright to such things as fashion or should we be restricting its use to derivative works?
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Harold Holzer won the Lincoln Prize for his book Lincoln and the Power of the Press. Harold has a new book entitled Brought Forth on This Continent: Abraham Lincoln and American Immigration. I want to learn from Harold why Lincoln encouraged more Europeans to move to the US. Many were Catholics from Ireland and Germany who were generally viewed as potential Democratic voters. How did Lincoln persuade the immigrants to fight and support the Republicans during the civil war?
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Michael Wexler is a partner with the law firm Seyfarth where he specializes in trade secrets, corporate espionage, and employment restrictive covenants. I met Michael 12 years ago at the Father-Son event at Camp Horseshoe in Rhinelander Wisconsin and became friends.
Josh Soven is a partner at Paul Weiss. Josh learned his trade working for the US Department of Justice’s Anti-Trust Division and at the Federal Trade Commission. I met Josh in our first class in college an English Seminar called the Malcontent in the Novel. We became college roommates and have been close friends for nearly 40 years.
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Ernie Freeberg is a Professor of American History at the University of Tennessee. Ernie wrote a book entitled Democracy’s Prisoner: Eugene Debs, the Great War, and the Right to Dissent.
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Malika Zeghal is the Prince Alwaleed Bin Talal Professor in Contemporary Islamic Thought and Life at Harvard. She just published her book entitled The Making of the Modern Muslim State: Islam and Governance in the Middle East and North Africa.
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Chris Arnade and I worked together in the Emerging Markets Department at Salomon Brothers in the mid-1990s. Chris spends his time walking the world with his camera sending dispatches from global cities. We will discuss why he walks and what he learned in places like Seoul, Hanoi, Amman, Tokyo, and Dakar.
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Stefan Timmermans is a medical sociologist at UCLA and the author of a new book entitled The Unclaimed: Abandonment and Hope in the City of Angels.
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Anne Curzan is the Dean of Literature, Science and Arts at the University of Michigan and the author of, Says Who? A Kinder, Funner Usage Guide for Everyone Who Cares About Words.
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Anne Curzan is the Dean of Literature, Science and Arts at the University of Michigan and the author of, Says Who? A Kinder, Funner Usage Guide for Everyone Who Cares About Words.
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Greg Makoff has a new book entitled, Default: The Landmark Court Battle over Argentina’s $100 Billion Debt Restructuring.
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Bethany McLean is the author of the book, The Big Fail: What the Pandemic Revealed About Who America Protects and Who It Leaves Behind.
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Henry Olsen is a Senior Fellow at the Ethics and Public Policy Center and the author of two books: The Working-Class Republican and The Four Faces of the Republican Party.
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Steve Lewis is the former President of Carleton College and former Provost at Williams. I want to learn from Steve what are the constructive steps that a university president should make to facilitate a healthy conversation on campus on provocative and highly charged topics. How can a college develop a social contract among students and faculty that fosters free speech?
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John Bolton served as the US Ambassador to the UN under George W. Bush and as US National Security Advisor for Donald Trump. John published his memoir The Room Where It Happened about his time working in the Trump Administration.
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Elliott Abrams is a senior fellow for Middle Eastern studies at the Council on Foreign Relations. Elliott served as deputy assistant to the president and deputy national security advisor for George W. Bush, where he supervised U.S. policy in the Middle East for the White House, and as Special Representative for Iran and Venezuela for Donald Trump.
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Gary Saul Morson is the Lawrence B. Dumas Professor of the Arts and Humanities and Professor of Slavic Languages and Literatures at Northwestern University. Saul’s work ranges from literary theory, the history of ideas, and the relation between literature and philosophy in the works of Chekov, Dostoevsky, and Tolstoy.
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Brian Rosenberg was President of Macalester College for 17 years and is now a visiting professor at Harvard’s Graduate School of Education. He has a new book entitled “Whatever It Is, I’m Against It”: Resistance to Change in Higher Education.
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Hal Brands is the Henry A. Kissinger Distinguished Professor of Global Affairs at the Johns Hopkins School of Advanced International Studies. Hal is the author of the book entitled The Twilight Struggle: What the Cold War Teaches Us About Great-Power Rivalry Today.
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Eitan Shamir is the former head of the National Security Doctrine Department at the Israel Ministry of Strategic Affairs. He is also the co-author of the book entitled The Art of Military Innovation: Lessons from the Israel Defense Forces.
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Philip Wallach is a senior fellow at the American Enterprise Institute. Philip is the author of the book entitled Why Congress, which describes the role of the legislature in the American constitutional framework and why we need to encourage Congress to legislate instead of delegating its responsibility to the executive branch, the bureaucracy, and the courts.
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Patrick Ruffini is the author of the book Party of the People: Inside the Multiracial Populist Coalition Remaking the GOP. Patrick is the founder of Echelon Insights that uses digital analytics to improve polling and strategy for Republican candidates. I want to hear from Patrick if voter behavior is entrenched and whether the Republicans can persuade Black and Hispanic voters to vote like their White Working-Class brethren.
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Cynthia Nicoletti is a legal historian and law professor at the University of Virginia School of Law. Cynthia is the author of the book, Secession on Trial: The Treason Prosecution of Jefferson Davis.
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Gerald Posner is the author of the book Case Closed: Lee Harvey Oswald and the JFK Assassination. Gerald has spent years researching this book and interviewed all the major living players in the murder. This year is the 60th anniversary of the assassination, and I want to find out who killed JFK and if there was a conspiracy.
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Gerald Posner is the author of the book Case Closed: Lee Harvey Oswald and the JFK Assassination. Gerald has spent years researching this book and interviewed all the major living players in the murder. This year is the 60th anniversary of the assassination, and I want to find out who killed JFK and if there was a conspiracy.
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David Bell is a Professor of History at Princeton and the author of Napoleon: A Very Short Introduction.
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Jeff Speck is the author of the classic book now in its 10th edition entitled Walkable City: How Downtown Can Save America, One Step at a Time. I want to learn from Jeff why some cities are more walkable, what design changes can radically improve city life, why bike lanes and active pedestrian traffic make cities more vibrant, and why speedy cars are so problematic.
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Dr. Ari Ciment is the author of a new book entitled Breathless Tales: Life, Laughter, and Lessons. Ari managed the Covid ward at Mt. Sinai Hospital in Miami Beach when I was a patient recovering from COVID in December 2020. Ari has spoken more times on this podcast than any other guest.
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Josh Soven is a partner at Paul Weiss who works in Antitrust. Josh previously worked at the Department of Justice and the Federal Trade Commission.
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Anthony King is a Professor of War Studies at the University of Exeter in the UK. Tony has written a recent book entitled Urban Warfare in the 21st Century, and he spoke previously on this podcast 18 months about the war in Ukraine.
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Boris Vladimirov is a market strategist at Goldman Sachs. I have been a close friend of Boris for over 15 years, and I met him when he was a bond speculator for the macro hedge fund Brevan Howard.
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Julian Jackson is an Emeritus Professor of Modern French History at Queen Mary at the University of London. Julian is one of the preeminent scholars focused on Vichy France. He has written extensively about France and the second world war and has published an important biography of Charles de Gaulle.
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Asa Hutchinson is the former Governor of the State of Arkansas and is currently running for the Republican Nomination for President of the United States. I want to learn from him what it takes to run for president in this election, what the critical policy issues will be, and how he can beat the front-runner, Donald Trump.
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Michael McConnell is a Stanford Law Professor who recently published a new book, Agreeing to Disagree: How the Establishment Clause Protects Religious Diversity and Freedom of Conscience.
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Michael D. Smith is a Professor of Information Technology and Marketing at Carnegie Mellon, and he has just published a new book entitled The Abundant University: Remaking Higher Education for a Digital World.
Jonathan Bernstein is a senior at Northwestern. I want to hear the student’s perspective. I want to find out from Jonathan how he enjoyed the hybrid model at his university, how he uses online courses to learn at institutions like Wall Street Prep, and how he uses Chat GBT to study.
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Paula Marantz Cohen is the Dean of the Honors College at Drexel University. Paula just released a new book Talking Cure: An Essay on the Civilizing Power of Conversation. I want to hear from Paula about what is critical to a successful conversation and why we should care.
Darren Schwartz is our What Happens Next Film Critic. I’ve asked Darren to review three of my favorite films that deal directly with talk. They are Woody Allen’s Annie Hall, David Mamet’s Glengarry Glen Ross, and Spike Jonze’s movie Her.
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Robert Kaplan just released a new book entitled The Loom of Time: Between Empire and Anarchy, from the Mediterranean to China.
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Aaron Tang is a law professor at UC Davis. He has written a new book entitled Supreme Hubris: How Overconfidence is Destroying the Court and How We Can Fix It.
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Jeremy Bernstein was a work colleague of Oppenheimer at the Institute for Advanced Studies and is the author of the book Oppenheimer: Portrait of an Enigma.
Darren Schwartz is our What Happens Next culture critic and will help us find the humor in the atomic bomb.
Billy Herriott, the assistant golf pro at the Lake Shore Country Club, made a road trip from Chicago to Indianapolis to watch Oppenheimer on the IMAX screen in its intended 70-millimeter.
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Sophia Saker is an intern on What Happens Next. Sophia recently graduated from Brown and will be working for a Hollywood talent agency after the writers’ strike is over. Kay Hymowitz is a fellow at the Manhattan Institute and the author of the book Manning Up: How the Rise of Women has Turned Men into Boys. Debbie Warren loved Barbies as a child and wrote her graduate school application essay on collaboration when playing with barbies as a kid. Darren Schwartz is the What Happens Next film critic and will discuss why is this movie is so funny and entertaining.
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Michael Reid is a journalist and author who wrote the new book, Spain: The Trials and Triumphs of a Modern European Country.
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Dick is the C. Carlisle and Margaret Tippit Professor of Statistics at Williams College and the author of the college textbook Intro Stats.
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Anthony is the Distinguished Research Fellow at the Acton Institute and a Professor of Interdisciplinary and Theological Studies at Kuyper College. He is also the author of the book Heroic Fraternities: How College Men Can Save Universities and America.
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Tom Malone is a Professor of Management at MIT’s Sloan School and the Director of the MIT Center for Collective Intelligence. Tom is the author of the book Superminds: The Surprising Power of People and Computers Thinking Together.
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Retired Federal Judge Gary Feinerman recently joined the law firm Latham and Watkins as a partner in litigation. Gary will discuss the recent case in North Carolina related to gerrymandering and whether the state courts can overrule the state legislature’s redistricting maps.
Renée Flaherty is the attorney who successfully argued the case of Jackson v. Raffensperger in the Georgia Supreme Court. This case is about the limits of state authority to regulate occupations. Jackson teaches new mothers how to breastfeed, but the state changed the licensing requirements demanding that she meet minimum education requirements that would prevent her from doing her chosen profession which is counseling lactation care.
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Rick Banks is the Jackson Eli Reynolds Professor of Law at Stanford Law School, the co-founder and Faculty Director of the Stanford Center for Racial Justice and he is also on the faculty at Stanford’s School of Education.
Rick was previously the co-host for this podcast What Happens Next during most of 2020.
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Patrick Allitt is a Professor of History at Emory. Patrick is perfectly positioned to help us evaluate the AP US History exam as he has graded and written the AP Tests. Patrick has also taught the US History survey class that is available from the Teaching Company’s Great Courses.
Annie Abrams is the author of the new book entitled Shortchanged: How Advanced Placement Cheats Students. Annie teaches AP English at the NYC magnet high school Bronx Science. We will hear from Annie about her concerns related to teaching for the AP tests, and how it affects high school English pedagogy.
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Betsy DeVos is the former Secretary of Education and the author of the book Hostages No More: The Fight for Education Freedom and the Future of the American Child. I hope to learn from Betsy about why school choice will improve educational outcomes. I also want to hear about how COVID changed the relationship between parents and schools, and whether some students might benefit from vocational training instead of a college track curriculum.
Darren Schwartz is the What Happens Next movie critic. We are going to discuss three films. The first is the documentary Waiting for Superman which is about the success of charter schools. We will then review two classic films on teenage angst: the ridiculous and stupid comedy classic Superbad and the romantic comedy Easy A.
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Arnette Heintze worked in law enforcement and the Secret Service. In the Secret Service he worked the detail protecting Presidents Bush and Clinton and was awarded the US Secret Service Valor Award for heroism. Arnette operated for 15 years Hillard Heintze which is a security and investigative firm used by many of the country’s largest firms.
Tom Sancton is the author of the book The Last Baron: The Paris Kidnapping that Brought Down an Empire. The book is fabulous, and it tells the true story of a targeted kidnapping of one of France’s leading industrialists.
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Jennifer Sciubba has written a book entitled 8 Billion and Counting. I am fascinated by the field of demographics because population growth is critical in determining a nation’s future political and economic power.
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Valerie Fridland is a professor of linguistics at the University of Nevada at Reno, and she is the author of the book Like, Literally, Dude: Arguing for the Good in Bad English.
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Edwin Battistella is the author of the book, Sorry About That: The Language of Public Apology. Darren Schwartz is the What Happens Next movie critic.
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Ashok Mody is a Professor in International Economic Policy at Princeton. He is the author of the book India is Broken: A People Betrayed, Independence to Today.
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Ingo Trauschweizer is a Professor of Military History at Ohio University. He recently wrote a biography entitled Maxwell Taylor’s Cold War: From Berlin to Vietnam.
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Patrick Allitt is a Professor of History at Emory University, and he is currently writing a new book entitled Keeping Track: A Concise History of American Railroads.
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Kevin Cook is the author of the book Waco Rising. Patrick Allitt who is a Professor of History at Emory University and a scholar in American Religious History. And we welcome back the What Happens Next film and TV critic, Darren Schwartz.
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Michael is the Richard and Frances Mallery Professor and Director of the Constitutional Law Center at Stanford Law School and a Senior Fellow at the Hoover Institution. He is also the author of the book the President Who Would Not Be King: Executive Power under the Constitution.
Rick is the Jackson Eli Reynolds Professor of Law at Stanford, and the author of the book Is Marriage for White People? How the African American Marriage Decline Affects Everyone. Rick is most famous co-hosting this podcast What Happens Next during the second half of 2020.
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Stephen Biddle is a Professor of International and Public Affairs at Columbia University. Stephen previously worked for General Petraeus in Iraq and General McChrystal in Afghanistan.
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Dan Willingham is a Professor of Cognitive Psychology at the University of Virginia. He is the author of the new book entitled Outsmart Your Brain: Why Learning is Hard and How You Can Make It Easy. We are going to hear about how to be smarter about learning new material in school and in life.
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Nicolas Véron is a senior fellow at Bruegel Institute in Brussels and at the Peterson Institute in Washington, D.C. His research focuses on the financial system and international banking regulatory matters. Today Nicolas will discuss the radical change in US policy for uninsured bank deposits.
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Laura Hamilton is a sociologist at UC Merced and the author of multiple books including Broke, Who is Paying for the Party, and Parenting by Degree. Laura is interested in how socio-economic status influences who goes to college, how students perform, their job prospects, and their marriage market. This discussion should be very provocative.
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Gerald Posner wrote the book Pharma: Greed, Lies and the Poisoning of America. Gerald will speak about the conflict that pharmaceutical firms face with their desire for advancing public health and their profit motive. We will also discuss the advancement of pain management care, fears of addiction, and the success and failures of OxyContin.
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Nobel Prize winner Myron Scholes and Elm Wealth's Victor Haghani discuss the Golden Rules of Investing.
Victor Haghani is a former Salomon Brothers colleague of mine and one of the founders of Long-Term Capital Management. A decade ago Victor founded a wealth advisor, Elm Wealth, as an extension of managing his family office.
I endorse Victor’s wealth management strategy that dynamically manages portfolios of low cost ETFs focused on delivering attractive risk-adjusted, after-tax returns for clients. You will hear directly from Vic about these ideas and you can learn more from his website elmwealth.com.
Myron Scholes won the Nobel Prize for his contributions to options theory. This is just a tiny fraction of his many contributions to finance. Myron will speak today about the importance of diversification both across assets and time. Myron was an early advocate of low cost index funds and believes that you need to dynamically change your investment portfolio when market risk conditions change.
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The first speaker will be Jay Greene from the Heritage Foundation who will discuss Florida Governor’s challenge to the DEI bureaucracy in Florida’s public universities. Jay and I were high school debate partners at New Trier in Winnetka, Illinois and are still very close friends.
Our second speaker will be Dr. Stanley Goldfarb who runs a not for profit called Do No Harm. Stanley is the former Associate Dean at the UPenn Medical School and the author of Take 2 Aspirin and Call me by my Pronouns: Why Turning Doctors into Social Justice Warriors is Destroying American Medicine. Stanley will discuss how DEI is harming medical schools’ curriculum and medical care.
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Our first guest will be Sonali Chakravarti who is a Professor of Political Theory at Wesleyan University who focuses on the importance of juries to democracy. She is the author of the book Radical Enfranchisement in the Jury Room and Public Life and Sonali will discuss how to expand jury nullification.
Our second guest will be Retired Federal District Court Judge Gary Feinerman who left the bench two months ago to be a litigation partner at Latham and Watkins. Gary presided over 48 jury trials, and I want to learn from Gary about what he learned watching juries from his vantage point as a judge.
Our third guest is David Stellings a law partner at Lieff Cabraser Heimann & Bernstein. David is one of the top class action lawyers in the country and represented the class in the famous VW Diesel Case, David will discuss the challenges working with a jury in complex civil litigation.
Our final speaker will be the What Happens Next film critic Darren Schwartz who will review the classic 1957 film 12 Angry Men and its continuing relevance to understanding the innerworkings of jury deliberation.There is much to cover so buckle up.
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Tina Brown will discuss her new book The Palace Papers: Inside the House of Windsor – The Truth and the Turmoil. Tina is the former editor of The New Yorker and Vanity Fair. Tina has written several other books including the Diana Chronicles as well as The Vanity Fair Diaries.
Tina will explain why the public is so fascinated with the Royal Family, the continuing deterioration of Prince Harry’s relationship with his brother William, the next in line to be king. Why Harry decided to give up his royal responsibilities. And Tina will explain why she believes that the monarchy will survive and prosper. There is much to cover so buckle up.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Gisela Sin is a Political Science Professor at the University of Illinois and the author of the book entitled Separation of Powers and Legislative Organization: The President, the Senate, and Political Parties in the Making of House Rules. Gisela will explain what rule changes that McCarthy had to agree to get the necessary votes, and we will find out what the implications are for the legislative agenda and the House’s power in negotiating with the President.
We will also hear from Tennessee Republican Congressman Mark Green who will describe the internal squabbles that he witnessed during this historic 4-day saga on the House floor to pick the Speaker, and I plan to ask Mark about what this means for the Republicans going forward during this term.There is much to cover so buckle up.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
We are going to hear from Ilya about what happened last term besides Dobbs and what to expect from the Supreme Court. This year’s big cases will be on affirmative action, limiting state courts influence in elections, and interstate commerce. Ilya spoke on this podcast previously about free speech.
Our second speaker is Eugene Kontorovich who is a Professor of International Law at George Mason’s Law School and works with the Kohelet Policy Forum on legal reforms related to Israel’s Supreme Court. Israel’s Supreme Court has been flexing its muscle lately and has rejected the Knesset’s laws that it feels are unreasonable including political compromises on the military draft as well as firing a cabinet minister that it viewed as unqualified because of previous legal troubles. We will hear from Eugene about Prime Minister Netanyahu’s proposed judicial reforms and the hysteria it has triggered in Israel’s legal community.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Nobel Prize winner Myron Scholes and Elm Wealth's Victor Haghani discuss the Golden Rules of Investing.
Victor Haghani is a former Salomon Brothers colleague of mine and one of the founders of Long-Term Capital Management. A decade ago Victor founded a wealth advisor, Elm Wealth, as an extension of managing his family office.
I endorse Victor’s wealth management strategy that dynamically manages portfolios of low cost ETFs focused on delivering attractive risk-adjusted, after-tax returns for clients. You will hear directly from Vic about these ideas and you can learn more from his website elmwealth.com.
Myron Scholes won the Nobel Prize for his contributions to options theory. This is just a tiny fraction of his many contributions to finance. Myron will speak today about the importance of diversification both across assets and time. Myron was an early advocate of low cost index funds and believes that you need to dynamically change your investment portfolio when market risk conditions change.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Our speakers will be economists Ran Abramitzky from Stanford and Garett Jones from George Mason. Ran is the author of Streets of Gold: American’s Untold Story of Immigrant Success and Garett wrote the book The Culture Transplant: How Migrants Make the Economies They Move to a Lot Like the Ones They Left.
Both speakers are pro-immigration, but Garett wants us to focus our efforts on recruiting immigrants with skills. Garett believes that the success of immigrants’ descendants is a function of the culture imbued from the old country. In addition, the immigrants social and cultural mores will affect America’s social mores as well, so be very careful who you let in.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Pickleball is the hottest sport in America. Player enthusiasm is off the charts. In my neighborhood in Miami Beach and my mothers in Sarasota, pickleball is the rage. This is becoming the norm. The game is fun to play and is open to all ages and skill level. And the people love it.
Today’s guest is my close friend Steve Kuhn who founded Major League Pickleball, you know the one where Tom Brady and LeBron are team owners. Steve is incredibly creative and highly excitable. You are going to love Steve.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
I hope to learn from Scott how he thinks about constructing a novel and character development. What is the role of the editor? How do you go about the rewriting process? In the post development phase, how do you market a novel and sell the film rights, and generate excitement about the work so that booksellers can sell it?
There is much to cover, so buckle up.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Speakers: Lauren Rivera and Beth Hendler-Grunt.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Speakers: Wendy Cromwell and Claudia Gould
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, politics, and the arts. I give the speaker just six minutes to make their opening argument.
Today’s topic is models and bottles.
Our first speaker on this program will be Nina Scalera who is a fellow podcaster with her own show She Werks Hard for the Money about her life as a 20-something working as a bartender at the trendy midtown restaurant Avra. Nina will give us a glimpse into the NY dating scene from her vantage point behind the bar.
I am also raiding the What Happens Next archive and I have selected excerpts from a conversation with Ashley Mears who is a a sociologist at Boston University, and the author of the book Very Important People: Status and Beauty in the Global Party Circuit. I wanted to contrast the bar scene at a cool bar with bottle service at a hip club.
Buckle up.
I make this podcast to learn, and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Ok, let’s start with Nina’s opening six-minute remarks.
Nina Scalera
Topic: Life as a NYC Bartender and the NYC dating sceneBio: Bartender at Avra and host of the podcast, She Werks Hard For The MoneyPodcast link: She Werks Hard For The Money
Transcript:
My name is Nina Scalera. I am a career bartender, currently working at a well-known Greek restaurant on the Upper East side of Manhattan. I've been working as a bartender in the city for almost five years, but my journey into the food and beverage industry started long before that. I was born and raised right outside of Atlantic City, New Jersey by two hardworking casino workers: my mother a cocktail waitress, and my father a dealer. I spent most of my childhood in casinos and quickly realized the fast paced, high-energy environment was for me. I saw how my mother's charm and vivacious personality brought in the big tips and how my father's kindhearted character brought customers back time and time again. As a teenager and young adult, I worked in all different hospitality settings: nightclubs, mom and pop restaurants, casinos, and we can't forget about Hooters, although my father likes to forget that one.
It didn't matter where I worked or who I served. People just loved to be around my positive and energetic personality. It became almost like a performance for me. Each table I waited on, I could be a different character, an elevated version of myself. I fell in love with entertaining my guests, and the 20% tip that followed was the bonus. A desk job wasn't for me and to take my career to the next level I had to dominate the bar. Using my industry connections and a few extra pumps of perfume, I convinced some poor schmuck to hire me as a bartender. Being behind a bar and serving multiple people gave me a whole new perspective on what it meant to multitask.
It was like learning a dance routine with complicated steps. But the more I practiced, the better I got. I decided to embrace the chaotic dance of bartending, and I've been dancing ever since. My approach to bartending is very similar to how I live my life. Don't take stuff too personally. Have fun, laugh, and enjoy the ride. Connecting with people doesn't feel like work at all.
I embrace my femininity behind the bar. It's my secret weapon, and it's what works for me. If batting my eyelashes and referring to a group of men as boys gets me some extra cash, well, honey, I'll do it with a smile on and I'll walk all the way to the bank.
At the end of the day. I'm in the business of fun in one of the greatest cities in the world. I am so lucky to find joy in how I make a living. I am proud to say that I'm a bartender, which is why I started my podcast, She Werks Hard for the Money. I host a fun, energetic show about what it's like to be a female behind the bar. A lot of millennials fall into the hospitality industry not knowing what they're doing, but I'm there to be their confidant.
Sometimes you feel a little insecure about admitting you're a bartender, but my space for podcasting is to help everyone understand that it's a way to make a living. I started my podcast during COVID, and it's become a passion project of mine.
Full transcript coming soon
Ashley Mears
Topic: Why was there no red wave?Bio: Author and Sociologist at Boston UniversityReading: Very Important People: Status and Beauty in the Global Party Circuit is here
Transcript:
I'm a sociology professor and I followed an unusual path into academia. Like a lot of young girls, modeling was my teenage dream, much like boy’s dream of becoming professional athletes. When I was in Atlanta, where I grew up, I started modeling as a teenager, which meant shooting catalogs for the local department store. I noticed even then how hard it was to fit into extremely narrow standards of beauty. Most of the models were white, all of them were very thin and quite young. I noticed there was a very high turnover because of the quest for novelty. Fashion is, by definition, change and models have short careers, especially women, because they're perceived value on the market is tied to youth. So much so that when I turned 19, my agency advised me to actually lie about my age when I went to New York, to claim in auditions that I was 18. That's when I thought maybe this isn't a good career path in the long-term.
I went to graduate school to study sociology in New York because I wanted to understand the market dynamics of the fashion world. In my first year of graduate study, I got scouted to join another model agency. This time I signed up with the goal of being an analyst, to keep track of how the money worked. I interviewed models, agents and clients, just to understand the market from their perspective. I also was sent out on modeling assignments. From day one, the agents advised me to lie about my age. By now I was 23, and they told me to say that I was 18.
In sociological terms, people that study labor would see modeling as a bad job. It's structurally unstable, there's high turnover, there's high risk, but indeed, there's also high rewards. The cultural imagery of fashion models is that they're very successful, that it's very glamorous, that they're very well paid, but what I found in my first book, Pricing Beauty, is that models are pretty poorly compensated, but they do get a lot of perks, such as the treatment of being a VIP in bottle-service nightclubs.
This brings me to my second book, Very Important People. When I was researching the modeling industry back in New York around 2006, I met several men that work in nightclub called promoters. They get paid by nightclubs anywhere between $200 to $1,000 dollars a night to bring the right crowd. Now, for the highest end of nightlife in New York, these kinds of clubs offer what's called bottle service. Bottle service is when expensive bottles are brought to someone's table, at prices that are starting at a markup of a thousand percent on up.
Promoters are expected to bring the right crowd, and in bottle service nightclubs, the right crowd of very important people: It's men with money who are paying for the expensive bottles of alcohol and it's the women who are, or look like, fashion models. They are ubiquitously called girls, regardless of their age.
I followed promoters beginning in 2011 for 18 months, I interviewed 44 of them. What I found is that while promoters can make a pretty good living and the clubs make a quite a big profit in the nightlife industry, a huge multi-billion-dollar industry, I found the girls don't get paid. They add huge value to a space.
This raises a very interesting question. Why do people work for free? There are four different reasons to explain why the girls would participate in this structurally unfair arrangement.
First, it's the free meal, because as I had learned earlier, most models don't get paid very much so being able to go out and afford an expensive meal in a luxury restaurant is something most of them can't access.
Two, they have strong relationships with the promoters who spend a lot of time cultivating relationships with girls and building friendships.
Three, promoters open up access to this exclusive world, which is also connected to a fourth, ego stroke of belonging to the elite. By definition these are very exclusive spaces, and so even though promoters are gaining financially, and the girls are not, promoters are opening up an opportunity for them to afford a lifestyle that they otherwise can't.
Full transcript coming soon
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This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein. What Happens Next is a podcast which covers economics, finance, politics, and science. I give the speaker just six minutes to make their opening argument.
Today’s topic is: No Red Wave.
We need to do a detailed postmortem of the Midterm elections. Our speaker is Henry Olsen who is the author of The Working-Class Republican: Ronald Reagan and the Return of the Blue-Collar Conservatism. Henry will explain why there was no red wave in an election despite the Republicans winning the national popular vote by 3% or 3.2 million votes. Henry will explain how the Republicans improved their voting share in very blue urban districts and very red rural districts which didn’t help Republicans win additional seats. We plan on going deep with the political analysis now that all the votes have been counted.
Buckle up.
I make this podcast to learn, and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Ok, let’s start with Henry’s opening six-minute remarks.
Henry Olsen
Topic: Why was there no red wave?Bio: Department Chair of History at Colgate UniversityReading: The Working-Class Republican: Ronald Reagan and the Return of the Blue-collar Conservatism is here
Transcript:
Henry Olsen:
Well, there's only a few things you need to know about the midterm elections. First, the Republicans gained about 6% on what they had in 2020. They lost the House vote by a little over 3% in the 2020 election, and they are ahead nationally by about 3%. That's a significant shift. People did move from D to R.
The second thing is that much as the Democrats had an inefficient vote distribution in 2016, that meant they won the popular vote, but lost the electoral college. Republicans had an inefficient vote distribution in 2022. The gains were largest in deep red areas or in deep blue areas with only a few exceptions. What this means then is that in the swing seats didn't get the 6% shift.
They might have gotten a 3% shift, or in some districts it shifted in favor of the Democrats. So that's one reason why the election prognosticators were off. We rarely have seen such an inefficient vote distribution for the Republicans. That's why they only gained nine seats in the House when a national swing of an efficient distribution probably would've given them a little bit over 20.
The third thing, people who disapproved of President Biden voted for his party. Typically, what happens is the people who somewhat disapprove, vote against the President's party by 20 or more points. Why is it that the people who somewhat disapproved of Biden acted differently? I suspect that the answer is that they responded to President Biden's call to make this into a choice between the right and the left. His speech about ultra MAGA Republicans, and democracy, and Dobbs, and all the parade of horribles, Republicans were allegedly going to start doing if they were in power. Usually that doesn't work. Usually presidents try and make elections into a choice rather than a referendum, and the voters decide they're going to make it a verdict on the party in the White House.
They didn't do that this time, and that's why Republicans didn't get a wave. So those three things, a real shift in favor of Republicans, an inefficient vote distribution that meant that Republicans struggled to get traction in the swing areas. And the willingness of people who didn't like the direction Biden was going in to still pick his party means that Republicans have a lot of soul searching to do if they're going to win the Senate and the presidency in 2024.
Larry Bernstein:
Let’s start with Biden’s approval numbers. Biden had some good luck with Dobbs and successfully passing some spending legislation last summer. His approval numbers peaked in August before heading back to his 2022 trending average around election day. Do you think that if the election had been held in August that the Democrats would have kept the House?
Henry Olsen:
It's hard to say. They would've had to win back five more house seats, and I don't think there are that the difference in approval ratings between the November election and his peak approval ratings were enough.
Larry Bernstein:
Individual House races do not have sufficient polling. So, prognosticators rely on national trends like Biden’s approval rating and generic questions about the congressional ballot. Why was this polling method less successful than usual in predicting the results for the House on a national basis?
Henry Olsen:
There are two things. One, the approval rating traditionally would have been the great predictor. The fact that it wasn't this time is one of the great conundrums of this election. The generic congressional ballot, the polling average is right on nationally. The Real Clear Politics polling average said Republicans would win the generic ballot by somewhere between two and three points. They'll win it by around three points. But again, then you get to the inefficient vote distribution that anyone who looked at this six point shift, would've said, any seat that Biden won by six points or less should be in play.
It should be close, and it should lean to the Republicans. But there's lots of seats that Biden won by six points or less, where the swing was the opposite direction. So even though that is historically an excellent predictor of the seat, it wasn't this time.
I've been doing this all my life. I've been doing it professionally for well over a decade. That's never happened before that both usually accurate measures of congressional shifts were off. Because clearly voters in different regions and of different types were reacting differently to similar information. Why they were and who those people were will be important to how candidates fashion their strategies going into 2024.
Larry Bernstein:
Inefficient vote distribution. By this you mean Republicans added voters in congressional districts that Republicans were going to win anyways like in rural Iowa, or they gained votes in minority districts like in urban Chicago where the added votes that turned a lopsided Democratic win into a less lopsided Democratic victory.
The real action for control of the House happens in only 40 of the 435 districts where the winner wins by a margin of less than five percent.
These are the true swing districts. Since this is the great question for control of the House. I would recommend that pollster’s poll in just these swing House districts and aggregate the data to get a material sample size. These swing districts are around 10% of the population, and that would have told us there was no red wave.
Henry Olsen:
I think that would be an excellent thing for pollsters to do. If you were doing that in September, you would've missed some of the seats in New York that flipped from Democrat to Republican, only one of those seats were won by Biden by less than eight points.
But as a general matter, I think that would be an excellent thing is take the 40 or 50 house seats that are closest to the median in both directions and poll those and come up with a 1500-person sample for those only would be something that National Pollsters should consider doing, given the fact that national numbers were not predictive of the actual shift in seats.
Larry Bernstein:
I subscribe to the Charlie Cook Report that forecasts House elections. Dave Wasserman does the ratings for Charlie, and he splits the ratings into Likely Democrat, Lean Dem, and Dem Toss-up and then the same for Republicans. Both the Democrats and Republicans won all the likely seats often by 7 to 10 points. The 20 lean Dem or Republican seats were won by their respective party except for like one each in extremely close races. All the serious action happened in the toss-up races. Of which there were 26 Democratic Toss-ups and Ten Republican toss-ups. The Republicans won 5 of their ten toss-ups which is what you would expect, and the Dems lost only a few which is why they lost the House but didn’t lose in a wave.
Dave Wasserman and other prognosticators accurately called the individual races but got the wave wrong. Let’s give them some credit here.
Henry Olsen:
Dave is particularly good at forecasting races. Kyle Kondick at the Sabato’s Crystal Ball is also superb. The one thing I would say about Dave and Kyle is both of them thought that Republicans would win more of the toss ups, and so they identified the right seats, but they thought that Republicans would win the bulk of the toss ups when in fact it was Democrats. So they did a superb job in identifying which seats were in play. They did a superb job in resisting the siren song of Republican wave, which I and some others fell into. But they too thought Republicans would do better in the toss ups than happened. And I think that gets back to that inefficient vote distribution that surprised everybody.
Larry Bernstein:
Next topic is the role of the governor’s race as it impacted local congressional races. And let’s start with DeSantis’ huge victory for governor of Florida and the incredible feat of winning Miami-Dade County that voted for Hillary over Trump by like 20 points just six years ago.
Henry Olsen:
Florida is ground zero for Republican enthusiasm. Until the fall of 2021, Florida had had a Democratic voter registration plurality for the entirety of its history. It now has a substantial and growing Republican registration plurality. Miami Dade is a Latino dominated community. It is the heartland of Cuban America. It's also a place with substantial South and Central American immigration.
Marco Rubio carried it by nine points and Ron DeSantis carried it by 11 points. That can only happen with a massive shift in Latino voting sentiment.
In 2016 Latinos in Miami-Dade moved against Trump and towards Clinton. In 2018, they moved back to the pre-Trump margins for DeSantis for governor. In 2020, they moved strongly in favor of Trump and Republicans, giving Republicans upset wins in congressional seats. And now it went massively not just for DeSantis, it went for Rubio and strongly pro-Republican margins in all of the congressional seats and state legislative seats.
Miami-Dade got the national attention but both DeSantis and Rubio carried Osceola County, a suburban county south of Orlando. It is the only county in America with a Puerto Rican plurality. It's a Latino thing. It's up and down everywhere in Florida.
Is DeSantis riding a wave or did DeSantis generate a wave? My guess is it's a little of both. DeSantis is somebody who, for all of the liberal media's scorn, is extremely well-liked among Floridians and not just traditional Republicans. You don't win against Charlie Crist, who is a statewide figure who had lots of money, by nearly 20 points unless people approve of you. And it was up and down the ticket. It wasn't, like when Chris Christie won his landslide victory in 2013 against an uncontested opponent, and it didn't move anybody on other races. Christie won by 40 points. Republicans didn't gain anything in New Jersey.
Republicans gained up and down the ballot. They picked up four congressional seats largely because of redistricting. But the margins, even in those Republican redistricted seats were larger than they were in 2020. And that's the bright spot. If the Republican strategists need to look at what's going on in Florida as the success factor and ask themselves is that's something that we can, as you'd say in business, bring to scale.
Larry Bernstein:
Michelle Margolies who is a UPenn Professor of Political Science spoke on this podcast What Happens Next. She said that political analysts need to be careful assuming that Hispanic voters are homogenous. There is a big difference between Mexican Americans and Cuban Americans, or Puerto Ricans, or immigrants from Venezuela. I moved to Miami-Dade two years ago and my community includes Cubans, Argentines and Brazilians. It is a real Hispanic melting pot.
Henry Olsen:
Much as in the heyday of Catholic immigration, it was useful to say there's a Catholic vote, particularly when Catholic nominees like John F. Kennedy in 1960 or Al Smith in 1928 were on the ballot. But it was better to think of them as an ethnic vote that Irish would vote differently than Italians, who would vote differently than Poles who would vote differently than Germans. That's the way to think about the Latino vote. The Cuban vote has always been Republican because they came over in waves in response to anger at the communist dictatorship. And they viewed Republicans as the better party on that issue.
I suspect that you would see a similar phenomenon, Venezuelans fleeing Hugo Chavez or Nicaraguans Fleeing Danielle Ortega are different in their attraction to the Republican Party than Colombians coming for a better life. We don't really have the data that allows us to say this with specificity, because most pollsters don't have the money or the skill in parsing out these different ethnic groups. It would be useful to look at census data when that is finally released, that ask about ethnicity and nationality and correlate that with precinct level voting data. That you can only draw a limited amount of statistical inference from that because of the ecological fallacy, but you can tease some things out.
The Mexican American vote is the largest share of the Hispanic voter base. That's particularly true in the Southwest where California, Texas, Arizona, and Nevada are dominated by the Mexican immigrant.
Mexican immigrant votes differently, so that's the nationality question. Facility with English and generations in America correlate with openness to Republican voting. Third generation in America is likelier to vote Republican than first or second generation, are you measuring a generation effect or are you measuring a Cuban effect because they're the largest group in that cohort?
Protestant religiosity correlates with Republican voting, while most Hispanics are Catholic in some form. I say in some form because like white Catholics, many practice their faith devoutly, others are Catholic in identity, but don't go to church or don't take it as seriously.
Many others have been converting to Protestantism, and they convert either Pentecostal or Evangelical Protestantism. This has been affecting politics in Central and South America. Bolsonaro, the President of Brazil, receives his main political support from converts from historically Catholic Brazilians to Evangelical Christianity. Evangelical Protestants are a significant force in Costa Rica's elections now. And Evangelical or Pentecostal Protestant Hispanics are the group outside of Cubans who are most open to voting for Republicans.
Larry Bernstein:
What do you think is the relationship between religiosity and Republican partisanship?
Henry Olsen:
We started to see religiosity be a strong predictor of voting trends as the culture wars became more politically salient. Frequency of attendance become more and more Republican that first came in among evangelical Christians, but by the latter part of the 2000s, you could also see it in mass going white Catholics as opposed to Latino or black Catholics.
Larry Bernstein:
Let’s change the discussion to the political issues in the midterm elections. And let’s start with the DeSantis campaign in Florida which focused on three issues: crime and law enforcement, staying open during COVID and anti-Wokeness and the culture wars.
Henry Olsen:
People across the political spectrum value their physical safety. Look at the shifts in the New York metropolitan area where crime is publicized as a real problem. People will vote for people who say, “I want to reduce crime as my sole priority.” We know that that's a vote getter nationwide. The salience of it obviously will be partially mediated by the degree people perceive crime as a problem.
What DeSantis did with COVID was to balance the need to live with the need to survive. And it's quite clear during the Covid pandemic that the Democratic base voter favored survival, survival, survival.
But if you're a Republican candidate, you're not trying to get the approval of the Democratic base voter. You're trying to unite an issue with the swing voter with the Republican base. DeSantis struck the right balance. And this is a proxy for approaching governance in general, that what the base of the Republican Party wants is small government. What the base of the Democratic Party wants is large government for its own sake. And what the middle of America wants is a balance between a government that protects me where I need it, and lets me live otherwise a life of my own choosing. So, if DeSantis view on COVID is a proxy for his view on domestic policy, speaks very well to his ability to talk to the swing voter in a way that neither party’s base can.
And then you get to the cultural issues. Where conservative cultural issues fail is when they're viewed as being the imposition of a minority view on a majority for reasons that are not shared by that majority. So if you want to talk about pro-life. It's clear there's a super majority of Americans who would favor banning abortion after 15 weeks of pregnancy.
There is a super majority of Americans who would oppose banning it in the first trimester.
If you talk about cultural issues that can be divorced from a specific religious or ideological position and can be firmly rooted in the American tradition, that's a vote winner. If on the other hand, you want to talk about Christianity in ways that suggest that you think that traditional Christianity is or ought to be the default religion of the American nation, then that's a vote loser.
Larry Bernstein:
Let’s move on to Illinois and Michigan where Democrats did very well in the Congressional midterms as well as in the governor’s races. This seems surprising given that crime has increased there and COVID lockdowns were stringent.
Both Democrat governors were pro-teacher unions and anti-school choice. Why did the Democrats do so well in these midwestern states?
Henry Olsen:
Just with respect to Michigan, Gretchen Whitmer was somebody who pushed strongly the teacher’s union agenda on education, favored safe survival over living on COVID and was where the center of the Democratic party is between liberal and progressive. Crime in Detroit should have been an attractive target. But Republicans put up somebody who was not known, who had been a conservative commentator.
She took an extreme position on abortion in a year when Michiganders were voting on a measure to enshrine the right to an abortion in the state constitution. People have choices, and the choice that was given Michiganders was, do you prefer this person Gretchen Whitmer with these policies, or do you prefer Tudor Dixon? And what we learned is that given that choice, people prefer the center of the Democratic Party to the base of the Republican party. And that went down the line. You don't see in rural Michigan, the huge shifts to Republicans that you see in other parts of rural America. In urban Michigan, you see shifts to the Democrats from 2020.
And that's a warning signal for Republicans. Don't do this nationally unless you want to get your hat handed to you like you did in Michigan.
Now Illinois, the Democrats spent millions of dollars to put their preferred candidate, who was an extreme Republican candidate on the ballot. Do you want the Republican base's choice, or do you want somebody who is center of the Democratic party, between liberal and progressive?
What's interesting about Illinois is that while Republicans did not gain, you don't see the same short of shifts. Jonathan Jackson, Jesse Jackson’s son’s Congressional district is never going to elect a Republican, but it has a large part of Chicago that shifted to the Republicans by 10 points.
Jesus Garcia, a Hispanic district in the city of Chicago moved to the Republicans by seven points. Delia Ramirez moved Republican by seven points. So areas most impacted by crime, you did see a significant shift to Republicans. They weren't enough to elect any Republican candidates.
I'd say the lessons are somewhat different In Illinois, In Michigan, you had a clear case where voters had a choice and they decided, I prefer Democrats up and down the line. In Illinois, you had a clear choice, but they were willing to vote for other Republicans. But because of the gerrymander and the Democratic nature of the state, they couldn’t gain seats, but you did see a shift in favor of the Republicans.
Larry Bernstein:
Next topic is Democrats funding far-right candidates during the primaries with the objective that the Republicans choose an extreme candidate who can be beaten easily. We saw the Democrats use this strategy successfully in Senate races in New Hampshire, Pennsylvania and Arizona, and in governor’s races in Illinois, Michigan and Pennsylvania. Do you think that the Democrats will work to get a more beatable Trump nominated instead of a less toxic candidate like DeSantis?
Henry Olsen:
They won't spend money doing that because the presidential race is the only race in America where the amount of press attention is so large that the importance of money is dwarfed. But what you can do is keep Trump's name in the news. What you can do is remind Trump's supporters of the animosity they have towards people who want to get him. And lo and behold, that was being done all throughout 2022, whether it was prosecutors in Georgia or in New York or the raid of Mar-a-Lago.
Now we have a special prosecutor who is looking into Trump. They won't spend money on behalf of Trump, but they will use the avenues that they have to keep Trump's name and keep Trump's feud with the left in public view, because that helps unify their coalition in opposition to Trump. If they end up with Trump as the nominee, I'm sure that they think that that is the better person for them to face than DeSantis or another Republican.
Larry Bernstein:
Is the big takeaway from this past midterm is that political parties should help your opposition’s extremists?
Henry Olsen:
The way they get this done is they create special committees that run ads that are designed to appeal to the base at the same time as they would alienate the independent swing voter. It's not Democrats endorsing, it's Democrats attacking at a time that would help that person. What's clear is that in those few places where we have Democratic uber-progressives, who were in races they too alienate the middle. Republicans want a seat in suburban Oregon where a progressive defeated a moderate Democratic incumbent and there was nearly a 10-point swing to elect a Republican because people in the middle may not want the Republican base, but they don't want the Democratic progressive base either.
Democrats have tons of money; they can spend $40 million in Republican primaries and still have money left to play in the general election. Republicans don't have that type of money. If I were a Republican strategist conserving limited funds, I would save them for the general.
Larry Bernstein:
After the midterms the Harvard Harris survey showed that among Republican voters in a Republican Presidential Primary, 45% would vote for Trump and only 26% would vote for DeSantis. That seemed surprising to me as many Republican voters that I know would much prefer DeSantis. What am I missing?
Henry Olsen:
Surveys differ. There are surveys that have DeSantis ahead. I don't believe the Harvard Harris number in terms of margin. I could believe Trump being ahead. There are Trump diehards. They'll turn out in droves. They are not a majority of the Republican electorate. Nationally they're somewhere in the low thirties. That's a great base to start from.
The center Republican is what I call MAGA adjacent. They want somebody who is Trump-like. And what they like about DeSantis that they don't necessarily like about Hailey or Pompeo or Pence, is that DeSantis impresses them as Trump-like, but not Trump. And so that's why DeSantis has this early lead on other people in polls and in some polls leads over Trump, is that if you combine the conservative base with the never Trump and the mag-adjacent crowd, that's the majority.
Larry Bernstein:
Mail-in ballots. Democrats have embraced mail-in ballots, while Republicans do not endorse use mail=in ballots because of fears of fraud. Mail-in ballots have helped Democrats, will the Republicans adapt and use the mail going forward?
Henry Olsen:
In many states, Republicans do use mail-in balloting. They just will use them at lower rates. People will show up on election day and hand deliver them. Republicans have come to oppose mail-in ballots because Donald Trump told them to. In COVID, the Democrats embrace this and Donald Trump, rather than trying to actually look at it in a nuanced way, characterized the entire episode as fraudulent without any evidence.
That's why Republicans have that belief. What should they do after this election?
Republicans of a savvier sort have always recognized that the likelihood to turn out frequently rises with education. If the Republican electorate is becoming less formally educated, and the Democrats are going to be more educated. What this means is that the Republicans rather than Democrats benefit from efforts to turn out low propensity voters.
In places like Wisconsin and Michigan, the low propensity voter is a white without a college degree. What that means is that they may turn out in presidential years, but they will still be less likely to turn out to turn out than similarly situated college or postgraduate educated voters. A savvy Republican would use statistical analysis to say these voters are registered to vote. We think that if they cast a vote, they would be likely to cast a Republican vote.
Republicans should learn from that and increase their propensity to win by increasing their voter’s propensity to vote.
Larry Bernstein:
Next topic is the youth vote. Young people came out to vote in the midterms and disproportionately for Democrats, what happened?
Henry Olsen:
Voters who are under the age of 25, you're looking at the least white cohort within the electorate. You're looking at the highest number of Latinos, African Americans and Asians. So, you need to tease out, are you measuring racial or ethnic disparities, or are you measuring things that are due to the different attitudes of young people? To lump them all together is a fallacy. Secondly, propensity to vote goes up with age.
What we know is that college educated people have a higher propensity to vote. It wouldn't surprise me to learn, therefore, that the current 18 to 25 set is more dominated by college educated voters than that same cohort will be 30 years from now. That would help explain what we've seen over the last 40 years. But you look at their cohorts 40 and 50 years later, and they're voting for Republicans, some of that clearly is changed minds.
Working class people will vote in their thirties and forties as they acquire responsibility, but not when they're single and they're 19. And if the Republican Party is a working-class party today that suggests that simply the natural aging of the cohort will increase Republican voting as Republican voters naturally come to join in the civic ritual. And that's something that is vastly under researched in the political science sphere.
It would make sense that abortion might drive turnout on the margin of low propensity young voters who share cultural liberalism to a greater degree than previous voters.
The Republican party needs to understand that traditional cultural conservatism, rooted around sex and the public regulation thereof is increasingly something that holds majority support only among the oldest voters.
So the Republican Party of the future is going to be culturally more liberal than the current Republican party, simply because to be relevant it will be culturally more liberal.
And abortion is the one issue that has resisted this, there is a majority of people in the country who favor of abortion within the first trimester. The pro-life pro-choice numbers go back and forth, but they've been extremely stable for 50 years. And I think the explanation for that is it's one of the traditional issues in which you can cast the question as competing rights of the individual, as opposed to the question of society versus the individual. Virtually every other sexually oriented moral social issue comes down to, should a social sense of what is right be imposed through law regardless of the wish of the individual. And that trend over the last 50 years has been increasingly we're going to choose the individual over the social.
Larry Bernstein:
How important was Dobbs Supreme Court abortion case to the Democrats success in the midterms?
Henry Olsen:
You'll find that partisans will say, “this was the most important issue in determining my vote.” But in fact, they're partisans. What they're doing is selecting the issue to justify their partisanship rather than the other way around.
When Republicans say inflation was my most important issue. If Biden was good on inflation, would you vote for Biden? No, you choose another issue. I think abortion was the same for the Democrat. The question for me was always, what about the swing voter, the independent voter?And there, I was very leery of the Dobbs effect because what we saw in pre-election polls was that independents tended to rank abortion lower in their concerns than inflation. Inflation concerned independent is less likely to vote in the midterm than the abortion concerned independent.
Larry Bernstein:
How will the abortion issue affect political strategy going forward?
Henry Olsen:
The Democrats have a problem in that what their party base wants is unpopular, abortion with no restrictions. The Economist poll, if you're given a multiple list of when should abortion be illegal, always, except with the three exceptions, rape, incest, life of the mother after the first trimester, after the second trimester, or never, half of people who say they're Democrats will choose never. Okay? This is the Republican opportunity. But of course, if the Republican opportunity is pursued, then that means you have to come into the fact that the middle of American opinion is also in favor of abortion on demand in the first trimester.
And that's where the pro-life voter can't go. So what it means for the Democrat is they will try and push large sounding measures that they will characterize as enshrining Roe, which for many people is understood to be abortion in the first trimester, and abortion with minimal restriction in the second trimester, but which in fact go much farther.
Republicans have a difficult choice to make, which is that to satisfy their pro-life constituency means to step out of where the majority opinion is, which is, I call it weakly pro-choice. That is if asked about that directly, they will support the right to choose an abortion within the first trimester.
I think they are best served by saying, we think this should be decided in the states. We won't sign legislation that codifies Roe, and we won't sign legislation that bans that at the national level. This will make both sides partisans unhappy but speaks directly to the middle and can be characterized in a pro-life way.
Larry Bernstein:
It sounds to me like the abortion issue plays to the Democrat’s partisan advantage. Should the Republican House codify Roe in a way that allows abortion on demand in the first 13 weeks and get the issue of the table?
Henry Olsen:
There's no way that anything that they would pass would be acceptable to Democrats. And that simply makes it a national issue. That's because I think the best path for Republicans is to remove it as a national issue. Two-thirds to three quarters of Republican voters are pro-life. It's not a good idea to put a stick in the eye of your base, nor would it take the issue off the table. So, no, I do not think it would be a good idea for Republicans to codify Roe.
The only national compromise I could see theoretically possible, would be a national 15 week ban that would preempt all other state laws. Democrats would never agree to that because that would mean that New York, California, Massachusetts couldn't go farther than that and Republicans wouldn't agree to that because it would invalidate the Texas or the Georgia fetal heartbeat laws. But if you wanted to say at the center of national opinion would like, that's what the center of national opinion would like, which is why it's the only feasible compromise. But it could never happen. And it's the only theoretical compromise that one can reach, but it's one that won't happen because each party base is for its own reasons would reject it as unacceptable.
Larry Bernstein:
Henry, I end each episode of a note of optimism, what are you optimistic about?
Henry Olsen:
My note of optimism is that for all the talk of polarization, there are still shared American values. A super majority of Americans want a renewal of the American promise not its rejection. What typifies American politics has been a refusal of the bases of each party to give the center what it wants, which is a renewal rather than its replacement. And that when one party figures this out, we're going to have a dominant political party again, like we've had throughout most of our history. Not a dominant party that wins every election, but which sets the terms of debate and wins more than they lose. And then we'll look back on this as we would look back on the period up to 1932 as a period of conflict that ended with a new American orthodoxy, one where freedom and liberty and the pursuit of happiness can quite easily thrive.
Thank you for reading What Happens Next in 6 Minutes with Larry Bernstein. This post is public so feel free to share it.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, politics, and science. Today’s topic is: Are you white?
Our speakers will be Dan Bouk, who is the Department Chair of History at Colgate University and the author of the new book called Democracy’s Data: The Hidden Stories in the US Census and How to Read Them. Dan will speak about our ongoing governmental data collection to determine race, gender, and other personal information. The search for these answers and ethnic classification informs us about who we are as a society. The downside is that these questions highlight differences in our national identity.
Our second speaker is George Mason Law Professor David Bernstein who is the author of the book Classified: The Untold Story of Racial Classification in America. The answer to the question whether you are White, Black, Hispanic, Asian, or other has consequences. It can determine who gets a government contract, a job or is admitted to a select college. Should the government be in the racial classification business, and do government imposed racial classifications undermine our societal objective to live in a multi-racial society?
Buckle up.
Since the beginning of COVID, I have commented on the monthly employment data released by the Bureau of Labor Statistics because it is the most important economic statistics to determine the growth of the US economy. In the month of November using the Establishment Survey jobs increased by a quarter of a million jobs over the month and half a million over the past two months. This rate of growth is typical for an average month pre-COVID. But the Household Survey, jobs decreased by a hundred thousand for the month and five hundred thousand for the past two months.
So why are these surveys going in the opposite direction and differ by a million jobs over two months. Well, the surveys are done differently. The Establishment asks big firms about their hiring and firing, and the Household telephones homes to see if there was a change in employment status for anyone living there. In the long run, the Household Survey is more accurate because lots of people work for small firms or are self-employed and thus are properly included. However, the Household Survey only surveys 60,000 month and there is a very large month-to-month variance and has a big error month-to-month. I would keep an eye on these differences to see if there is an economic slowdown that might be impacting small firms more than large ones.
Average hourly earnings in the private sector increased by 0.7% rate in November which is at an annualized growth of 8.4%. A surge in wages may be inflationary and non-transitory.
I make this podcast to learn, and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Ok, let’s start with Dan’s opening remarks.
Dan Bouk
Topic: Governmental Data CollectionBio: Department Chair of History at Colgate UniversityReading: Democracy’s Data: the Hidden Stories in the US Census and How to Read Them is here
Transcript:
I wrote a book about the history of the US Census called Democracy’s Data. The book tells stories about the 1940s census. It's a historical account using the census to understand American society, still mired in a great depression on the eve of a world war.
The census is an awe-inspiring project. The idea that a government can and should count every one of hundreds of millions of residents is audacious.
Take the 1940 census as an example. For that count, the government mobilized 120,000 people to span the country setting out to gain detailed information about 131 million people living in the United States. The census counts every person for the purpose of making policy in the here and now, but it also creates a permanent record of the American people. A 1930 Census Bureau official wrote "every person in the United States, however insignificant he may be, has a permanent place in the history of the country,” or as the Census Bureau advertised in 1940 with some more poetry. “You cannot know your country unless your country knows you.” In practice, the count is much messier than it seems. It has always been this way.
People must be labeled and classified, but they often fit poorly in one or more of the categories that have been predefined. In Democracy’s Data, I look at the difficulties faced, for instance, in trying to describe queer households or other living arrangements. The challenge, the census makers preconceptions about what a family should look like.
People also go uncounted in every census. This has been a concern since the very first one. After the 1790 Census, Thomas Jefferson assured his correspondence in Europe that the count was too low that the US was larger and growing more quickly than the count implied. In the 20th century, the first estimates of undercounts were only about 1% of the population. After the 1940 census, by comparing the numbers of young men counted for the draft suggested the census underestimated the black population by about 13% and the entire population by 3%.
Every census count must be understood as bearing uncertainty.
In 2020, considering the extraordinary challenge of completing a census during a pandemic, the fact the Census Bureau produced an account at all is remarkable. Wrestling with uncertainty should lead us to reconsider the ways we rely on them to automate decisions.
Apportionment began in 1920 to hold the House at 435 seats. Politically, since then, the size of the population has tripled. The House has stayed the same size, and every 10 years we see situations where some states are granted seats while others lose seats, based census counts that are much smaller than the error and uncertainty associated with those counts.
Full transcript coming soon.
David Bernstein
Topic: Should the government be in the racial classification business?Bio: Law Professor at George Mason UniversityReading: Classified: The Untold Story of Racial Classification in America is here
Transcript:
Racial classifications dictated by law have been as American as apple pie since the 19th century. Americans these days shake our heads with revulsion when we read about the absurd lengths authorities went to in the past, when they were enforcing racist Jim Crow laws or racist immigration laws. The irony is that government-mandated racial classifications are today more common than ever.
If you apply for a mortgage or enroll your kid in school or receive a COVID vaccine, you're asked to check a box indicating your race and ethnicity. These classifications descend from the racist classifications in use a hundred or more years ago.
My book Classified: The Untold Story of Racial Classification in America delves into the complex and sometimes surreal world of government-imposed racial classification. For example, the Asian American classification includes both Pakistani-Americans and Filipino-Americans. They don't look alike, they don't live anywhere near each other back in their ancestral homelands, there's really nothing in common except they're both arbitrarily put into the same classification.
Most people think it's just a matter of self-identification, right? You can check whatever box you want. To some extent that's true, but in some cases, the bureaucracy decides to question them because there's something valuable at stake, like affirmative action benefits. There are cases in which someone checks the Hispanic box, but then a government official says, “Wait a second, your name is Joe Smith. You look Caucasian. You don't look Hispanic. Give us some evidence that you're Hispanic.”
And it's very troubling because these hearings bear a great resemblance to race trials of the 19th century where we talk about how thick are people's lips, crazy things that we thought we left in the past. And we still do those things today.
How do we get here? The classifications were invented in the 1970s in a black-white binary. The general sense was everyone knows who's white and who's black. But today, thanks to immigration, intermarriage, we have a much more diverse American population. Almost 20% of Americans are Hispanic. About 6% or 7% are Asian. 21% are first or second-generation immigrants who have very different lived experiences than people who have been in the country ancestrally for 400 years.
And the rules haven't really changed to take account of that. We have tons of people who are quarter Hispanic or a quarter Asian or one-eighth black. The rules don't really say whether they're supposed to be counted as one group or the other.
The default is count anyone who is mixed as being of the minority group. But there's no rhyme or reason to that. Other than that minority-rights groups want to be able to claim more constituents. In any event, while racial discrimination is still a barrier to minorities, asserting a non-white identity can sometimes be an advantage for affirmative action purposes. So, there's an incentive of people who have only remote cultural or ancestral ties to a particular group to claim that identity in practice.
We call these people identity entrepreneurs. In my own world of the legal academy, it's not uncommon for individuals to check a minority race box when they apply to law school but then identify as white once they matriculate.
Concern about this is spreading across the political spectrum because a lot of affirmative action programs meant to help African Americans, it turns out that a lot of the benefits are going to African immigrants, or Hispanic immigrants and their descendants, or Asian immigrants and their descendants. This whole idea that we have people of color and they're indistinguishable is not only empirically absurd, but it flies in the face of what classifications were meant to bring historically oppressed groups into the mainstream.
What do we do about it? We could have more finely grained classifications. But the other option, which is what I favor, is to have a separation of race and state. Race is too important and leads to too much potential conflict in society to have the government picking winners and losers. Therefore, we should have a strong presumption against using race at all. And if we do use it, we should really be very careful about how we're using it. What are we trying to accomplish and how are we trying to accomplish it?
If we're really looking for diversity in higher education, it is absurd to take all people who have ancestry from Pakistan all the way to the Philippines and put them in the same diversity classification. It's time we should be looking for a situation where we all identify primarily as Americans.
Full transcript coming soon.
Thank you for reading What Happens Next in 6 Minutes with Larry Bernstein. This post is public so feel free to share it.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein
Larry Bernstein:
Welcome to What Happens Next. My name is Larry Bernstein. What Happens Next is a podcast which covers economics, finance, politics, and science.
Today’s topic is CRISPR and the ethics of genetic engineering.
Our first speaker is Stanford Law Professor Hank Greely who is the author of the book CRISPR People: The Science and Ethics of Editing Humans. A Chinese scientist recently edited the genes in a human embryo with the purpose of improving that child’s defense to the HIV virus. Three children were born with these genetic enhancements and their progeny will carry those genetic changes in their germline. Hank will discuss whether the science is sufficiently advanced and that the risk/reward makes sense for babies and can the scientific community police itself to adopt appropriate safety procedures before doing this genetic manipulation again.
Our second speaker is Jacob Appel who is making his third appearance on What Happens Next. Jacob teaches medical ethics at Mt. Sinai Medical School, and he will provide us with an ethical framework to evaluate human genetic testing. Genetic engineering on babies is coming soon, now what?
Buckle up.
I make this podcast to learn, and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Ok, let’s start with Hank’s opening remarks.
Hank Greely
Topic: CRISPRBio: Law professor at Stanford UniversityReading: CRISPR People: The Science and Ethics of Editing Humans is here
Transcript:
Almost four years ago now, on Sunday, November 25th, an email from a friend caught my eye. It had the subject line CRISPR Babies. And I thought, “Oh my, this is going to be interesting.” And it turned into this book, CRISPR People: The Science and Ethics of Editing Humans.
I want to talk about the particular genetic manipulation involved in this case, called human germline genome editing.
What was that email about? Word had just broken that a Chinese scientist, who was trained as a Biophysicist in the US and got his PhD at Rice.
Larry Bernstein:
I know this is unbelievably confusing, but the Chinese scientist’s name is “He”. It reminds me of that Abbott and Costello routine about Who’s on first.
Hank Greely:
He did a postdoc here at Stanford. He went back to China and became interested in becoming famous and immortal by being the first person to CRISPR babies. And that's what He did. CRISPR is a verb derived from an acronym. Clustered Regularly Interspaced Short Palindromic Repeats. We're all so happy that the acronym is CRISPR.
CRISPR is a way of editing DNA. It is not the only way, but CRISPR is faster, cheaper, easier and more accurate than the ways we had before.
What He did was get some people who desperately wanted to have children. The men were all HIV positive; the women were not. They were married couples. They wanted to have kids and they were very worried about the kids’ getting HIV. He said, “I will change the genes of your children, so they will not be able to get HIV.” They went through IVF, breaking Chinese law, by the way, which forbids HIV positive people from using assisted reproduction. They went through IVF, He changed one gene. Now we've got roughly 22,000 genes that code for making proteins. You change one of them called CCR5, which makes a protein happily also called CCR5, which sits on the outside of some of the cells of your immune system, including importantly T cells. An important part of the immune system, the most common type of HIV locks on to the T-cell and infects them by finding two proteins on the outsides of those T cells. He was going to break the CCR5 proteins. He had 16 embryos that he tried to modify this way. He put about eight of them into the uterus of the volunteer women who wanted to be the mothers. Three of them took, two of them led to births sometime in October 2018, He had five videos professionally produced and translated into English ready to go as soon as the news broke.
And two days later, a large global international human genome editing summit took place in Hong Kong, very close to his home in Shenzhen. He spoke at the summit. He expected, I think, to be received as a hero. He was received as an anti-hero. He didn't become famous. Well, He became famous except there were the letters “in” in front of the famous. He eventually stormed off the stage and has not been seen in public since. He ultimately was sentenced to three years in prison by the Chinese authorities.
But the first news report in China talked Chinese scientists has amazing breakthrough, leads world. Then 122 Chinese academics used WeChat to put out a public letter saying this is a terrible thing. This shames our country in front of the world. And a few hours later, Beijing announced that the guy had been suspended from his work. Two babies were born. Who are they? We don't know. China says they're monitoring them closely, but for reasons of their privacy, they're not releasing any information. We only learned a year later after his trial that a third baby had been born the following summer.
I think it was an awful experiment, mainly because one of the first rules in human experimentation dating back to the Nuremberg trials of Nazi doctors, was the risks and the benefits have to be in some sort of reasonable balance.
The risks to these babies to be the very first humans created using this with very little evidence from non-human primate models, with very little evidence from ex vivo embryos. The benefits were that they would be somewhat more HIV resistant. Small potential benefit, huge potential risk. The informed consent was terrible. The parents were told they were getting a genetic vaccine against HIV. They were not told these were the first humans in the world who were going to have this done to them.
What should science do about this? This topic had the closest thing I've ever seen in 30 some years of following bioscience to a scientific consensus. This should not be done now. Maybe when we know more about safety and efficacy, maybe it makes sense, but not now. And yet science didn't stop it from happening. There were at least eight academics, including three of my colleagues here at Stanford, who knew about this before it happened. And they didn't say a word. Maybe they should have.
Bigger question, what should we think about it? There are two camps. One says because this changes not just one person, but potentially changes every descendant of that person, we should never do it. If you want to fix sickle cell disease in people, you change the genes in their blood forming stem cells from their bone marrow, but you don't change their eggs and sperm. The next generation is not affected with this because you’re changing it at a very early embryonic stage.
~ full transcript coming soon ~
Jacob Appel
Topic: The ethics of genetic testingBio: Professor of medical ethics at Mount Sinai Medical School
Transcript:
Larry Bernstein:
Jacob, tell us about genetic engineering and CRISPR and how medical ethics applies to this emerging technology.
Jacob Appel:
CRISPR is a technology that involves changing the genetic makeup of human beings in a way that will affect not just them but their progeny by making genetic changes to the germline. There are two different sets of ethical issues that arise. How much risk should any individual, whether a parent or a scientist, take in creating a child. Then the societal risk the implications of making such changes for the world.
Larry Bernstein:
Let's start with societal oversight and decision making. In 1927 in the Supreme Court Case Buck vs. Bell, Supreme Court Justice Holmes famously concluded that three generations of imbeciles were enough, and that the state was justified in sexual sterilization for the mentally disabled. That decision is now viewed as abhorrent; I suspect because the state should not be involved in interfering with private decisions like having a child.
In the future, the public policy issue will be the opposite. It will be regulating designer babies that are smarter, more attractive, faster, more creative, simply better. Does the state have a stake, a valid interest, in preventing parents from engaging in genetic engineering?
Jacob Appel:
So that's a very complex question. Ask yourself: were the individuals involved in the eugenics movement wrong because their science was wrong? Based on racial theories of eugenics, but simply inaccurate and disturbing because of their inaccuracy? Or were they also wrong, even independent of the science? Even if they could have improved the species by reducing the risk to disability and increasing life expectancy and the like, would they still have been wrong?
And the second question is, were they wrong because they imposed this upon people? It was involuntary, which many find deeply objectionable.
The state clearly has some interest in the reproductive welfare of human beings. It wants to make sure that there are relative gender balances in the population like India or China, where you see a tendency to either abort or euthanize infant females.
Society may have interest in preventing birth defects or disorders that cause severe suffering for infants. Beyond that, we tend to step back and allow parents to make decisions. But as those decisions affect other people that might give us pause. I will offer two very different thoughts on the issue of genetically enhanced children.
They might prove the great equalizer, because right now, if you are well off, you get into good colleges or excel intellectually or athletically. You get an SAT tutor, a tennis coach. You use all sorts of economic means to make your kids better. CRISPR offers similar opportunities at a very cheap rate to other individuals who can't afford a tennis coach or an SAT tutor but might be able to afford genetic engineering to make their kids brighter or more talented.
By changing these polymorphisms in society, you may have unintended consequences. For example, there is good data to suggest that individuals who have bipolar disorder have close relatives who are more creative. Now, if you removed the gene that causes bipolar disorder from the population, you would have one fewer debilitating illness, but you also might have less creativity. We would notice the visible victims we saved. We'd never notice the invisible loss. And that's the challenge of tinkering with the genome.have a stake, a valid interest, in preventing parents from engaging in genetic engineering?
~ full transcript coming soon ~
Thank you for reading What Happens Next in 6 Minutes with Larry Bernstein. This post is public so feel free to share it.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein. What Happens Next is a podcast which covers economics, finance, politics, and the arts.
The topic for today is Food Porn.
Our speaker is Rebecca Halpern who is the writer and director of a new documentary film Love Charlie that will be released in theaters and available for streaming on Apple and Amazon on November 18th. The film is about the life of Top Chef Charlie Trotter who revolutionized American cuisine. Charlie was a creative genius who used a different 10-course menu each day for 25 years. He introduced us to farm to table, placed table in the restaurant’s kitchen, and eliminated hard liquor and foie gras from the menu.
Charlie Trotter influenced many of the great top chefs of his generation and demanded excellence from everyone around him.
Buckle up.
I make this podcast to learn, and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Ok, let’s start with Rebecca’s opening remarks.
Rebecca Halpern
Topic: Food PornBio: Film Director and WriterFilm: Love, Charlie: The Rise and Fall of Chef Charlie Trotter is here
Transcript:
My name is Rebecca Halpern. I'm a documentary filmmaker. My latest film and directorial debut, Love Charlie: The Rise and Fall of Chef Charlie Trotter will be released November 18th in select theaters and on demand on Apple and Amazon.
Why is Charlie Trotter important? Chef Charlie Trotter reimagined American cuisine and made Chicago the culinary capital that it is today. Charlie and his team improvised 10-course tasting menus, never serving the same dish twice. He's credited with inventing microgreens, taking vegetarianism mainstream, and being the first American chef to put a table in his kitchen.
He's also the godfather of food porn, thanks to his groundbreaking style of photography, which he used in more than 14 cookbooks. Charlie's obsession with exceptional ingredients and his exacting management style drew ambitious chefs from all over the globe to his door. His flock of trainees have become the who's who of the culinary world.
Why make this movie? His legacy stands to be lost to time. Relatively few people know anything about him. I grew up in Chicago in the late 1980s and 90’s, and there were three giants who ruled the city: Michael Jordan, Oprah Winfrey, and Charlie Trotter. My mom was a food critic and often would talk about Charlie Trotter like he was some unicorn who was born to revolutionize the culinary world.
I was approached to direct this doc knowing only the media's caricature of him as a trailblazing but tyrannical perfectionist. I wanted to learn more about who he was, what made him tick, what drove his relentless pursuit of excellence, and what happened to him that ultimately made him flame out so spectacularly at the end.
What can we learn from Chef Trotter's story? Before he opened the restaurant, everyone in Charlie's life called him Chuck. He was a fun-loving dreamer whose passion knew new no bounds. Over the course of his career, Chuck gave way to Chef Charlie Trotter, his professional persona with devastating consequences.
This is not a film about food. It's a cautionary tale about what happens when a person's identity becomes consumed by their work.
There's an organizational psychologist named Adam Grant who recently posted a quote on Instagram that really resonated with the film. He said that asking kids, “What do you wanna be when you grow up?” Sends the wrong message about work. He said, “We should teach kids that who you are is more important than what job you do. That work is an activity. It doesn't have to define your identity.” And I think Chef Trotter's story is a perfect example of what can happen when it does.
Larry Bernstein:
You said that Charlie reimagined food photography in his 14 cookbooks. What did he do that was new?
Rebecca Halpern:
Before Charlie Trotter cookbooks were an instructional manual on how to put a dish together, very few illustrations, detailed instructions, not a lot of philosophy or the why behind a recipe exists. Charlie Trotter created coffee table cookbooks, where his photography was super intimate and up close with the food was revolutionary. It changed the way cookbooks were published. From that point forward, now there hasn't been a chef that's put out a cookbook that doesn't look like one of Charlie Trotter's cookbooks. Charlie also went deep on the philosophy, the why behind his recipes. Grant Achatz says in the film, the chef of Alinea, which is a three Michelin star winning restaurant, it was almost as if he could read and think about how the food would taste just from Charlie's cookbooks. And that's something that you didn't see before, and now it's ubiquitous
Larry Bernstein:
In the film you interview several important chefs of the Chicago food scene, including Grant Achatz. Grant describes an experience where he mishandles some peaches and Charlie berates a colleague for allowing Grant to do this, making Grant feel even worse. Why did you choose to include that scene and what does it illustrate about Charlie Trotter's management style?
Rebecca Halpern:
I'd like to back up for a second and talk about how Grant found himself at the restaurant. Grant fell in love with Charlie Trotter because of his cookbooks. It was through his cookbooks that Charlie Trotter seduced, not just Grant, but hundreds of aspiring young chefs. Grant, at that time, had a very contentious relationship with his own father and was looking for a mentor figure, someone that he could look up to. His hope was that Charlie Trotter would be that person. When he got into the restaurant and started working there, he quickly realized that Charlie was not the warm and fuzzy mentor that he was hoping for.
Charlie was a task master. He didn't understand that maybe you just needed coaching or a softer hand. He didn't really care about what he could do to get you to do your best. Sometimes it was manipulative and sometimes it was toxic. But to those people who stuck with him, who saw the world the same way he did, they had remarkably wonderful experiences. So, I think it's a two-sided coin.
Larry Bernstein:
Rebecca and I both went to New Trier High School in Winnetka Illinois as did Charlie Trotter. It's a powerhouse. How do you think the New Trier experience affected Charlie Trotter's path?
Rebecca Halpern:
New Trier is called the Harvard of high schools, and I think anyone who went there found that New Trier was infinitely harder than their undergraduate career. The expectations on all of us were huge. Every kid that goes to New Trier has a leg up on most every other kid in the world.
Charlie was viewed as an entitled whose father bankrolled him before he had any real work experience. Luckily, he had this incredible talent. But when he told his parents he wanted to be a chef, they were like, “What? You want to go into the service industry?”
You are an artist when you are at the level of Charlie Trotter. I think he viewed it that way.
Larry Bernstein:
Charlie may have been entitled because his dad bankrolled his restaurant opening, but amazingly, he convinced his dad to work as his operations manager and his mother to work in coat check before he promoted her to hostess.
I want to turn next to Michael Jordan and my favorite scene from the ESPN documentary The Last Dance. In it, Jordan has been pushing his players as hard as possible to maximize their 2performance and his teammates conclude that he was a complete a*e. We had the producer Michael Tollin on the podcast, and I asked him, what was the most important scene in that 10-part documentary? And he said, “at the end of act 2, I asked MJ the question was there a personal cost for being such an ae? And Jordan became so emotional that we had to stop filming.” Why do these incredible performers, the best in their respective field, think they need to be an a**e to inspire excellence, especially when it comes at such a high personal cost?
Rebecca Halpern:
When you are blessed with the talent that Michael Jordan or Charlie Trotter had, you develop a sense that everyone who's in your orbit should have that same level of talent and that same dedication to excellence. Charlie Trotter is often mistaken for a perfectionist, and that couldn't be further from the truth. He thought perfection was boring. Perfection is about the outcome. Excellence is about the process.
He felt that how you closed a cabinet door, how you took out the trash, how you set a table, how you did your mise en place, how you made a piece of fish, how you delivered it to the table, every element of the process required the same level of care. He had dishwashers who ascended to the top of the food chain in his restaurant. Why? Because they demonstrated a certain level of care in what they were doing.
We called the film “Love, Charlie” for a reason. For Charlie, the quest for excellence, that relentless level of care that he poured into everything he did, was his idea of love.
And I think that quest for excellence, anyone who's gotten really good at anything in life who's spent 10,000 hours doing anything, you don't become great at something because you don't care. You have to pour attention into every single detail. I used to play competitive golf. I understand what it means to care as much about the blade of grass that your ball is sitting on as the wind that's blowing and there at that moment and what the golf course layout is like, and course management is part of it.
I have to care about my golf shoes, make sure there's nothing stuck under my cleats. I have to make sure that my glove fits me perfectly so that my grip every time I grab the club is the same. I want to make sure that my irons are clean so that within each groove there's not a piece of grass or anything that could influence the way the ball spins coming off the club face. That's care, that's excellence.
Michael Jordan demanding that people show up and be excellent every day in everything they did. I don't think that that's a bad thing. I don't. And people who are challenged to be excellent don't like it a lot of times. And they resent that. In Charlie's case, there were people in his orbit who he pushed them too far, and they resented him for it.
Larry Bernstein:
In your film you show Charlie’s funeral. The church was packed with former customers, co-workers, and other top chefs. Sure, he rubbed a lot of people the wrong way, but many people there loved him because he pushed them to be their best selves.
Rebecca Halpern:
Getting people to do their best, especially if they were on board with his approach, he derived a great deal of satisfaction out of that. But ultimately, I don't think it was about them ever. It was always about him and his restaurant and what he was striving for. Charlie Trotter was a narcissistic, self-centered guy who did a lot of what he did so that the shine would come back on him.
Larry Bernstein:
One of Charlie’s claims to fame was his daily, never repeated 10-course tasting menu that showed his creativity. In contrast, other great chefs create a spectacular dish and then repeat it to highlight their strengths. Not Charlie, he wanted to show you each day he could do something different that was amazing. Why did he do that?
Rebecca Halpern:
I think it's partly showing off. It's partly a love of improvisation. He loved jazz. It was also partly about challenging his staff to stay on their toes and be fresh. When you're a fine painter, let's say, and you squeeze a tube of paint, what color is coming out of that tube? The consistency, the texture, the weight, exactly how to use it on the canvas.
Food cuisine at the level that Charlie was cooking is infinitely more difficult because you're dealing with ingredients that are completely out of your control. There is no tube of paint that you can squeeze and guarantee you're going to get the same exact texture, flavor, scent out of every time. The improvisation for Charlie is all the more impressive when you think about these factors, that the ingredients that he was using, and every time he opened his toolkit, he never knew what he was going to get. If he got a batch of bad red peppers, he'll find something else. And he thrived on that too.
He also was the only chef who served only wine, and it wasn't like he did wine pairings. He designed his dishes around the flavor, the immutable flavor of the wine. You can't change the way wine tastes, but you can change a dish to satisfy the wine. And so his relationships with his sommelier were very close for that reason.
Larry Bernstein:
Charlie wrote an important book about serving wine with food. He also announced to great fanfare that he was going to remove liquor and hard alcohol from his restaurant.
Rebecca Halpern:
It was another way for Charlie Trotter to show off and be different. He loved to be considered an enigma. He loved it when people didn't understand why he was doing what he was doing. And going strictly to wine did help compliment his food and create a better dining experience, which was completely in his control. When you're doing a 10-course tasting menu with few deviations, you are in command of the conversation. It's a monologue necessarily that you're listening to from the chef. I mean, that's what it is.
If he wanted to do only wine, he could do only wine. If he wanted to put a table in the kitchen, he could put a table in the kitchen if he wanted to treat people like crap; he did it how he wanted to do it. Chef Charlie Trotter becomes consumed by that level of corruption of thinking he can get away with anything, he can do anything he wants, just kind of grew almost out of control.
Larry Bernstein:
Burger King makes the customer the decision maker, have your way, but not Charlie Trotter. He did not offer an a la carte menu. He decided what you're going to eat tonight. Just like if you go to the symphony, the conductor decides what gets played. He viewed the consumer as secondary relative to his own vision of what food should be. How do you think about Charlie’s overbearing, paternalistic attitude towards the customer’s culinary experience?
Rebecca Halpern:
I mean, that was part of his philosophy. Nobody crowds sources a skyscraper. It's the vision of the architect. He was a control freak. He wanted things to be exactly how he wanted them to be, and he viewed himself as an artist. And he was well within his right to do that.
Larry Bernstein:
Next topic is Charlie’s health. He had several minor strokes. His doctors told him that his health was failing. In the film you made it seem that his work was killing him on the one hand but not working was a death sentence. How do you think about Charlie’s choices at the end of his life?
Rebecca Halpern:
He did drive himself so hard that he ended up killing himself.
He made choices that ultimately led to his own demise. Doctors told him not to fly because of his inoperable brain aneurysm and he made the choice to fly to Wyoming and the next morning was found dead on the couch by his son.
It was like he was playing Russian roulette at the end there. And I feel for Charlie Trotter because I know what it's like to become addicted to the detriment of your own personal life, of your relationships, of your own health. When it came time to just be Chuck again, he couldn't do it.
Larry Bernstein:
Let's talk about Charlie’s first wife Lisa who plays such an important role in the film. She had a chance to go to law school and follow her career, but Charlie persuaded her to abandon her dreams and adopt his. Charlie becomes consumed by his restaurant and that’s the kiss of death for their marriage. What do you think about that relationship and what does it show about Charlie?
Rebecca Halpern:
It requires a team to get across the finish line. Lisa, I wanted to really give her due for helping open the restaurant, helping shape his vision, helping him to explode onto the scene the way he did.
Their relationship suffered. If you're obsessed with your career, things are going to fall by the wayside. So, in terms of his weakness, it was just a foretelling of what was to come for him. They broke up a couple years after the restaurant opened and he immediately remarried a woman who was working for him named Lynn. And the two of them, Lisa and Lynn, could not have been more different. Lisa was much more intellectual. Whereas Lynn, she's got this big blonde hair and she's glamorous and has this movie star looks to her. He was trying to control his image and he picked his leading lady in that moment.
Larry Bernstein:
Let’s move to the Charlie Trotter brand. The first time I heard about Charlie Trotter was when he opened that shop next door to his restaurant which sold various Charlie Trotter goods like smoked salmon and other dishes.
Rebecca Halpern:
You can still get his smoked salmon at Whole Foods and it's insanely good.
Larry Bernstein:
I'm on that. I moved to back to Chicago in 1999, when Charlie Trotter was still the Restaurant King of Chicago. He then opens up franchises in Las Vegas and Mexico and they’re not successful. What did he do wrong?
Rebecca Halpern:
He believed in his brand so much that there was absolutely no flexibility. His restaurants in Vegas failed. Why? Because they want to turn tables in Vegas, they want people to be gambling for as long as possible. A meal that lasts three hours is a non-starter for a casino operator, but Charlie Trotter refused to budge.
He was going to open a restaurant at Time Warner in Columbus Circle, and they wanted him to move in a fast-casual kind of a direction and he refused because it wasn't his brand. That hurt him only in so far as his inability to scale up. But it wasn't a bad thing necessarily. If you are known for one thing and you do that one thing really well, you should stick to that one thing.
His TV show, people loved it. The reason he didn't become a Food Network star was because Charlie Trotter is not Emeril. He's not as charismatic, he's not as telegenic and he's not as pleasant to watch. He has this elitist vibe to him that for the masses, I don't think appeals. He started to get stretched thin and didn't have the business infrastructure.
His dad was gone. He didn't have anyone in his court giving him great advice on how to scale up in that way. Also, he wanted three Michelin stars. That was his lifelong goal. Your art will suffer if you don't have the right infrastructure in place and if you can't let go and delegate properly.
Larry Bernstein:
I would like to play a clip now from your film Love Charlie.
Larry Bernstein:
In the 1980s, French high-end cooking was the rage. Julia Child introduced French cuisine to the American public through television, in a way that amused, surprised and beloved her audience. Charlie learns about French techniques that rely heavily on cream and butter. Tell us about Charlie’s decision to follow a completely new direction that becomes nouveau American cuisine.
Rebecca Halpern:
He certainly introduced a new style of American cuisine. They hardly used any cream or butter in his cooking. He was a huge proponent of vegetarianism. He offered two 10-course tasting menus. One was a meat menu and the other was a vegetable menu. He felt that vegetables deserve just as much attention as any kind of beef or poultry or fish.
What was interesting was Charlie's trip to Europe didn't last very long. He was backpacking, eating at very fancy restaurants, leaving his backpack up with the Maître D’, and look at what he was able to absorb and synthesize. Charlie Trotter was in his early twenties, didn't have hardly any work experience, certainly very little formal training. It's pretty remarkable what he was able to take and borrow from the French and then make his own.
Larry Bernstein:
Let’s run a second clip from the film. Here we have chef’s Wolfgang Puck and Emeril talking about what made Charlie Trotter’s methods so innovative.
Larry Bernstein:
Rebecca, tell us about Charlie’s concept of farm-to-table cuisine.
Rebecca Halpern:
Charlie Trotter made a concerted effort to build relationships with purveyors in ways that other chefs weren't. Not only was he seeking them out to procure the best food they had to offer, but he was working with them to create the kinds of vegetables that he wanted to put on the plate. There's a chef in Ohio named Farmer Lee Jones, who he worked with very closely. He called him up one day and said he was tired of salad greens. What can we do next? Together they innovated microgreens, which are ubiquitous now. There are microgreens on burgers, there's microgreens on salads. They use them as garnish on desserts. I mean, everyone uses microgreens. That was revolutionary about Charlie's approach to the farm-to-table movement.
Larry Bernstein:
Let’s talk about food critics. You mentioned your mother was a food critic. The world shifted away from the food critic to recommendations by ordinary customers with the Zagat Guide and now with Yelp and Open Table reviews. How do you think about the demise of the food critic and their role in determining taste?
Rebecca Halpern:
I always laugh whenever anyone I'm going out to dinner with ask the waiter what's good here. First, you've never met this waiter. You don't know if you share the same taste as this waiter. The waiter could be telling you what's the most popular thing on the menu, but who's to say that any of those people share your tastes?
I don't know that the food critic necessarily serves a purpose. My mom was really a food writer. If she had a bad experience at a restaurant, she just wouldn't write about that restaurant and give it any shine. And I think that's great. Celebrate excellence and the rest, they'll find their own future, their own way. They'll either go away or they'll stick around.
There is a place for food criticism. People who write about food in the same way that art critics write about art, where it looks at the body of work of this one chef and where are they today versus where they started. I think some food criticism, while warranted, is also just about creating news, it's click bait frankly.
Larry Bernstein:
How did Charlie Trotter think about publicity? You mention in the film that he got lured into making outrageous statements, but that only seems to help his brand. Is there no such thing as bad publicity?
Rebecca Halpern:
He did call Rick Tramonto, who is the other top chef in Chicago, fat and threatened to eat his liver. All press is good press, especially when there are people nipping at your heels and you want to stay ahead of them. There was a tenor to the coverage of Charlie Trotter that seemed like the media and others were looking to take him down. It was egregious in some respects.
That was a kind of journalism that I don't believe in, which is this gotcha journalism where you're looking for people at their worst. The way the media treated him was just painful to watch.
Larry Bernstein:
The next topic is the art of documentary filmmaking. You foreshadow Charlie’s death. What did you conceive of the documentary’s narrative arc?
Rebecca Halpern:
I love telling true stories because they write themselves. In Charlie's case, there was such a strong beginning, middle, and end that to take it apart just didn't make sense because it was so compelling as it was. And it's funny because that's one of the driving philosophies behind Charlie Trotter's cuisine. The ingredients should speak for themselves.
Larry Bernstein:
In the making of The Last Dance, ESPN sent a video crew to tape the Bulls behind the scenes for an entire season creating loads of archival footage. They also had interviews with Phil Jackson, Scottie Pippen, Steve Kerr, Dennis Rodman, Carmen Electra, and Michael Jordan.
For Love Charlie, you obviously got your hands on plenty of archival footage and interviews with people who were close to him. But you didn’t have Charlie Trotter himself. How did you deal with this limitation?
Rebecca Halpern:
Archival footage is everything, especially when you start production on day one of a global pandemic. There was so much we wanted to do that we couldn't, because we couldn't get groups of people together to do a shoot. So, the archival footage really saved us.
One of the criticisms that we got about the film was that you didn't get to see Chef Trotter cooking enough in the kitchen. Chef Trotter didn't really cook all that much. He was more of a dictator who told people what to do and they all executed his vision.
We got lucky because we had 350 postcards that he had written to Lisa, his first wife, when he was formulating his vision and basically scripting his whole life story before he lived it. That really helped because we could lean into the visuals of those postcards to help augment the story.
Larry Bernstein:
What I've learned from my experience making this podcast is the critical role of editing in crafting a narrative. Tell me about your editing process for this film.
Rebecca Halpern:
In our case, because it's a past tense story, we were able to write it before we went into edit. The thing that was most important about the edit is the use of visual metaphors. We represented Charlie's inner thoughts and his philosophies. For example, one of our interviewees said that he always felt like time was shorter for himself. So what do we show?
We show one of the postcards that he wrote that happened to be Salvador Dali's melting clocks. That was a good visual metaphor for what he was feeling for time in those moments. I needed an editor who thought in that same way. I also wanted an editor who really understood nuance and would be able to find those moments when Charlie was looking at the camera or thinking where it caught him off guard.
There was a moment when my editor and I literally jumped for joy because we had 16-millimeter home video footage that Charlie Trotter's family had shot of Chuck as a teenager doing a gymnastics routine. And there's a moment in the film when we talk about his pursuit of excellence, and he says that he's dyslexic and he can't function unless everyone in the kitchen is moving in the same direction. We layered in that clip of him doing his gymnastics routine. Not only was it a visual metaphor for the precision and the excellence and the care that he needed to pour into everything that he did, but it also happened to just fit perfectly in timing wise in that little section to cover what we were hearing.
To me, that's great storytelling. A lot of true crime these days on television is very literal. What you're hearing people say is what you're seeing on the screen and it's mindless. It's almost as if you could turn the visuals off and just listen to a podcast. I really wanted to tell a deeper story visually so that the audience could engage with it intellectually. Somebody once said to me, “Well, we're going to rent this at home and I'm going to stop it 50 times so that I can read everything that's on there.” And I thought, that's a very Charlie Trotter thing to do. The edit was extremely important in terms of the overall vision and style of the film.
Larry Bernstein:
Prior to Love Charlie you did true crime shows, and this feels like a true crime related documentary. Charlie's dead. Who done it?
Rebecca Halpern:
The hallmarks of true crime–red herrings, these twists and turns where you think it's one person, but it's really another person or where things are revealed over time–it's a great proving ground for a storyteller. I took this true crime approach to Charlie's life. He was very enigmatic and maybe he was also the perpetrator as much as he was a victim.
Larry Bernstein:
What are your hopes for this film?
Rebecca Halpern:
The point of making this movie is so that Charlie's legacy is remembered. He deserves to have a place in the pantheon of great American chefs. I want people to be inspired by him. Charlie's favorite quote was, “After love, there's only cuisine.” Here's a guy who died because of his obsession with his career. How many of us can say they've devoted themselves to this one pursuit without any balance in their lives? It's going to open up a lot of conversations around mental health in the workplace.
I'm moving into directing full time now, and this is my debut feature. I'm hoping that it will lead to more opportunities to tell other great stories about people and events that require a nuanced and sophisticated kind of storytelling.
Larry Bernstein:
Rebecca, in each episode I end on a note of optimism, what are you optimistic about?
Rebecca Halpern:
I'm optimistic that people are going to watch this movie and come away feeling like they want to apply a new level of excellence to their own lives. That even though it's a cautionary tale and you see the cost of pursuing excellence relentlessly, there is something really inspiring about seeing someone caring so much about what they do.
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Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein. What Happens Next is a podcast which covers economics, finance, history, politics and sports.
Today’s session is about game theory and sports. Today’s first guest is Stanford Economics Professor Paul Oyer who has written the book An Economist Goes to the Game: How to Throw Away $580 million and Other Surprising Insights from the Economics of Sports. Paul will discuss which sports your kids should play. Why South Koreans dominate women’s golf? And how does game theory inform us whether Michael Jordan should take the last shot or pass the ball to another player? Our second speaker will be University of Michigan economist Stefan Szymanski who is the author of Soccernomics. Our discussion will focus on the economics of all thing’s soccer including why European soccer owners lose money, and why do certain soccer positions take most of the earnings.
Buckle up.
I make this podcast to learn, and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows.
If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content. Ok, let’s start the session with Paul Oyer. His session was taped with several my friends at Stanford Day an event that celebrated my friend Myron Scholes 80th birthday.
Paul, please begin with your opening remarks.
Paul Oyer
Topic: Which Sports Your Kids Should PlayBio: Professor of Economics at Stanford UniversityReading: An Economist Goes to the Game: How to Throw Away $580 Million and Other Surprising Insights from the Economics of Sports is here
Transcript:
It started as a project with my son. He helped draft some of the chapters and did some of the background research.
But along the way, he became a communist and the whole economics thing wasn't working out anymore. So, it's really become my project. It starts with a story of my son hitting a game winning home run in little league. And what's that got to do with economics? Well, because economics is not the study of money, it’s the study of scarce resources. And the scarcest resource we have is our youth.
The economics of being a kid are all about the tradeoff between investment and consumption. Youth is an opportunity to learn things and do things that will create human capital that will make you better off later in life. But it’s also a chance to consume and enjoy. These great memories are really utility, value and consumption, but if I'd spent too much time on Little League, I wouldn't be a Stanford professor right now.
The first chapter is about how much should you invest in your child's sports career. And the lesson is for those of us who are lucky enough to be in a fortunate position, we should probably not invest that much in it for the sake of their future, but rather we should invest it strictly because we want to enjoy consumption in sports when you're a kid. My son played little league, he was very good, but we didn't pursue a sports career for him.
And you might say, well, but all the skills he learned in sport made him better at his current jobs and made him better at school, the discipline, but the empirical evidence on that is really weak. They might develop those benefits. It's hard to say it's going to pay off later. And it's certainly hard to say relative to the opportunity cost of studying, practicing the violin or something else that it's better.
There are exceptions. Giants fans you've heard of Jock Pederson. Well, Jock played little league with my son. So sometimes this pays off. He makes $6 million a year. Now my son doesn't, by the way, and there's probably a lot of kids in my son's class at Brown University who make $6 million who've become entrepreneurs.
The point is, even if you count the Jock Pederson’s and Jeremy Lin’s of the world, sports doesn't typically pay, even when you think about scholarships and maybe getting into college in some instances.
What are the exceptions? Kevin Durant is very different from my son. He was born into a difficult economic situation. And if you just look statistically at the economic mobility of somebody with his background, the likelihood that he would rise to a high level of income through standard jobs is not very high. Whatever barriers there are, unlike a kid from Palo Alto who could get into Brown University and make a decent living, it looks tougher for a kid like Kevin Durant from inner city Washington, DC.
Kevin Durant, when he is 13 years old, he's six feet, eight . That makes a big difference. The number of people who are six feet eight when they're 13 and coordinated is very small. And the fraction of those who play in the NBA someday is large. If you find yourself coordinated, willing to spend a lot of time investing in basketball skills, and six feet eight when you're 13, then the return on investment looks really, really good. There were 320,000 African American baby boys born in 1988 who live in the United States. 320,000.
Kevin Durant earns 1% of the income of that group. The amount of money involved relative to opportunities elsewhere for this particular kid. Now, what about the white kids or what about the white kids from Palo Alto? It wouldn't be anywhere near that level even with his income. Between 6% and 7% of all the money earned by American black men born in 1988 was earned by NFL and NBA players. So, if you know when your 13 that you have the physical skills to go down that path, it becomes worth it if your other opportunities aren't that good. So that's the economics of youth sports.
The second chapter is about why are some countries so great at sports? Liechtenstein is the most accomplished country in the world measured in Olympic gold medals per population. It has a population of 37,000 and they win a gold medal in skiing every few years because of just pure natural advantage. They're lying at the base of a mountain. The kids after school go up and ski and there's only 37,000 people. One of them becomes good every few years. And it's totally location based.
Did you watch the Winter Olympics? Norway dominates cross country skiing. Again, that's what an economist would call natural advantage because in Cross Country skiing in Norway the mountains are far away. Because of the nature of how dark it is in the winter, there isn't as much daytime, which is critical for downhill skiing but not so much for cross country. Other factors that give Norway a natural advantage better than Sweden and Finland?
Well, that comes down to putting a complimentary investment from their other natural advantage, which is oil. Norway has all this oil money. One way they've chosen to spend it is to develop their Olympics teams. The book is about sports, but it's about economics more broadly because that story is exactly the story of why wine in Napa Valley is so great. You’ve had this natural advantage in grape growing and then you have a complementary thing, which is rich millionaires around here who need a hobby and pour money into making these wineries really good.
It's the same economics as Norway and skiing.
My favorite economic story, which has nothing to do with natural advantage and that's Korean women golfers. So women golfing fans turn on a women's golf tournament and look at the leaderboard, you almost always see some Korean either at the top or near the top, and a Korean guy usually not.
There was one major championship won by a Korean man 20 years ago. 36 have been won by Korean women. And if you look in the top 50 golfers in the world right now, the top Korean man is ranked 18th, and for women, the number one golfer is Korean. Three of the top 10, and 14 of the top 50 women are Korean. So why men versus women? Well, first let's talk about why they're good at sports. Like why Korea? Like what a stupid place for golf to be good. Do you know how crowded Seoul is? If you hit a golf ball in Seoul, you'll kill people. If you drew a golf course in the middle of Seoul, 10,000 people would live in that amount of space.
So, there's no natural advantage. If you've been to Asia and seen these triple deck driving ranges and you hit your ball, there's a net. It goes like five feet before it hits a net because there's no space. So why golf? Well, that's a mystery. Why are the girls so good particularly in Korea? That balance between investment versus consumption as children. Koreans are all-in on investment. I'm not making, racial stereotypes. it's empirical statements.
Based on surveys of Korean kids, they eat dinner with their parents the least of anybody in the world. On the days when they do the entrance exams for college, they close the airports, or at least make them fly in a different direction so the kids can concentrate on the tests, and they open the stock exchange late, so the parents can drop their kids off and get them all settled. The much less amusing part of this is suicide rates the day after the results come out are high. It's all about focus. The boys focus on school because it's going to pay off in the career. Why are the girls less focused on this?
Korea has the largest gender pay gap in the world among developed countries. The only country that competes with it for that is Japan. And the girls are like, “Well, I have to work all day because that's the culture here. I'm going to focus my efforts on golf. They're also really good at archery and a few other weird things. And it's all about differences in the payoff in the labor market and how people spend their time. There's a woman named Jeongeun Lee6. She won the 2019 US Open, and she recently was second in another major golf championship. Her name is Lee6 because there are so many Korean women on the Asian golf tour and so many named Lee that they give them numbers to identify them by.
She said she wanted to play golf because I wanted to support my family no matter what. And so, economics drives these things.
Larry Bernstein:
I want to push back on your explanation for the dominance of Koreans in women’s golf. Lots of kids are miserable in school or have limited economic opportunities, but they lack the discipline to practice golf every day. I would have thought that you would have argued that some famous female Korean golf star was a role model for a generation of young girls and that her success encouraged them to play golf.
Paul Over:
I can come up with a story for anything. It took a while to zero in on an explanation for the Korean women. Czech women are very good at tennis and there are institutional reasons for their success. The rich people in Czechoslovakia 200 years ago loved tennis and that filtered through and then later the Soviets built on top of that.
I've done research not related to this book about the role of random things on the labor market, but random stuff affects whole country’s trajectories. And Czech tennis is a good example where random stuff from a few hundred years ago had a huge impact.
Larry Bernstein:
Economics drives professional sports. Different sports play more matches. Major league baseball has 162 games, the English Premier Soccer League has 38 matches, but American football has only a 17-week season without including the playoffs. Why is there so much variation between sports? And why don’t they play all year long?
Paul Oyer:
So there's trade-offs. On the one hand, more money, more games, more games, more injuries, and less consumption of leisure. American football, the risk of injury is so high that they're really in a bind to go any further than 17 or 18 weeks. They will keep going.
College football fans, when we were kids, you'd play nine weeks, you'd play a bowl game, and that was it. Now college teams, after the new playoff systems in place, some teams will be playing 16, 17 games. So, it's all economics. The money gets bigger. That trade-off between more money now. But the risk of brain injuries is a limiting factor.
The revenue per game being higher is more incentive to extend the season. If the revenue per game wasn't as high as it is in the NFL, you wouldn't be able to sustain a sports league with millions of dollars of salary that can only place 17 games in a season. The only way a sport can survive with a short season like 17 is if the revenues are really, really high. There are other sports where the seasons are very short, but they handle it differently because it's an individual sport where people are more substitutable. Boxing and MMA and marathon running people only do them a few times a year, but there are races and fights every weekend. The sport can have revenue every weekend, even though the individuals only are getting paid a few times a year.
Larry Bernstein:
Nobel Prize Winning Economist Douglass North wrote about the importance of institutions to economic success and the role of path dependency. How do you evaluate the role of institutions to the success of national sports?
Paul Oyer:
Look at the examples we talked about, the Korean women's golf came without any institutional support whatsoever. It just grew organically, and Se-ri Pak became a major champion, and then everybody piled-in, and it became a big deal. And then the institutions around it, which are the clubs and other things that are now making champions built around that success. Czech tennis is the opposite. Institutions really drove the success there. They had their own tournaments around the time Wimbledon started and the Czech aristocracy have been playing tennis and focusing on it for hundreds of years.
Norway, their success is all driven by institutions specifically set up by the government.
One dynasty I didn't talk about is the most dominant is East African marathoners. I compiled the list of the top 25 marathoners in the world, 24 of them were from Kenya or Ethiopia. And it's more condensed than that. There's a group called the Kalenjin Tribe that live up in the mountains, and that's where all these runners are coming from. It's not institutions, it's all about a history and informal institutions and other things that make them so incredible. Institutions are an enabling factor, but they're neither sufficient, nor are they required.
Larry Bernstein:
Croatia has outperformed recently in multiple sports: basketball, soccer, skiing, among others. It has outperformed many of its European peers without substantial government funding, what is going on here?
Paul Oyer:
You don't need to be China to have as many great people as Croatia has. If you have the institutions in place to find the great athletes, you only need a few million people to get you there. A few million people in Norway get you plenty of good athletes, even if you just drew from a random few million around the world rather than only Norway.
Larry Bernstein:
In your book you discuss a critical moment in Game 6 of the 1997 NBA finals between the Chicago Bulls and the Utah Jazz. During the timeout, Jordan whispers to Steve Kerr to be ready. Everyone, in the stadium and watching at home, knew that the basketball will eventually end up in Michael Jordan’s hands to take the last shot. And sure enough, Scottie Pippen dishes the ball to Jordan with the clock ticking down. The entire Utah Jazz defense converges on Jordan. Instead of shooting, Jordan passes the ball to Steve Kerr who hits the winning jumper from the top of the key. Why did Jordan pass it to Kerr and what does economics and game theory inform us about strategy in sports?
Paul Oyer:
I love the Michael Jordan question. Look, Michael Jordan was going to be a great basketball player no matter what, but he was only going to be as great if he got the strategy right. If you look at basketball players who don't play the mixed strategy, and always drive to their left or if Michael Jordan always took the last shot, he wouldn't have been effective.
Five guys would've been standing on top of him, and he would've shot anyway, and they would've blocked it. He must get it right. And he does it over time by trial and error. He survived because he had incredible skills and did it well. In the book, there are three examples about this mixed strategy equilibrium. The first one is goal kicks. If I'm shooting a penalty kick, I can shoot left or I can shoot right? And it's the best two by two simultaneous choice in the history of the world for economists. It's so much better than the true prisoners' dilemma as far as how it really works.
The kicker kicks and at the same exact moment, the goalkeeper dives one way or the other, and it has a huge impact. Kids, they're 10 years old and they always kick to the left because that's natural, and then the goalies start figuring it out, and they always dive to the right. They figure it out. But if they don't, they're going to be out of the league. It's just pure survival says the equilibrium's going to work out there. And there's papers written showing that on penalty kicks, it works out.
Larry Bernstein:
Just to clarify what you mean by this is. Most right footed kickers are better attacking to their left, so the goalies will dive in that direction to block it. To keep the goalies honest, the penalty kickers will have to kick to the right sometimes. And what the economists discovered in the data of nearly 1500 penalty kicks in professional soccer is that the chance of scoring is equal by kicking penalty shots in either direction because both the goalies and the penalty kickers successfully randomized their behavior.
Paul Oyer:
Tennis is another example. My tennis serve I have no control over it . I get awesome random variation in where my serve goes, but it's decided for me by randomness. There's been analysis showing that the best players really do get that right.
The third example is pitching. Pitching is another example of a really great mixed strategy equilibrium setting where the pitcher is deciding whether to throw high, low, fast, slow, curve ball, fast ball.
The batter has to anticipate this because if they're anticipating the wrong pitch, they're more likely to strike out. It is so much harder to get that equilibrium right. With the soccer kick, it doesn't matter. It's the same each time. You have to make sure you don't have a pattern and any predictability in baseball, whether you should throw a fastball or not is completely different if you're facing a guy hitting .220 in the eighth inning of a game, that's a four-run difference versus if it's the bottom of the ninth and you're pitching to Aaron Judge. So those percentages with which you do change dramatically. And they now have people analyzing that on baseball teams.
But even you can't get the equilibrium right on this, in baseball, they've shown best pitchers are actually not as good at the strategy as the other guys. And the reason for that is they don't have to be to survive. The example I use in the book is Jamie Moyer. He pitched till well into his forties, and he was known for being crafty and really good with strategy. Well, he had to be, if you're 45, you can't be throwing the wrong pitch, you'll be out the next day. But you compare him to Mariano Rivera threw the same pitch, 91% of the time, everybody knew it was coming. It didn't matter.
They couldn't hit it. And it's not, you don't have to worry as much on the strategy if you're not on the survival.
That was a long answer to your question, which is Michael Jordan makes that pass thousands of times over his career and over time he gets to the right equilibrium and so does the defense.
Stefan Szymanski
Topic: The Economics of SoccerBio: Economist at the University of MichiganReading: Soccernomics is here
Transcript:
Larry Bernstein:
Stefan, what is the state of soccer analytics?
Stefan Szymanski:
We've seen some big claims about progress in data analysis to improve performance. Liverpool, whose owners are famous for the application of analytics to achieve success with the Boston Red Sox, have claimed to make great strides. They've argued that their successful player trading, such as the huge profit they made on the trading Curtin, have been largely based on the use of statistical analysis. They also won the Champions League in the Premier League title.
There's no question that they have put together a great team of statisticians, but we question whether they've really made a breakthrough. It's impossible to know what techniques Liverpool is using because the club won't show its model to outsiders.
Liverpool's data analysts aren't opening themselves up to peer review. The only thing outsiders can do is look at the data that is available and see if there's any evidence of exceptional performance.
From the financial statements we identified the annual spend on salaries and net transfer expenditure for each club in the Premier League over a 10 year period and related it to the lead position achieved. What the data show is that Liverpool spent a bit less and achieved a bit less than the three teams ahead of them.
This isn't a spectacular overperformance. The data tells the same story. If we look only at the most recent five seasons, we don't believe that analytics is capable yet of winning trophies. Three of soccer's leading coaches in the current era, Ola, Jose Marino and Jurgen Club himself have little time for it. We think the data analytics going on inside clubs in the 2020s is like alchemy, the search for the philosopher stone, a material that could turn base metal into gold. Alchemy has a bad names the opposite of scientific inquiry and at root a waste of time. But recently, some historians have pointed out that it wasn't all bad. While alchemists search for the philosopher stone, they experimented with every possible combination of materials. And in the process discovered many things that remain of practical value today, especially in metallurgy. Their insane quest laid the foundations for modern chemistry.
Larry Bernstein:
Is soccer data only available to experts or is it like Bill James’ baseball data that was freely available to the public?
Stefan Szymanski:
Online sources provide large sports databases for free which you can analyze. Last year, the University of Michigan launched an online course in sports analytics on the Coursera platform, which can be accessed for free. Soccer analytics, it's no longer the province of big clubs with big money, and some amateurs have managed to get jobs by undertaking their own garage band style research. In 2019, United hired Ashwin Ramen, a 17-year-old soccer geek living in Bangalore based entirely on his online research capabilities. Soccer analytic alchemy turned into chemistry thanks to the exploration undertaken by vast numbers of unknown researchers. Something similar seems to be going on in the world of soccer analytics.
There are open networks in which people share ideas and knowledge based on a common interest in making sense of the game.
Larry Bernstein:
Michael Lewis wrote a fantastic book years ago called Moneyball. Michael Lewis and I both worked at Salomon Brothers the same time, and Michael was fascinated by how my fixed income arbitrage department applied quantitative analysis to bond trading. Moneyball tells the story about how Billy Beane applied statistical analysis to baseball when he was the general manager of the Oakland As. Billy Beane appears to have added the most value to the drafting process as well as with his player trades. What are you seeing in soccer?
Stefan Szymanski:
In soccer most of the top players come from the development processes of the top clubs. And this is something that people often misunderstand about soccer. They imagine that these players are coming from all over and the big clubs just hire them when they mature. But actually, that's not true.
The ability to play soccer well is a form of human capital. And the question is how much of that human capital is specific to where you learn it and how much of it is general. The issue for clubs is that it's almost all general capital. So whatever the players learn at one club can be easily transferred to another, which is why clubs can identify talent, but they really struggle to profit from that development because there's a wide open market.
American sports have solved this problem through various restrictive practices, not in the least the draft, which is a way of making sure that there isn't competition for talent. But soccer has traditionally not had those mechanisms, which is one of the many reasons why soccer has always been a less profitable business than the major leagues in North America.
Larry Bernstein:
Is European soccer unprofitable for its owners?
Stefan Szymanski:
Very few at the top can make money. In England, Manchester United and Arsenal have always made money, but all the other clubs have pretty much all systematically lost money for decades.
Larry Bernstein:
What determines profitability for European soccer if there is unlimited competition? Shouldn’t firms earn a fair return on capital and the players earn most of the money? Is there any brand value for clubs that can generate extra TV revenues, stadium ticket sales, and jersey advertising?
Stefan Szymanski:
It's a great question: how some make money and some don't? What is the equilibrium in the industry? North American leagues are relatively straightforward to understand. They have market power, they generate economic rents, they share the economics rents amongst themselves. That's standard cartel theory.
If the reason for the existence of the club is something more than the owner's pursuit of profit, there can be a reason why you can make losses. Soccer clubs in Europe represent communities, and people are willing to lose money in support of their communities. They provide more than just profits.
But then why is it that some clubs can make money? Well, the answer according to John Sutton is that there are no sunk costs in this industry.
Ask yourself, why does Coca-Cola even spend on marketing? Who on the planet has not heard of them? Well, the answer is it's not to sell the drink, it's to create barriers to entry. Anybody else would have to spend like that. The analogy in soccer is that the big clubs like Manchester United, Barcelona, Real Madrid, Munich, these clubs spend an absolute fortune on hiring players.
And anybody who wants to challenge them has to sink a similar amount of money into players. They're creating a barrier to entry, even though there are hundreds of teams competing in the market.
Larry Bernstein:
The global capital markets are very deep. You could do an IPO and raise billions if there were excess returns. But is there? Did Chelsea, for example, get a return on its capital?
Stefan Szymanski:
Roman Abramovich got his return on capital. His return on capital was a position in British society, which immunized him from being expatriated by Vladimir Putin. And until Putin invaded Ukraine this year, he got away with it. He made himself an established figure that's easily worth the $1 billion investment he put on it. Sheik Mansour at Manchester City, what he's building is a reputation for Abu Dhabi.
The people who are investing are getting returns other than purely financial returns.
Since Covid we are seeing private equity flood into European soccer because they see these assets as being cheap. If you buy up a Manchester United that's historically been a guaranteed return.
But these private equity funds are putting their money into some of the lesser clubs. They think that they can follow the same strategy as Sheik Mansour and Roman Abramovich. The problem is there's room for one or two more, but if you start to have a dozen or so more competing entities, then you are going to undermine the dominant position of all of those clubs, which would be very interesting for European soccer, but those private equity firms will end up making money.
Larry Bernstein:
If I had to bet, with a competitive market the teams will not make any excess returns and all the rents will go to the players.
Next question relates to monetizing our tribal instincts. When I was growing up, I was a fanatical Chicago Bears fan. I loved Payton, Ditka, and Singletary. But American sports have been changing. Some kids love fantasy football and care more about the individual players than the teams. Do you think the European soccer teams can monetize this tribalism and can they blackmail communities with threats of relocation to have the local community pay for new stadiums?
Stefan Szymanski:
The idea of relocation is absolutely anathema in Europe. If you try to move a team in Europe, it would be considered a criminal offense. There are hundreds of teams, and each team represents a local community. And that community aspect is something that was preceded in the United States. If you go back to the 1950s, minor league baseball teams had a local identity, but that's died out now. And so, the only remaining manifestation in America is college sports.
Larry Bernstein:
Recently some of the European soccer teams tried to create a super league and that unraveled in a day. Was this an attempt to create a monopoly so those teams could earn higher profits?
Stefan Szymanski:
What you have in Europe is traditionally all these different markets. England is a market, Germany is a market, Italy is a market. And what's happened in the modern era is that those market barriers have come down. Fans in England can watch Spanish teams and Italian teams and so on.
The owners were trying to create something called a European Super League. Rather than Real Madrid play Liverpool once in a blue moon in the Champion League, we should play them every year. So you create a league and that is worth billions, giving people an opportunity to see the best teams in Europe play against each other more frequently. What was the problem with what they were doing?
The problem is they wanted to be guaranteed a presence in this league.
Larry Bernstein:
How does it work now if a soccer club performs better or worse than its peers?
Stefan Szymanski:
At the end of each season, teams move up or down in this hierarchy based purely on sporting performance. If you're at the bottom of the league, you go down. And that for these big clubs is a huge potential economic threat. You can't be sure that one day you won't get relegated.
It doesn't happen very often but it can to even the biggest clubs. So, what they were trying to do was insulate from this competitive process. That's an antitrust violation trying to get rid of competition. And fortunately, it's also against all the traditions of European soccer so the fans really hate the idea. And that was ultimately what stopped that process.
It was too transparent and that's why it failed.
Larry Bernstein:
The NFL owners are big time profit seekers. yet their organizational structure encourages equality among the teams. All the TV revenues are shared equally. The best draft choices go to the teams with the worst records, and the worst draft choices go to the most successful teams. The life of the average NFL player is short, so teams have trouble creating dynasties. My Chicago Bears were unbeatable in 1985, but they won only a single super bowl. What do you see in soccer?
Stefan Szymanski:
That's a very interesting question. The hidden assumption in your statement is that if they didn't do this, they would be less profitable.
There are two interpretations of what they're doing. Their explanation is that for a league to be successful, you need competitive balance. This was an idea dreamt up by baseball in 1879 that we need to share resources because if a competition becomes too unbalanced, then people will lose interest. It will become too predictable. And so we need to share resources fairly equally to make sure that teams are competitive from year to year.
Do leagues that are more balance create more interest? There's an awful lot of research in economics on this, and the results are completely ambiguous.
What's the economist explanation? Well, if you are engaged in a cartel activity, you want to reduce the forces that competes away rents. What you want to do is find mechanisms which will disincentivize teams to compete with each other in economic terms.
So the draft is a way of stopping teams competing to get the best new players coming into the league. The salary cap is a way to stop teams competing to build up a better team. The revenue sharing is a way to stop teams competing by saying, “if I compete and generate more revenue, I'm just going to have to give it away to the other teams anyway.”
All of these are anti-competitive mechanisms to maximize the rents and the monopoly profits of the league rather than this claimed benefit of competitive balance.
Larry Bernstein:
I went to see the US open and there were games between excellent players who aren’t in the top 10 and just a few fans were watching their matches. Their tennis was excellent, but nobody cared. But the top players have huge crowds. Most of these economic rents are earned by the US Open franchise and not by the top players.
Imagine if the top eight players in tennis decided to boycott the Grand Slams and instead took it on the road and had competitive round robins. They could get sell-out crowds and earn most of the rent themselves. Why don't we see that? Why don’t most of the rents go to the players instead of the organizers of Wimbledon?
Stefan Szymanski:
Well, I say this to you as an economist, money is not everything.
Larry Bernstein:
Oh, come on.
Stefan Szymanski:
Sorry. Hate to say that. These players have brought up on the traditions of Wimbledon. A cynic might say they're brought up on those specifically so that those tournaments can earn rents, right? Maybe that's true. But, tradition plays a role and tradition embeds rent, so it creates barriers to entry. That's the serious point here: a sport without tradition, without a history is not that interesting, right?
Compare this with European soccer. All of the leagues that are competing in Europe, they've been there for decades. It's not that people are tuning in to watch Japanese soccer or major league soccer. That's not really an attraction. It's new and it's not very good and it's not going to be competitive. But the German league, the Spanish League, it can attract fans across borders.
Larry Bernstein:
Michael Lewis in another of his classic books The Blind Side highlights the value of the football player who plays left tackle. This is an offensive lineman position that protects the quarterback. And it is such an important role that the best left tackles earn much more than the other players. In soccer, there are huge differences between player compensation. This is a team sport. Should teams splurge and spend most of their money on one or two great players and then have a bunch of other low paid teammates, or should the team pay more evenly and get a much better average player?
Stefan Szymanski:
We still have a lot of uncertainty about how members of a team fit together. Some people argue that you're only as good as the weakest link in the team, and therefore you need to distribute your spending more evenly rather than focusing all your money on the top player.
What is the optimal salary structure, how should you concentrate your resources? I did research on this in soccer and found that teams were better off focusing on the spine of the team, which is the striker, the main midfielder, the main central defender and the goalkeeper. So four out of 11 players and it wouldn't really matter much spending on anybody else.
Larry Bernstein:
In the interview with Paul Oyer on today's podcast, we discussed the game theory of how to defend Michael Jordan. Should players over defend the best players and leave relatively open the worse players in soccer? How do you evaluate the complex dynamics of team sports?
Stefan Szymanski:
This is turning out to be the big problem with data analytics is that how do you simultaneously control the contribution of all the players at the same time?
So, you could imagine that that there would be some teams that would have to put all their defense onto Michael Jordan, but there are some teams where they have such good defenders that you wouldn't need to do that. My sense is that that analytics has made relatively limited progress in sports like basketball and soccer, unlike baseball because you can break down baseball into single events, pitcher versus batter. And it's much easier to understand what's going on.
One of the things that data seems to be showing is that teams should spend more time planning free kicks in soccer. The expected goals from free kicks is ridiculously high if you practice. But the more detailed strategy of movements of the players around the field that's beyond our grasp at the moment.
Larry Bernstein:
What are you optimistic about as it relates to professional soccer?
Stefan Szymanski:
I tell you what I think is great is the rise of women's soccer. Women's soccer is becoming something that will match men's soccer globally in the way that women's tennis matches men's.
Larry Bernstein:
What's driving that success of women's soccer?
Stefan Szymanski:
Women's soccer was deliberately restrained by men for most of the 20th century. And what's changed is that women have forced their way into the market and forced men to recognize their capacity to play the game. Resources are going into women's soccer and they're getting better and better. It's a non-linear process. It's exponentially in terms of the improvement in quality.
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Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, science and politics. Today’s session will be Designing the Perfect Portfolio.
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, science and politics. Today’s session is How Team Owners use Sports Analytics. Today’s guest is Jeff Luhnow the former General Manager of the Houston Astros and the current owner of soccer teams in Mexico and Spain.
Jeff will explain how owners use sports analytics to draft and trade players. How to use game theory to improve strategy for penalty kicks. And how to use metrics to improve player development. The Moneyball culture has changed sports and you will hear from a leader in the field what goes on behind the scenes.
Buckle up.
I make this podcast to learn, and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Ok, let’s start today’s session with Jeff Luhnow.
I would like to welcome Jeff Luhnow, who is a fraternity brother of mine from the University of Pennsylvania. We were in the same pledge class and Jeff lived directly above me in the fraternity house in 1985.
After graduating from Wharton and then the Northwestern Kellogg Business School, Jeff worked as a management consultant at McKinsey before taking a job with the St. Louis Cardinals organization.
Jeff, how did you get into sports?
Jeff Luhnow
Topic: How Team Owners use Sports Analytics
Bio: Former General Manager of the Houston Astros and the St. Louis Cardinals. Current owner of Cancún F.C. and CD Leganés
Transcript:
Jeff Luhnow:
I've been a sports fan my entire life. When I graduated from Wharton undergrad, I found out that the owner of the Dodgers was a Wharton alum, so I sent him a letter saying, “Hey, is there any jobs in sports?” He didn't respond naturally. And I thought, “okay, I'm not meant to be in sports.“
I went off to be an engineer and then went to business school and became a management consultant for about six years, and then did two technology startups. But in 2003, the book Moneyball was published, and Bill Dewitt Jr, who's the owner of the St. Louis Cardinals, read the book and said, “the Cardinals are going to fall behind if we don't start thinking about how to use some of the emerging analytics to our advantage.”
He looked around his front office and knew he didn't have anybody that could really help with that. His son-in-law happened to be a colleague of mine at McKinsey, and he called me up and said, “My father-in-law wants to talk to you because he wants a person with business and technology experience who loves sports to help him bring the Cardinals into the Moneyball era.” Three weeks later, I was flying to St. Louis to meet the general manager. My job was to figure out how to modernize the St. Louis Cardinal's front office, how to make sure that the best business practices and the best information was used to make decisions. It was not easily welcomed by some people that were already there, because outsiders are not welcome. There's the sense that if you haven't played, coached, scouted, there's no way you could ever do any of these jobs.
I chose my battles wisely. I ended up taking over player development, scouting, and all the analytics functions, and the entire farm system for the St. Louis Cardinals. It became one of the most productive farm systems in all of baseball. The Cardinals produced many major league players, a lot of wins, and a lot of value for the organization. The results ended up proving that modernization was necessary, and it was completely the vision of Bill Dewitt Jr.
Ultimately, the Cardinals ended up winning the World Series twice when I was there. But the last time was 2011, and a majority of the players on the field had been either drafted, developed or traded for using the new modern techniques. The proof was in the results.
Larry Bernstein:
You also brought your management consulting experience from McKinsey. Tell me about how you applied some of the management principles to the Cardinals?
Jeff Luhnow:
In a McKinsey environment, you're working with clients that are experts in their area, and you're not the expert. You're there to help them make better decisions or help them organize their information and come up with a strategy. I have never scouted a baseball player. I would sit with scouts, and I'd asked them what they're looking for, and I try and figure out, is there a formula here? How do they do it?
Part of the management style that worked well from what I learned at McKinsey is admit you don't know right up front. Don't pretend you're an expert in something you're not. The experts are the people that have been doing it forever. They have information; they have ideas. I spent time with the scouts, and I asked them how the Cardinals could scout better. All of the ideas presented to management were not my ideas. They were ideas from the scouts, but I was a voice, I was a way for their ideas to get to the top and create meaningful change.
One of the misnomers about Moneyball is that you get rid of all the scouts. That couldn't be further from the truth. If you're making the best decisions, you're using the scouts and you're also using data and analytics that help minimize errors and maximize impact.
Larry Bernstein:
How did the Astros poach you from the Cardinals?
Jeff Luhnow:
, Jim Crane, the owner of the Astros called Peter Ueberroth, who is the former commissioner of baseball. And he said, “I'm having trouble figuring out who I should bring in to lead baseball operations.” And Peter said, “I know the guy” and within half an hour he was calling me and said, “Hey, congrats on the World Series this year. I'd love to love to talk to you about potentially coming over and helping the Astros do the same thing.” So that's how it started. It was the same day that Albert Pujols signed with the Angels. So, both Albert and I decided to leave St. Louis on the same exact day. His impact was obviously much bigger than mine.
Larry Bernstein:
I don't know. Did they go to the Worlds Series?
Jeff Luhnow:
Two years later, they went to the World Series and lost it.
Larry Bernstein:
Tell me how you restructured the Astros organization?
Jeff Luhnow:
The Astros had been a team that in 2004 and 2005 had played the Cardinals in the NLCS. Both teams were equivalent in caliber, market size, in revenue, et cetera. The Cardinals went through a very minor dip and got back to the World Series and won it. The Astros continued to slide down. It was an organization in disarray, losing money, not a lot of prospects in the farm system.
So, it was quite an overhaul, and it was pretty clear that this was not going to be a quick fix, that it was going to take years. Everybody wanted to know how many years, including the owners, the press, and the fans. What I told them is, “we're going to work as hard and as fast as we can to turn this around as quickly as possible.”
We're not going to measure our progress in wins because we're projected to lose a hundred games.
So, we're going to focus our efforts on building a robust farm system, building the infrastructure to make decisions, having a good scouting operation, to lay the foundation to start competing for the playoffs.
We wanted to build something that was built to last. I internally promised five years to the playoffs, without saying that to the public. We managed to get there in four years. Since that time in 2015, the Astros have been the most successful team in baseball. The Dodgers have won a lot of games, but in terms of the consistent level of success, going to the World Series four times in six years
Larry Bernstein:
How important was the farm system and personnel development to the Astros success?
Jeff Luhnow:
The Astros are never going to outspend the Yankees, so you have to compete in other dimensions, and developing your own players is absolutely the way to go. Now, everybody knows that, and everybody tries that. But it's hard.
We were able to build a culture of continuous improvement using the best available information, having stretch goals, ways to measure everything. We always had ideas about how every player can get better. I mean, Justin Verlander came to Houston and got better. Gerrit Cole came to Houston and got better, even though they're already Hall of fame type players.
They chose those goals. We would present information to them and say, “Here's how we measure your performance in 10 different areas, and here's how important that is to us winning games and you making money and having big contracts. Pick the ones that you want and we’re going to tell you how to measure them, and we’re going to meet with you regularly and show you your progress, and were going to give you tools to help you get better in those areas.” It's amazing, once players take ownership of their own goals and improvement areas, how quickly they do improve. Low and behold, you have players that were below average defensively who are winning gold gloves. It's really incredible what happens. It's a whole culture, not just with the players, but with the staff and the front office about continuous improvement, knowing what you're trying to improve and measuring it along the way.
Larry Bernstein:
One of the points that Billy Beane made in Moneyball is that the manager is not that important to the team. I don’t believe it because the managers made some critical game-time decisions Do you agree with Billy Beane about the small differences between professional managers?
Jeff Luhnow:
I completely disagree with that. I think the leader in the dugout or on the side of the pitch field of football is essential. And you look at some of the greatest coaches of all time, they do have something special, they do create victories and championships, there's no doubt about it. They set the tone in the locker room; they decide the strategy. What I think Michael Lewis was getting at, and what I think Billy would probably and I would both agree on, is that if you let your manager or coach make the personnel decisions about who you bring in, that's probably not the optimal way to do it.
Because they have limited information compared to your scouts about what players are going to do in the future. When you're putting together a team, you don't really care what they did in the past. All you care about is what they're going to do in the future. And so how old they are, they're athletic skills declining, all that stuff matters, and coaches aren't necessarily the best people to assess that.
I also think the manager gets blamed and he gets credit for things that aren't under his control. That's natural because that’s the person that’s doing the interviews after the game. In Spain in football, 20% of the coaches have already been fired this year.
Why? Because there’s no one else to blame. You can't fire the players. When your season starts, and you get off to a rough start, you're expected to fire the coach, which is ridiculous. My team got off to a bad start, and I got pressured from the media, from the fans, from even part of our cap table, “Hey, why aren't you firing the coach? Isn't that what you have to do when you lose three or four games in a row?” And I said, “No, no, it's not the coach's fault. The players are not playing up to their capabilities. We haven't had a lot of luck. We've had tough competition. I'm not firing the coach. If you want to fire the coach, you're going to have to fire me first.” And we won three out of our last four games.
We're now out of the bottom of the league. We're climbing our way to the middle. Had I fired the coach, I would've had to pay him out his entire contract. And the new coach is going to want new players. It's a vicious cycle. if you give the coach too much decision-making authority with respect to putting the roster together, you shoot yourself in the foot.
In terms of the day-to-day inspiration of the players, knowing how to maximize the players on the field, Tony La Russo was a master at that. He would figure out a way where every one of the 25 players on the team played to the max of their potential. He would put them in at the right time, in the right situation, and they would succeed. It's important for any championship team.
Larry Bernstein:
You've switched from working in baseball to soccer. Tell us about that transition. I think you're probably the only person who's come from managing a baseball organization to professional soccer. How does your experience in baseball help you in soccer?
Jeff Luhnow:
It's a great question. I've studied basketball when Darryl Morey was the GM here of the Rockets. He and I used to get together regularly and talk about the differences and similarities between our sports. Same thing with the general manager of the Texans. When I left baseball, I seriously considered getting into the NFL. Football was the most interesting sport because I think there's the most opportunity to modernize and do some of the things that I did in baseball in the world of football.
You're not talking about a discreet pitcher throwing a ball and a batter swinging and an outcome resulting from that. You're talking about 11 athletes on the field running and passing a ball around, and 11 athletes on the other team trying to prevent them from progressing. And every person on that field impacts every other person on that field in the likelihood that a goal is going to be scored in the next minute. The dynamics are much more complicated and have never really been fully understood. Now that there's camera and radar technology to accurately know where every pair is always on the field and what the outcomes are likely to be.
Larry Bernstein:
Michael Lewis in his book The Blind Side discusses how compensation varies by position. Michael Lewis focused on the importance of the left tackle to protect the quarterback. How do you think about this idea if relative compensation by position as it applies to soccer?
Jeff Luhnow:
Well, it's a complex problem. The dynamics of how a goal gets scored, it's not just one person out there doing his thing.
The ball has to be passed to that person, and the ball has to be sent from one side of the field to the other before he has the opportunity to score. Even though there are lots of great players, Messi and Ronaldo, it's hard for one player to really dominate without the support of the other 10 players on the pitch. In baseball, for example, when we traded for Justin Verlander at the Astros, we had analytics that told us how much our percentage chance of winning the World Series improved by bringing in Justin Verlander and putting him at the top of our rotation.
In the world of football, you want to answer that same question, right? If you bring this player in and you spend the many million euros to transfer him in, how much is he going to improve your team's chances of reaching the playoffs? Or how much is he going to help you avoid relegation? The cost of failure is extremely high. And then obviously there's huge rewards if you get to the top of the league, because in our case, we get to go to the first division and the revenues are much higher there.
Jeff Luhnow:
Nate Silver has this 538 website. I look at the odds that he has in there almost every week for my team. What are my team's odds of getting relegated this year? Right now, I think we're 17% chance of relegation and 15% chance of playoffs. We have our own internal models, which aren't exactly that, but pretty close. It allows you to make decisions knowing where you are. Now, we were up at 23 or 24% when I was getting calls from investors. Are we going to fire the coach? So I promised them by December, we're going to be down under 15 and hopefully under 10 by January. But that's the kind of analysis you need to do. If we bring in this player, or this group of players, are we going to be able to get that relegation down to single digits? And are we going to be able to increase our chances of getting the promotion playoffs up into the 20, 25% range? And then we'll know if it's worth it or not.
Larry Bernstein:
In Moneyball, Billy Beane argues that he created real value in his player trades, and that what he took advantage of was biases on the other team's scouts. Take the example of the fat kid out of college who doesn’t even look like an athlete, but when Billy Beane looks at his statistics, he says, “Oh my goodness, this guy looks fantastic at how do these people not see how good this player is?”
Jeff Luhnow:
Paul Ware calls it the Blonde Hair effect, Billy Beane calls it the fat kid effect.
Larry Bernstein:
How do you minimize your biases when you’re drafting and trading players?
Jeff Luhnow:
Sports people have this mental model of what a good athlete looks like. And it's oftentimes based off if they were a good athlete, they look for players that resemble some of their characteristics. Biases out there allow people like me and Billy Beane to take advantage of that. It creates an opportunity for the undervalued players.
We did this study early in my career with the Astros, with the Cardinals. The average hitter's eyesight is 20/10.
Larry Bernstein:
Wow.
Jeff Luhnow:
So you're already talking about a group that has elite eyesight. We were able to take some players that had never been corrected because they're 20/20, their ophthalmologist never thought they needed a correction. And we corrected them down to 20/10 and boom, they got better. Now they were seeing the ball coming out of the hand.
Larry Bernstein:
When I was a kid, my dad told me that Ted Williams said he could see the stitch on the ball.
Jeff Luhnow:
Yes, yes. And you can, if you have got 20/10 vision and you have seen a hundred thousand pitches in your life, you can see the seam on the ball and whether it's a slider or a fast ball coming right out of the hand. And that's what elite hitters can do. Decision making is huge. I had an opportunity to spend a day at Red Bull Salzburg, which is one of the model teams in the world of football. They're a small team in Austria. They win their league every year. They go to Champions League, They make a lot of money, and they sell a lot of players for a handsome profit.
And they have on their campus in Salzburg a room with a complete 360 VR and their training decision making. People don't realize how important decision making is for athletes. There's instinctual decision making that comes from experience of playing a game. But you can train decision making and put the player in different situations.
At Northwestern where I went to business school, they built a new athletic complex. And part of it was they put in a VR room for the quarterback, and they could have Iowa's defense and have the quarterback make different decisions. It's not physical training, it's mental training. So, sometimes players have good decision making, but their physical attributes don't pass the test. They're not the tallest or the fastest, but they're valuable because their instincts allow them to make better decisions, whether it's swinging a pitch or where to pass the ball, or see the play develop ahead of time. Those things are huge and they're really hard to identify that this player is making better decisions the most.
Larry Bernstein:
At one of my Stanford events in March of 2020, Jeremy Beilenson who runs the VR department at Stanford, said that they were using VR to train Stanford quarterbacks. Can you teach better instincts?
Jeff Luhnow:
Stanford copied Northwestern. There’s probably less science around how to improve decision making, because we're talking about athletes make decisions in split second timing. When I was with the Astros, we brought in a psychiatrist who used to train troops in combat. He had a lot of success with hitters because having to make quick decisions. It's not life and death, but still when a projectile’s being thrown at you at a hundred miles an hour and you've got less than a fraction of a second to make a decision whether to swing or not, that's a lot of stress.
I don't know how easy it is to train decision making in that sort of environment. You need to have a certain physical skill to compete at the elite levels of these professional sports. Jose Altuve is five foot, five inches tall. First tryout he came to at the Astros, he was told to go home. He came back the next day and he insisted to come back.. They let him in, they signed him $15,000, and he has become one of the best players in the world, and he's five foot, five inches tall. He would never have passed any scout. Baseball's a little bit different, but there are players in football that don't fit the profile.
Larry Bernstein:
Athletes’ capabilities decline rapidly with age. Getting the decay function right seems to be the critical to player compensation and trade value. I know there are exceptions like Tom Brady, but how do you think about aging in your calculus?
Jeff Luhnow:
The aging profile of professional athletes has not been well studied until the last 10 years. And in sports, it depends on the position. What we have discovered in soccer, a goalie peaks in his thirties.
The athletes that you worry about are the ones that rely on speed and strength. If those two are the factors that drive your performance, you're going to peak at 21 to 22 years old. Then it's a matter of how much you condition your body, your sleep, your nutrition, your workout habits to prevent the inevitable decline that's coming.
Larry Bernstein:
As part of the aging process, some people might change their game. Michael Jordan announced that over the summer he was going to learn how to play better defense and that his goal was become the defensive player of the year. And he did it. Tommy John had surgery on his arm and came back and had a new pitching style and had a long and successful career afterwards. What can some players better to aging?
Jeff Luhnow:
The first thing is awareness that their key skill is going to erode. And they're no longer going to be elite at that position. You'd be surprised how many pro athletes think it's going to last forever. If you're a winger in soccer and you're used to running really fast and outrunning the competition to get to the ball, at some point your speed's going to decline and you're going to have to become more of a finesse passer shooter type of player. This doesn't happen overnight. You have to practice it, you have to learn it, you have to study it.. I've seen athletes do that, but I've also seen when they don't have that growth mindset. And how can I start preparing today to have success?
Larry Bernstein:
I want to change the topic to a difficult personal issue for you. You were fired as general manager of the Houston Astros due to a sign-stealing scandal. Your firing was done in a very public way. How did you get up the next day?
Jeff Luhnow:
I was on vacation when I got fired. I was in Cabo San Lucas, so I just went to the beach and ordered a margarita. I never had been fired in my entire career, so it was something new and different. I had some sense that that might be coming because the investigation into the Astros and because I was the GM and I was in charge. It happened on my watch, so I figured that I was going to be receiving some punishment. For me it was to a certain extent liberating.
And I tried to keep my mind focused on that. I'll tell you that it wasn't fair, but life is not fair. And if you're constantly trying to make things fair, you're going to drive yourself crazy because life is not fair. I focused on the positives, which are, wow, I just had a 16 year run in baseball. It was one of the most successful runs of an executive in the history of baseball. I've left behind a legacy of modernizing two organizations that have been incredibly successful.
And now I get a chance to do whatever I want. I can stay in sports, I can switch sports, I can learn some other craft. I was fortunate enough that I didn't have to go find a job right away.
I decided to write a book at that point, and writing the book was probably more therapeutic than anything, but it was also really fun to go back and reflect on all my sports stories.
A guy I really respect here in town gave me advice. He said, “The thing you shouldn't do is go do something else right away. Take your time, take six months, take nine months, spend time with your family, reconnect with friends and think about what you want to do. You can go back to baseball if you want. You can go to another sport. You can go into business, whatever you want to do.” I took that advice.
Ultimately, I think it was probably one of the best things that's ever happened to me. And it's kind of weird to say, because I loved my time in baseball, but I also had grown complacent. It was no longer challenging me the way it was in the beginning where I had all this resistance and I had to turn around two organizations in very fundamental ways.
Larry Bernstein:
Why did you pick soccer as your next career?
Jeff Luhnow:
First of all, it's the biggest sport in the world and I love it. And I grew up in Mexico and I'm a big fan. When our team loses in Spain, it's like a death in my family, literally for a whole week. Football in Europe is the closest thing to a religion. People are invested in the outcome of their favorite team and they live and die every Saturday or Sunday with the outcome of the games. It exists in baseball too. We're going to see it with the Astros with the World Series.
The passion of the fans, the fact that it's a truly an international game. Baseball's international. You have players from Dominican Republic, Mexico, Japan, et cetera. But football exists everywhere. Every country in Africa plays football and has leagues. Every country in Asia, every country in Latin America. Football is a common language for all cultures.
It's also so much opportunity to modernize these organizations, to use information, to put in a culture of continuous improvement. I want to create it from scratch with several different teams, create a network of teams and win. At the end of the day, I hope to be hoisting a football trophy, just like I did the World Series Trophy in 2017.
Nothing would give me more satisfaction than that. I've learned to appreciate football that I never did as a fan. The low scoring game for Americans, it's kind of boring. But once you're in it and you understand the nuances and all the things that have to come together for a goal to be scored and the randomness of it all, the skill involved that's behind the scenes that you don't even see. You start to appreciate the game.
Watching 98 minutes of a football match where you are invested in that team the way we are, is way more stressful than watching a baseball game. Football you're constantly nervous that your defender's in the wrong place and you're going to let a goal score. The severity of each goal is so high, and the benefit of each goal for your team is so incredible that I'm on pins and needles for 98 minutes every week.
Larry Bernstein:
There is a lot of complex game theory in soccer. How do you apply that theory during the match?
Jeff Luhnow:
Every manager, whether it's baseball, basketball, American football or European football, uses game theory as part of their strategy. It's a chess match against the other coach, and they're anticipating your moves, you're anticipating their moves, et cetera. I love the penalties. There's a lot written about them. One of my favorite things is that a team in Germany would give the instructions to the goalie. So rather than having the goalie try and read the foot or the path of the person striking the ball and trying to react, they would basically use probabilities and say, “Okay, on this one, you jump right.”
And they discovered there's an action bias where the goalie doesn't go to either side people think, “Well, what an idiot, why didn't he move?” But that allows a lot of goals to go down the middle. So, they actually had him standing in the middle a lot more. The world of football is starting to move more towards where the NFL is.
Let's choreograph and run a play that we think has the maximum chance of getting the ball into the net. I think game theory is instinctual to really good coaches and sometimes front offices can meddle too much by trying to script what the coach does with the team. Despite the fact that everybody thinks that general managers like me and Billy Beane write the lineups for the coaches or tell them what plays to run, we don't do that. We let the coaches do their job. We just want the coaches to understand the probabilities.
If they understand the probabilities, and then make their best decision with all the other information that they have that we don't have, that's great.
The other night when San Diego lost, in the ninth inning, they had one out and runners at first and second, and, the batter came up and bunted. When you bunt, you're giving the other team an out. They've got two outs left and they're eliminated from the playoffs. They used one of those two outs to move the runners 90 feet. But the runner didn't score. You're now relying on the 25% chance that the next hitter's going to put the ball in play and the runner's going to be able to score. You just damaged your team's chance to win.
Bob Melvin said, I told him to bunt. I don't think Bob Melvin told him to bunt. I think he was covering for the player. I think the player just decided to bunt. It was a bad decision. You have to let the manager, you have to let the players make the decision, but you just hope that they're using the best possible information, and it's your responsibility to make sure they have that information.
Larry Bernstein:
How do you explain the incredible increase in both the value of NFL franchises and NFL player salaries?
Jeff Luhnow:
I have been shocked at how valuations continue to appreciate to what seems to be irrational levels. But every time we have a new irrational transaction for a team, whether it's the Dodgers or the Clippers or Chelsea Football Club, five years later, that looks like a bargain.
The best way to make money is equity appreciation. These are not generally cash flow positive operating entities. Why? If you do generate positive cash flow because of the TV contract, because your fans are paying a lot to come to games, you have so much pressure to reinvest in player wages to make your team competitive.
Jim Crane bought the Astros for about $625 million. It included a lot of debt. That club is now worth over $2 billion. It no longer has debt. There's been dividends paid out so that everybody's gotten their money back. Talk about an incredible investment.
A large part of that equity appreciation has come from the fact that the Astros have been one of the best teams in baseball for the last eight years. Winning creates a lot of ancillary benefits to the club. I mean, you never used to see Astros hats.
Jeff Luhnow:
, When I first got to Houston, I went to the local sporting goods store, and there were more Rangers hats than there were Astros hats. That's our rival.
I saw an Astro's hat in Ghana last week doing some soccer scouting.
Larry Bernstein:
I bet the next big profit opportunity for sports team owners is to monetize gambling. I can imagine a world where you'll be sitting at your seat and there is a way to bet on every aspect of the game. What is the future of sports gambling?
Jeff Luhnow:
The betting is going to happen. The leagues are all going to want to monetize that. But they have to do it in a way where there's not going to be players that are going to be paid off to make certain things happen.
Larry Bernstein:
I could have been a contender.
Jeff Luhnow:
Yeah, I mean, the temptation is there and it's always going to be there. But I think it's inevitable that betting becomes part of the sporting event. People's attention spans are different today They want action. They want entertainment.
We used to play these games in the in the bleachers of Wrigley Field, where we bet on whether or not the ball would end up on the mound after the half inning, and you pass the hat around and put dollars in, and if you were right, you keep the money, stuff like that. So, it's always been part of the game, but how do you prevent the players from profiting from changing the outcome? That's got to be figured out before it gets to where I think it's going to eventually get to.
Larry Bernstein:
Let’s turn to television advertising. American football has TV timeouts at the end of the quarters, two-minute warnings, and change of possessions. Honestly, it's boring at times. Soccer's not like that, and that reduces the ability to air commercials. How does soccer monetize its television advertising rights?
Jeff Luhnow:
There's a lot of ads that you're watching without even really realizing it. Ribbon boards all around the soccer pitch. Signs on the shirt like NASCAR players out there playing football. I hate it.
The first thing we did when we bought a team in Cancun is we took all the advertisements off the shirt, and we just put Cancun across the front with our badge and just played with no advertisements. It was such a unique refreshing look. We now have a sponsor on the back, but .
Jeff Luhnow:
I do think that the bigger challenge with TV is not monetizing the commercials. It's figuring out the transition to mobile because everybody wants on demand on their phone. How are the economics going to work when we're no longer watching TV at home, that we're watching primarily on our iPhones. With any change comes some disruptive players and some changing economics.
Leagues are being very creative in terms of how they're thinking about monetizing the viewership part of it. There's this whole argument about the Super League in Europe. They could sell their own TV rights and all that. And that's created absolute havoc throughout Europe.
Larry Bernstein:
Why were people so angry about that?
Jeff Luhnow:
The game of football belongs to the people. It does not belong to any owner of any team. When you are a Sunland fan in Sunland, England, in the championship league, second tier of the English football pyramid, you feel like you own that team, and there's nobody that's going to tell you that you don't own that team.
Owners are taking care of the franchise for the fans. We're trying to do it in a way where we make the most money and we create the most value, and we get the most championships, but we are caretakers of something that belongs to the public. And when you start to disentangle what happened with the Super League, there were less than 20 teams that wanted to form an elite league and leave everybody else behind.
In Spain, the first division is not that good if Barcelona and Real Madrid aren't in it, right? In English Premier League, if you don't have Chelsea and Arsenal, it's not the same league. So, it's basically damaging everybody else for the sake of those. And I know those are the ones that drive the most viewership and the most revenues, but there's a different way to compensate them than breaking away into their own league. It really hit a nerve that exploded very, very quickly, and the reaction was intense, and everybody backed off with exception of a few players.
Larry Bernstein:
Can I give you a counter example? UCLA abandoned the Pac 10 for the Big 10. We did not see the same crybaby tactics by local college students and their alumni. Why was that so different?
Jeff Luhnow:
Yeah, it's, it's a good question. Everybody loves their college team. It's not quite the downgrade that losing the three top teams in a European football league would be. You go to a college football game on a Saturday and there's a hundred thousand people there in Michigan, and people are dressed up and love it and, and live and breathe it. It's part of their DNA.
Larry Bernstein:
How does a big college football game compare with European soccer?
Jeff Luhnow:
I don't think it's quite to the level of religion like it is in Europe. I really don't.
Larry Bernstein:
Jeff. I like to end each episode on a note of optimism. What are you optimistic about as it relates to sports?
Jeff Luhnow:
More and more people are using sports to give back to the community and to the world. My group, Blue Crow, we own eight soccer clubs around the world in Africa, Middle East, Europe, Latin America, North America.
Sports teams are realizing that they can make a difference, not just by satisfying their fans by winning, but by impacting the communities around them. For example, we do a lot of recruitment of players from Africa who come from very poor villages.
My satisfaction comes from not the player that got to the big leagues and hit the home run, but the player that learned English and was able to go back to his hometown and get a job that he never would've gotten otherwise had he not come to our academy.
We have a responsibility to make people's lives better in the communities around us.
Larry Bernstein:
Thanks Jeff for joining us today.
If you missed last week’s session, please check it out. The speaker was former Fed Governor Kevin Warsh and he spoke about the regime change at the Fed. The inflation genie is out of the bottle and that means higher interest rates due to quantitative tightening. Treasury bond market prices have been artificially manipulated by the previous Fed purchases, especially for the TIPS which are the inflation indexed notes. With the change in fed policy, Kevin thinks that the bond market will be very volatile, with major yield curve swings and discontinuities in prices. This was a fascinating conversation that also included Nobel Prize winner Myron Scholes.
The topic for next week continues our conversation about the economics of sports.
Our first speaker will be Stanford economist Paul Oyer who will discuss his new book An Economist Goes to the Game: How to Throw Away $580 million and Other Surprising Insights from the Economics of Sports. Paul will discuss which sports your kids should play. Why South Koreans dominate women’s golf. And when should Michael Jordan take the last shot or pass the ball to another player?
Our final speaker will be Stefan Szymanski who is the author Soccernomics and our discussion will focus on the economics of all things soccer including why owners lose money, and why the top players get rich.
You can find our previous episodes and transcripts on our website whathappensnextin6minutes.com.
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I would like to thank our audience for your continued engagement with these important issues, good-bye.
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Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, science and politics. Today’s session will be Designing the Perfect Portfolio.
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, science and politics.
Today’s session will be Regime Change at the FED.
Today’s podcast is a conversation that includes former Fed Governor Kevin Warsh and my old boss Nobel Prize winner Myron Scholes.
There is no free lunch and Kevin will explain how excessive government spending has resulted in a surge in inflation and changed the behavior of ordinary Americans on how they spend, save, and take risks. The inflation genie is out of the bottle, and to get inflation under control will require a regime change at the Fed. This will not be an easy battle to fight, and you should expect chaotic market movements.
Buckle up.
I make this podcast to learn, and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Ok, let’s start today’s session with Kevin Warsh.
Kevin Warsh
Topic: Regime Change at the FEDBio: Former FED governor, Kevin Warsh
Opening Remarks:
To summarize it, the 21st century has been decidedly unkind to most Americans. A series of shocks have shaken their American ethos. The policy making response has been extraordinary with both positive and negative connotations.
It's changed expectations for policy going forward. And it certainly caused the rest of the world to look at us differently.
Those shocks:
First, 9/11 led to a series of wars. The global financial crisis where I still have the scars from my 10 years in government. Third, the pandemic. And the fourth shock is the Russian invasion of Ukraine.
Now I would say we're living through a new era of price instability. Not because that means we're in a time where inflation will be permanently higher, but I'd expect there to be large variances around what we'd think of as stable prices in the decade ahead.
I begin the paper with one of my favorite lessons from Myron, which he used to call the ice cream truck.
What happens is there's kids on a playground. Some are on the jungle gym, others are playing, doing their thing. And then Myron's ice cream truck comes by and rings the bell. They get an ice cream. The ice cream truck leaves and you'd think they go back to the place in the playground where they were before. But they never go back; It's changed. The environment's changed, the ecosystems change, their wants and preferences have changed. And that is a metaphor for what's happened to the US economy during these shocks.
We begin the paper with a quote from Hayek, where he says, “If old truths are to retain their hold on men's minds, they must be restated in the language and concepts of successive generations.” Well, that's what we tried to do.
I've been hanging around Hoover since I was 19 years old, and it's my 30th reunion this weekend. For places like Hoover that believe in free markets and limited government, it is one thing to go back and say, “Oh well, what did Ronald Reagan do?”
We have enduring lessons from that era but this isn't a cut and paste exercise.
The world is different. The G2 rivalry with China is different than the rivalry with the Soviet Union. Our economy is different.
What is it that was born out of the enlightenment that is still valuable today? And we created what we call a triptych, three panels on a wall. And what we say is that the core of the American experiment and its leadership in a peaceful world has three I’s: ideas, individuals and institutions. And these three I’s have to be applied to the conduct of public policy in Washington: fiscal policy, trade policy, monetary policy, regulatory policy.
But we need a framework.
The first were ideas. Paul Romer reminded us that ideas are different than goods. They're non-rival goods. There's no fixed pie of ideas where one slice of that idea for you means less of a slice for me. The promulgation of ideas areis the key to American prosperity in the 21st century.
And is the conduct of economic policy suppressing these ideas by keeping rates at zero for more than a decade, is that really the right price to give rise to new ideas? That's the first part of the triptych.
The second is individuals. Cogan and I maintained individuals are different. They're the core of civil society. They're not cogs of a machine. They have a set of preferences and inclinations that are unique to them.
But if we treat individuals as part of groups, are we going to extinguish the flame that would cause them to create new ideas? Connecting the other part of the triptych. We wonder whether the culture, to use a loaded word, is civil society doing harm to individualism.
The third is institutions.
Ben Bernanke's work for which he received the Nobel Prize, where he'll be standing having his picture taken with the likes of Myron.
He brought institutions back into an understanding of financial crises and the Great Depression.
Cogan and I fear there's a conflation of roles of institutions between the public sector and the private sector where we think there's a very red line that should separate the roles and responsibilities. And inside the public sector our government trying to compensate for the failures of other institutions in government. An example, whether the Fed has become an appeals court for broken fiscal policy and has wandered in areas that are outside of its remit. Cogan and I worry about that institutional creep and it happened to coincide with this period of price instability.
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Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, science and politics. Today’s session will be Designing the Perfect Portfolio.
Today’s podcast was recorded previously at Stanford at an event to honor my old boss and close friend Myron Scholes who won the Nobel Prize in Economics.
Our first speaker will be Andy Lo who is a Finance Professor at MIT, and he will discuss his book In Pursuit of the Perfect Portfolio. Andy interviewed a dozen leaders in academic finance and top practitioners about how to design a portfolio balancing risk and reward by maximizing diversification.
Our second speaker will be Jonathan Levin who is the Dean of Stanford’s Graduate Business School. Jon will explain how Myron Scholes’ ideas have shaped academic research in finance and how his models have been applied by investment professionals.
Our third speaker is Victor Haghani. Vic and I worked together at Salomon Brothers before he left to be one of the founding partners at Long-Term Capital Management. Vic will answer the question, how much should you gamble when you have an excellent investment. Vic’s ideas are very important, because most of us focus on what to invest in and spend little time wondering how big to bet? And whether to increase or decrease the wager when uncertainty and volatility increases or decreases over time.
Our fourth speaker is my good friend Bruce Tuckman who teaches at NYU’s Stern Business School and is the former Chief Economist of the CFTC. Bruce will discuss the benefits that derivatives like interest rate swaps and commodity futures provide hedgers and investors.
Our final speaker today will be Myron Scholes who will discuss the best ways to adjust your portfolio if you are concerned about ESG. Some market participants who are concerned about carbon emissions are selling shares in their polluters, but Myron thinks that investment managers should first optimize the portfolio and then buy carbon credits to maximize returns while minimizing carbon in the environment.
Buckle up.
I make this podcast to learn, and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Ok, let’s start today’s session with Andy Lo.
Andy Lo
Topic: In pursuit of the perfect portfolioBio: Professor of finance at MITReading: Behave: In Pursuit of the Perfect Portfolio is here
Opening Remarks:
It's an incredible honor for me to be part of Myron's 80th birthday celebration.
The topic that I'm going to focus on is this book in Pursuit of the Perfect Portfolio. Larry, thank you for assigning so many chapters. I felt quite bad because you guys had a lot of homework, but I'm going to treat you like I treat my MBA students and I'm going to assume that only 10% of you have done the readings for the class.
The book began as a very thinly veiled hero worship. My co-author, Steve Forster and I, both taught investments over the years. Luminaries that have inspired us in our research, and so we decided, why not ask them, what a perfect portfolio is.
We ended up collecting these wonderful interviews. Everybody that’s featuring in the book, we’ve interviewed on video. There are YouTube videos that you can see. And we were thrilled that we got such diversity of opinions about what the perfect portfolio is.
There isn’t a single perfect portfolio. This is meant to capture a summary of the different perspectives and bring it down to the level of a non-MBA, non-finance, individual to be able to make use of these ideas.
Jonathan Levin
Topic: Myron Scholes’s influenceBio: Dean of Stanford’s Graduate Business School
Opening Remarks:
First of all, Myron, thank you for the invitation to speak. When Myron asked me to come in and just say something on the occasion of his birthday, it caused me to spend time reflecting on the incredible impact that Myron has had on academic finance, on the practice of finance, on the his colleagues, on his friends, on everyone that he has touched.
And it is profound. There are few people in our line of work who've had that kind of impact on the world and on the people around them. I stumbled on this fantastic interview that he did a few years ago with Darrell Duffie. And if you have a chance, it's on Stanford’s GSBs website. It is just a wonderful video. I wanted to share with you like three things that just came across so strongly in that video and inspired me. First, we talk a lot around here about the relationship between theory and practice, The idea that you develop theories so they will get out and change practice, and then you look at what's going on in practice because that's what gives questions for theory.
That's the feedback loop at the center of academic finance and, and really everything that we do in business schools. I think everybody appreciates, if you had to say what discovery has had a profound impact on practice, Black-Scholes would be at the top of absolutely everyone's list, or certainly in your top five. And what I had not appreciated how much there was a two-way loop there. One of the things that I learned in hearing Myron talk about his work and his career in this interview with Darrell was that first, he started working with Fischer Black doing consulting for Wells Fargo in the late 1960s to figure out passive portfolios.
It was a precursor basically to the portfolios Vanguard introduced in the mid-seventies, and got him working with, with Fischer Black. And the idea that motivation to start working on option pricing came from students. It came from his students at MIT in a program called the Sloan Fellows Program. There's only three of these programs in the world. We have one of them here at Stanford GSB. There's one at MIT and one in London. And the Sloan Fellows, students who are experienced professionals were writing theses about trying to use the capital asset pricing model to price options using actual data that they had for OTC markets. And it was an unsatisfying analysis because they were looking at terminal values and trying to discount them back, and it just wasn't working. And so he realized this is, this is not going to cut it.
And he got talking with Fischer, and it was that practical problem that he was facing that led to the theory that led to the profound change on practice. What a cool example for all of us academics to see how that dynamic works.
The second thing that I took from this interview was Myron's theory about how research advances. There is this popular conception of great research, great innovation, great discovery, that it happens like eureka moments, just lightning strikes and then suddenly, special relativity or whatever it is, these incredible breakthroughs. And if you look at the history of finance and you said, what would be an example of an eureka moment? Like you put Myron pretty, close to the top of that list as like candidate for Eureka, but it's hard to think of anything else that would quite rise to that level.
In the Black-Scholes, there is a eureka idea, which is that you think in small time increments and then you go forward to a terminal condition as opposed to starting at the end and trying to discount back. In truth, there is a eureka moment. But he says that's not actually how his discoveries worked, that his discoveries worked basically because there was like amalgamation of ideas at Chicago, at MIT at the time that he was getting involved in finance and there was a form of connectivity. People were putting ideas together and remixing ideas and things were just in the air. And that is such a powerful idea.
It really struck me, particularly after the experience we had in the last two and a half years where we were all isolated and you didn't get any of that.
Why is it that we're sitting in this room? Why is it that we have universities where people sit in buildings together and talk to each other and interact? It's precisely to foster that sense of connectivity that leads people to make big innovations and breakthroughs. And I just love that even if you took the most striking example of a eureka moment, it wasn't that it was connectivity.
Okay, the last point that I would say about this interview that Myron gave was how strongly Myron's defining characteristic is his extraordinary intellectual curiosity.
Myron is just fascinated by ideas and his enthusiasm is electric; it's contagious. And I think everyone here has worked with him in different capacities, has gotten to experience that, admired it and envied it. And it's reflected in the format of this event, which is unusual for an 80th birthday party, to have a book club that seems to be organized like an academic seminar which is a special thing.
I really appreciate the chance to celebrate you and to have this event here at the GSB and admire you so much. Thanks for giving us this opportunity to do this.
Victor Haghani
Topic: How much should you gamble when you have an excellent investment?Bio: Founder of Elm Wealth and co-founder of Long-Term Capital Management
Opening Remarks:
I'm going to talk about a critical and under-appreciated aspect of investing. Investing involves two decisions: There's the what, and there's the how much. Nearly 100% of financial market commentary is dedicated to the “what to buy or sell” question, and in my opinion, not enough attention is paid to the “how much should I buy or sell” question. I’m going to explain why I think the “how much” question is so important, at least as important as “the what” question!
I can tell you from my experience as a founding partner of LTCM – you know, the hedge fund that had quite a wonderful beginning, but not such a wonderful end—that the how much decision can be critically important. You can get the what decision right, but if you get the how much decision wrong, you're out of business. On the other hand, you can get the “what” decision wrong, but if you get the “how much” one right, you're fine. And you carry on. At LTCM I think we got the ‘what’ decision largely right, but not so much with the ‘how much’ decision.
It turns out that I wasn't alone in under-appreciating the importance of the “how much” question.
Seven years ago, we ran an experiment where we went to groups of financially sophisticated young people, both at universities and at banks, and we offered them to play a game where we gave them $25, and they could flip a coin that was biased to land on heads with a 60% probability.
And after a half an hour of flipping the coin, they could keep however much money they had grown the $25 into subject to a cap of $250. You can play it on our Elm Wealth website if you want—there’s a link to it in the upper right-hand corner of our research page. We get like a hundred people coming there each week to play it.
We published a paper on it, and the results were crazy. 25% of the people went bust. Only 20% reached the $250 dollar cap. It seemed to us that these young financially trained people didn't really have a toolkit for how to think about it.
So how should we answer the question of how much? Well, one way that I like to answer the question of how much is to say that you should make your choice such that it maximizes your personal expected utility. In economics, “Utility” is a measure of the happiness or satisfaction. If you're like most people, the more wealth you have, the less of an increase in utility you get from each extra dollar of wealth, that is, you have a marginally decreasing utility of wealth. That makes you normal, and it makes you risk averse. Having a marginally increasing utility of wealth, that is, wanting more wealth the more you have of it, is usually viewed as an abnormality, maybe even as a sign of addiction!
The decision that maximizes your expected utility can be very different compared to the choice that maximizes your expected wealth. For instance, in the 60/40 biased coin flipping experiment that we did, the strategy that would maximize your expected wealth is to bet a hundred percent of your wealth on every flip of the coin. That's the wealth maximizing thing to do. It doesn't seem like it is, because you're almost definitely going to go bust. It's absurd. Nobody would do it. But that's the wealth maximizing thing to do, because there’s a tiny probability of winning every flip and the expected wealth from that outcome is higher than the expected wealth from any other strategy you could follow. By contrast, we get a much more sensible result when we look for the decision that maximizes our Expected Utility. For people with typical levels of risk aversion, and we've done some experiments and surveys that give us an idea of what’s typical, what maximizes your expected utility is betting something like 10% of your wealth on each flip.
I’m guessing that some of you will have heard of the Kelly criterion, a formula derived by John Kelly, a researcher at Bell Labs, in 1956, that determines the optimal size for a bet. The Kelly bet-size is found by maximizing the expected value of the logarithm of wealth, which is equivalent to maximizing the expected geometric growth rate of your wealth. Because the Kelly Criterion leads to higher wealth compared to any other strategy in the long run, and by long run I mean the very, very, long run, it is considered by some to be superior to the approach of maximizing expected utility. I view it more as simply a special case of Expected Utility maximization, and one which most people, who do not have an infinite horizon, find way too risky. In the case of a 60/40 biased coin, the Kelly bet would be to bet 20% of wealth on each flip of the coin, a sizing which we have found very few people would find optimal. That said, it still would have been a better approach to playing our experimental game than any strategy pursued by our 60 subjects.
Moving away from flipping a biased coin and a little more into the real world, the general answer to the question of how much risk to take is that it should depend on the expected return and risk of the investment being considered, and on your personal level of risk aversion. Under a stylized set of assumptions, a simple formula can be derived, which has become known as the Merton Share, in honor of Bob Merton who as far as I know was the first to derive it. The formula is: fraction of your wealth to invest in a risky asset is equal to the expected return of the risky investment above that of a safe investment, divided by the risk of the asset expressed as standard deviation of returns, but squared, and divided by your personal degree of risk aversion.
The formula will be more memorable if we take it for a spin, so let’s see how it works for the case of a typical investor who is deciding how much of his portfolio to put in a stock market index fund and how much to put in a safe asset, like T-bills or tips. Let’s say that he believes the expected return of stocks is 5% more per annum than the return on the safe alternative, and that he views the risk of stocks as being about 20% per year. For his personal risk aversion, we’ll use a value of 2, which is the degree of risk aversion that would have him optimally betting 10% of his wealth on each flip of the 60/40 biased coin, that we started off discussing. Ok, we have all the numbers we need—so the fraction of his portfolio he should invest in stocks is equal to the excess expected return, 5% divided by the product of stock market risk of 20%, but squared so that’s 0.2 times 0.2 or 0.04, and his personal degree of risk-aversion, which we have said is 2. So, we get 0.05 divided by 0.04 times 2, so that’s 0.05 divided by 0.08, which is 62.5%. So, under these assumptions, this typical investor should want to have 62.5% of his portfolio in stocks and 37.5% in the safe asset. This just happens to be close to the typical 60/40 stock/bond allocation that has been so popular with investors over the years, but it’s important to realize that this approach gives different answers as the expected return and risk of the stock market change over time, which they do. For example, what if stocks become 50% riskier, and so you believed that 30% was the right number to use for the prospective risk of the stock market? Let’s also say that in this case stocks have already gone down in price, such that now you’re thinking the expected excess return looking forward has increased from 5% to 6%. Well, applying the Merton share you’d get 0.06 divided by the product of 0.3 squared, which is 0.09, and the risk aversion parameter of 2, so that’s 0.06 divided by 0.18, which is equal to 33%, a little more than half of the 62.5% allocation with return of 5% and risk of 20%.
This expected utility framework gets more powerful and useful when you start to apply it over many years of your lifetime, which is known as the problem of lifetime consumption and portfolio choice.
So, what kind of questions lend themselves to Expected Utility analysis? Well, any time where you're trading off expected money versus expected risk, and you need to put a price on risk, expected utility is the tool to reach for.
For instance, if you have a low basis asset that you don't really want to hold, but you also don't want to pay capital gains tax from selling it, how do you think about how much of that to liquidate? More generally, how do taxes affect your asset allocation, given, as Myron reminds us, that the government is our partner in profits but not losses.
What kind of investment approach makes more sense? Buy and hold, or a dynamic approach that you vary with changes in the expected excess return and risk of available investments? The expected utility perspective tells you that the dynamic approach makes more sense. What about options—do they make sense in your portfolio? What kind of and how much insurance makes sense to buy? House insurance, life insurance, health insurance? The decision to buy a home versus rent one can also be a risk versus return trade off. How much do you need to have in the bank to retire? How much can you spend in retirement? Should you buy an annuity?
How about bequest decisions? Giving money away sooner to your kids or to charities is good because it's growing and you're getting tax benefits sooner rather than later, but there's more risk to doing that.
Given the power, flexibility and logic of using Expected Utility to guide our decisions under uncertainty, you might be wondering why you haven’t heard of these ideas from your financial advisor, or read about them in the WSJ? During the break, I was talking with David Krebs, a famous economics professor here at Stanford, who's a real expert on this whole area, and his take on expected utility was, “it's too complicated.”
Then there’s the behavioral finance crowd who say that's not the way people make decisions.
But what we’re concerned with and trying to figure out is: how should people make decisions?
I and my colleagues have been trying to make these ideas accessible to people in practical ways through our work at Elm, a wealth advisor and investment manager I founded about 11 years ago. We use low-cost index funds and ETFs, dynamically adjust portfolios to changing market conditions, and keep fees and taxes as low as possible.
I’m also writing-- with my business partner and Elm CEO James White-- a book that's going to come out hopefully early next year called The Missing Billionaires: A Guide to Better Financial Decisions, that's focused on this topic as well.
This expected utility perspective of making your financial choices to maximize the expected utility you get from spending and giving away your wealth over your lifetime is entirely consistent with the whole discussion we just enjoyed with Andy Lo about his book: “In search of the perfect portfolio.” Expected utility tells us that you shouldn’t expect the market to give you extra return without taking more risk.
It also agrees with Andy’s conclusions that diversification matters, taxes matter, fees matter, and the long-term real spending power of our wealth matters. And Expected Utility also agrees with the main idea that Myron contributed to the Perfect Portfolio book: that size matters-- in the sense of how much risk is the right amount to take-- and sometimes size matters a lot!
Bruce Tuckman
Topic: Six myths about derivativesBio: Professor at NYU’s Stern Business School and former Chief Economist of the CFTC
Opening Remarks:
Well, it's Myron's weekend and Larry gave me six minutes, so I thought I would do six derivative myths in six minutes.
Myth number one, that derivatives are weapons of mass destruction invented in the last 50 years by evil geniuses like Myron. So, two things: One, derivatives have been around for extremely long time. We have evidence of forward contracts on wooden planks and on barley in 19th and 17th centuries BC. We have contracts for differences, which we call futures in Renaissance Europe. We have very active stock options market in 17th century Amsterdam. And we have in 19th century German books payoff diagrams for options like we see call options and spreads.
Secondly, derivatives are used for legitimate business purposes. Some of the applications I teach in my class, airlines using commodity futures to hedge the cost of jet fuel, pensions hedging their liabilities with swaps, life insurers investing using CDS instead of corporate bonds. Asset managers hedging foreign investments with FX futures. Structured products, which include equity options to limit losses. And the last thing I'll say about this myth, there's a study over the last 20 years, S&P 1500 companies, more than half used derivatives. From 20% of the smaller companies and 90% in the largest.
Myth number two, that derivatives played a major role in the financial crisis of 2008. That's not right in my view.
The crisis was a result of leverage, mostly in non-derivative mortgage products and mortgage-backed securities. Interest rate swaps and credit default swaps on corporates had nothing, no significant role in the crisis. It is true that CDS on mortgages did cause losses, but they were very small relative to the non-derivative losses. The only significant exception to this, AIG which wrote CDS, it sold protection on mortgage back securities. But I'd say this was not a large part of the crisis. First, AIG's failure was equally due to its securities lending business as to its CDS. Second, by the time AIG failed, we've already had Countrywide, Bear, Indie Mac, Fanny, Freddie, and Lehman. So, it's not like AIG could cause a crisis.
Myth number three, there are $600 trillion of globally outstanding OTC derivatives.
This is on the Bank of International Settlements website that that's the size of that market. And it's just a wild exaggeration. When you buy a bond and sell a bond, you've got nothing left. But when you do over the counter derivatives, you usually take a position derivative, and then you cancel out the risk with a similar but not identical derivative. And all these statistics that you read in the newspapers just add up all these amounts and don't offset the risk. The CFTC we had all the data of everybody's swap transactions. If you look at the universe that we look at $267 trillion notional amount of outstanding of interest rate swaps, if you count that correctly, falls to about $18 trillion of five-year bond equivalents.
And if you think about that, the treasury market is $25 trillion. The corporate bond market is $15 trillion. So, it's a reasonably sized market.
Myth number four, banks use derivatives and interest rate swaps to take big bets on interest rates.
So that's not right. If you look at the data of every bank's position, the interest rate risk that the banks have interest rate swaps is basically 0% of equity. It's really nothing. And half of interest rate swaps used by banks is to facilitate the customer loan business.
So that's a big use of swaps for banks.
Myth number five, interest rate swaps are over the counter swaps are customized to meet client needs.
There's a big idea that the reason why we need over the counter markets and swaps as opposed to futures, which are so liquid and so easy to trade. Swaps are needed because they're customized for customers. And this is just not true.
The dealers have said this for a long time, and when they look at the data from 60 to 80% of IRS notional amount could be replaced in futures or standardized swaps. That's something we might want to think about.
Myth number six, that CCPs central counterparties basically eliminate systemic risk.
You've got a central counterparty, it stands between, you have derivative on one side, derivative of the other side, and instead of facing each other, you face the central counterparty.
So why is that not really eliminating all risk? First, we've really put our eggs in one basket, right? If you look at the London Clearing House, it's just enormous relative to any other CCP. We've got this one place we've really got to watch enormously, carefully. And secondly, I just want to tie it into what happened earlier this week in the UK with pension funds. It used to be before Dodd-Frank that a bank could make a decision, this is a safe counterparty. For example, I've got a pension fund. It's got liabilities, it has some core bonds that it receives fixed and swaps to hedge out liabilities. That pension funds is really safe. I'm not going to charge the margin. And that part of the derivative world in my view is very safe.
What happened earlier this week is that rates went up dramatically. When the value of the liabilities fall, the value of the assets fall. So that's good. The pensions are still hedged, but they've received fixed on swap. So, they now have a loss on their swap that they've got to make margin calls related to their swap contracts. But they're not getting any margin back from the pensioners when their liabilities are going down. So, in the guise of reducing counterparty risk in the system, we've introduced this liquidity risk that was big enough for the UK to have to intervene. That's it. Six minutes.
Myron Scholes
Topic: Building a green portfolioBio: Professor of Finance, Emeritus, at the Stanford Graduate School of Business, Nobel Laureate in Economic Sciences, and co-originator of the Black–Scholes options pricing model
Opening Remarks:
Thank you for your thoughts and explanations of your research interests. I obviously enjoyed John Levin's comments. The comments of Tuckman, Haghani, and Lo were wonderful. Andy mentioned the importance of empirical finance. As a young professor, I knew that the combination of theory and empirical research would make for a stronger finance research agenda than one alone. The same is true of the marriage of ideas from practice and academics. Ideas lead to new theories or augmentation of old theories. Empirical research tests theory and models and leads to new or augmented theory. Andy is correct that what that is what led me to spend time to reinvigorate the Center for Research and Security prices and build huge data files of stock price and accounting information that became so important to finance were the first big data proponents. The discussions augmented my belief that the dynamics of innovation is to make processes faster, more individualized, and more flexible under uncertainty. We move from a static hardwired hardware approach to a more flexible software approach that changes as we learn more through testing our models and approaches. This is the major force in finance.
I was going to discuss my paper written with my colleague, Ashwin Alenkar on Carbon Emissions and Asset Management. I will only have time to summarize its findings. Two major current approaches that portfolio managers use to be active in reducing CO2 emissions given the ESG movement in Europe and the United States, our first, exclude firms or underweight firms with poor ESG scores such as coal, oil and gas producers from their portfolios. The hope is that this increases the cost of capital to these firms by reducing their stock prices but not to a clear end result.
Engage with firms is the second approach and cajole them to the carbonize and reduce carbon emissions. Passive investment managers take this approach for they are constrained to stay at the benchmark, which includes carbon emitters. This approach has vague and uncertain outcomes.
We propose and model a third approach. The portfolio manager optimizes the portfolio as usual to select investments to maximize the expected return of the portfolio for a given level of risk or given objective such as a passive objective, and then buy carbon credits to offset the carbon emissions of the companies in the portfolio. The portfolio is carbon-neutral and not the contents of the portfolio.
The market prices of carbon credits exist and are traded in an active secondary market. Market prices determine the cost to make the portfolio net carbon neutral. At today's prices to offset the carbon emission of the S&P 500 portfolio, such as the Vanguard ETF would cost about seven basis points. This is a known cost. For less developed market portfolios, the cost would be upwards to 35 basis points at current carbon credit prices. The portfolio manager would offer two portfolios in our view, one optimized, but without any carbon offsets at all, and the other, a clone that differs from the first portfolio and uses credits to entirely offset the carbon emissions of the common portfolio for a known cost. Investors then would choose a convex combination of these two spanning portfolios to satisfy their own utility or preferences as the decarbonization, given the cost of credit and the prices that they are willing to pay to reduce carbon emissions. This is the first best solution.
Firms move to decarbonize by producing their own carbon offsets called white carbon by changing production methods, inventions, et cetera. This takes time and it will not occur instantaneously. These new innovations are a growth engine for the global economy. Other firms might invest in producing offsets they sell as carbon credits to others by planting forests or expanding the use of plants in the ocean. Their green carbon and blue carbon credits that compete with white carbon in providing a reduction in the global CO2 emission landscape. These credits sell in the over-the-counter credit markets. Although a young market, over 350 million metric tons of carbon credits were sold in the voluntary credit market in 2021 that theoretically would neutralize $4.3 trillion investment in the S&P 500 portfolio. Although carbon credits are only a band-aid, as the transition to a greener economy moves ahead, it is a necessary band-aid that will slow down the bleeding and is a great alternative until we achieve our goal of carbon neutrality or decarbonization. When the price of carbon credits increases more credits are made, and companies are incentivized to move more quickly to decarbonize. Excluding firms is not costless or cost effective. Constraints are costly if they have value showing up in loss returns or increased portfolio volatility because of reduced diversification. The annual loss return in the S&P 500 ESG portfolio was over 1% a year, less than the unconstrained S&P 500 and with higher volatility. Exclusion is uncertain and no one benefits, and it is costly. Portfolio managers alternatively can build carbon neutral portfolios with no one costs. Because the market prices of carbon credits exist, they can assess and manage the credits that they acquire for their investors. Investors will know the costs and will assess their own benefits to reduce CO2 emissions of their portfolios and do so cost effectively when compared to other alternatives. Why? Because carbon credits are priced in the market. This, in our view, is an alternative that should be considered by portfolio managers and has superior outcomes than either the current approach of excluding firms or cajoling managers to reduce carbon credits.
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Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, science and politics. Today’s session will be on No Free Will.
Our speaker will be Robert Sapolsky who is a Professor of Biology and Neurology at Stanford as well as the author of numerous books including Why Zebra Don’t Get Ulcers and Behave.
Robert believes that you do not have any free will. That instead your behavior is dictated by a complex combination of factors that include genes, environment, hormones, glucose levels, and epigenetic events. It is complicated, but Robert will argue that there is no little man in your head making the decisions.
Buckle up.
I make this podcast to learn and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Today’s podcast was recorded at Stanford in conjunction with an event to honor my old boss and close friend Myron Scholes, the Nobel Prize winner in Economics.
Ok, let’s start today’s session with Robert Sapolsky.
Robert Sapolsky
Topic: There is No Free WillBio: Neuroendocrinology researcher, author, and professor of biology, neurology, neurological sciences and neurosurgery at Stanford UniversityReading: Behave: The Biology of Humans at Our Best and Worst is here
Opening Remarks:
I published a few years ago a book called Behave: The Biology of Humans that Our Best and Worst.
Like every other animal out there, we are aggressive; we are using the same exact circuitry in our brains. We're secreting the same hormones as any other primate. When we're empathic, when we're responding to somebody else in pain, we're using the same parts of the brain as when you see that in other species, whoa, we're just like them and whoa, we're completely different from them because we can do stuff that no chimpanzee on earth could ever do. We can feel the pain of somebody on the other side of the planet whose face we never see. We can watch somebody on a movie screen and feel badly for them, and there are a bunch of pixels. We can press a button and kill somebody on the other side of the planet with a drone.
We are, without question, the most miserably violent species on this planet. Chimps have the rudiments of organized warfare. We leave them in the dust. We are the most violent species, we're awful, we're miserable. And at the same time, we're also the most altruistic species and the most cooperative and the most compassionate.
How we can be both so awful and so wonderful and how so often the exact same behavior has such different meanings in different contexts. In one setting, you pull a trigger, and it is a horrific, violent, heartless act. In another setting, you do the same exact thing with your muscles and your motor cortex, and you pull a trigger. And by suicidally drawing fire on yourself, you save the lives of a whole bunch of innocent people. The behavior is absolutely the same, the context, a universe apart.
Why did that person just do that? Because one second ago, this part of the brain activated, that part of the brain went silent.
Why did those neurons do that just now? What happened in the previous seconds to minute? What sensory stimuli in the environment triggered those neurons to do that? What smells? What sounds what internal signals? And in the previous hours, days, what did hormone levels have to do with it? What your testosterone levels were like this morning? What did they have to do with how sensitive your brain would be to those sensory stimuli?
And from there, you're off and running, what has the previous months been like? Have they been wonderfully stimulating? Have they been boring? Have they been traumatic? Because this whole field of neuroplasticity, the very structure of your brain will reflect with the last half year has been like, and thus the sensitivity to hormones and sensory stimuli and all of that.
And then you're back to fetal life. Environment does not begin at birth. Trauma dramatically begins the second you are an implanted fertilized egg because your mother's environment, what's in her bloodstream? Is she stressed? Is she frightened? Is she using a substance that's abusive? Is she healthy?
And then back to before you were fertilized. What do your genes have to do with it? Yep, all of these have to do with it. What kind of culture did your ancestors generate 500 years ago? And if you're asking about different types of cultures, you're asking about different types of ecosystems that make for different types of cultures. And then you're ultimately asking about evolution. Why is it that we are so much more cooperative than chimps are, but so much less cooperative than Bonobos are? Why is it that we're so much more pair bonding and monogamous than bonobos are, but we're less monogamous than South American primates are.
Because of what happened a second ago and a minute ago and an hour ago and a century ago, and all of that to place it in a larger context, why did that behavior occur? Because of what just occurred before this and what just occurred before that?
Now let me give you a sense of what some of these influences look like and why it is that this led me to realize ultimately what this book is about is why we have absolutely, not a shred whatsoever of free will. And let me just give you some examples. And they're not meant to convince you of any of that if you find that to be ludicrous. To give you a sense of where these totally nutty biological influences on behavior are coming from. Okay? So, you are a judge.
I'm not specifying what country, what legal system, what type of judgment, who you're judging. But you're in a situation where you must make a judgment about something about the person in front of you who has done something violent, who you now have to decide are they going to do something like that again? Have they learned their lesson? Have they showed remorse? Can you free them now on parole? Do you send that back to jail longer? What things are going into your decision? And we all know what's going into it. It was freshman philosophy classes and which law school you went to and all sorts of stuff. Let me tell you a little bit about some of the other factors that will significantly influence what kind of decision that judge will make. First one, most acutely this has been studied, published in a prestigious journal some years ago, has been replicated. What's the single best predictor of whether this judge will send this person back to jail or parole them? How many hours it has been since that judge has eaten a meal.
Immediately after lunch, people had a 60% chance of getting parole, by three hours later, 0% chance. Same thing in the morning, top of the morning 60% chance, zero just before lunch.
What that's about is biology. Your brain is expensive. And when your blood glucose levels are low, your brain doesn't work as well. And when levels are low, the most expensive, most important, part of your brain, your frontal cortex is particularly bad at working. What does the frontal cortex do? It makes you control your impulses, to send this person back for another 10 years, to regulate your emotions, to do the hardest thing out there in some circumstances, to try to see the world from somebody else's perspective, to try to understand somebody whose entire lifetime has been utterly different from yours.
And as the minutes tick by, and the blood glucose levels go down, the judges take a shorter time to make a decision and they're less likely to grant parole. This is about energy. You do an experiment. Mid-afternoon you have them drink a sugary drink or one that tastes sugary and is filled with an artificial sugar that doesn't boost up your energy levels. And one group suddenly shows more compassion. One group suddenly is more likely to cooperate in an economic game, less likely to cheat. Oh my god, this is amazing. And you sit those judges down and you say, “Whoa, that's really interesting. A couple of hours ago you let that guy go free, but just now you sent this guy back and they seem to have done the same thing.”
You look at loan officers in a bank and the number of hours it's been since they've eaten a meal, the less likely they are to grant a loan. You look at people looking at CVs, deciding who to interview, and if it's the CV of somebody from an out-group, whatever your culture's equivalent is of an out-group, the wrong race, the wrong religion, the wrong whatever, as the hours go by, you spend less and less time looking at their CV, until it's lunch. And then you come back, and you are a humanitarian like you cannot believe for about 45 minutes afterward.
Why did that person just do that? Because of their blood glucose levels. So, you've looked at this judge just now who in some cases decides this person is terrifying, and I'm not letting them out on the streets, and in other cases, decide this person’s paid their price to society. What we've just seen is maybe differences in the thresholds of the brain as to what counts as menacing.
Where'd that come from? And here's one of the significant factors, prenatal environment. Back when you were a fetus, if your mother was very stressed, stressed by socioeconomic stressors, stressed by refugee status, stressed by who knows what, she secreted a lot of stress hormones which got past the placenta, which got in your circulation, which got into your brain, and among other things, caused permanent changes in gene regulation. The incredibly trendy term for it is an epigenetic change.
And a part of your brain called the amygdala. What's the amygdala about? Fear, anxiety, aggression driven by fear. And what is now identified is exactly which genes are turned on permanently and which ones are turned off. And as a result, if you were in the womb of a stressed woman, your amygdala on the average in adulthood is gonna be bigger than most other people's and more reactive to provocation and have a harder time turning off when it's over with and have a harder time telling the difference between a neutral stimulus and a threatening one. Wow. Why did you decide, this person who looks, prays, eats, loves differently from you is more of a menace than that other person is? Part of it is how your brain was being constructed when you were a fetus. How your brain was being planned for, is how threatening you find the world to be.
Final example. So, we've got this judge making this decision, and so are they going to grant parole to this out-group member versus this in-group member? Are they going to grant clemency? Are they going to give asylum to these out group people fleeing, try to come into your country. Here's another significant predictor. What culture do you come from? What culture were you raised in 500 years ago? How much of an infectious disease load did your ancestors have? Because if they were dealing with a lot of infectious diseases, they didn't like outsiders, they didn't like people coming in and bringing in diseases. And for the last 500 years, they constructed a culture of xenophobia. One of the predictors across the world of how open people are to strangers is the infectious disease load of their ancestors five centuries ago.
What is going on here? This is the biology rumbling underneath the surface. Why did you do what you just did? It's got something to do with the culture you were raised in and your ancestors. It's got something to do with your blood glucose levels. It's got something to do with what your brain was being pickled in when you were a fetus. We’re biological organisms, and we are nothing more or less than the sum of our biology and the environment with which it interacted that we've had no control over.
Free will is complete nonsense. There simply is no such thing as free will. We are being controlled by subterranean forces. When you look at our explanations for why we do what we do, they are post hoc. You ask somebody in a brain scanner to make a moral decision about something. And what you could see is the emotional parts of the brain make the decision seconds before the more cognitive parts. The cognitive parts are playing catch up to justify the emotional responses. You have all these sorts of studies showing that. So. my theme since then and a book that I am finishing, which is about how in God's name are we supposed to function, if we accept that there is no free will? How is society supposed to work? How are we supposed to do things so that the roof doesn't collapse in? And what most of the book is about is just clawing my way towards a very, very dismal science. And I don't mean economics. Does science tell us anything about how we're supposed to function? Once people accept that there's no free will, or at the very least that there's so much less free will, that you better rethink the way you make judgments about everything out there?
And the book has two themes. One is throughout history; we have managed to subtract blame out of how we assess some of the troubling things in the world around us. And not only has the roof not collapsed, but we’ve also made the world a more humane place, so we can do it.
But the other point is some serial murderer is not responsible for what they did. It's going to be a million times harder to convince you that you are not responsible for your amazing resume and your good table matters and anything else that you've ever been praised for.
It's going to be hard to realize this stuff applies to some of the most frightening humans out there, but I'm convinced by now it's going to be much harder to convince us it applies to some of our best traits. So that's kind of what the book was about. And this is what the next book is going to be about. The title is Determined: A Science of Life Without Free Will.
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Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, and politics. Today’s session will be on the future of work. Our speaker will be Nick Bloom who is a Stanford Professor of Economics.
Nick is a leader in the research on working from home. Nick will explain the growing dominance of hybrid work for certain segments of our economy. It turns out that hybrid work increases productivity for some employees, and it makes them happy.
Technologists are aware that work from home has changed the nature of employment, and substantial R&D is being to improve the zoom experience with dozens of cameras to make it seem like we are together.
What Happens Next uses a team of interns to make this program and I have job openings. Interns improve the podcast by selecting topics of discussion, editing, and production. If you’re interested, please let me know.
I make this podcast to learn and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Today’s podcast was recorded at Stanford in conjunction with an event to honor my old boss and close friend Myron Scholes, the Nobel Prize winner in Economics. He will join us in this podcast with some very provocative questions.
Ok, let’s start the session with Nick Bloom.
Nicholas Bloom
Topic: The Future of WorkBio: Professor of Economics at Stanford University
Opening Remarks:
I'm going to talk about work from home. I'll talk about three things. One is where we currently are, two is the impact of working from home, and three the future.
Where are we? 1965 is the first data we have in America, about a half percent of days, were work from home.
Work from home levels went up about tenfold between 1965 to 2019. In 2019, on the eve of the pandemic, 5% of days in America were work from home. The pandemic happens, it goes from 5% to 60%. I'm guessing everyone in this room probably is working from home in 2020. It's then fallen back down and asymptoting at about 30%. The two critical numbers are for 5% in 2019 to 30% now.
Sixfold increase and sticking. The past four months have been about 30%.
Well, there are three groups of Americans, 55% cannot work from home at all. The folks working in Chipotle or McDonald's or in the university cleaners, catering, security, et cetera. There's another group at the other extreme which are full time remote. They're about 15%, mostly like call centers, payments processing, HR.
The remaining groups about a third is basically professionals, managers. They're almost entirely hybrid: Monday, Friday you work from home.
Globally, America, Canada, Northern Europe look very similar about 30%. If you go to Asia, Australia, New Zealand levels are lower. In South America, Africa are lower still, but the increase is very large.
So, work from home was very low, surged up to 60% and has dropped to 30%. It's probably the largest change to US labor markets since World War 2 when you had a big increase in female labor force participation.
The donut effect is the impact of work from cities. We've got data from the United States Postal Service change of address and from Zillow transactional data, what you see is a lot of people have moved out from city centers into the suburbs. So, give an example, you're some techy. You are living in Central San Francisco in 2019. You're going into work every day.
Suddenly I'm only going to be going to the office two maybe three days a week. I'd really like a bit of space for a home office, maybe a backyard for my kids. You move out to the suburbs.
If you own property in Tahoe or East Bay, you've probably done very well. If you own property in the center of San Francisco, you're probably about flat.
It's been even more extreme for retail. I've worked with a few retailers, and they've seen sales collapse in the city center like Panera Bread or Starbucks, Chipotle, no one's going in every day, particularly Monday, Friday sales plummeted, but out in the suburbs they're doing really well. A lot of activity is just moved out of the suburbs. Impact number two is on firms and organizations. Employees, they're much happier. We've surveyed tens of thousands of people. People really like hybrid. If you ask people, how much would you value being able to work from home two, three days a week?
You typically get numbers at about a five, 10% percent. Why is that? Well, you save on commute, it's less stressful. You have two days a week, you can work from home. Most people don't want to work from home five days a week only about 25% of people do. Most people want to come in two, three days a week, work from home two, three days a week.
We find clearly in the data is well organized hybrid, which is when everyone comes in on the same two or three days a week and works from home on the same two or three days a week, seems to improve productivity.
If you come in Tuesday, Thursday and everyone comes in, having meetings, presentations, lunches, training events, mentoring, et cetera. Monday, Wednesday, Friday at home. The evidence is productivity is up.
And the big reason is on your home days, you save a lot of time. The average American saves 70 minutes a day by working at home, of that about 30 minutes more work, 40 minutes more leisure. If you're an employer, your employee works about 30 minutes more a day. And if they get it right, they're doing quiet stuff, they're just more effective at it. It's doing concentrated work. It's a win-win economically.
The third thing that's interesting is around globalization. Going back to the eighties is a big globalization of trade and China joining the World Trade Organization in 2001. Over the 20 years after, it was a huge surge in global trade in manufacturing. It's running out of steam. What I think is going to happen for the next 20 years is globalization and services. I must have talked to 300 organizations since the beginning of the pandemic.
Firms all say the same thing, which is there are some individuals or some tasks that have been fully remote for the last two years and they've been really good. We maybe just don't need them in the organization or maybe don't need them in the state or in the country. The next 20 years there's going to be a big surge of outsourcing. Like take Stanford, our IT department or payroll. They're fully remote, they just don't need to be in California.
I talked to a lot of tech firms and they are swiveling hundreds of millions of dollars of R&D budget towards making technology to support work from home.
What that means is if you look five or 10 years out, the technology's going to be way, way better to support this. Bigger screens, lots of little microphone, lots of little cameras.
When you watch a football game on TV, there isn't one camera, there's like 10 cameras and they keep changing. Holograms, there's a whole set of technology.
Thank you for reading What Happens Next in 6 Minutes with Larry Bernstein. This post is public so feel free to share it.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, politics, religion and current events. Today’s session will be on the Allied Conquest of Japan. Our speaker will be Yale historian Paul Kennedy who is well known for his classic book The Rise and Fall of the Great Powers. This will be the final podcast of his four-part podcast series on the history of World War 2. Today’s podcast will focus on the battles beginning in 1944 and ending with Japan’s unconditional surrender.
Buckle up.
What Happens Next uses a team of interns to make this program and I have job openings. Interns improve the podcast by selecting topics of discussion, editing, and production. If you’re interested, please let me know.
I make this podcast to learn and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Let’s begin with Paul Kennedy.
Paul, on our previous podcast on WW2 we ended the discussion in 1943. You argued that 1943 was the most important year of the war because the allies won the Battle of the Atlantic, Italy surrendered, and the Americans produced sufficient naval forces to crush the Japanese in the Pacific. Today, let’s discuss the battles of 1944 and what actions led to the ultimate Allied victories. Please set the stage for what the war looked like at the beginning of 1944.
Paul Kennedy
Topic: The Allied Conquest of JapanBio: Author and historian at Yale UniversityReading: Victory at Sea is here
Opening Remarks:
Nineteen forty-four was when the three great allied movements against the axis all took place. On the Eastern front, there was the largest ever Red Army offensive called Operation Bagration, which buckled the Nazi held front in Eastern Europe. In 1944, the allied navies had chiefly pulled out of the Mediterranean, apart from bombarding around the Angio landings, because they were preparing to put all of their amphibious assets into the D-Day operation in Normandy in June 1944. In the Pacific under Nimitz, moving towards a big showdown with the Japanese Navy at the great Battle of the Philippines Sea, which we sometimes call the great Mariana's Turkey shoot because of the losses there.
More Paul Kennedy: 1943: The Year that Decided the Outcome of WW2
This episode is the third part of our ongoing history of World War 2.
Our speaker, Paul Kennedy, is the J Richardson Dilworth Professor of History at Yale. He has a new book out entitled Victory at Sea: Naval Power and the Transformation of the Global Order in WW2.
This episode Part 3 will focus on the fateful year 1943 when the war was won. Paul will tell us why the US decided to invade North Africa instead of Europe, as a trial balloon. Why North Africa was followed up with an invasion of Italy that subsequently knocked Mussolini of the war. We will learn about the internal strife within the allied alliance, the disputes between the armed services, and why the allies won.
Thank you for reading What Happens Next in 6 Minutes with Larry Bernstein. This post is public so feel free to share it.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, politics, religion and current events.
Today’s session will be on the secular intolerance for religious Jews.
Our speaker will be Jason Bedrick who is a Research Fellow at the Center for Education Policy at the Heritage Foundation. Jason is also the author of the book Religious Liberty and Education.
The New York Times had a recent 5-page story about the inadequacies of NYC Yeshiva Schools. This two-year investigation concluded that the students in the most religious schools had inadequate English skills because their classes are taught in Hebrew, Yiddish, and Aramaic.
The New York Times concluded that these Yeshivas do not serve the public interest because the kids graduate with few job prospects and little earnings power which is unfair and unjust.
New York State provides funding for the schools and therefore, they argue that the Yeshivas should be coerced into a state mandated curriculum.
Jason plans to rebut the New York Times accusations, and he will explain the animosity particularly by Jewish secular progressive leaders with the most religious Jewish Hasidic sects.
Jason believes that parents should decide how their children are educated and that we should be tolerant of those that choose a religious life.
Buckle up.
What Happens Next uses a team of interns to make this program and I have job openings. Interns improve the podcast by selecting topics of discussion, editing, and production. If you’re interested, please let me know.
I make this podcast to learn and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Let’s begin with Jason Bedrick’s opening remarks.
Jason Bedrick
Topic: Secular Intolerance for Religious JewsBio: Author and Research Fellow at the Center for Education Policy at the Heritage FoundationReading: Religious Liberty and Education is here
Opening Remarks:
The New York Times has waded into the controversy over yeshivas in New York. Last Sunday, they released the results of a two year investigation looking at a certain subset of Orthodox Hasidic yeshivas. The vast majority of Orthodox schools are teaching secular studies, but a subset of Hasidic schools that are focused primarily on religious instruction and have about 90 minutes or less a day of instruction in English, language arts, and math.
Essentially the case that they make is public money invites public oversight. The Hasidic yeshivas are performing very poorly as measured by standardized test scores. And they are graduating students who are lacking the basic skills that they need to compete in modern society and dooms them to lives of poverty and dependency. Therefore the government must intervene.
The New York Times relies essentially on anecdote and innuendo, instead of hard data to make their case. We'll start with funding. We're talking about $250 million, for 50,000 students, about $5,000 per pupil per year. And most of those funds are actually for non-instructional purposes, for school lunches, transportation, security. Very little, probably between $1000 and $2,000 per pupil, is plausibly tied to instructional purposes. Let's compare it to the public school system. The public schools are spending about $31,000 per pupil.
What about test scores? The New York Times entirely ignores the Regents exams.
The Regents are the exams that all high school students have to take, if they're in the public system and most private school students. The yeshivas perform on the Regents, you'll see that 19 of the top 20 average private school scores in New York's English Language Arts exam were the yeshivas.
They find that a small number of the schools are failing. They point to nine in particular where everybody failed. They don't mention that the rabbis in those schools are not happy about taking the tests. It's a requirement to receive certain government funds, and there's no incentive for them to do well on the test. And so they tell the students you can just fill in the circles and you can come back to real learning and not worry about these government regulations.
If the government should intervene, you have to tell a plausible story that those students would actually be better served by intervention. These are students that are living in homes where Yiddish is the primary language. English is a second language. So let's compare those students to the English language learner students in the public school system. There are 155 schools in New York City alone in which less than 1% of the ELL students were performing at grade level on the 2019 English Language Arts exam. In more than 95% of New York City's public schools, at least two thirds of the ELL students failed to perform at grade level.
There was no evidence that the public schools would be doing a better job serving these students.
I think at the core of this is this question of dependency, are these schools failing to provide the children with an education that will allow them to become self-sufficient adults? And what the New York Times does is it says that the poverty rates in certain neighborhoods in New York: Williamsburg, Borough Park, and Flatbush are higher than the city average. That's true. You really shouldn't be looking at poverty rates because poverty rates are distorted by family size. The average number of children per households in the United States is just over two, but for Orthodox families, it is 6.5 children.
The poverty rates are going to be significantly higher because poverty rates are calculated based on family size.
Those statistics are distorted. What you really want to look at is income. According to the 2021 Pew Survey, the Orthodox Jewish community outperforms the rest of society. About half of Americans earn below $50,000 per year, among Orthodox Jews, it's only about a quarter.
What about those earning more than $150,000? That would be 8% of the general population, 26% of Orthodox Jews. Modern Orthodox median income is $188,000 per year. Hasidic Jews had a median household income of $102,000 per year about twice the national average.
There just is no case that they are not prepared to operate in the modern economy.
At the core of this is really a fundamental disagreement over the purpose of education. For some people, education is about economic value. It's about getting a good job. Others, it's about status. It's about being able to get into an Ivy League school, and that's fine if that's how people want to pursue their education, but there has to be room for people who believe that at the core of education is passing on traditions to your children, having a relationship with God, forming your character, not only to produce good workers or even good citizens, but to produce good people, good friends, good neighbors. Education is about preparing children for adulthood in their community. And in this case, schools are doing exactly that.
Thank you for reading What Happens Next in 6 Minutes with Larry Bernstein. This post is public so feel free to share it.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, politics, the arts and current events.
Today’s session will be Abolish the FBI and Why Don’t Some Men Work?
Our first speaker will be Harvey Silverglate who is one of America’s top defense lawyers. Harvey has represented criminal defendants in some of the most famous cases. He has taught at Harvard Law School and has been the Chairman of the Board of the ACLU’s Massachusetts Affiliate. Harvey is an expert on the FBI and he feels that the ghost of J. Edgar Hoover haunts the FBI, and as a result, the FBI needs to be shut down, the staff fired, and a new national police force needs to be created to handle national crimes. This will be a provocative discussion.
Our second speaker is Nick Eberstadt who is the American Enterprise Institute Henry Wendt Chair in Political Economy. Nick is the author of the book Men Without Work, and the second edition of the book will be released tomorrow.
Nick is going to discuss the steady increase in the number of men who are 25 to 54 who do not work and are not looking for work. We are going to find out who these men are, what they do all day, and whether they are happy. And finally, we are going to hear about what public policies may have exacerbated this problem and what we can do about it.
Buckle up.
What Happens Next uses a team of interns to make this program and I have job openings. Interns improve the podcast by selecting topics of discussion, editing, and production. If you’re interested, please let me know.
I make this podcast to learn and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Let’s begin with Harvey Silverglate’s opening remarks.
Harvey Silverglate
Topic: Abolishing the FBIBio: Attorney, journalist, writer, and co-founder of the Foundation for Individual Rights in Education
Opening Remarks:
I've been a lawyer since 1967. I have done criminal and civil liberties law and students’ rights law. I've had a tremendous amount of experience with the FBI. And my conclusion is that J. Edgar Hoover may be dead, but his ghost hovers over the Bureau. In this age when confederate statutes are being torn down, names taken off buildings in Washington, DC, we still have the John Edgar Hoover Federal FBI building. And that's because in a very real sense, he is still the director.
I've been a long time member of the ACLU, although it's more progressive now than civil libertarian. I was on the Board of the Massachusetts affiliate. I was President of the Board. I advise people, do not under any circumstances talk to the FBI. Why? Because they will not allow a lawyer for an interviewee or to record the interview. Believe it or not. They have two agents at every interview. One of them asks the questions and the other one takes notes. The one who takes notes goes back to the office afterwards and types up a summary of the interview. It's called a form 302.
I have never seen a 302 form that was accurate. It was what the agent hoped to hear from the interviewee rather than what the interview actually said.
I was meeting with a group of FBI agents and Mueller. Mueller walks in with two agents. I just want to start by telling you that criticism of the Bureau is a non-starter. I said, Bob, the whole purpose of the meeting was to complain about the phony forensics and the phony interview techniques used by the Bureau. And he got up and walked out. That is how irrational the Bureau's approach toward any criticism is.
Any lawyer worth his or her soul will never ever accept the reports of FBI forensic agents, you have to hire a specialist. The agents tell the forensic people what result they want, that's what they get.
Thank you for reading What Happens Next in 6 Minutes with Larry Bernstein. This post is public so feel free to share it.
Nicholas Eberstadt
Topic: Why Men Don’t WorkBio: Author and American Enterprise Institute Henry Wendt Chair in Political EconomyReading: Men Without Work is here
Opening Remarks:
The latest monthly job numbers underscore a troubling paradox about the state of work in our country. Employment levels are finally back above pre-pandemic highs and unemployment rates continue to skirt 50-year lows, but that's only part of the picture. An extraordinary flight from work is also underway. Inadvertently exacerbated by the largesse of the COVID 19 emergency measures, we now face an unprecedented peacetime labor shortage with employers, practically begging for workers while vast numbers of grown men and women are stubbornly sitting on the sidelines of the economy, even though job applicants have more bargaining power today in the current great recession than at any time in recent memory. Never before has work been so readily available in modern America. Never before have so many been uninterested in taking it. Unfilled non-farm positions have averaged over 11 million a month. For every unemployed man and woman in the US today, there are nearly two open jobs.
Major sectors of the economy are now wide open to applicants without any great skills, apart from the skills of showing up to work regularly and on-time, drug free. Why the bizarre imbalance between the demand for work and the supply of it? One critical piece of the puzzle was the policy response to the pandemic in 2020 and 2021. Washington pulled out all the monetary-fiscal stops to avoid an economic collapse. Those heroic and extraordinary interventions may indeed have avoided a worldwide depression, but they also disincentivized work in America as never before, padded by transfer payments, disposable income in America spiked in 2020 and 2021 reaching previously unattained heights despite the economic crisis. And after the initial temporary plunge in consumer spending from the COVID shock, the stimulus funded rebound pushed consumer demand well above its pre-COVID trend line.
Savings rates doubled in 2020 and 2021, a windfall of over two and a half trillion dollars in extra savings was bestowed by Washington on private households through borrowed public funds. As my study Men Without Work details, work rates for men of prime working age 25 to 54 had already collapsed to late depression levels driven mainly by a half century long flight from work. For each jobless prime age man looking for work, another four were neither working nor looking by 2019. The current manpower shortage highlights the new face of the flight from work in modern America with pre COVID rates of workforce participation, almost 3 million more men and women would be in our labor force today. Half of the gap is due to men and women 55 and older, no longer working. Strangely, workforce participation rates for the 55 plus group remain lower now than in the summer of 2020 before the advent of the COVID mRNA vaccines.
Why premature retirement? Thanks in part to pandemic policy wealth effects. COVID era interventions transformed the financial profile of America, nearly doubling the net worth of the bottom half of American households. 64 million homes reaped an average of about $25,000 from this COVID policy lottery. Before COVID, 9 million homes headed by men and women, 55 to 69 years of age, over one in five, had less than $25,000 in life savings. COVID era windfalls generated by the pandemic policies have played a role in the withdrawal of many older men and women from the workforce. The question is, will we witness a gradual return to earlier patterns of work or have longer term work norms and attitudes been affected by the pandemic too?
Self-reported time-use surveys paints a grim portrait of nonworking prime age men checked out from civil society, largely disengaged from family care and housework, sitting before screens, increasing the risk of death and despair. Men aged 55 to 64 who are neither working nor looking for work were kings of the screen, clocking in 2,400 hours during 2020, possibly a new record in the inactivity Olympics. The signs that growing numbers of citizens are ambivalent about working should not be ignored. Success through work, no matter one’s station, is key to self-esteem, independence and belonging. A can-do work ethos has served our nation well. America's future will depend in no small part, on how, and whether people choose to work.
Last Week’s Episode: Internships
Parents and kids spend a lot of time worrying about getting into college. But as soon as they enroll, their next concern is landing a big internship, because it may help in landing a job after graduation.
On today’s program, I want to focus on three issues. How do kids get an internship? What would be an ideal internship for a particular individual? And what skill building should the intern focus on?
I want to discuss the topic of internships from both the young adult as well as the employer’s perspective. Having a corporate internship program is very valuable because it can attract great young talent for future employment.
I had 10 interns this summer for this podcast. They were engaged in all aspects of production from content creation to social media marketing.
You will hear from 8 interns today about how they seek internships, developing skills, and how they plan to use this experience in their future work.
Internships are a critical part of a young person’s development. I thought it would be entertaining to hear about this podcast’s internship as a case study.
Each week, we have a zoom intern meeting. The first order of business is to review the last podcast to provide constructive criticism, good and bad. Each week an intern is required to read a book and then make a case as to whether the author should be on the podcast. Every few weeks, I invite an adult in the room. This is a friend of mine who actively listens to the podcast and then participates in the intern call. It is very helpful for the interns to engage with the adult world, and the feedback from my friends is very valuable.
I work directly with each intern to improve their editing skills, critical thinking, and oral communication. And the interns teach me stuff as well, particularly all things technology. As you might suspect, everything comes far easier for them.
Interns need constant feedback and direction. They don’t know what to do or what is wanted. But they also love freedom of action, so I tried to give the interns choices. What books to read, podcasts to create, and which projects to focus on like website design or marketing.
Many of you have teachable skills that would be valuable for young people, and I encourage you to reach out and find interns. It is very satisfying to interact with intellectually curious and hungry college and high school students, and they will learn a lot from you.
Let’s start with our first speaker Ross Perlin who is the author of the book Intern Nation.
Ross Perlin
Topic: Ethics and InternshipsBio: Linguist and authorReading: Intern Nation is here
Opening Remarks:
Every year, millions of young people do internships across the world, a gateway into the world of white collar work
In Intern Nation, my book, I set out to understand internships. Internships fit into a whole pattern of seasonal part-time, independent contractor, freelance work arrangements that bury the old notion of a stable career and work trajectory where you have a single employer.
People have been very slow to recognize the importance of internships. They're very different from apprenticeships. Apprenticeships have thousands of years of history. They are largely concentrated in the trades. And there is regulation around them as well, ensuring that real training is happening, that people are being paid. These are often arranged between employers and unions with an office of apprenticeship as part of the Department of Labor, helping to broker those arrangements, whereas internships have no one paying attention to them. There's a legal limbo that interns have fallen into around things like sexual harassment. Are they actually employees? Are they working?
Attention needs to be paid to those who cannot do internships. Those who cannot afford the pay to play system. In fields like media and politics, especially unpaid internships, internships that often turn on connections as well, what does it mean for those fields that many people simply can't do them in the first place? Internships have played a role in the widening equality of the last several decades.
Since the work I did with Intern Nation, there has been a real reaction. The Fair Labor Standards Act, which was a cornerstone of New Deal legislation that ended child labor and helped establish the minimum wage and overtime. Many unpaid internships, especially at for-profit employers, were actually illegal.
This led to lawsuits, most famously around the film, Black Swan, to reestablish the principle of a fair wage for a hard day's labor. Some employers have always seen internships as an investment, a key way to source talent. Others have been less scrupulous about it. I don't think what we have is working.
Jay Greene
Topic: Inequality in Internship ProgramsBio: Senior Research Fellow in the Heritage Foundation’s Center for Education Policy, and the Former Department Chair for Education Reform at the University of Arkansas
Opening Remarks:
Parents should be helpful in getting internship opportunities for their own children in the same way that they should be helpful in all respects for their children. A decent society is built on families where parents develop the full potential of their own children.
We've tried collective child raising by the state. And we have found that those are not the ideal way to help develop the full potential of young people into being decent and productive adults. An internship is just one of the many things that parents could do to help develop the potential of their children.
After all, if parents don't advocate for the wellbeing of their own children, no one else will to the same extent and therefore a good society is one where all parents are trying their best to advocate in this way. But barring engaging in immoral or bad behavior, simply helping your own children is not immoral.
Now, there is something puzzling about why it is that this is an even a matter for your listeners.
What Happens Next Interns
Justin Benjamin, Thomas Triedman, Carly Brail, Nick Ragde, Dylan Partner, Ryan Claffey, Griffith Pool, Dora Wedner (former intern, currently working at 818 Tequila in marketing and sales), and Ross Armon
Thank you for reading What Happens Next in 6 Minutes with Larry Bernstein. This post is public so feel free to share it.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, politics and current events.
I make this podcast to learn and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows.
This week’s program is on internships.
Parents and kids spend a lot of time worrying about getting into college. But as soon as they enroll, their next concern is landing a big internship, because it may help in landing a job after graduation.
On today’s program, I want to focus on three issues. How do kids get an internship? What would be an ideal internship for a particular individual? And what skill building should the inter focus on?
I want to discuss the topic of internships from both the young adult as well as the employer’s perspective. Having a corporate internship program is very valuable because it can attract great young talent for future employment.
I had 10 interns this summer for this podcast. They were engaged in all aspects of production from content creation to social media marketing.
You will hear from 8 interns today about how they seek internships, developing skills, and how they plan to use this experience in their future work.
Internships are a critical part of a young person’s development. I thought it would be entertaining to hear about this podcast’s internship as a case study.
Each week, we have a zoom intern meeting. The first order of business is to review the last podcast to provide constructive criticism, good and bad. Each week an intern is required to read a book and then make a case as to whether the author should be on the podcast. Every few weeks, I invite an adult in the room. This is a friend of mine who actively listens to the podcast and then participates in the intern call. It is very helpful for the interns to engage with the adult world, and the feedback from my friends is very valuable.
I work directly with each intern to improve their editing skills, critical thinking, and oral communication. And the interns teach me stuff as well, particularly all things technology. As you might suspect, everything comes far easier for them.
Interns need constant feedback and direction. They don’t know what to do or what is wanted. But they also love freedom of action, so I tried to give the interns choices. What books to read, podcasts to create, and which projects to focus on like website design or marketing.
Many of you have teachable skills that would be valuable for young people, and I encourage you to reach out and find interns. It is very satisfying to interact with intellectually curious and hungry college and high school students, and they will learn a lot from you.
Let’s start with our first speaker Ross Perlin who is the author of the book Intern Nation.
Ross Perlin
Topic: Ethics and InternshipsBio: Linguist and authorReading: Intern Nation is here
Opening Remarks:
Every year, millions of young people do internships across the world, a gateway into the world of white collar work
In Intern Nation, my book, I set out to understand internships. Internships fit into a whole pattern of seasonal part-time, independent contractor, freelance work arrangements that bury the old notion of a stable career and work trajectory where you have a single employer.
People have been very slow to recognize the importance of internships. They're very different from apprenticeships. Apprenticeships have thousands of years of history. They are largely concentrated in the trades. And there is regulation around them as well, ensuring that real training is happening, that people are being paid. These are often arranged between employers and unions with an office of apprenticeship as part of the Department of Labor, helping to broker those arrangements, whereas internships have no one paying attention to them. There's a legal limbo that interns have fallen into around things like sexual harassment. Are they actually employees? Are they working?
Attention needs to be paid to those who cannot do internships. Those who cannot afford the pay to play system. In fields like media and politics, especially unpaid internships, internships that often turn on connections as well, what does it mean for those fields that many people simply can't do them in the first place? Internships have played a role in the widening equality of the last several decades.
Since the work I did with Intern Nation, there has been a real reaction. The Fair Labor Standards Act, which was a cornerstone of New Deal legislation that ended child labor and helped establish the minimum wage and overtime. Many unpaid internships, especially at for-profit employers, were actually illegal.
This led to lawsuits, most famously around the film, Black Swan, to reestablish the principle of a fair wage for a hard day's labor. Some employers have always seen internships as an investment, a key way to source talent. Others have been less scrupulous about it. I don't think what we have is working.
Jay Greene
Topic: Inequality in Internship ProgramsBio: Senior Research Fellow in the Heritage Foundation’s Center for Education Policy, and the Former Department Chair for Education Reform at the University of Arkansas
Opening Remarks:
Parents should be helpful in getting internship opportunities for their own children in the same way that they should be helpful in all respects for their children. A decent society is built on families where parents develop the full potential of their own children.
We've tried collective child raising by the state. And we have found that those are not the ideal way to help develop the full potential of young people into being decent and productive adults. An internship is just one of the many things that parents could do to help develop the potential of their children.
After all, if parents don't advocate for the wellbeing of their own children, no one else will to the same extent and therefore a good society is one where all parents are trying their best to advocate in this way. But barring engaging in immoral or bad behavior, simply helping your own children is not immoral.
Now, there is something puzzling about why it is that this is an even a matter for your listeners.
What Happens Next Interns
Justin Benjamin, Thomas Triedman, Carly Brail, Nick Ragde, Dylan Partner, Ryan Claffey, Griffith Pool, Dora Wedner (former intern, currently working at 818 Tequila in marketing and sales), and Ross Armon
Thank you for reading What Happens Next in 6 Minutes with Larry Bernstein. This post is public so feel free to share it.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, politics, the arts and current events.
Today’s session will be on You Cannot Teach That!
Our speaker will be John Ellis who is the former Dean of the University of California at Santa Cruz and a Professor of German Literature. The topic is the corruption of the Humanities, and what this means for the University.
I’ve raided the What Happens Next archives to find additional material that supports John Ellis’s discussion. We are going to hear from Arnold Weinstein who is a Professor of English at Brown University who will discuss the increasing resistance to teaching Mark Twain’s Huckleberry Finn.
We will also hear from my friend David Grazian who is a Professor of Sociology at UPenn who will discuss the challenges of teaching Tom Wolfe’s Bonfire of the Vanities and why it is much easier to teach the HBO Series The Wire than the novels of Tom Wolfe.
Our final speaker is Patrick Allitt who is a Professor of History at Emory University. Patrick is going to discuss the increasing relevance of George Orwell and his central role in the American literary canon.
What Happens Next uses a team of interns to make this program and I have job openings. Interns improve the podcast by selecting topics of discussion, editing, and production. If you’re interested, please let me know.
I make this podcast to learn and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you enjoy today’s podcast, please subscribe so that you can continue to enjoy this content.
Let’s begin with John Ellis’s opening remarks.
John Ellis
Topic: The corruption of the HumanitiesBio: Former Dean of the University of California at Santa Cruz and a Professor of German Literature
Opening Remarks:
The main thrust of this book is that the nation faces one of the most serious crises that it's ever encountered because its entire educational system from top to bottom has been thoroughly corrupted by destructive political radicals. The problem: it's that the aims themselves have fundamentally changed. Higher education has decided to repurpose itself. Instead of producing new knowledge and a thoughtful well-formed citizenry, it wants to promote a political ideology.
Advanced societies obviously have all kinds of institutions to function: fire, police, courts, and so on. Only one of them has decided that it will do what it wants to do, not what society employs it to do. Academia has repurposed itself essentially without ever having asked or received permission to do that.
First of all, just how bad is the situation really? I’ve tried to give the public a strong sense of how extensive is the rot. The second question is, how can this have happened? We know that Harvard, Yale, Berkeley were brilliant places and deserved our respect for a long period of time. How is it possible that these places can have descended into what is utter buffoonery and stupidity.
The third basic question is what is the extent of the damage that's being done to our society? Academia trains journalists, school teachers, lawyers. And those professions are going to be corrupted too.
The fourth question really is what can we do to fix this? You can't persuade professors to do any better. They're solidly entrenched in those institutions. You cannot persuade those people to do differently, because that's what they want to do.
My point is that only the public is in position to change things because the only way forward is to decide that this travesty doesn't deserve public money any longer. State legislators ought to stop funding state universities until radical reform is done. And radical reform means removing from the classrooms people that are political activists and not professors at all.
From the Archives: You Can’t Teach That!
Speakers: Arnold Weinstein, David Grazian, and Patrick Allitt
Speaker 1: Arnold WeinsteinTopic: Increasing resistance to teaching Mark Twain’s Huckleberry Finn.Bio: Professor of English at Brown University
Speaker 2: David GrazianTopic: The challenges of teaching Tom Wolfe’s Bonfire of the Vanities Bio: Professor of Sociology at UPenn
Speaker 3: Patrick AllittTopic: Increasing relevance of George Orwell and his central role in the American literary canonBio: Professor of History at Emory University
Thank you for reading What Happens Next in 6 Minutes with Larry Bernstein. This post is public so feel free to share it.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, politics and current events. Today’s session will be on War Games: China Invades Taiwan.
Richard Fontaine and his team at the Center for a New American Security or CNAS developed war games with retired defense officials and members of congress. A few days ago, there were war games to see what happens if China were to invade Taiwan.
What Happens Next uses a team of interns and I have job openings. Interns improve the podcast by selecting topics of discussion, editing, marketing and production. If you’re interested, please let me know.
I make this podcast to learn and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you wish, you can send me your email list and I will take care of it.
Let’s begin with Richard Fontaine and his opening presentation.
Richard Fontaine
Topic: War Games: China Invades TaiwanBio: C.E.O. at the Center for a New American SecurityReading: Dangerous Straits: Wargaming a Future Conflict over Taiwan is here
Opening Remarks:
Why engage in war games in the first place? Wars are complex, dangerous, costly events. The games require us to confront the difficult choices facing policy makers and vividly see the consequences.
We have a very talented team that designs and implements these kinds of war games. The NBC segment is just the tip of the iceberg. The team spent weeks researching and designing the scenario, and it did produce real insights.
The interest in Taiwan has been rising for obvious reasons. Given that China continues to up the ante, the Speaker of the House’s visit to Taiwan provoked a response. Three times over the preceding months, President Biden has publicly said that the United States will defend Taiwan. And everyone's trying to learn the lessons of the Russian invasion of Ukraine.
The Red Team’s goal was a unified Taiwan with the mainland and the Blue Team tried to prevent the Chinese from doing that. That set up a crisis situation. Debate over independence in the Taiwanese legislature erupts into a political crisis. Beijing demands immediate unification talks; Taipei refuses to join, China mobilizes its armed forces. Undertakes a significant buildup in the East and ultimately takes a cross-strait operation against Taiwan to decapitate the government. And in-so doing launched preemptive strikes against the United States to keep the United States out of the war. That didn't work. America did enter the war on Taiwan’s side, bombs China and things escalated even further from there.
Most striking in the game was how destructive this US-China clash became, how quickly it escalated, and how the game concluded with no end in sight to the conflict. Japan and Australia entered the war, China and the United States attacked each other directly. And Beijing detonated a nuclear weapon above the ocean, which would've marked the first use of nuclear weapons in combat since World War II. When the game was finished, both sides believed that they hadn't lost the battle for Taiwan and intended to keep the war going at very significant cost. All this suggests a clash over Taiwan might well be a prolonged war rather than a short conflict, that it could very easily extend to region's beyond the Western Pacific, that both sides might be willing to escalate significantly, and that the consequences of such a war are particularly grave.
The game illustrated some ways in which the United States and its allies can strengthen their deterrence, hopefully increasing the chances that they won't have to fight such a destructive war in the first place.
From the Archives: China and Taiwan
Speakers: Admiral James Stavridis USN, James Holmes, Rory Medcalf, and Daniel Markey
Speaker 1: Admiral James Stavridis USNTopic: The Next World WarBio: Former Supreme Allied Commander of NATO (2009-2013) and former Dean of the Fletcher School of Law and Diplomacy at TuftsReading: 2034: A Novel of the Next World War is here
Speaker 2: James HolmesTopic: How will the US Navy contain the Chinese Navy?Bio: J.C. Wylie Chair of Maritime Strategy at the Naval War CollegeReading: Red Star Over the Pacific: China’s Rise and the Challenge to US Maritime Strategy is here
Speaker 3: Rory MedcalfTopic: How will Australia, India, South Korea, Japan, and the United States work together to contain Chinese Power?Bio: Head, National Security College, Australian National UniversityReading: Indo-Pacific Empire: China, America and the Contest for the World’s Pivotal Region is here
Speaker 4: Daniel MarkeyTopic: Russian Perceptions of China’s Regional Dominance & China’s Asymmetric Military Capabilities Bio: Senior Research Professor in International Relations at Johns Hopkins School of Advanced International StudiesReading: China’s Western Horizon: Beijing and the New Geopolitics of Eurasia is here
This Saturday’s Show: John Ellis
Topic: Corruption of the HumanitiesBio: German literature professor at UC Santa Cruz
Thank you for reading What Happens Next in 6 Minutes with Larry Bernstein. This post is public so feel free to share it.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, politics and current events.
Today’s session will be on Putin and Ukraine.
Our speaker will be Mark Galeotti who is the author of the books We Need to Talk About Putin and The Weaponization of Everything. Mark will speak about Putin’s war objectives and his implementation strategy. A couple of months ago the Russian government banned Mark from entering the country.
What Happens Next uses a team of interns and I have job openings. Interns improve the podcast by selecting topics of discussion, editing, marketing and production. If you’re interested, please let me know.
I make this podcast to learn and I offer this program free of charge to anyone that is interested. Please tell your friends about it and have them sign-up to receive our weekly emails about upcoming shows. If you wish, you can send me your email list and I will take care of it.
Let’s begin with Mark Galeotti and his opening presentation.
Mark Galeotti
Topic: Putin and UkraineBio: Author and director of the consultancy Mayak IntelligenceReadings: We Need to Talk About Putin is here and The Weaponization of Everything is here
Opening Remarks:
The basic thesis of my book, The Weaponization of Everything, is that good old-fashioned war, large scale conventional Shoot-y stuff, is increasingly untenable as an instrument of policy. It doesn't mean to say that it's going to go away entirely, but that it is becoming much, much less useful because it’s no longer a case in which national power and wealth could be measured necessarily by oil fields and coal mines. A lot of it is in terms of intangibles, which you can't just simply seize. The costs of war have increased so dramatically. If you take the entire RAF air fleet that defended Britain during the battle of Britain in World War II, add together the cost, convert it to modern money, you can buy six F 35 fighter jets.
But it's not just simply about the financial costs. There are the political costs that even authoritarian regimes nowadays have to worry about. There's international law. There is the fact that our economies are now interconnected and therefore when we invade other countries, we are also actually damaging our own markets.
But international tensions are not going away. Rivalries are being moved into the economy, into law, into politics, into information, into all these other kinds of spheres. And although it might seem bizarre to say that, given the book came out one month before Putin invaded Ukraine.
Before he invaded; Putin was winning in a non-kinetic struggle. Now he's invaded. At best, he can hope for a stalemate. So this is the basic future. It's less shooting but lots of conflict in other realms instead.
This Saturday’s Episode: Richard Fontaine
Topic: War Games: China Invades TaiwanBio: C.E.O. at the Center for a New American SecurityReading: Dangerous Straits: Wargaming a Future Conflict over Taiwan is here
Thank you for reading What Happens Next in 6 Minutes with Larry Bernstein. This post is public so feel free to share it.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, politics and current events. Today’s session will be on Operation Warp Speed.
Our speaker is Paul Mango who helped manage Operation Warp Speed as the former deputy chief of the US Health and Human Services. He has just written a new book entitled Warp Speed: Inside the Operation that Beat COVID, the Critics and the Odds.
What Happens Next uses a team of interns and I have job openings. Interns improve the podcast by selecting topics of discussion, editing, marketing and production. If you’re interested, please email me at larrybernstein1@gmail.com.
Please subscribe to our free weekly email that is available on our website, whathappensnextin6minutes.com to hear about our upcoming podcasts.
Let’s begin with Paul Mango and his six-minute presentation.
Paul Mango
Topic: Operation Warp SpeedBio: Former Deputy Chief of the US Health and Human ServicesReading: Warp Speed: Inside the Operation that Beat COVID, the Critics and the Odds is here
Opening Remarks:
I wrote Warp Speed for two reasons. One is the whole effort occurred during a presidential election year. And I think the success of Operation Warp Speed got buried because the media was intently focused on the campaign. Anything that was going well maybe wasn't going to be talked about in the media, particularly if it was the incumbent president. The second reason was because there's a lot of lessons to be learned from what we did well and what we would do differently. It's important for government policy makers, for the American people, for private industry, to understand how this happened. The previous best time for bringing a vaccine to market was four and a half years. And the Operation Warp Speed did it in 10 months.
Why was it successful? Five reasons I talk about in the book. One is private industry had invested in technology called messenger RNA. It was a technology platform that had never been used to develop vaccines, but it was available to us and we took a shot at it. We invested a couple billion dollars in it and it worked. The second reason was that we had a principle that basically said, do not permit the federal government to do anything that the private sector can do better. That was a guiding principle for us. The third reason was we had secretary Alex Azar who was 10 years in the pharmaceutical industry before he was a secretary and he understood the risk thresholds and what the pharmaceutical industry would do and would not do.
And he understood that they wouldn't start manufacturing vaccines in a normal course if they didn't get FDA approval. So we did in parallel things that were typically done in series, and we started manufacturing vaccines long before the FDA approved anything.
The fourth reason was Moncef Slaoui, who was our chief scientific advisor had a venture capital mindset. He said, we're going to invest in six different vaccines across three different technology platforms. We only need one to win.
The very last reason was just a management philosophy that permitted experts rather than people with lofty titles, to do what was necessary to get the job done.
What would we have done differently if we could do it over again? I think we failed pretty miserably at communicating with the American people about how safe and effective these vaccines were.
And we were in a very difficult situation because if we started talking about safe and effective vaccines before the FDA adjudicated it, we would've been accused of trying to unduly influence the regulators. So, we didn't talk much about it, but what we could have talked about was the standards we raised for these clinical trials -- 50% more participants in these trials than in a typical vaccine clinical trial and a longer interval between the time people got their injections and the time we evaluated them for any type of adverse reaction. So, these were actually higher standards than was ever used before. So those were things we would do differently, lessons for why we were successful, and why I wrote the book in the first place.
This Saturday’s Episode: Mark Galeotti
Topic: Russia’s Ongoing War in UkraineBio: Director of Mayak Intelligence and Senior Associate Fellow at the Royal United Services InstituteReading: The Weaponisation of Everything: A Field Guide to the New Way of War is here
Thank you for reading What Happens Next in 6 Minutes with Larry Bernstein. This post is public so feel free to share it.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.whathappensnextin6minutes.com
Larry Bernstein:
Welcome to What Happens Next. My name is Larry Bernstein.
What Happens Next is a podcast which covers economics, finance, history, politics and current events.
Today’s session is on the risk of authoritarianism. We have two guests. Our first speaker is Moises Naim who is a fellow at the Carnegie Endowment for International Peace and the author of the new book entitled Revenge of Power.
Moises will tell us about how populism, polarization, and post-truth undermine the democratic process. And that there is a global trend in the past few decades away from democracies towards more authoritarian regimes.
Our second speaker will be Julian Waller who is a political scientist at George Washington University, and he has a new paper that was recently published in the magazine American Affairs entitled Authoritarianism here?
Julian will speak about why strong democratic governance in the US makes it unlikely that authoritarianism can take hold in the US because of the diffusion of power within the Federal government and how state and local control through federalism strengthens democracy.
Buckle up.
If you missed last week’s podcast check it out. The topic was part three of our ongoing history of World War 2 with Paul Kennedy who is the J Richardson Dilworth Professor of History at Yale. Paul has a new book out entitled Victory at Sea: Naval Power and the Transformation of the Global Order in WW2.
This episode focused on the fateful year 1943 when the war was won. Paul explained why the US decided to invade North Africa instead of Europe, as a trial balloon. Why North Africa was followed by an invasion of Italy to knock Mussolini out of the war. And, we learned about the internal strife within the allied alliance, the disputes between the armed services, and why the allies ultimately won the war.
Let’s begin today’s session on authoritarianism with Moises Naim.
Moises Naim
Topic: Populism, Polarization, and Post-TruthBio: Scholar at Carnegie Endowment for International Peace and Former Editor in Chief of Foreign PolicyReading: Revenge of Power: How Autocrats are Reinventing Politics in the 21st Century is here
Opening Remarks:
This past decade has been rich in world changing events. Almost unnoticed is the global crisis of democracy. There is a global onslaught against the checks and balances that define a democracy. Undemocratic systems are on the rise. They currently account for 70% of the world population. That is 5.4 billion people live in non-democracies, according to studies by the University of Gothenburg. A decade earlier, the percentage of people without democracy was 49%. So that was a decade in which democracy became a system of governing that is in danger of extinction.
Not since 1978 has there been such a low number of countries in the process of democratizing. There are two reasons why the democratic backsliding didn't cause alarm. The first is that there were just too many other urgent problems to successfully compete for the attention of the media, public opinion: the pandemic, the global financial crisis, Brexit, and the war in Ukraine -- left little room for non-immediate emergencies. The second reason is that most attacks in democracy were deliberately difficult to detect, which made it much more difficult for people to fight back. But the reality is -- and this is according to the University of Gothenburg -- the level of democracy enjoyed by the average global citizen in 2021 is down to 1989 levels.
Of 195 countries, only 34 are overall democracies. This profound, important structural change took place stealthily. There is a new crop of autocrats that present themselves as democrats and then stealthily undermine democracy from within. They win elections, they get to power and immediately they start on weakening checks and balances that characterize a democracy. They do that by using three strategies that I call the three Ps: populism, polarization, and post-truth. Populism has always existed and is centered in the notion that requires a Messiah-like charismatic leader that represents the noble people that is being exploited against the elite. Normally, what happens is that that charismatic leader becomes a dictator, and instead of defending the interest of the poor, makes whatever necessary decisions in order to stay in power.
Some of the tricks they normally use to achieve that are polarization, deepening the differences that exist in societies. Polarization has acquired new potency thanks to the new technology, social media, and all the rest that we can broadly call the third P, which is post-truth. Propaganda controlled and centralized by dictators.
Now post-truth includes propaganda used by the state, but it also includes the messages of listeners, fans. And post-truth is casting doubts on what people believe, creating confusion, undermining trust in society. And the three Ps have been used around the world by very different regimes and leaders. And that explains the dire situation that democracy finds itself in and the decline of democracy we have seen in the past decade.
Julian Waller
Topic: Low Risk of Authoritarianism in USBio: Political Scientist at George Washington UniversityReading: Authoritarianism Here? Is here
Opening Remarks:
So I have good news. The United States is simply not on the verge of a fascist takeover and those that counsel imminent democratic death do us a disfavor. That does not mean that politics here in the American Republic are healthy. They very clearly are not. A general political legitimacy crisis has been rumbling through American society since at least 2016 and shows no signs of abating. However, a period of heightened political tension, mistrust and division does not necessitate the full breakdown of political order.
Many scholars, commentators and policy makers have honed in on the perceived threat of democracy's gradual decline, the so-called democratic backsliding framework, which has become popular as a predictive playbook for how the end of democracy comes about. This focus on a gradual approach, usually emphasizes procedural tricks, slow institutional capture and distorted electoral outcomes. It's informed primarily by the experience of certain European countries: Hungary, Russia, Turkey, Serbia are most commonly cited. The problem is working through any convincing account of a gradual slide into electoral authoritarianism in the United States requires considerable leaps well beyond tinkering around the electoral margins by way of House gerrymandering, Senate malapportionment or the electoral college.
The problem with relying on this way of understanding predictions about the collapse of democracy is that we often presuppose that a stable consolidated authoritarian regime inevitably comes next, rather than just short-term political chaos or constitutional crisis. This leads us to the lure of unfortunate hyperbole, where we have all this talk about the authoritarian or tyrannical nature of the Republican party, for example, or the looming dictatorship resulted from populous leader like Donald Trump.
So, democratic breakdown today is this form of gradual slide into what we call electoral authoritarianism. There is another common form of democratic collapse, which is even more evocative. And that is a military coup leading to the suspension of constitutional order and the creation of a military-backed civilian bureaucratic authoritarian regime. Neither of these scenarios are especially likely in the current political and institutional ecosystem of the United States.
Democratic collapse is really, truly genuinely difficult. You have to understand that the lessons we draw from foreign countries -- they have to make sense. We hear a lot about the Hungarian case. It's a very soft electoral authoritarian regime, but this an ethnically homogenous country of 10 million people, the population of Michigan. It experienced the massive discreditation of the current political opposition in the wake of the financial crisis, leaving the now current government very well placed to not only win elections heavily, but to do so while promising to rid the system of what was widely perceived to be a deeply corrupt elite. It has a parliamentary system with a tendency to produce lopsided electoral outcomes in big swing elections. This allowed the quick capture of all state institutions by the ruling party, enabling them to change the constitution easily.
The United States is absolutely nothing like this at all. Here in America, one must be able to control a vast set of political and economic organizations in order to fashion a genuine stable authoritarian regime. The US is a country of 330 million people spread across an entire continent containing a smorgasbord of overlapping racial, ethnic, and class segments divided into a multitude of powerful state governments whose legitimacy and political authority are centuries old and practically meaningful to the lives of their respective citizens.
We need to be very careful about the lessons we draw from foreign cases and the realities of what authoritarian regimes and their paths to power actually look like in an ideal world. This shouldn't be a particularly controversial opinion, but things are quite heightened and tense these days. And it's very easy to fall into extreme interpretations or even wish casting disaster, which is something we need to be careful to avoid.
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Sneak Preview of Next Week’s Episode with Moisés Naím
Topic: Populism, Polarization, and Post-TruthBio: Scholar at Carnegie Endowment for International Peace and Former Editor in Chief of Foreign PolicyReading: Revenge of Power: How Autocrats are Reinventing Politics in the 21 st Century is here
Larry Bernstein
Welcome to What Happens Next. My name is Larry Bernstein. What Happens Next is a podcast which covers economics, finance, history, politics and current events.
Today’s session is the third part of our ongoing history of World War 2.
Our speaker is Paul Kennedy is the J Richardson Dilworth Professor of History at Yale. He has a new book out entitled Victory at Sea: Naval Power and the Transformation of the Global Order in WW2.
This episode Part 3 will focus on the fateful year 1943 when the war was won. Paul will tell us why the US decided to invade North Africa instead of Europe, as a trial balloon. Why North Africa was followed up with an invasion of Italy that subsequently knocked Mussolini of the war. We will learn about the internal strife within the allied alliance, the disputes between the armed services, and why the allies won.
Let’s begin.
Paul Kennedy
Topic: Part 3 of the History of WW2 - 1943: The Year that Decides the Outcome of the WarBio: J. Richardson Dilworth Professor of History at YaleReading: Victory at Sea is here
Opening RemarksIn the immediate aftermath of Pearl Harbor, after Churchill had come to the White House, the Grand Alliance was facing three enemies: Nazi Germany, Mussolini’s Italy, and Japan.
You couldn’t take all three of them on at once, certainly not in 1941 to 1942. So, what is the batting order? You have to understand where the two great combatants on the Western Ally side are sitting. For the United States, a terrible attack on Pearl Harbor, and there was pressure from Congressmen, from the public, from the US Navy to make the Pacific campaign by far number one.
For the British, they had just escaped invasion the year before. They were in the fight against Nazi Germany and its buddy Italy, and they wanted a European-centric war and the Pacific coming next. Thank heavens by 1943, US productivity is such it can have both. But it couldn't then.
Now let's get to the three-armed services of the United States,
The US Navy, it not only wants to be in the Pacific first, because it feels so badly hurt by Pearl Harbor, but because in the Pacific, it's likely that Pacific commanders, like Admiral Nimitz, would have the main role. For the two other US armed services, the Europe first strategy was attractive. For the US Army it was attractive because these dinky little islands in the Pacific offered no chance of putting a million strong American soldiers in.
The European campaign, the US Army would be the lead service. For the US Air Force under Hap Arnold is certainly intent upon building these enormous, long range, four engine, strategic bombers to blast the enemy's economy, railway systems, productivity, and get victory in the war that way. And it was hard to imagine anywhere in the Pacific where you could have air bases to put 2,000 B-17 and B-24s, whereas if the Air Force went to join the Royal Air Force Bomber Command, it could start the systematic attacks upon German industry.
When you looked at the techno-industrial capacities of the three Axis powers, Germany was the country which was most likely, Larry, to deal you a really severe blow if it developed some of its super weapons.
Remember by 1941, '42, there was even a great apprehension fueled by Einstein's urgent messages to Roosevelt that Germany might acquire the atomic bomb. So, there were a lot of reasons why it was Germany first.
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