The State of Big Business

Tyler Cowen's Calm & Contrarian Economic View

Episode #485

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I get nervous a lot. Some books make that worse. Some make it better.

Tyler Cowen’s new book makes it better.

“It’s calm,” I told him.

“That was my goal,” he said, “to calmly go through the facts.”

Which is helpful. Because it’s the opposite of outrage porn.

He’s not fueling the fire. He’s watering it.

The book is called, “Big Business: A Love Letter to an American Anti-Hero.” It’s sort of a contrarian book… “which ought not to be contrarian,” Tyler said.

“So what’s everyone’s problem?” I asked.

First, he clarified, “It’s not everybody’s problem… I think we’re in a grumpy time period. People are upset at politicians, at Congress, somewhat at the church, the media… There’s a loss of faith in many institutions. There’s a sense that whatever is perceived as having power has to be taken down. And I think big business is caught up in that.”

He tells me his solutions on the podcast.

And dispels a lot of fears.

But only to create new ones… Which is helpful in a way. It helps me know where to look.

And it will help you, too.

Here’s what I learned from Tyler Cowen, economist, chess master (who’s one standard deviation above me) and bestselling author about the state of big business today:

  • Hear how millionaires make their income and the simple thing you can do to learn from them – [0:00]
  • Episode preview – [1:08]
  • I welcome Tyler Cowen, economist, and author, back to the show and say why I like his new book “Big Business: A Love Letter to an American Anit-Hero – [2:42]
  • I ask Tyler when he quit chess (something he loves) at age 15 when he realized he wouldn’t become world champion – [3:43]
  • The stress of tournament chess – [6:38]
  • “One of the key things I learned early on from chess is that there’s always someone smarter than you. And that’s a good lesson to learn.” – Tyler Cowen – [8:35]
  • What’s the correlation between success and opportunity? – [9:24]
  • Decide how much you hate losing. Then use that knowledge to decide your field – [10:47]
  • We dive into Tyler’s book and how he dismantles the arguments people have against big business and Wall Street, the mechanism that finances business – [12:09]
  • I ask Tyler to describe the general stance against big business. He explains why there’s a loss of faith in large institutions – [13:13]
  • The flaw with expecting perfection from businesses (and treating them like people) – [14:26]
  • Fun fact: 53% of people admit to lying on their Tinder profile – [15:10]
  • Who we should and shouldn’t expect perfection from (airlines vs. fast food companies) – [16:04]
  • I ask Tyler why we’re taking our frustrations out on big business. He talks about how social media lets us complain more… and why we’re attracted to bonding over negative emotions – [16:30]
  • How the ‘08 financial crisis is still impacting views today – [18:30]
  • How Tyler measures if the economy is doing well – [19:55]
  • Why are people in favor of giving the government more control these days? – [20:13]
  • Do you really care about your data and privacy? We take a look at the numbers – [21:28]
  • Tyler says the best way to get more privacy – [22:28]
  • Is it bad for Google and Facebook to have all data? I ask Tyler – [22:48]
  • Tyle says why healthcare is the worst sector of business in the U.S. right now – [25:45]
  • Regulation vs. deregulation, which is better for healthcare? – [27:04]
  • Why it’s difficult for humans to understand consequences – [28:32]
  • We discuss lending, various global debt crises and the role of derivatives – [29:19]
  • The problem with breaking up big banks – [31:41]
  • Today’s culture of blame… Tyler says why he thinks “We’ll almost all end up worse than where we started off.” – [32:29]
  • Is Google in cahoots with the U.S. government? – [34:49]
  • Why the NSA is not the biggest concern when it comes to privacy (and your friends are) – [36:00]
  • Why “lack of privacy” seems like a good thing to me (so far) – [37:18]
  • Tyler points out that people are feeling a lack of control right now… (student debt, the rise of China, etc.) and how this is causing them to lash out at consumer-facing companies – [37:28]
  • Everyone has an opinion of Mark Zuckerberg. But pretty much no one has feelings for or against Boeing or they’re C-level people… just something to think about – [37:45]
  • I ask Tyler “What is everyone’s problem?” when it comes to big business. But he says it’s not everybody’s problem. Most people trust Amazon. And big business in general. The largest critics of big business are the media and intellectuals… He says, “It’s a kind of war within the elites” – [39:08]
  • Subject change: we talk taxes – [40:50]
  • Is my dollar better spent by me? Or the government? I ask Tyler what he thinks from an economist standpoint – [41:09]
  • The problem with the government making promises they can’t afford to keep – [41:38]
  • Why having good intentions (free education, free healthcare, social security, medicare, etc.) doesn’t always lead to good outcomes – [42:45]
  • Not everyone should go to college. Tyler says why – [43:05]
  • The psychological impacts of “credentialism” in the U.S. – [45:06]
  • Free education already exists. “The internet is like the free college of today…” – [46:15]
  • Higher education isn’t big business. But that’s where big business is hiring from… Meanwhile, the cost of education and loans is creating fear around innovation. People feel they have to play it safe. So what’s the solution? – [48:12]
  • Why Trump’s policies are more anti-big business than you think – [49:30]
  • Tyler’s thoughts on how the government should address foreign companies stealing intellectual property or blocking U.S. businesses from operating internationally – [51:06]
  • The #1 story Tyler suggests you follow right now… Trump’s attempt to try to take down Huawei, one of the biggest companies in China – [52:13]
  • Tyler lists the ways he sees China retaliating against us – [54:45]
  • Tyler says why he doesn’t predict a recession – [55:07]
  • Is the U.S. economy doing well? And is there too much artificial money being pumped into the U.S. economy? – [55:59]
  • Why our price inflation rate is still below 2% – [56:50]
  • The state of investment – [57:45]
  • Why the trade deficit is net-positive for the U.S. – [58:50]
  • I tell Tyler what I like about his books and how he makes me feel calmer. Then I ask “What should I be worried about?” And “At one point, do we need regulation?” – [59:48]
  • Final question: I ask Tyler, “What compelled you to write the book?” [1:02:09]
  • I say why I recommend this book… it’s a really good primer for what economics in America is like right now – [1:02:54]
  • Teaser: hear what’s coming up next time on “The James Altucher Show” – [1:04:22]

 

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