“The world discovered that John Maynard Keynes was right when he said during WWII that ‘whatever we can really do we can afford,’” writes Adam Tooze. “Budget constraints don’t seem to exist; money is a simple technicality. The tough limits on financial sustainability, controlled, we believed, by fierce bond markets, were blurred by the 2008 financial crisis. In 2020, they were erased.
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Tooze is an economic historian at Columbia University, co-hosts the “Ones and Tooze” podcast, writes the brilliant Chartbook blog, and is the author of “Crashed,” the best story of the financial crisis of 2008. He has now come out with a new book, “Shutdown: How Covid Shook the Global Economy,” which tells the story of the unprecedented global economic response to the pandemic.
The common thread of Tooze’s work is how the last decade of crises has overturned many of the fundamental assumptions that have guided economic policy-making over the past 50 years, including those to which many contemporary economists and policymakers continue. to hang on. So that’s what we’re mainly talking about here. But we also discuss how the boundaries of acceptable thought in the economics profession are guarded, the real risk of runaway inflation, the limits of green monetary policy, the fight for Jerome Powell’s re-election as President of the the Fed, what the Covid crisis reveals about our ability to respond to the climate crisis, the need for supply-side progressivism and more.
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(A full transcript of the episode will be available at noon on the Times website.)
“The Ezra Klein Show” is produced by Annie Galvin, Jeff Geld and Rogé Karma; fact check by Michelle Harris; original music by Isaac Jones; mixing by Jeff Geld; audience strategy by Shannon Busta. Special thanks to Kristin Lin.