Episode 2: "Unintended Consequences" with Ed Conard
July 10, 2012 at 9:04pm
Welcome to Ricochet's Money & Politics Podcast with me, Jim Pethokoukis, columnist and blogger at the American Enterprise Institute and official CNBC Contributor.
In this week's episode, I chat with Edward Conard, a former executive at Bain Capital and author of Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong. Conard explains why the U.S. economy needs the "one percent" -- and the innovation and entrepreneurship they generate -- as well as why the Obama-Dodd-Frank approach to fixing the financial system has only made things worse.
And once you're done listening to the podcast, you should check out Conard's legendary appearance on The Daily Show with Jon Stewart.
Here are some links to reviews of Unintended Consequences and other materials related to the book and our chat:
"Please Don't Soak the Rich" - Wall Street Journal
"The Purpose of Spectacular Wealth, According to a Spectacularly Wealthy Guy" - New York Times
Piketty and Saez vs. Burkhauser and Cornell: Who’s right on income inequality and stagnation? - James Pethokoukis, AEIdeas blog
Looking backward: The nostalgia economics of Barack Obama - James Pethokoukis, AEIdeas blog
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Comments:
Jun '10
Re: "Unintended Consequences" with Ed Conard
You cut your risk of major economic collapse by not putting all your eggs in one basket, as they did with mortgages. The danger is to have too much confidence in (or too much artificial government support for) one type of investment, like mortgages, or solar energy. When banks do stupid things, it's usually because government has incentivized the stupidity.
Oct '10
Re: "Unintended Consequences" with Ed Conard
Though to be fair, certain foreign governments (China and a few Middle Eastern sovereign wealth funds come to mind) were also creating perverse incentives by putting all of their money in the U.S. basket.
Jan '11
Re: "Unintended Consequences" with Ed Conard
Fine interview and podcast. I listened twice so far, there are lots of interesting tidbits. I may have to spend a few bucks on the book.
These are collector edition podcasts, no commercial intro from Rob...yet.
Aug '10
Re: "Unintended Consequences" with Ed Conard
Excellent podcast! Three of the key takeaways I got from this are:
Romney's got to somehow distill these issues down to a simple enough form that enough voters can comprehend the situation and vote for him. I pray he can do it.
Mar '12
Re: "Unintended Consequences" with Ed Conard
Jim & Ed, really a great podcast. Thoughtful, detailed, provocative. I was taking notes throughout -- and am off to buy Ed's book, too. I've long believed that the breadth and depth of innovation is among the most critical factors separating the US economy from the rest of the world. I fear we the current administration's policies, with the ACA's caps on medical technology ROI and the general tilt toward MITI-like industrial policy, will do real damage to our innovation engine. I hope I'm wrong.
Jim and Ed's discussion gives me hope. Looking forward to the next episode, Jim.
Aug '10
Re: "Unintended Consequences" with Ed Conard
The first two episodes of this podcast have been superb. A great addition to Ricochet's member benefits.
Dec '10
Re: "Unintended Consequences" with Ed Conard
WOW! That was a great podcast. I will probably need to listen to it at least once more to get everything out of it. In the meantime, I have also listened to the first part of his John Stewart appearance and I have the second part cued up, for when I have a chance.
Truly, this podcast post should be bumped back up to the top, to make sure that people (like me) that hadn't got to it, give it a listen. To partially respond to Mel Foil, I think Conard's point would be that the mortgage issue, as well as the moral hazard issue, are givens. However, he emphasizes that the withdrawal aspect, forcing banks to maintain additional reserves to protect against runs, that is the avoidable drag on recovery that could be mitigated by admitting that the government is going to be the ultimate gaurantor and charging the banks fees to reflect that reality.
So much to consider, and reconsider, when I have a chance to listen again.
Sep '10
Re: "Unintended Consequences" with Ed Conard
I enjoyed it, especially the setting of the empyrical record straight regarding income growth and percieved inequality, etc; I also liked his mention of rational expectations needed to be better considered in policy debates, especially in tax debates.
However, I think his analysis of the "Great Recession" was flawed. He is far too much in to the Chicago school and isn't taking into account enough of either Austrian business cycle theory and/or public choice theory (especially regarding the Fed and the cure being worse than the disease--the cure is certainly worse because if as Madison wrote, men aren't angels). I'd love to hear him have a conversation with Russ Roberts of EconTalk.
May '10
Re: "Unintended Consequences" with Ed Conard
Content-dense. Listened to it three times. Wouldn't hurt to sit down in a hard chair, strong cup of coffee, no outside distractions, and listen to it a fourth time. Great podcast.