Trump Just Fired the BLS Chief. Is Fed Chairman Powell Next?

0:00 We're with the chairman, as you know. Chairman, come on over. >> Come on over. Look at his face. He's like, "Come on over. I'm going to browbeat you, and I want you to be right next to me when I do it." Hey there, friends, fans, and foes of Dad Saves America. John Pola here and I thought I would take this Friday to dive into well frankly one of my favorite subjects and also one that impacts literally all of us. The path of monetary policy. Let's dive right into good old Jerome Powell. The always energetic Jerome Powell.

0:40 Inflation has been running somewhat above our 2% longer run objective. In support of our goals today, the Federal Open Market Committee decided to leave our policy interest rate unchanged. >> So that means they are not going to lower or raise interest rates. They're going to keep interest rates their policy position, which is actually more much more complicated than just like setting a price. There's all kinds of crazy stuff that goes into what he's talking about, but basically staying in the same rough position as we have been.

1:09 We believe that the current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments. >> It's also worth keeping in mind what he just said earlier, which is the current inflation rate has been at 2.5%, which is above the Fed's stated explicit target of an average of 2%. And I think it's important to remember that the Fed hasn't gotten down to its 2% target in a long time. We haven't been there since before the COVID epidemic. So we we're not back to normal. We're not back to what the Fed said they're we're supposed to be at.

1:54 And they've also fundamentally missed their own targets. And that's their fault. They're in control of the rate of inflation. They cause the inflation. They're not chasing inflation. They create inflation. >> I will have more to say about monetary policy after briefly reviewing economic developments. Recent indicators suggest that growth of economic activity has moderated. GDP rose at a 1.2% pace in the first half of this year, down from 2.5% last year.

2:24 Although the increase in the second quarter was stronger at 3%, focusing on the first half of the year helps smooth through the volatility in the quarterly figures related to the unusual swings in net exports. And this is the other big macroeconomic news item of our time right now, which is that uh GDP growth was strong in the second quarter. But that number, which I will have to do a whole another video on the weirdness of GDP and how it's measured and whether it is even really a very good indicator, but just for consistency sake, uh GDP growth has been above trend for the second quarter at 3%, but almost all of that has come from net exports. And so there's there's this trade thing going on with the the way the economy is taking shape. And um it's confounding everybody, but needless to say uh tariffs are a tax. They are a cost and they do disrupt things, but they haven't disrupted things nearly as much as most people, myself included, thought they would. And in fact, the impacts on business development and business investment are a little more mixed and again less bad than I was personally expecting. The moderation in growth largely reflects a slowdown in consumer spending. In contrast, business investment in equipment and intangibles picked up from last year's pace. Activity in the housing sector remains weak.

3:46 >> Activity in the housing sector remains weak. And we're going to come back to that because housing is, as we know, very sensitive to changes in interest rates. In fact, interest rates play a very big role in the monthly cost of our housing. Um, of course, the picture there is also more complicated than just the interest rate and and your mortgage rate. In the labor market, conditions have remained solid. Payroll job gains averaged 150,000 per month over the past three months. The unemployment rate at 4.1% remains low and has stayed in a narrow range over the past year. Wage growth has continued to moderate while still outpacing inflation. Overall, a wide set of indicators suggests that conditions in the labor market are broadly in balance and consistent with maximum employment. And of course, Jerome Pal didn't even get this right because as of this morning, the jobs report indicates that July only added 73,000 new jobs and May and June have been revised sharply downward by over 250,000 jobs, leading President Trump to actually say he's going to fire the Commissioner of Labor Statistics.

4:50 >> And we're just hearing from President Trump via Truth Social that he is firing the Commissioner of Labor Statistics. He says effective immediately. This is the same Bureau of Labor Statistics that overstated the jobs growth in March 2024 by approximately 818,000 and then again right before the 2024 presidential election. >> This is a good reminder of just how hard it is for centralized authorities to even get the basic facts of our economy right. One other piece of the puzzle in thinking about this notion of maximum employment is the idea that generally speaking, you can never get to full employment as in every single person is working. There's always going to be a certain amount of churn of change of people being fired or quitting jobs and taking some time to get a new job. If you literally had everyone working, it would become impossible to do anything because you could never hire anybody without trying to poach them from somebody else. And it's just not likely to happen. In fact, it's actually kind of amazing that unemployment has gotten as low as it has considering how much disruption our economy has faced.

5:55 Inflation has eased significantly from its highs in mid 2022, but remains somewhat elevated relative to to our 2% longer run goal. Estimates based on the consumer price index and other data indicate that total PCE prices rose 2.5% over the 12 months ending in June and that excluding the volatile food and energy categories, core PCE prices rose 2.7%. So when he's talking about the fact that they focus on inflation minus the volatile sectors of food and energy which frankly I think all of us care a lot about and we care when those prices go up. The premise here is that those are both commodities and there's lots of other factors that tend to swamp the printing press. Inflation when it comes to the prices going up and down. You know, we have booms and busts in oil and energy and in food and commodities like rice and and in fact, the Fed during the 2008 time frame got this wrong and it made the Great Recession a lot worse than it otherwise would have been because they saw food prices spiking and slammed on the brakes harder than they should have.

7:03 This is one of the problems with the Fed is that it tends to get things wrong in both directions. printing too much money during a boom and slamming on the brakes too much during a bust. And that's what happened in 2008 partly because of these volatile commodities in energy and food. So there is some value and some validity in looking at inflation rates minus food and energy. But as a matter of like what's the total picture of the cost of living for Americans, you can't exclude food and energy. We need to eat. We need to get to places. We need to heat our homes. These things matter a lot and they are part of the total cost of living picture.

7:42 >> At today's meeting, the committee decided to maintain the target range for the federal funds rate at 4 and a quarter to 4 and a half% and to continue reducing the size of our balance sheet. We will continue to determine the appropriate stance of monetary policy based on the incoming data, the evolving outlook and the balance of risks. That is the high energy, the electricity of a Fed announcement. Um, but it is literally a shock wave that goes through our economy because the Fed is the monopoly in control of our money and money is one side of every single economic transaction. We use money to buy things and we receive money when we sell things. So money is in a sense the only truly macroeconomic good. It is the thing that is a medium of all exchanges. So the Fed matters a lot. In fact, the Fed is frankly the most powerful and strange institution in our society. It is more powerful than most people appreciate and more dangerous than most people think about on a daily basis. It has a long storyried history, but a quick recap is worth putting it in context.

8:58 >> The Federal Reserve began as a response to a financial crisis and has only grown with each one since. >> Of course, because when you are created to resolve crises and then you don't, if you're a government agency, you keep getting bigger and getting more power. That's that's the game we play. They have been failing their way into more and more jobs and a larger and larger role in our economy for over a hundred years. >> Although not always without criticism.

9:23 >> The time has come. That's the Fed. >> The Fed is primarily still a bank for banks, but it has also become the stop gap for most other parts of the financial system. >> And this is important. We talk about the Fed and setting interest rates, but it does a lot of other stuff, including oversight for the banks, which is weird and tends to involve some corruption because it can also bail out the banks it's overseeing and print money to do so. Uh, it is the clearing house for checks. This piece of paper that your grandmother uses to pay for things at the grocery store in a way that slows the whole line down. It is known as the lender of last resort, which in other words, it's the entity that bails banks out. But more seriously, that lender of last resort function was one of the earliest conceptions of a role of a central bank. that in the event that there were bank runs and that the bank was fundamentally sound but just didn't have the money to pay it all out right then and there the Fed or the central bank the first really serious central bank was the Bank of England could serve as a a backs stop to provide liquidity in an in time in a time of increased demand for savings or for money and you know again it plays all these roles and most of them shouldn't be under the same roof, but this is how you fail up in Washington.

10:50 >> He can make decisions quickly and without political fallout. >> To the extent you have a handful of unelected people making huge decisions about the economy, it's something that Congress and the White House, our elected leaders have really decided over uh many decades to really outsource this to the Fed. The Fed is so it's so weird as an American that likes the Constitution because it is an extra constitutional entity in the truest sense. It has power and authority that doesn't seem in keeping with the separation of powers or the enumerated powers in our constitution. The Congress did create it with the Federal Reserve Act of 1913 and it has continually added authority, power, roles and responsibilities to the Fed. But the actual responsibility for holding it accountable is pretty weak. It basically amounts to the president appointing the board of governors and the chairman, in this case Jerome Powell, and that's it.

11:57 And the weirdest thing about this, especially as somebody that doesn't like big government and certainly doesn't like the sort of deep state and unaccountable bureaucracy, when it comes to the Fed, if we're not going to get rid of it, we should be really, really careful about making it even more subject to our democracy, which is also known as politics. But before we get to the politics, it's worth being reminded of the recent past.

12:29 So, just to take a quick look, and I'm going to pull up my favorite thing, the the St. Louis Fed's charts going back to 1960. Here is what inflation has looked like. This is a graph of the inflation rate, the change year-over-year. And as you can see, the only time the Fed has actually gotten close to zero, which no change in the price level is how I would interpret price stability, is basically two catastrophes.

13:05 The financial crisis of 2008 and 9 and a brief moment in the in in the later parts of the Obama administration where inflation got down close to zero. At every other point, we have had inflation comfortably above 2% by and large. The notion that they have hit a 2% average has only really been true during a period that's generally known as the great moderation. you know, in the aftermath of the great inflation of the 1970s and 80s, which again gave rise to the idea that the dual mandate of employment and inflation control are at odds with each other, or should I say aren't at odds with each other. You can have the worst of both worlds. We had this period starting around 1983 of relatively stable inflation and growth. Then comes the financial crisis of 2008.

14:05 And then comes the great inflation of 2021 23. So the Fed's job performance hasn't been very good. The Fed has not been a source of price stability in the United States. How does this work? What has happened? Well, the way they do it is they flood the system with money. That's that's what happens. >> Fair to say you simply flooded the system with money. Yes, we did. That's another way to think about it. We did.

14:38 >> Where does it come from? Do you just print it? >> We print it digitally. So, we, you know, we as a central bank, we have the ability to create money um digitally and we do that by buying treasury bills or or bonds or other government guaranteed securities and that that actually increases the money supply. We also print actual currency and we distribute that through the Federal Reserve banks. So most of the money printing isn't currency, which the Treasury technically does. It's the creation of money that's simply deposited electronically into accounts. And that's where this M1 money supply, which as you can see, just went into the utter stratosphere starting in 2020 and has still remained largely in the stratosphere ever since and has actually been going up since 2024.

15:26 That's what they're doing. There's a couple other things worth noting here. The other mechanism you could say that this is what they're actually doing and an outcome of that is interest rates. So as they make create more money, interest rates go down because there's more loanable funds to be borrowed and so the supply of available money goes up and the price of borrowing goes down. And that's what we see here in the aftermath of 2008 where the Fed drove rates to zero. They stayed that way until we sort of started coming out 2016, Trump is elected and they gradually rise and you could see of course that inflation, you know, heading into 2020 was incredibly moderate. It was below 2% during the first Trump administration.

16:17 And then uh along comes 2020 and rates go back down to zero and they stay there too long. long enough to induce the second great inflation of the past hundred years. And the last piece of the puzzle here is that there are very particular kinds of goods and assets and services that are, let's say, more responsive to interest rates and easy credit, namely the things that you need to borrow money to purchase. So, capital expenditures, uh, buildings and housing. And so when you look at the case Schiller price index, what you see is that that money printer has driven prices up and up and up and up and up over time. And I'm going to come back to this because this is a really important issue. That's getting to the core of the reasons to be a critic of the Fed. That is the reasons why I am a critic of the Fed and would like to see a fundamentally different monetary system. One that is not responsive to our politics and also not a monopoly of force that continually gets things wrong and gathers more power as it does. President Trump has a different perspective on this and before the announcement, well, he had certain expectations and uh well, let's just hear from him. And what we really want to do, and I think I can speak for Tim and I think I can speak for the entire Senate, we can uh speak for everybody, frankly, is we want to see interest rates come down. Our country is booming and the interest rates is a final little notch. And if you look at Europe, they've lowered 11 times. 11 times in a short period of time. We've lowered zero. And you know, they are competition. Although we're in the process of probably making a very good deal with them, too. They're they want to make a deal very badly. Very badly.

18:10 So, we're making a deal. We just completed our deal with Indonesia. We just completed our deal with the Philippines. We're making unbelievable deals. And the money is pouring in. I know many of you don't share my dislike for tariffs. But, uh the money pouring in is into the Treasury, not into our pockets. The Treasury is not our pockets. The Treasury is the government. So, there is a lot of tariff revenue. It is not the American people's revenue.

18:35 It's government revenue. It's important to remember because when you hear this, it sounds like we're making a lot of money. No, no, the government is. We want to get interest rates down. >> But on interest rates, at some point, does the level of interest rates now slow economic growth? >> Uh, yeah. It never helps it if it's high. Never helps it. Well, it's already as good as we're doing. >> Think of how well we'd be doing. We'd be like a rocket ship. As good as we're doing, we'd do better if we had lower interest rates. And we should. We're prime. Don't forget, without us, the whole world collapses. So we should have the lowest interest rate because you know you >> he's not wrong about that. We are we are the global hedgeimon.

19:12 >> You can talk about Switzerland. You can talk about wonderful countries, no debt, no but without us everything collapses. We should have the lowest interest rate. And I >> I'm not sure that that's the way that works. That just because we have the biggest military we have the lowest interest rates. But I don't know, there might be something to that. If you took it down three points, not a little bit, but three points, if you got us down to one, we would save more than a trillion dollars basically with just a paper transfer. You wouldn't be cutting costs of anything. You wouldn't be building anything. Just a three points. That's a big cut. That would be a serious acceleration of the money printer. The notion that that would be costless is well, recent history suggests that that's not the case. that you run that printing press like that and you are going to drive inflation and so that won't be costless. If it was costless then the monetary cranks and MMT folks that think we can just print our way into oblivion would be correct and they're not. And recent history has proven that they're not cost of anything. You wouldn't be building anything. Just a a move of the hand saying we're going to lower interest rates. You would save a trillion dollars a year. And again, when he says you would save a trillion dollars a year if rates stayed low and prices didn't go up, well, that would be kind of magical and we should be doing that. If that was true, why not? Why not have it all? Um the reality is it's not true and printing that money to drive down rates would push prices up and um and we'd be stuck in the inflationary crackup spiral that we just started to escape. And that also helped propel President Trump back into office. The money printer extravagance of the Biden administration is part of what drove inflation through the roof.

21:05 So this is not coherent stuff. And again, I voted for President Trump. I want him to succeed, but this is not coherent stuff what he's asking for right now. >> And there's there's nothing you can do to save that kind of money. So So why not? Well, we we had a little talk about it and I thought it was a very productive talk. Uh he'll be able to tell you at his next meeting, but I will say that he did say the country is doing really well.

21:32 >> So, at his next meeting, as we saw, he did not lower rates and certainly didn't lower them by three points. Um which led President Trump to uh to go after him. And go after him he did. Jerome, too late, pal, has done it again. He is too late and actually too angry, too stupid. been too political to have the job of Fed chair. He is costing our country trillions of dollars in addition to one of the most incompetent or corrupt renovations of a building in the history of construction. Put another way, too late is a total loser and our country is paying the price. What's he talking about here? Well, what he's talking about here is something kind of crazy actually and a reasonable example. It's actually a kind of microcosm of all the things both government and monetary policy that can go off the rails. And that is the $2.5 billion renovation of the Fed's offices. I'm not really sure why an organization that is basically a set of economists and some computers uh needs to have anything other than good security. And frankly, the most important thing is good cyber security.

22:49 Of course, uh we get a great Trump moment walking through the site. >> Well, thank you very much. We're looking at the construction and we're with the chairman as you know. Chairman, come on over. And we're just taking a look at what's happen. >> Come on over. Look at his face. He's like, come on over. I'm going to browbeat you and I want you to be right next to me when I do it. >> It's a tough construction job. They're building basements where they didn't exist or expanding them and a lot of very expensive work. There's no question about it. It looks like it's about 3.1 billion. It went up a little bit or a lot. Uh so the 2.7 is now 3.1.

23:36 >> Not aware of that. >> This moment here is so good. Look at pal's face. >> 2.7 is now 3.1. Not aware of that. >> Yeah, it just came out. >> Yeah, I haven't heard that from anybody for >> And here it is. Here's the prop that's ready. Ready for the PBS NewsHour cameras. >> I know that about 3.1 as well. >> 3.1 3.2. >> This came from us. >> Yes. >> I don't know who does that.

24:10 >> You're including the Martin renovation. You just added our entire capital. >> Yeah, you just add you just added in a third building is what that is. That's a third building. >> No, but it's it's a building that's being built. >> No, it's been it was built 5 years ago. We finished Martin 5 years ago. >> It's part of the overall work. >> It's not new. [Laughter] I mean, you know, at one level you're like, "Pal's getting railroaded here."

24:35 But it's just a bunch of economists and computers. Why do they need billions of dollars in buildings? I I'm with Trump on this one. This is crazy talk. This is just government extravagant nonsense. >> So, we're going to take a look. We're going to see what's happening. Uh, and it's got a long way. Do you expect any more additional personal runes? >> Don't expect them. Uh we're we're ready for them, but we we have a little bit of a reserve that we we may use, but no, we don't.

25:05 >> We have a little bit of a reserve, naming. Namely, we can print as much money as we need. >> Be finished in 2027. >> As a real estate developer, what would you do with a project manager who would be over budget? >> Which blogger asked this question is my question. Mr. president, what would you do to uh given the circumstances? >> Generally speaking, what would I do? >> I'd fire him. >> Do you think you say, Mr. President, do you think coal to do that?

25:35 >> Well, I'm here just really with the chairman. He's showing us around, showing us the work, and so I don't want to get that. I don't want to be personal. >> Are there things are there things the chairman can say to you today that would make you back off some of the earlier criticism? Well, I'd love him to lower interest rates, but other than that, what can I tell you? >> Before we come back to the core of the issue, which is the politicization of the Fed, the way the Fed mishandles our economy, and etc, etc., it is worth noting again that the $2.5 billion is crazy. In fact, it's so crazy that it would make it in the top 15 most expensive building projects on planet Earth. It's somewhere between two major casino hotels. One of which in Macau and I think the Win in Las Vegas from scratch, by the way. So, not renovating.

26:24 No, Steve Win built his entire hotel for roughly the same price as this renovation to the Fed. And you know, I I can I can understand why President Trump likes low interest rates, why he feels that they're an engine for growth. He is a builder. He is a New York City builder. And so, you know, you gota, it's easy to forget that that's his background. His background is in the building business. You know, that was what the uh the apprentice was all about, right? It was, you know, money.

27:04 >> You know, that's what he was doing. That's that's the show. You know, builders are the people that benefit from low interest rates. The housing sector benefits in the short run from low interest rates. Here's the problem, and here's where this seeming diversion into silly nonsense and browbeating the the chairman of the Fed ends up being even more useful as an example because the question, it turns out that the Fed's renovation project has gone over budget. And the reasons it has gone over budget are very very instructive. From the same CNN article, it reads, "A 2023 Fed budget document attributed some of the additional cost to quote significant increases in raw materials, higher labor costs, and changes in construction schedule expectations which lengthened use of lease space. In other words, the Fed printed tons and tons of money, drove up the cost of commodities and labor and inputs and pushed its own project over budget along with all of the rest of our projects and our housing and our food and our general cost of living. And this is what central banks do. This is the reason to be upset at the Fed. Not that it's keeping rates too low right now, but because it has serially robbed us out of our back pocket. The reason why it is the the story that we can't and or I should say the story that we shouldn't get enough of is because when the Fed and the monetary system goes wrong, psychopaths come out of to fill the breach. That's what happens when the Fed mismanages the monetary system. the medium of exchange that's on the side of every other transaction. We get populists and cranks and communists coming out of the woodwork with cockamamey solutions to a problem that they don't understand but that we all feel.

29:09 >> My platform is that every single person should have housing. If there was any system that could guarantee each person housing, whether you call it the abolition of private property or you call it, you know, just a statewide housing guarantee, it is preferable to what is going on right now. >> This is the almost certainly soon to be mayor of New York City, of Donald Trump's New York City of And I did an entire video last Friday about Mr. mom Donnie and his um his cockami ideas that will turn the city into ruin and make all of the problems he claims to care about worse. But he is the result of monetary mischief. That's what he is. He is the result of monetary mischief. When the money goes wrong, everything else goes off the rails. Our politics goes off the rails. Frankly, our morality goes off the rails. If we want to end the housing crisis, the solution has to be moving toward the full decommodification of housing. In other words, moving away from the status quo in which most people access housing by purchasing it on the market and toward a future where we guarantee highquality housing to all as a human right. This neolenism isn't a surprise for one of my least favorite economists, John Maynard Kanes.

30:28 He is the architect of federal stimulus. He is a big government guy. He's sort of the original, not quite a communist big government economist. John Maynard Kes, the architect of stimulus, hater of savings. But before he went totally off the rails in the 1930s, he wrote a book in the aftermath of World War I called the economic consequences of the peace. And I want to read an extended moment from this book because it really perfectly encapsulates what happens when the monetary system goes wrong and what risks lie in the aftermath. Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate secretly and unobserved an important part of the wealth of the of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily. And while the process impoverishes many, it actually enriches some. This is really important.

31:37 Inflation doesn't simply rise the cost for everybody. It redistributes who has the wealth. It's akin to pouring water into an ice tray. It doesn't just fill the water line all the way. It fills this part and then it slowly makes its way to the end, the people who are worse off for it. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls beyond their deserts and even beyond their expectations or desires become proeteers who are the object of the hatred of the bourgeois whom the inflationism has impoverished not less than the proletariat. And this is cutting straight at the folks voting for Mr. for mom Donnie, the bourgeoa elite managerial class who are making $180,000 a year and can barely afford a park slope apartment for two. They see this. They see the profiteers in their landlords and say, "Tear the whole system down. Let's try communism." As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors which form the ultimate foundation of capitalism becomes so utterly disordered as to be almost meaningless and the process of wealth getting degenerates into a gamble and a lottery. Lenin was certainly right.

33:09 There is no subtler, no sherer means of overturning the existing basis of society than to debauch the currency. The process engages all of the hidden forces of economic law on the side of destruction and does it in a manner which not one man in a million is able to diagnose. I read this gosh it's 2025. When did I read this? 2007. I came across this thing. I was like, my god, this is the most incisive summary of what inflation and monetary mischief does to a society. It is an allout assault. We have seen it over and over and over again. Vhimar Republic, you you wouldn't have had Hitler without the printing press in the VHimar Republic.

34:02 Venezuela, Zimbabwe, Argentina, on and on and on. Hyperinflation after hyperinflation, destroying societies. And I'm not the only one who's come across this thing because Rick and Morty has a great little sequence that is just worth revisiting because it sums it up perfectly. So, what are you doing with Level 9 Access anyways? Destroying the Galactic Government. >> Awesome. Are you going to settle their nukes to target each other? >> Or or reprogram their military portals to disintegrate their entire space fleet. Good pitches, kids. I'm almost proud. But watch closely as Grandpa topples an empire by changing a one to a zero.

34:41 >> Mr. President, the Blimp Flark's value just dropped to nothing. >> What do you mean? >> I mean, our single centralized galactic currency just went from being worth one of itself to zero of itself. >> Calm down, people. Deploy the Galactic Militia and declare martial law. >> Yes, sir. Uh, what should I pay them with? Their payment is the honor they'll feel to serve their Wait, who's paying me to yell at this guy? >> I can answer that for money. I never thought I'd live to see.

35:07 >> Gentlemen, gentlemen, there's a solution here you're not seeing. >> Give me your jacket. you. >> That is not actually even a hyperbolic way to describe what happens when uh you fully politicize the monetary system. This is the most difficult challenge that comes about when we start to look at this seriously. The Fed can get worse than it is. It can get worse by becoming a full agent of populism, of the Congress, of the president. This is what has led all of those prior regimes to collapse in hyperinflation because the Argentinian peronists promise a bunch of crazy stuff like Mom Donnie does. They don't have the actual resources to pay for it. So they turn to the printing press and say, "Print me that money and it complies." The same happened in Vimar. The same happened in Venezuela.

36:06 The same happened in Zimbabwe and many, many other places. This puts those of us that are critics of the deep state in a difficult spot. And it's easy to say we should switch to Bitcoin or go back to the gold standard, but that transition itself could also be incredibly scary. and lead to catastrophic disaster on the way from here to there. So I am a critic of the Fed. I think the Fed is terrible. Uh I think the Fed has mismanaged its role and on the way to eliminating it, I think there is something that we could do and that is tell the Fed it has one job and that is to stabilize nominal incomes. Not inflation, nominal incomes.

36:49 This gets super wonky super quick and I won't dive into it too deep right now, but I encourage you if you're geeking out on money to look up nominal GDP targeting. It would account for a lot of the things that gets the Fed off track and would at least make it a better second best solution to returning to the classical gold standard or maybe having something like a cryptocurrency. I am surprisingly a little more skeptical of crypto than uh many of my like-minded friends. Uh but that too is for another time. So that's probably my single biggest takeaway here. The Fed is a problem. You should know about it. You should be aware of it and you should be critical of it. But be careful what you wish for as far as making it a tool of the presidency or the congress too directly. There is a broader conversation that I wish our politics was capable of having here to reform the Fed. Ideally on a path towards elimination but at least towards more truly stable money so that we you and I, our kids, our grandparents can plan for ourselves. That's the core of the issue. The core of the issue when it comes to money is that what money fundamentally is is a kind it's a it's actually a kind of moral technology.

38:17 It's a contract. It's a contract that says I made a contribution to the society and I have a little receipt and when I buy from you and you take that receipt of my contribution, I'm making a contract that you're going to get to use that for what you need. So, I'm using it for what I need and you get to use it for what you need and you're going to do that tomorrow. So, it is a contract over time just like any other. And the capitalist system is simply that. It's voluntary exchange. It's us trying to make plans for the future, make decisions about investing or saving or going on vacation. But when it comes to saving and investing, those interest rates and that value of money being stable and representing actual reality, not the whims of presidents or the printing press is really, really important because when it goes wrong, the whole world goes haywire. What do you think? Should we just get rid of the thing tomorrow? Should we go all in on Bitcoin? Uh or is MMT actually the right answer and I'm just a complete free market crank? Let me know in the comments. Head over to dadsavesamea.com to find out more and to see my interview with George Seljin and others on macro and monetary policy. And of course, have a great weekend.