Policy Punchline

Alan Blinder was the Vice Chairman of the Board of Governors of the Federal Reserve System under President Bill Clinton. In this episode, we seek to answer questions on the Fed’s unprecedented actions in light of the COVID-19 crisis and their long-term implications, from whether the injection of liquidity is propping up the financial markets in unhealthy ways, to whether the lack of coordination between fiscal and monetary policies could potentially exacerbate inequality like after the 2008 financial crisis…

We say that the Fed’s actions have been unprecedented because it not only pledged to buy an unlimited quantity of government debt, but also decided to support even some of the riskiest corporate bonds; it lowered the target rate to 0-0.25 percent and announced in the June FOMC meeting that it’s not even “thinking about thinking about raising rates…” Is the Fed well-equipped to mitigate the economic effects of a pandemic? In the process, how can we manage the public expectation so that the Fed is not being given “mission impossibles?”

The Fed’s “Main Street” lending to small/medium sized businesses has somewhat pushed the Fed to uncharted territory. While Prof. Blinder believes that the Fed is doing a better job of injecting money into Main Street than it did in 2008, he acknowledges that the Fed is primarily equipped to support large corporations, and as such may play a role in exacerbating inequality. He also argues that the financial system has grown too large, to the point where “the tail is wagging the dog.”

An expert on the 2008 financial crisis, Prof. Blinder walks us through a series of critical comparisons. Today’s crisis is not one created by housing bubbles or elaborate financial instruments, so there generally seems to be less resentment among everyday Americans towards financial elites. But by stepping into junk bond territory, the Fed has effectively backstopped some of the biggest names in the hedge fund and private equity industry and some of the most aggressive speculators. Will there be a strong reaction against financial elites similar to the one we saw in 2008-09 with the Occupy Wall Street movement?

A lot of studies have been done on how the 2008 financial crisis bailout exacerbated inequality in the U.S. One reason often given by economists and journalists is that the monetary policy response was adequate, but the fiscal stimulus didn’t follow suit. How do we ensure that the same doesn’t happen again? How can the Fed and the Treasury be smarter and attach more conditions to the loans and grants they make to large corporations?

In a recent Wall Street Journal op-ed, Prof. Blinder dismissed concerns over the inflationary impact of the Fed’s radical monetary policies as “Scarlett O’Hara questions” about the long-term effects of the Fed’s monetary policy – specifically on the deficit and on inflation. He argues that these potential issues are not particularly pressing or worrisome and that these are questions to be dealt with after the coronavirus crisis is averted: “I’ll think about that tomorrow.” In this episode, we probe deeper into the reasoning behind this idea, and whether the fear of the deficit or inflation might undermine the economic recovery in the short and long run.

Full bio: Alan Blinder is the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton University. He previously served as the Vice Chairman of the Board of Governors of the Federal Reserve System under Bill Clinton, as well as on Clinton’s Council of Economic Advisors. Blinder is one of the leading voices in the discourse surrounding fiscal and monetary policy, and has written many best-selling books, including the latest “Advice and Dissent: Why America Suffers When Economics and Politics Collide.”

What is gerrymandering and how does it affect people’s electoral rights? How can we use technology and data to empower communities to get the representation they deserve? More importantly, why is 2020 important besides the presidential elections, and how can it shape American politics for at least another decade? In this interview with Princeton professor Sam Wang, we explore what gerrymandering means for local communities and voters, why it has become such a big issue in the last decade, and what citizens can do about it. We also discuss how COVID-19 impacted the 2020 electoral and redistricting processes in the United States, as well as what it means for the current election and gerrymandering cycles.

Sam Wang is a unique figure: a neuroscientist by trade, he started analyzing politics in the early 2000s, when he was among the first to aggregate US presidential polls and use statistical methods to analyze them. This work led to the establishment of the Princeton Election Consortium, a blog opened with the mission to provide informed analysis of US national elections by members of the Princeton academic community. In 2012, he recognized new, systematic distortions in representation in the U.S. House. Understanding the causes of these distortions launched his interest in voting rights and led to the creation of the Princeton Gerrymandering Project. The Princeton Gerrymandering Project conducts nonpartisan analysis to understand and eliminate partisan gerrymandering at a state-by-state level.

In its landmark 2019 decision on partisan gerrymandering, the Supreme Court acknowledged the Princeton Gerrymandering Project’s analysis. While approving of the Project’s mathematical analysis, the court decided that there was no legal standard for it to act with regard to gerrymandering, so it barred challenges on a federal level. This decision breathed new air in Prof. Wang’s work with the Princeton Gerrymandering Project, encouraging them to adopt a federalist, state-by-state approach to pursue reforms against partisan gerrymandering, a topic that’s discussed at length in the episode.

The episode is co-hosted by Tiger and Theodor Marcu, a 2020 Princeton graduate who worked closely with Prof. Wang and the Princeton Gerrymandering Project. He and four other undergraduates founded Representable.org in 2019 to fight gerrymandering across the US with the help of a novel approach: collecting crowdsourced data about communities. Representable allows nonprofits and community members to draw their communities on a map and submit them to an online database that can then be referenced by journalists, nonprofits, redistricting committees, and lawyers in each state. This data can be used to show how proposed or existing district lines may break communities apart, which is a marker of partisan gerrymandering. In the second half of the episode Tiger and Theodor discuss the role that Representable will play in the 2020 redistricting cycle, how crowdsourced data can be used to fight gerrymandering, as well as the role of online platforms in a democracy.

“Burning Down the House: Newt Gingrich, The Fall of a Speaker, and the Rise of the New Republican Party” is the latest book of Princeton politics professor and historian Julian Zelizer. The book explores how the 50th House Speaker Newt Gingrich started an era where Republicans practiced a ruthless style of partisanship that ignored the conventional norms of Washington and continually tested how far politicians could go in bending government institutions to suit their partisan purposes.

In this interview, Prof. Zelizer, Tiger, and G. Terrell Seabrooks discuss some of its most salient themes and explore the many thrilling stories in this book: such as Gingrich’s takedown of Democrat House Speaker Jim Wright – a pivotal moment when Gingrich “swept the old order aside;” or, in 1983, Gingrich crafted the message of his career – branding the Democratic Party as the symbol of Washington’s corruption in the post-Watergate era…

Gingrich redefined partisanship by expanding the boundaries of what was permissible in the arena of congressional warfare, and he legitimated ruthless and destructive practices that had once been relegated to the margins. Steven Bannon said that when Republicans went for head wounds, Democrats were having pillow fights. Why didn’t the Democrats follow the Republicans’ strategy? Was it because of integrity or was it because of a fundamental lack of political will? We reflect on the history of partisanship and Congressional warfare tactics and hope to provide clarity on the near-term development of American politics.

We also discuss Gingrich’s relationship with the media and President Trump. A historian by training and having received his PhD from Tulane, Gingrich understood the importance of narratives and good storytelling. We explore how Gingrich helped fuel the rise of TV politics, where the line between entertainment and serious policy discourse became increasingly blurred.

As one of Trump’s most trusted advisors, Gingrich was considered for being Trump’s running mate in 2016. Both men are like “pirates,” as Gingrich himself explained: “[Trump] is outside the normal system, he gets things done, he’s bold, he’s actually like a figure out of a movie. In a lot of ways, my entire career has been a little bit like a pirate. I’ve taken on the establishment of both parties, [I’m] very prepared to fight in the media.” However, Trump eventually chose Pence over Gingrich as his running mate in 2016 because he didn’t want a “two-pirate” ticket. Pence was a much safer, composed vice presidential candidate who indeed helped Trump get elected – an outcome that Gingrich had always hoped for.

From Gingrich and the “establishment,” to President Trump and modern legislative floor tactics, this interview delves into the strategy that has helped shape the Republican agenda for the last three decades. Is Gingrich responsible for the partisan divide we see today? How can democrats respond to the increased politicization of lawmaking in Washington? Is this polarization a permanent element of our political system? All of these questions, and more, are answered in this episode.

“Burning Down the House” will be available for purchase beginning on July 7, 2020. We also encourage you to listen to Prof. Zelizer’s podcast, Politics and Polls, co-hosted by Princeton professor Sam Wang.

Julian Zelizer is the Malcolm Stevenson Forbes, Class of 1941 Professor of History and Public Affairs, Princeton School of Public & International Affairs. He has been one of the pioneers in the revival of American political history and is now the author and editor of more than 20 books on American political history. Professor Zelizer is also the co-host of the popular podcast Politics and Polls and a frequent CNN Contributor.

In late June 2020, Covid-19 claimed one of the largest giants in the energy industry: Chesapeake Energy. Chesapeake is a leader in the fracking industry that had been on the rocks for a few years now. In this episode, we detail the rapid rise of the fracking industry with Russell Gold, WSJ senior energy reporter in Texas.

Gold’s first book, "The Boom: How Fracking Ignited the American Energy Revolution and Changed the World," documents the invention of hydraulic fracturing in 1974, how it is both a threat and a godsend for the environment, and how it led the revival of manufacturing in the United States.

We also discuss Gold’s second book, "Superpower: One Man's Quest to Transform American Energy," in which he discusses renewable energies and focuses on the legendary figure Michael Skelly, who used his Harvard Business School contacts to create impressive companies. The midwest can produce the most amount of renewable energies because of the cheap land and suitable climate, so Skelly’s vision was to build low-cost clean energy options between places such as Oklahoma and non-midwest states. The already crazily complicated deal was even further complicated by the strong political opposition at the time, from which we discuss the today’s landscape from The Green New Deal to a realistic vision for sustainable energy use.

Russell Gold is an award-winning investigative journalist at The Wall Street Journal, responsible for covering all facets of global energy with a particular focus on the U.S. energy boom, power generation and the global energy transition. He’s been covering energy for the journal since 2002 and his reporting has taken him to five continents and above the Arctic Circle two times. In 2010, he was part of the Wall Street Journal team that covered the Deepwater Horizon explosion and oil spill. The Journal’s work was awarded the Gerald Loeb Award for best business story of the year and was a finalist for the Pulitzer Prize in National Reporting. In 2020, he will inaugurate a new beat the Journal: Climate change and business. Outside of his work at the Wall Street Journal he’s written two books. His first book, The Boom, was longlisted for the FT Goldman Sachs Business Book of the year prize in 2014. Superpower, his second book, was published in June 2019.

Museums and galleries have been closed since March under lockdown rules, and there are growing fears among curators that many museums may never open again due to financial difficulties. James Steward is the Director of Princeton University Art Museum, where he leads a staff of 110 with an operating budget of $20 million and collections of over 110,000 works of art that span the globe and encompass 5,000 years of world history. In this interview, we discuss the role of art museums in helping make us better citizens and how the responsibilities of large art institutions may even expand in the wake of the coronavirus epidemic.

An avid museum visitor himself, Tiger also asks Director Steward how the art viewing experience has changed and will continue to evolve in light of Covid-19:

- Can the art viewing experience possibly be even better after we take away the shared physical space and give people a chance to reflect in a solitary fashion?

- Art museums have always said to perform effects of anti-alienation and symbolize the unification of a social sphere rendered by fragmentation by class division and other societal issues. One often argues that in a place like an art museum, we may finally have a model of utopia as people come together across those obstacles and collectively share an experience. Is this something that art museums can actually achieve, especially after Covid? 

- Museums often contain people with the same class, race, educational level… What major takeaways could the art museum industry derive from this Covid crisis and the ongoing #BlackLivesMatter movement that might motivate it to change its course, so that museums can in fact achieve such utopian vision – helping restitch our social fabric and transcend divisions?

How can we use evidence, not predetermined cultural scripts based on past pandemics, to evaluate the current Covid-19 crisis? This is the question Dr. Merle Eisenberg raised in his recent Washington Post op-ed. When we talk about coronavirus, we often hear anecdotes from the 1918 Spanish Flu pandemic. Why do we focus so strongly on this particular historical example, and what do we miss out on when we ignore earlier histories, such as the Justinianic Plague (550-750 CE), which we will explore in detail in this episode.

What are the differences between the way Covid is being handled compared to past pandemics? From the public’s social distancing measures to the rich people’s fleeing from crowded cities, are there any broad trends and patterns of behaviors during pandemics that consistently lasted throughout history? Are pandemics generally inequality-reducing (like how the Black Death ended Feudalism), or inequality-exacerbating (like today’s billionaires getting richer from Covid)?

In this long discussion on the history of pandemics, Dr. Eisenberg and Tiger also explore topics on state capacity and resilience. For instance, the Ottoman Empire tested by a series of local droughts, shortages and famines during the 1560s–1580s, but the pre-industrial society was able to “contain the damage by shifting tax burdens from the affected areas, ordering fixed price sales of grain from other provinces, and in some cases arranging direct shipments from local or imperial granaries.” It provides an illustration to how societies throughout history develop anti-fragile political structures.

Merle Eisenberg is a late antique, medieval, and environmental historian who investigates how people responded to end of the Roman Empire to shape their communities and create new medieval states. His research projects range from analyzing how rulers issued laws to build frameworks for their states to case studies of how climate change has affected pre-modern localities.

He co-hosts the podcast “Infectious Historians” with Lee Mordechai. The podcast aims to provide a flavor of past disease outbreaks while also discussing some pressing present questions.

Currently a postdoctoral fellow at the National Socio-Environmental Synthesis Center (SESYNC), Dr. Eisenberg is working on a project entitled “The Making of a Pandemic: Plague, Environment, and the End of Antiquity.” It examines the outbreak of the first great socio-ecological disaster in recorded human history: the first bubonic plague pandemic, commonly known as the Justinianic Plague (c. 541-750 CE).

Multiple tech companies (Amazon, IBM) have—in a rather surprising turn of events—pledged to stop providing facial recognition technology to police departments in light of the #BlackLivesMatter movement. In this episode, Dr. Annette Zimmerman of Princeton University gives context to the wider public debate on algorithmic justice and the biases of artificial intelligence technology that is rapidly unfolding right now.

Dr. Zimmermann, Arjun, and Tiger touch on some of the most long-standing questions in the field of AI research and moral philosophy:

- What is algorithmic bias? Is all bias bad? How do we understand algorithmic bias from a moral and philosophical perspective, as well as from a technical perspective?

- Where do we see algorithms exacerbating structural injustices in society, and in what precise ways are algorithms doing so?

- What are some of the questions unworthy of asking or are merely “AI alarmism” that is not helpful to the discourse? 

- AI fairness is an active research area. Is reducing bias in the algorithm a fundamental solution, or more of a patch to a deeper problem? If we remove certain features and modify the data and/or algorithm, are we playing God to some extent? In other words, what gives AI researchers the right (let alone the responsibility) to change aspects of the dataset and algorithm?

- Is it possible to assign responsibility for the decisions of an AI system to the creators of the system, since they have enough of a degree of control (e.g. the features, the predicted variable)? Is the creator of an AI system is culpable for the decisions made by that AI?

- What are the dangers of private companies providing AI services to public institutions? How can we combine top-down and bottom-up approaches to reduce the prevalence of biased algorithms making societal decisions (e.g. SF banning facial recognition)? Do we need a redesign or revamp of social and democratic institutions to deal with the idea of algorithmic decision making? What do you see as the fundamental societal changes we need to make?

Dr. Zimmermann is a postdoctoral researcher at Princeton University, affiliated with the University Center for Human Values (UCHV) as well as with the Center for Information Technology Policy (CITP). Currently, she is focusing on the ways in which disproportionate distributions of risk and uncertainty associated with the use of emerging technologies like algorithmic decision-making and machine learning — such as algorithmic bias and opacity — impact democratic values like equality and justice. She has a particular interest in algorithmic decision-making in criminal justice and policing.

Jan Vogler from the University of Virginia analyzes the European Union as a polycentric governance system. He is particularly interested in the question of whether this institution with multiple layers of decision-making and a mix of shared and individual responsibilities of governments at different levels can effectively respond to the many challenges it faces today, from Brexit to the international refugee crisis. 

Another topic discussed in the podcast is which factors determine citizens’ views of the EU’s central administrative institutions. Since the average EU citizen does not have a lot of exposure to the EU bureaucracy, Dr. Vogler suggests that their perceptions of how the EU’s bureaucracy performs are shaped by domestic experiences with comparable institutions, i.e. domestic local and central bureaucracies. To what extent does this phenomenon explain Euroscepticism and inform us about possible reforms that the EU may need?

We also discuss multiple other topics, including the legacies of imperialism and colonialism with respect to the structure and functioning of public administration and differences between democracy in Europe and the United States. Another interesting aspect of Dr. Vogler's research that was not covered in the podcast is about the impact of the Black Death on democracy in Central Europe, which potentially answers some questions about the long-term impact of Covid-19 on politics and political institutions.

Dr. Jan Vogler is a Postdoctoral Research Associate in the Political Economy of Good Government in the Woodrow Wilson Dept of Politics at the University of Virginia. Born and raised in Germany, he served in the German Federal Defense Forces and received his bachelor’s degree from the Free University of Berlin. He went on to earn a master’s degree in International Relations from the London School of Economics and Political Science, and a PhD from Duke University in Political Science with a specialization in Political Economy and Political Methodology.

Stadiums closed; mass sporting events canceled... tough days for the sports industry, which is projected to lose $61.1 billion in revenue in 2020 due to Covid-19, according to one new research study. The NFL is preparing for its season this Fall – how is the league navigating decision making and planning during this time?

Tiger and Arjun invited Mr. Iwao Fusillo back on the show, who is Senior Vice President for Data Analytics and Insights at the NFL. There is so much that data can tell us about this crisis and the appropriate responses the sports industry should take, and few people are as well positioned and informed as Mr. Fusillo to answer some of our burning questions: What are the fans saying about returning to normal? Do they want to start watching games live again, or is there concern about live events? What is the role that data-driven approaches play in a crisis situation like the current pandemic? How is the NFL responding in a data-driven way to Covid? How difficult is it to plan scenarios and conduct extensive stress testing when the current situation is so uncertain, and data and trends seem to change weekly?

You will hear some very surprising data from this interview: for instance, while there is a long-term secular trend in declining households using TV, the NFL continues to increase viewership across all demographic segments including female, Hispanic, and even Gen Z. In fact, for the virtual NFL Draft during Covid, the NFL had the largest year-over-year increase ever in Gen Z viewership at 71%, with female and Hispanic also showing deep double digit increases.

Mr. Fusillo also talks about leadership and decision making in crisis moments. He says that over the course of a 30-40 year career, one would typically need to lead through 3 global crises, and for him, it was 9/11 in 2001, the financial crisis in 2008, and now the 2020 Covid pandemic. At the NFL, in a matter of days after the pandemic hit, Mr. Fusillo's team stood up a credit risk assessment capability used across thousands of league and team sponsors, product and media partners, significantly enhancing the League's risk tolerance and response in this crisis.

And Mr. Fusillo's punchline for us this time? The business world transformed over the past couple of decades where Chief Financial Officers are now just as likely to be tapped for CEO and public company board positions as their COO and CMO counterparts. Mr. Fusillo's prediction is that in the coming 10-20 years, the business world will transform again, where Chief Data Officers will soon become the most likely to be tapped for CEO and board positions. And ironically, COVID-19 somewhat accelerated us on this very positive path for the rise of technologists and data scientists in our business world.

On April 25th, the West Texas Intermediate price for oil futures delivered in May collapsed to -37 to -40 dollars a barrel at one point. It has never happened that oil prices fell into negative territory. While the oil crisis has seemingly stabilized, tons of questions remain. Prof. Jason Bordoff, the founding Director of Columbia University's Center on Global Energy Policy, joins Tiger and Owen for a discussion on the state of oil markets, the future political struggles between oil-producing nations, whether we're at all near the "endgame" stage for fossil fuel, and the broader energy transition in a post-Covid world.

To give a more elaborate explanation of the oil price crash – The first half of 2020 has seen the traditional energy markets in an unprecedented phase of unrest. As COVID-19 brought global movement to a halt and as oil producing countries scrambled to balance the market through cuts of their own, cracks in OPEC+ –– the most powerful oil cartel today –– were clearly visible. The political aftermath of the OPEC+ fallout saw countries increase their production, leading to both an increase in oil supply and a massive drop in demand. With nowhere to put this oil, oil futures went below zero for the first time ever as places to store this unused supply quickly filled up.

Jason Bordoff is the founding Director of the Center on Global Energy Policy at Columbia's School of International and Public Affairs. He joined the Columbia faculty after serving until January 2013 as Special Assistant to the President and Senior Director for Energy and Climate Change on the Staff of the National Security Council, and, prior to that, holding senior policy positions on the White House's National Economic Council and Council on Environmental Quality. He also hosts his own podcast “Columbia Energy Exchange” that features in-depth conversations with the world’s top energy and climate leaders.