Simon Johnson is the Ronald A. Kurtz Professor of Entrepreneurship at the MIT Sloan School of Management, where he is also head of the Global Economics and Management group. Prior to teaching, Professor Simon Johnson worked as the Chief Economist and Director of the Research Department at the IMF from 2007 to 2008.

This interview discusses his most recent book "Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream," which raises awareness of the need to continue investments in the U.S. and analyzes the impact of the recent decline of investments in innovation.

We trace back the history of public investments in America, like how MIT scientist Vannevar Bush’s bold vision helped start the National Defense Research Committee (NDRC) before WWII, which became central to allowing the U.S. leap in military tech and eventually win the War.

The post-WWII era in the U.S. saw corroborations between the private sector, federal government, and universities. This led to 2% of our GDP to go into research and development projects, but that number today is 0.7%. When did we start to witness the decline of the government’s tendency to fund science? Prof. Johnson wrote that we can trace it back to the anti-fluoridation messages of the John Birch Society founded in 1958, Senator Barry Goldwater’s election campaign in 1964 that advocated for small government, Senate Majority Leader Michael Mansfield’s criticism of the military due to the Vietnam War, and budgetary pressures arising from the Vietnam War and the Great Society.

Prof. Johnson also talked about how scientists have moved to the left and the political spectrum has shifted to the right – in ways not favorable to supporting unfettered scientific research and its implications. How have the political views of scientists influenced policy decisions for public investments? Shouldn’t this be a non-political, non-partisan process?

One particular example we discussed is the story of the Human Genome Project (you may see our interview with its co-founder George Church on our website). The HGP began in 1990 and cost $3 billion dollars in federal funding. By 2004, the total stock market value of the genomics sector was $28 billion dollars. The project laid important groundwork for the genomic and biotechnology revolution.

We also discuss the limitations of private funding driven by VC firms. Prof. Johnson especially listed the short investment time horizon problem. Is the private sector incentivized to work on the most urgent problems confronting our world rather than simply distributing profits to shareholders? Hard problems like climate change and inequality that require complex, nuanced solutions and not some big “catch-all.” It seems that the inherent incentive structure is such that PE/VC funds need returns 5-7 years, and that means investing in SaaS, consumer goods, and social media rather than nuclear tech / renewables / rethinking capitalism… Are we wasting huge amounts of human and monetary capital into “meaningless” innovations that churn profits but are not helpful to society? Is the only solution channel through the public sector?

Prof. Johnson’s answer is that it’s about complementarity: use the public sector to bring in innovations that can help spur more innovations in private sectors; and then the public sector should step in to regulate the private sector when needed.

Since Prof. Johnson was a Chief Economist at the IMF during the financial crisis, we also ask his thoughts on economic policymaking today and whether massive fiscal stimulus would be urgently needed to get us out of the Covid crisis. He believes that we should prioritize poverty reduction and getting the economy back on track first before worrying about the deficit.

Lee Cronin is a chemist and the Regius Chair of Chemistry at the University of Glasgow. He has been elected to the Fellowship of the Royal Society of Edinburgh, the Royal Society of Chemistry, and has published over 350 papers and given hundreds of lectures. He also heads the Cronin Group, a lab that is “motivated by the fascination for complex chemical systems, and the desire to construct complex functional molecular architectures that are not based on biologically derived building blocks.” He and his team are trying to make artificial life forms, find alien life, explore the digitization of chemistry, understand how information can be encoded into chemicals and construct chemical computers, and create complex molecular architecture not necessarily based on biological building blocks.

We start by discussing non-carbon-based lifeforms. Dr. Cronin’s interest in this subject comes from an aversion to assuming that carbon is the only life-permitting foundational molecule. He has created inorganic chemical cells that act in much the same way as our cells – in essence they are self-replicating and evolving.

This leads to discussion of implications and also nanotechnology, which is closely tied with chemical architecture. Nanotechnology can be split into two categories, according to Dr. Cronin: the biological engineering type, and the materials science/chemist type that deals with molecules and materials at the smallest scale. This leads to questions about whether evolution could be utilized and harnessed for human use.

Dr. Cronin also has an extensive background in education. A major project of Dr. Cronin’s are “chemputers.” Chemputers would be able to synthesize molecules after “reading” it off a paper, which naturally is a huge advancement for materials science and chemistry. We examine how this technology would scale up to practical use, and how it would be implemented in the real world.

We also discuss the possible futures of chemistry education, and how labs will operate in a more automated future world, including the possible risk of very real and dangerous applications of this technology. Such advancements also have implications for academia, and academic research. Further, we explore a more theoretical side to chemistry such as how quantum computing might affect chemistry work. Finally, we discuss Dr. Cronin’s work in energy and battery technology, which ties back into the nanotechnology side of things as well.

We hope you enjoy this interview with a very influential figure in the chemistry world.

Chris Wheat is the Co-President for the JPMorgan Chase Institute. Prior to joining JPMCI, he served as the Director of Analytics at a financial technology startup, where he led the development of advanced analytics algorithms. He previously was an Assistant Professor at the MIT Sloan School of Management and at the Center for Urban Entrepreneurship and Economic Development at Rutgers Business School. As a faculty member, he taught and researched topics in strategy, entrepreneurship, global microfinance, economic sociology, and social network analysis. At JPMCI, he leads research on small businesses and local economic development.

The COVID crisis clearly slowed the growth of the small businesses in all contexts, particularly those owned by racial minority groups. Mr. Wheat’s research during the COVID crisis quantifies the harm done to small businesses early in the pandemic and later on towards the end of 2020, via three business research reports that we engage in discussion with.

His report titled “Small Business Financial Outcomes during the Onset of COVID-19” shows that cities such as Atlanta, Las Vegas, Orlando seem to report slower economic recovery than cities such as Chicago, Seattle. Cash balances are an important metric of financial health, but the unemployment rate in Chicago is much higher compared to Atlanta. How should we reconcile the differences between these financial metrics in the context of economic recovery?

JPMCI’s report “Small Business Owner Race, Liquidity, and Survival” discusses the importance of developing a holistic understanding of financial health: including cash liquidity, revenues, and expenses. However, we usually hear about unemployment in the economy as the main metric, because that information is more readily available to policymakers and the public. How should we think the availability bias of information regarding small businesses affects government policy? How can we combat the asymmetry of information between policymakers and their constituents? What metric should policymakers look at when deciding how to implement financial stimulus? What is the most efficient way to supply businesses with exactly what they need?

JPMCI also found that the industry downturns during the beginning of COVID were felt equally across different owner races. As business started to pick up, cash balances of White-owned restaurants doubled while those of Black-owned restaurants increased by 38%. However, cash balances of Black-owned personal service firms increased by over 60% compared to those of White- and Hispanic-owned firms, which increased by less than 25%. How can we explain these different recovery rates? What do they tell us about the relationship between race and financial stability in different industries?

More broadly, we discuss the relationship between research and business, expanding into academia and industry. JPMCI holds a unique position that allows Mr. Wheat to conduct research that fits the description of neither scholarly academic nor finance professional. The question of data sourcing comes into play, along with a weighing of interests between private sector firms and public research groups. Furthermore, we explore the impact of business research in public policy. How is business research utilized in the public sphere, and what shape does that take?

For students navigating career paths in finance, tech or entrepreneurship and choosing between academia and business, Mr. Wheat offers insight into how to think about these different sectors from the perspective of an individual who has navigated all of them. His work into the COVID pandemic utilizes methodologies from every sector combined, and our conversation with him tackles the intricacies of COVID impacts on small businesses and the nature of business research in the big picture.

George Church is Robert Winthrop Professor of Genetics at Harvard Medical School and Professor of Health Sciences and Technology at Harvard and MIT. He is known as the father of synthetic biology and the CRISPR-CAS9 gene editing technology, and he is widely recognized as one of the most important geneticists of our age. In 1984, he developed the first direct genomic sequencing method, which resulted in the first genome sequence. He helped initiate the Human Genome Project in 1984 and the Personal Genome Project in 2005. He leads his own lab in Harvard and is also affiliated with the Broad Institute, the Wyss Institute, and a wide number of private companies that were spun off from his innovations.

In this interview, Tiger asks Prof. Church about his time as a graduate student and postdoc, how Harvard took a chance on him for many times during his early research career, his experience starting the Human Genome Project and its wide-ranging impacts, his critical contribution to the CRISPR gene editing technology, the ethical and policy impacts of genome technology, and the urgent problems left unsolved in the field.

The Human Genome Project began in 1990 and cost $3 billion dollars in federal funding. By 2004, the total stock market value of the genomics sector was $28 billion dollars. The project laid important groundwork for the genomic and biotechnology revolution that later transpired, and is a wonderful example of public-private partnership that is what this country needs today. What was the exact process like to sequence the first genome? What has it produced since, both scientifically and socially? Was the idea that we could sequence everyone in the world perceived as wild or immature?

Meanwhile, the Personal Genome Project that Prof. Church founded in 2005 pioneered a new form of genomics research. The main goal of the project is to allow scientists to connect human genetic information (human DNA sequence, gene expression, associated microbial sequence data, etc) with human trait information (medical information, biospecimens and physical traits) and environmental exposures. How is it different from the Human Genome Project?

Prof. Church compares the turning point of genome sequencing with the Internet around 1994, when suddenly everyone started using it. They have already helped bring down the cost of sequencing by 10-million fold. Similar to how Silicon Valley helped the Internet revolution by providing all kinds of softwares, it may be an adequate analogy to say that the HGP has provided the infrastructure like the Internet did, and perhaps the next steps would be additional business models and applications around genome sequencing that would further bring down the cost and make the benefits more widely available to everyone. The cost of reading and interpreting a genome has been shrinking exponentially. As the cost of this technology continues to decrease, what new possibilities will emerge?

CRISPR is a way of finding a specific bit of DNA inside a cell. CRISPR-CAS9 is a system biologically found in bacteria; it’s their version of a viral defense mechanism. When viral vectors inject DNA into the bacteria's genetic material, the CRISPR-CAS9 system finds it and switches it out with high precision. It allows us to not only delete certain info, but also precisely add in new sequences in specific locations. Prof. Church explains to us how CRISPR works and his critical contributions to the technology at its infancy.

Lastly, Prof. Church speaks to the moral-ethical concerns related to the CRISPR technology and synthetic biology at large. While the concept of gene modification is becoming an increasingly controversial topic, Prof. Church believes that not only is it a net positive to our world, our regulations should focus more on mitigating its impacts in a thoughtful manner, rather than trying to suffocate innovation altogether. “A politician trying to ban iPhones wouldn’t survive very long in office,” he joked.

Greg Lewis is an economist and the Senior Principal Researcher at Microsoft and co-leads the ALICE (Automated Learning and Intelligence for Causation and Economics) and EconML projects, an effort to develop use AI and machine learning for economics research. He specializes in industrial organization, market design, applied econometrics and machine learning. His work is unified by the twin goals of making better sense of microeconomic data, and using those insights to optimize firm decision making and improve market performance. His research has spanned a range of industries – online retailing, online advertising, procurement, electricity, education. Before joining Microsoft, Prof. Lewis was a professor at Harvard for seven years. He has a Ph.D. from the University of Michigan.

In this interview, Harsh and Tiger ask with Prof. Lewis about his research on consumer’s shopping trends online, how tech platforms rank search results and products, how to do causal inference using neural nets, how machine learning is in some news “the new statistics” and how it’s being integrated into econometrics.

In his recent paper “You Can Lead a Horse to Water: Spatial Learning and Path Dependence in Consumer Search,” Prof. Lewis introduces a new model of consumer search known as spatial learning. He explains his main findings in layman’s terms, and discusses how online platforms have the ability to manipulate consumer purchases to some degree by playing an active role in ranking products during a consumer’s searching process. His key insights focus on how consumers develop beliefs about products they see online, and how those beliefs change through experience and observation of reviews. More importantly, his methods try to understand how a good or bad experience with a particular product influences a consumer’s buying decisions about related products.

Prof. Lewis is a leading advocate to use machine learning methods for fundamental research in economics. In this conversation, he breaks down his development of DeepIV: a method for instrumental variable (IV) analysis using deep neural networks. He starts off by explaining IV analysis using simple examples and guides us through the improvements offered by deep learning. He elaborates that while neural networks are incredibly powerful at pattern recognition, their black-box nature offers great challenges as it fails to explain their predictions.

Prof. Lewis also addresses some “big-picture” questions about research in general. He talks about application of theoretical models to real-world scenarios, the effectiveness of computer simulations, as well as the age-old debate about how to uncover the “truth” from data. He talks about conducting research in the private sector as opposed to at a university, being optimistic about technology, and even a paper by Bill Gates about pancake flipping.

Last October, the IEA declared that solar power is “the new King of Electricity.” But as it currently produces only 2% of the global electricity, the newly crowned energy royalty has a long way to go before it will reach full dominance. In Taming the Sun, Dr. Varun Sivaram outlines the financial, technological, and systemic innovations that could allow solar power to provide a third of our energy in thirty years and truly claim the mantle of “Electricity King.”

Dr. Sivaram began our discussion by outlining the transformations in solar power that will make it the world’s primary energy source. He hopes that financial markets will make more capital available to fund both small-scale and large-scale solar projects. Solar technology itself also must make a qualitative leap, as incremental improvements in efficiency are replaced by entirely new ways of “taming the Sun.” Perhaps most importantly, energy systems must be revolutionized so solar energy can power transportation, manufacturing, and electric grids at large.

These innovations will help solar power overcome the complex challenges that it still faces, Dr. Sivaram argued. Solar panels can produce energy in unpredictable patterns, and only during certain hours of the day -- a phenomenon known as “the problem of intermittency.” Because grids that rely on solar power will have a large surplus of energy during periods of peak production, solar panels produce electricity when demand is at its lowest. That means solar producers of electricity sell energy at relatively low prices in a pattern known as Solar Value Deflation. Solving these issues could require storing electricity for future use using new battery technologies and hydrogen fuel cells, controlling energy demand so more electricity-consuming activity occurs during peak hours, and expanding the size of the grid to ensure that there is demand for solar electricity whenever it is produced.

Dr. Sivaram is particularly excited about a more speculative model for solar power from Taming the Sun: modular microgrids. He imagines distinct regional microgrids across the country that are linked through High-Voltage Direct Current power lines. Each locality or city would primarily use its own grid, but could “import” or “export” electricity to neighboring grids when solar panels are over- or under-producing. Each microgrid could separate from the national system, so dysfunction in one part of the grid could be easily contained. Dr. Sivaram added that technology that aggregates electricity being produced by individual solar panel owners and distributes it to where it’s needed could be instrumental in such a system.

Innovation of all types, however, is useless until it is applied to major power grids. India is one major electricity market with high potential for solar consumption, which makes it a source of hope for Dr. Sivaram. As India hurtles through stages of development, its energy demands will grow dramatically, and Dr. Sivaram is confident that current enthusiasm about renewables will continue. If he’s right, India will avoid becoming the world’s biggest emitter and move to the forefront of solar power. Though reform is urgently needed in India’s distribution utility systems, solar panel construction is cheaper in India than anywhere else, which is a promising sign for proponents of solar power there.

Global energy markets are at a crossroads, and Dr. Sivaram is leading the effort to put the world on the path away from fossil fuels and towards solar power. But he says that if the world is going to truly tame the sun, “we need new scientific solutions and we need public policymakers who understand what needs to be done.” For anyone interested in cutting-edge scientific solutions and the ideas that will shape the next generation of solar policymakers, this week’s discussion is a must-listen.

Mathias Risse is the Lucius N. Littauer Professor of Philosophy and Public Administration at the Kennedy School at Harvard University. He also serves as the Berthold Beitz Professor in Human Rights, Global Affairs and Philosophy and Director of the Carr Center for Human Rights Policy at Harvard University. His research questions the role of global justice in a wide range of topics like human rights, inequality, taxation, trade, immigration, climate change, and technology. He focuses on the “big questions” of political and moral philosophy in the United States and in a global context.

In this interview, Tiger and Marko discuss with Professor Mathias Risse his theory of “grounds of justice” and how technology changes the way we look at global justice. We go over the just nature of technology and how should individuals look at technology as being inherently fair. Risse sheds light on the rising movement across philosophy departments to critique and reform the widely used theory of John Rawls to include minorities and marginalized groups and how that has impacted philosophy scholarship. Lastly, we wrap up looking at politics in the United States and how the electoral college impedes the process of having fair and just elections, and why removing it could solve the problem.

Professor Mathias Risse has written three books with both “justice” and “on” in the title, yet all of these works appear to tackle a similar question: how should philosophers handle questions of justice in a global context? It all started with his book On Global Justice where he established his famous “grounds of justice” that global justice can be analyzed on.

However, how do these grounds change when we factor in the rise of technology? Can technology stand alone as its own ground of justice, or will it fit into the other pre-defined grounds of justice? Mathias Risse explains the future of technology in global justice and how technology can fit into his original theory from On Global Justice.

Additionally, we ask Prof. Risse his thoughts on the inherent nature of justice of technology: is technology inherently just? Is technology capable of being just as unjust as human actions and trade? He brings in other notable professors who have researched the topic including Princeton Professor Ruha Benjamin to answer this question on the just nature of technology in society.

John Rawls has provided a foundational understanding of political philosophy, but his work has recently been under fire. Rawls may have been able to provide a great framework for political philosophers but it overlooked the experiences of minorities and marginalized individuals in the United States.

Mathias Risse shares how philosophy departments have been attempting to critique and expand Rawls’ theory to include the viewpoint of marginalized groups in the United States. He shares how this changes our understanding of Rawlsian theory and what work is left to be done in Philosophy departments across the nation to make political philosophy more inclusive.

In the fall of 2020, Mathias Risse along with John Shattuck wrote a series of papers called the “Reimagining Rights and Responsibilities in the U.S.,” where Risse and Shattuck worked to explore areas of domestic politics and public policy that lead to injustice. These reports ranged from LGBTQ+ rights to voting rights and they all ended with a series of policy actions that could be taken to improve American society.

One policy action that is supported is the abolishment of the electoral college, but why would its removal lead to a more just society? How did the electoral college disenfranchise individuals and how does it continue to build a barrier to fair elections? Mathias Risse also takes on this question and shares with us his findings on how the electoral college impacts justice and how removing it can help increase the fairness of U.S. elections.

Robert Langer is an acclaimed chemical engineer, professor, and investor in biomedical technology. He is one of 10 Institute Professors at MIT, which is the highest honor that can be awarded to a faculty member. He has written more than 1,500 articles, with 1,400 patents issued and pending worldwide that have been licensed to over 400 companies. He is the most cited engineer in history with an H-index of 283 and over 331,000 citations according to Google Scholar. His inventions are estimated to have affected over 2 billion lives, and his most recent public work involves the coronavirus vaccine created by Moderna, which is the biotech company he co-founded.

In this interview, Arjun, Michael, and Tiger discuss with Prof. Langer his early career struggles as a freshly minted graduate student, his groundbreaking postdoc research on blood vessel growth for Judah Folkman that few believed could become reality, the future of tissue engineering technology, why the mRNA vaccine is safe and has withstood the test of time, the success of Langer Lab in spurring dozens of biotech companies, and the future of medicine amongst many other topics.

Prof. Langer was first offered 20 traditional chemical engineering jobs after he graduated from Cornell’s PhD program. Instead of taking those offers, however, he fought an uphill battle to find a position in medical research, eventually working with Judah Folkman at the Boston Children’s Hospital. Prof. Langer recalls that he didn't know too much biology about chemistry in his early career, so a lot of times he felt he was in the dark.

For the years that Prof. Langer has run his lab, the Langer Lab, he and his team have focused on two broad areas in biomedical engineering: tissue engineering and drug delivery systems. Both research areas lie at the core of many modern medical revolutions, from advanced drugs to synthetic organs.

Another drug delivery breakthrough that Prof. Langer describes more in-depth are star-shaped pills. The guiding principle behind the design is the following: standard pills are only able to deliver their encapsulated drug for a day. There are more crude ways to design pills that can administer drugs for longer periods, but the bulkier design could cause harm to the host, or block part of the digestive system. The star-shaped design solves for this: it is a pill that is small when ingested, expands inside the body, and leaves a large hole in its center for the digestive track to act normally. This kind of pill would make delivering some drugs, like insulin, much easier.

Prof. Langer then goes on to describe some of the broader aspects of these research fields. What are the most promising future applications for tissue engineering and drug delivery research? What are the current obstacles/limitations in research for tissue engineering and drug delivery systems? What capacity does AI have to further push the frontier in research for these fields?

Prof. Langer attributes two reasons to the amazing speed of the mRNA vaccine development process: the superior nature of the technology itself in comparison to previous vaccinat technologies, and the U.S. government’s “Operation Warp Speed” that invested a lot of capital into the private sector while providing regulatory support.

He explains the mRNA vaccine to us: DNA makes RNA, and RNA makes protein. While classically people focused on the protein part when producing vaccines, the process takes too long, and Moderna directly started with the mRNA part. The beauty of mRNA is that one can make it very quickly, give it to the body, and start testing for efficacy.

A key pillar of the mRNA vaccine technology is drug delivery, however. To a patient, the mRNA would get destroyed immediately if not properly encapsulated and protected by nanoparticles when being injected into the body. But once it’s successfully injected into the muscle, mRNA will trigger the body to start making antibodies and immunize the patient.

Wingham Rowan has long been a leader in forecasting the interactions between technology and society. For instance, he created, produced, and presented cyber.cafe, Britain’s longest running TV series about the internet. He also was a presenter on his own program for children, Rowan’s Report. More recently, however, Mr. Rowan has been studying the future of labor and how technology can improve the unpredictable nature of the gig economy. He leads Britain’s Beyond Jobs Project and the international nonprofit, Modern Markets for All. His big ideas about Public Official E-Markets, or POEMs, have been implemented recently in Long Beach, CA to great success.

At its root, POEMs are an effort to bridge the unequal gap between markets used by the upper and lower ends of the economy. Specifically, there are millions of “irregular” workers who cannot work traditionally scheduled hours. These people need jobs, and they can provide valuable labor to businesses. Mr. Rowan believes that everyday workers and small businesses should have access to smart markets, where they can find each other in a way that helps everyone. If the private sector won’t share the ones they use, though, the public sector has an opportunity to step in.

Would it be possible for governments, whether local, state, or national, to establish a system of online labor markets as a public utility? It’s a revolutionary idea. When pitching it, Mr. Rowan often receives pushback, including from us. We dig into the specifics of the system, interrogating where it could have problems and trying to find where its potential could be maximized. POEMs is no “silver bullet solution,” but through our conversation it’s clear that the plan, if properly implemented, can lead to serious positive social good.

Mr. Rowan is driven by a singular mission: to create better markets for gig work, allowing workers and businesses to unlock their entire economic potential. Instead of being at the mercy of an employer’s scheduling, irregular workers can take control and sell their own time through POEMs. Our conversation with him tackles many aspects of the POEMs plan, its possible pitfalls, and the ways it can solve inequality through public policy.

Stephen Roach is a Senior Fellow at Yale’s Jackson Institute for Global Affairs and a Senior Lecturer at Yale’s School of Management, where his research and teaching focus on the impacts of Asia on the global economy. One of Wall Street’s most influential economists, Prof. Roach spent more than 30 years at Morgan Stanley, where he was the Chairman of Morgan Stanley Asia and the bank’s Chief Economist. He has written extensively on globalization, trade policy, and international finance.

Last October, Prof. Roach published an article in the Financial Times titled “The end of the dollar’s exorbitant privilege.” He argues that the dollar could fall as much as 35 percent by the end of 2021. In this interview, Prof. Roach walks us through the reasoning behind his arguments and discusses the economic and political significance of a dollar crash, mainly pointing to two metrics – a decline in domestic savings and an increase in the current account deficit. Domestic savings was at 1.4% of national income in Q1 2020, compared to the 45-year average of ~7%. The current account deficit plunged to -3.5% of GDP in the second quarter, the sharpest quarterly decline on record, and the massive stimulus package will further blow up the deficit.

What are the implications of such a dramatic dollar crash in valuation, both in the U.S. and abroad? How have the current monetary and fiscal policy regimes exacerbated this issue? And is there anything the U.S. can do to prevent the fall of the dollar?

We also touch on another important market trend: the rise of Bitcoin. Despite the cryptocurrency’s increasing popularity and legitimacy among institutional investors and corporations – most notably Elon Musk and Tesla – Prof. Roach is skeptical about its potential as a global currency. We discuss the implications of Bitcoin’s rise and the difficulty of valuing an asset with no traditional fundamentals.

On one hand, Tiger argues that Bitcoin has never been supported by fundamentals but always by narratives and people’s faith in it. As long as the faith for Bitcoin is strong enough, as long as people’s doubt on the dollar and other forms of assets are strong enough, and as long as the hunt for yield continues, Bitcoin’s price will just keep shooting up.

Prof. Roach counter-argues that by definition speculative bubbles do not go on forever; they always burst. When an asset turns into a speculative bubble, that means people are buying the asset just under the expectation that the prices will keep going up. So by definition, it’s an investor play on price appreciation that is detached from the fundamental value of the asset. That detachment can go on for a lot longer than we think, but ultimately it reasserts itself when the price point involved, for reasons that are very different for each asset, gets so far detached that just the slightest, inconsequential shifts can lead to the bursting of the bubble.

Lastly, having spent the bulk of his career on Wall Street, Prof. Roach critiques the Fed’s monetary policy in the past few decades and reflects on his own forecasting career. He addresses the impact of the Fed’s rapid balance sheet expansion, which some argue is inflating prices of financial assets held by the private sector and, in doing so, primarily benefiting the wealthy. Do there exist more equitable ways of stimulating the economy besides Quantitative Easing (QE)? And, if so, what can the Fed do to implement them?

This is a far-reaching conversation beyond mere topics of the dollar dominance, Bitcoin, and the GameStop saga. It’s about piecing together the large macro-financial trends we’ve witnessed in the past few decades and trying to make sense of what might come next.