Policy Punchline

Jeremy Adelman is the Henry Charles Lea Professor of History at Princeton University and the Director of the Global History Lab, which strives to teach students internationally how to create new global narratives even across divides. Recently, the Global History Lab has brought displaced persons and refugees into its network. His academic focus is global, economic, and Latin American history. His recent books include Worldly Philosopher: The Odyssey of Albert O. Hirschman, published in 2013.

In this interview, co-hosts Tiger and Rebecca ask Professor Adelman about his views on global interdependence, why he thinks we are at a narrative impasse for multilateralism, how he uses history to understand the current global order, the resurgence of patriotic nationalism, as well as other topics relating to the Biden & Trump administration, international relations, and America’s actions in foreign affairs.

Professor Adelman began by explaining how he became interested and involved in history and, specifically, Latin America. He participated in activism in Central America in the 1980s’ dealing with civil war and transitional justice. This sparked his interest in understanding how countries relate to one another and the interdependence that is needed for their survival. In order for this globalization to be successful, a narrative which promotes a shared understanding between countries must be created.

1945 was the most recent time period in which a shared sense of purpose was established around the world: fight facisim and stop another depression. This need for globalization and the actions of the different countries was controlled and moderated by the United States. This liberal sense of purpose has reached its end point and is currently fatigued leading to the current situation which calls for a new shared narrative and purpose to be developed.

This need for interdependence began in the middle of the 19th century as a byproduct of the industrial revolution. It created a network in which countries relied on each other for basic necessities critical to their survival. Today, it is clear that 2008/9 were an inflection point and has resulted in us being in a transition period today. This is why there are countering narratives and beliefs regarding how the new global order should look.

We’re now at a narrative impasse, writes Professor Adelman in his recent Project Syndicate column titled “The New History Wars” – “We are now caught between an outdated style of patriotism and a fatigued pluralist alternative. The old national narrative that drove the boom in monuments was born in the heyday of empire and burnished in the twentieth century’s world wars, when founding heroes and myths served as a unifying force. But starting in the 1960s, civil-rights movements, feminism, and an influx of immigrants pushed Western societies to become more inclusive, and the old emblems of patriotism looked increasingly outré.”

While former President Trump was advocating for a return to a focus on the nation state, President Biden is leaning more towards Jill Lepore’s call for a progressive nationalism, one in which America has a shared national identity based on our roots in equality and fairness. Professor Adelman explains how this does not go far enough and instead America must focus on what is good about the nation in its relationship with something that is bigger.

The “Great Statue Reckoning” and the 1776 Commission are both “weaponizations of history” according to Professor Adelman, but he cautions against silencing these narratives and instead urges everyone to listen to the opposing side even if you disagree. People must be heard so that they do not believe that their identities are simply dismissed by society. American society is facing a very difficult situation: how to make those with whom you disagree feel heard even when you reject their very fundamental values and beliefs?

Esteban Rossi-Hansberg is the Theodore A. Wells '29 Professor of Economics at Princeton University. He performs research in macroeconomics, international trade, and urban and regional economics. He has been appointed the Glen A. Lloyd Distinguished Service Professor at the University of Chicago where he will join the faculty of the Kenneth C. Griffin Department of Economics in the Summer of 2021.

In Prof. Rossi-Hansberg’s recent paper “The Economic Geography of Global Warming,” he seeks to evaluate the economic consequences of global warming using a dynamic model with high spatial resolution. The paper is a perfect example of the kind of spatial economics research that Prof. Rossi-Hansberg pioneers and is particularly recognized for in the economics discipline. This podcast interview focuses on Prof. Rossi-Hansberg’s research in spatial economics and uses this climate change paper as an entry point to explain the methodologies and frameworks in spatial economics.

Spatial economics differs from conventional macro models by recognizing the singularities in space and how the local dimension influences agent decisions. Spatial frictions and shocks can impact the growth of local economies quite dramatically. These questions matter because it’s important to figure out whether changing these frictions could actually spur more growth or will merely lead to static reallocation effects.

Issues such as migration frictions, factor adjustment costs, investment decisions on a local level, and climate change are hard problems to solve. Spatial economics cares about the distribution of expectations and effects, and agents in different areas may care differently about the distributions in the future and that will influence their decisions. Prof. Rossi-Hansberg constructs these dynamic models that can provide a much more nuanced view on these economic questions.

For example, previous models of the economic impact of climate change rely on loss functions that track aggregate output as a function of temperature and other global variables. Importantly, these models do not incorporate local variation and behavioral responses, and therefore do not accurately model the reality of economic adaptation to climate change.

Prof. Rossi-Hansberg’s paper “The Economic Geography of Global Warming” aims to resolve the shortcomings of these previous models by using an integrated assessment model (IAM) with rich spatial data that looks at interactions between regions to show how the effects of global warming on production and migration are large, worrying, and unequal. He gives a detailed overview on how he goes about constructing an IAM and in particular, combining scientific modeling with socioeconomic analysis. He also gives examples of policy implications of the IAM and how they are used to come to practical policy decisions.

The paper notes that climate change does not affect regions in a homogenous fashion. Rather, certain regions of the world are impacted at different degrees than others – from welfare losses of 10% to gains of 15%. Prof. Rossi-Hansberg argues that these differences manifest in differences in productivity and amenities, with places like North America and Russia reaping those benefits. In contrast, the Global South and Europe suffer.

At the end of the interview, we also ask Prof. Rossi-Hansberg about his journey in economics academia over the years and why he decided to move from Princeton to University of Chicago in the coming summer. He praises America’s economics academia for being a treasure that allows one to freely think and push for frontier research, and he explains that his decision to join UChicago stems from a desire to explore new challenges in life after spending years at Princeton.

Sheldon Solomon is Professor of Psychology at Skidmore College. He is best known for developing terror management theory along with Jeff Greenberg and Tom Pyszczynski, which is concerned with how humans deal with their own sense of mortality. He studies the effects of the uniquely human awareness of death on human behaviors. He is co-author of several books, including the one we’ll be discussing today – The Worm at the Core: On the Role of Death in Life.

I was initially drawn to Prof. Solomon’s work because I listened to a three-hour long podcast interview between him and Lex Fridman. It was the most enlightening podcast I had listened to on the Lex Fridman Show, without exaggeration. That was a few months ago during a time when I was very confused and stressed. I was working nonstop every day and deciding between whether to pursue an economics PhD or go into the “real world” to work for a few years first before reassessing. Prof. Solomon’s ideas from taking a leap of faith in life to confronting the possibility of death were truly profound and changed a lot of my thinking back then.

Austen Allred is the Co-Founder and CEO of Lambda School. It is an online platform that trains you remotely to become a web developer or a data scientist. The user pays no tuition until hired. Austen’s start-up journey began in 2017 with him living in his two-door Civic while participating in Y Combinator (YC), the famous San Francisco-based seed accelerator. This experience became the foundation of Lambda School’s rapid growth. Before founding Lambda School, Austen was the co-founder of media platform GrassWire. He co-authored the growth hacking textbook Secret Sauce, which became a best-seller and provided him the personal seed money to build Lambda.

In this interview, co-hosts Tiger and Arsh interview Austen about Lambda School’s business model, his entrepreneurship journey, the future of higher education and credentialism, the powerful influence of Y Combinator in Silicon Valley and whether it’s become less prestigious than before, how Austen got involved in angel investing, the stellar rise of Clubhouse, and many other topics in tech and business.

We dig into the details of Lambda School’s operations and philosophy with Austen: Who ends up studying with Lambda? What is the selection process? What is the common trajectory of Lambda graduates? Could Lambda School’s educational model work in fields outside of computer science?

From the perspective of Princeton students, Tiger and Arsh also ask Austen’s thoughts on higher education and credentialism. A liberal arts education is often seen as valuable in the sense that it provides students with many useful assets to enter the workforce with: skills and knowledge, a degree or diploma, and opportunities to network and become involved in their field before graduation. However, companies like Google are now giving accreditation for people who take their software engineering and computer science courses. Tech companies seem to be putting higher value on having particular skills, not on having the broad knowledge of a liberal arts education. Is that the future trend? Where it will matter less and less whether someone went to Princeton or some other Ivy League school? Or will it actually matter more since liberal arts education will become rarer?

Austen is a seasoned entrepreneur and well-connected in the Silicon Valley community. Since Austen is an alumnus of YC, we ask him whether he thinks YC’s prestige and quality have come down over the years as it is now accepting hundreds, instead of just dozens, of companies into its incubator programs every year. It seems unrealistic to expect that there would be hundreds of high-quality startups every year, so is YC simply doing “spray and pray” rather than being actually selective? Does it still function as a true testament to the quality of a startup, or has it more become a place that could give startups more exposure to the VC community but actually adds little value to the companies themselves?

Austen is an early investor of Clubhouse, an audio-only social media app that has recently become increasingly popular amongst people in tech. Austen believes that Clubhouse could easily become a $100 billion company. Tiger, however, is not a fan of Clubhouse and believes that it provides a less thoughtful alternative to podcasts and simply adds more noise to the discourse. They debate the growth potential and future possibilities of Clubhouse.

Last but not least, Austen talks about how he got into angel investing and why the vast majority of Americans have missed out on the tremendous wealth creation that has mostly concentrated in Silicon Valley and taken advantage of by VCs in the past few decades. How could we democratize access to the private market boom? Is such democratization risky or constructive to building a more egalitarian society?

Ian Jefferies is the President and CEO of the Association of American Railroads (AAR), an organization whose members include the major freight railroads of the U.S., Canada, and Mexico, and Amtrak. Chuck Baker joined American Short Line and Regional Railroad Association (ASLRRA) as President after a 15-year career in the railroad industry.

In this interview, co-hosts Tiger Gao and Sullivan Meyer discuss with Ian and Chuck the basic functions of the American railroad system, business outlook, how the railroad system thinks about the climate challenge, policymaking in the transportation sector and beyond.

Sullivan and Tiger start by asking Ian and Chuck what their respective organizations do. In short, the AAR and ASLRRA are trade groups representing their constituent industries in Washington. For the AAR, that means giving voice to the seven Class 1 railroads in the United States, as well as a few hundred other large railroads. The ASLRRA, on the other hand, represents the over 600 shortline and regional railroads all over the country.

They then discuss the role of the railroad industry in America’s economic development and the nature of the rail economy. In the eyes of Chuck and Ian, strong railroads were and continue to be one of the defining characteristics of the American economy. Railroads still face tough competition against other forms of transportation, namely road freight.

We also explore issues of sustainability of railroads and their role in the fight against climate change. Railroads are the most efficient form of ground transportation, and thus central to America’s fight against climate change. At the same time, however, railroads have traditionally carried coal and energy products, so their secondary carbon footprint, at least historically, has been huge. Chuck and Ian make the point, however, that the industry is rapidly shifting away from hauling coal to intermodal freight and dry goods.

The interview wraps up with a discussion of politics and policy. In particular, Ian and Chuck differentiate policy for passenger and freight railroads. They argue that, while freight railroads run most efficiently and effectively with less regulation and government involvement, passenger railroads require government support. They also make a strong case for leveling the playing field between support for road freight and rail freight through shifts in government policy.

Harold James is the Claude and Lore Kelly Professor in European Studies and Professor of History and International Affairs at Princeton University. He is one of the most prominent financial and economist historians of our age, and his most recent book “Making a Modern Central Bank: The Bank of England, 1979–2003” was just published in the fall of 2020.

In this interview, Prof. James discusses his newest book, the modern history of central banking, global macro-financial trends in the last few decades, his insights on globalization and inflation outlook in 2020, and beyond. Prof. James dives into the details of the most important transformations undergone by the Bank of England, UK’s interactions with the European monetary system, as well as key external influences on the UK like Alan Greenspan and the German Bundesbank.

The Bank of England, the central bank of the United Kingdom, was established by the British Parliament in 1694. But ever since its genesis, it struggled over what efficiency and effectiveness meant. Central banks, especially the Bank of England, used to act behind a veil of secrecy, but the 1980s and 1990s marked a fundamental change in thinking about central banking all over the world following the great inflation of the 1970s, when the UK had the highest inflation rate in the developed world and realized that they needed to emulate other developed countries and establish better monetary policies.

By the 21st century central banks had transformed to be all about efficiency, stability, and transparent communications. Independent central banks are now also seen as the superior model because it would not be subject to political pressure. The journey of “making a modern central bank” thus involved shedding a strongly entrenched idea about British peculiarity or British exceptionalism and learning from the rest of the world.

1979 was a major caesura of the 20th century that started a new phase of globalization: the creation of the European Monetary System (without UK); the Iranian Revolution; Deng Xiaoping began a series of reforms that introduced the principles of the market to China; Margaret Thatcher became the UK Prime Minister; and the UK government announced the immediate removal of virtually all remaining exchange controls…

The period of 1979-2003 can be roughly divided into a few tumultuous periods in global macro-finance. In the late 1970s and 1980s, the US and European nations debated about monetary targeting. In the 1980s, exchange rate became seen as the cornerstone of credibility in Europe, which in turn dramatically influenced the UK’s central banking policies. In the 1990s, inflation targeting was “imported” to the UK on the basis of New Zealand’s pioneering experience.

The evolution of the Bank of England also went together with the evolution of monetary theory. In the beginning, no one knew what the function of the central bank was. Some said it as the institution that controls money and manages the banking system, while others believed that central banks were supposed to produce one fundamental public good – financial stability. Prof. James explains the competing philosophies behind central banking, monetary policy, and the interpretations for money, as well as the various interesting paradigms like Alan Greenspan’s “Spine Theory” that may have dominated monetary policymaking for many years and left profound consequences.

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.