Paul Volcker & Ray Dalio | State of the US Economy & Government

hello I'm Ray Dalio and I'm happy to be here with Paul Volcker who is my greatest hero and probably too many people the greatest living American and that's a big statement I've watched Paul evolve since 1970 when he was under secretary of the Treasury of Monetary Affairs all the way through the present and during those years he had more effect on the world economy and built up more credibility and has been at the center of more economic decision-making than any man alive in his 91 years he's affected the world in profound ways that we some of which are very famous and some of which are just a reflection of his credibility for example when the issue the controversial issue of the monies that Jews were lost in the Holocaust went into Swiss banks and that very delicate subject very different from regular economics the man that they chose to examine that question was Paul Volcker Paul in many many different occasions and at many different times shaped many many different issues so this is a man who has extraordinary principles I've known him to be the most principled person that I know and also to been at the center of most important economic decision-making during those many many years but for many decades and to see things from the top this is a man with great perspective and so I'm here today to pull out the principles of from Paul and to understand how he got those principles so Paul to start off please give me what you consider to be what your most important principles well first of all thank you for those very generous comments and let me say I'm glad to see you here at this point I've been a little the weather I hope I'm recovering but you know it's a book I just wrote we've got something to talk about you asked one of my principles and the first thing that comes to mind so I'm sure we'll get to later is my first principle is effective governance and I go back and we can discuss this in more detail Alexander Hamilton put it all in a nutshell Alexander Hamilton is an old Treasury guy he's a financial guy he restored the credit of the United States so he's a hero of mine he said the true test of good government is his ability to administer not the great policy we can they carry out the policies effectively and economically and good government is not just high policy it's making the Machine work day after day efficiently faith of the American people in our government today is really distressing you have been polls taken every year ask the same question and see how the transgenders do you trust your government to do the right thing most of the time didn't sound the right thing most of the time doesn't sound like a lot of difficult to test you get maybe 20 percent to say yes just about the Congress will be less than 20 percent and it's no great secret we're torn apart by ideological and other differences now so we've got a real challenge so when you ask my principles my first principle is good governance when you talk about principles like a dad in the family and we were not a family that spent money easily we like to economize and be sure how we were spending money I'd like to think we carry this over or I carry it over when I have some responsibilities and government to try to do it sufficiently not only is accurately but as efficiently as possible you know my mentioned my father he took over a city manager of this bankrupt town in 1930 and lasted for 20 years but he became the principle figure in the town has no question he was the best known and fortunately highly respected but he was a fanatic for disclosure he would do a very detailed budget every year and disputed it to everybody in fact and he went down to how many police cars they brought how many fire engines are bought and he professionalized the police department and the fire department two to two departments that are essential obviously in any town and he just he was a bug for not spending more than he had to spend but spend what was necessary for a professional operation it appears that he had a profound impact on your life you were born in 1927 this was two years before the stock market crash and the Great Depression in 1930 at the beginning of the Great Depression he took you in the family to Teaneck New Jersey by the way read about this in this book because it's the building of a great man and a system to build a great system and he came as the manager of that town I'm going to read a quote of your father that relates to what you're saying government is a science and I'm happy that the officials in the people of this community agree that the man who is the manager should be thoroughly trained in the science of government and in that in that part of the book you also refer to that it was a solidly middle-class town and you referred to his good education his basic good solid education and in the book you talk about your good solid education you talk about the importance of family and the science of government the idea of that good management and you refer to its outcomes that there was no crime in Teaneck New Jersey The Saturday Evening Post wrote in our that's entitled there is no crime in Teaneck New Jersey because it was well-managed because there was a middle class because there's good education I'm interested in what you think is happening to infrastructure education family middle class and government management and you expressed worries about the United States as position in the world do you think these things are related what are your hello all these things you say very familiar but I grew up precisely at the time when I graduate from high school or college World War two was over the United States at one the war in our opinion it rules the world it developed presumably a multicultural multi lateral system of governance and mutual growth it all seemed very successful we kind of forget that we had two miserable wars in Vietnam and then in Iraq but by and large I grew up in a world to where you know I moved in the United States Treasury I felt the kingpin those Treasuries around the world you work well I wasn't the US Treasury was yes the Australia and the Federal Reserve that's different now we're learning in a world where we're still top dog maybe with the top dog isn't so readily recognized by others as it was and we obviously have the rise of China as a clear competitive for world influence and how that all works out we'll see but it's it's not the comfortable world of assume leadership that I grew up with and that's what I struggled with in the Treasury and later in the Federal Reserve there are other forces the rest of the world is growing some of them more rapidly than we when I was in Federal Reserve Japan was the big question as to the arrival of the United States and go properly has a very good success economically we kind of forget about that now as things changed now it's China but we have to learn in the world in which we needed supplies America is not taking for granted anyone and I'm afraid that's been speeded up but what's been happening in Washington and the countries in the last four or five years House help weary obviously that this divided divisive miss and the Congress divisive nough sin the country it's made it impossible to take very coherent consistent approaches towards domestic problems but particularly toward foreign policy and that sense again that we are the natural leader we have certain allies that seem permanent ten or fifteen years ago don't seem so feminine anymore it's a tougher situation that we have to accommodate tool that makes some emphasis on effective government well the more important in my mind who is going to appreciate the United States as a leader if we don't seem to be able to manage our own affairs at home you keep referring to management of the government and your father was the manager and you've been around the management of all governments around the world you've also explained that the discouragement of government workers to be professional managers could you embellish on that point I know this is maybe probably your greatest mission is to have a beneficial impact on that you know there are two million employees and federal employees not counting the army the Air Force is over two million civilian employees which is exactly the same amount we had back in the Kennedy administration which is 80 years ago yes and you asked how is it government operating same number of people that there's an awful lot of outsourcing out contracting that's the kohu Defense Department itself out sources 300 billion a year or more who's minding the store and I'm not sure we're well enough equipped for those two million people I headed a through ition on the civil service when I left the Federal Reserve which was in 1987 and there was a big Commission we had ex vice presidents we had a cabinet offices we had congressmen we had a lot of people who issued a good report what impact did it have very little about how you needed to develop a more effective civil service make it easier to hire and make it easier to fire get the right leadership in there which some departments have and some do not have five years later he headed another Commission much smaller Commission with another good report but what impact does it have not enough one of the observations it's often struck me this is a feeling by you know many businessmen the government is not efficient doesn't do things right it's filtered a lot of time service and I'm very helpful which obviously there are isolated places where all those things are true but by and large I have been struck by the number of businessmen who've been called in the government for a secretary or something rather than the secretary in the White House whoever who after two or three years in government say I didn't realize there were so many people in the government that knew what they were doing and could do it effectively and it's one of the biggest experiences I take away from my years in government that it's much more effective potentially with a bit of staffing than I thought but that's a hard hard lesson to sell generally and it's not always true we have to improve the damn thing and that's what I'm after at at this point in your life the thing that you have devoted the most to is the proper nationalisation education of of government managers you've created the volcker alliance in which you've devoted you most of your net worth – yeah in order to foster the proper development of government workers in that way you've spoken to me in the past about how they're not respected and also how it's difficult at universities and various places to get them to be attracted in there because they're not given a good career path they're not given good training and they're not given much respect and that that is undermining the effectiveness of the system what are your thoughts about that thank you you've preached my sermon well I been concerned about the strength of the civil service you know people who want to go into civil service often can be selected and maybe in a school of public administration say okay you got a job it's February but we can't have you and can't pay you until the new fiscal year which is six months away so these people can't sit around with no pay or they think for six months if they go got a job on Wall Street or someplace instead but that's a typical of the kind of thing that needs to be repaired but what concerned me is yeah titude stored government itself and the difficulties getting in attracting and keeping the best people paralleled by the glowing lack of interest as I see it in universities 50 years ago hundred years ago schools has departments or schools of Public Administration Public Administration is a bad word now people associate public administration with a bunch of time servers sitting in some government office producing nothing useful the administration people don't think that when you say business administration but they think it went yeah it's a government administration but we have a problem and these schools many them have lost sight of how to teach what are they teaching what should the curriculum be how do we train people to oversee all that outsourcing hundreds of billions of dollars being outsourced who's minding the store are people equipped to do that have we taught them the right thing have we taught him how to manager we taught talk them out of debate issues is a right a good memorandum how to deal with other people other departments and so on this little vocal Alliance is trying to get a kind of marriage new marriage between universities and the government state and local government as well as federal government to see whether we can develop a stronger sense of interest in efficiency last time this is true in the United States was before World War one when there was a great movement for improving government and the Civil Service came into effect and up through the Depression years there's a lot of pressure a lot of done to improve government organization but a lot of people wanted to go into government now we are what he is later we've lost much of that so would you say a principle of yours is that in order to have effective government you have to have effective civil servants will you call them civil servants whatever you call them you had two people running I'm with Alexander Hamilton the true test of government is the ability to get something done efficiently and we lapse in that respect you've been in contact with economics in every country every major country is that a distinguishing characteristic of those that are successful and those that are not you have to have a great feeling commitment to whatever you're doing whether it's economists a civil servant and they still exist you know there's still a lot of people in government had a great sense of commitment to doing what's going on and you know look at this present change in government I think there's something like 700 maybe more potential presidential appointments in the new government all the secretaries and the secretaries assistant secretaries judges so forth and so on about a third of those offices are filled now nobody's paying attention now who's running those departments well the civil servants are left there they've been good for maybe not but leaderless basically that isn't the way to run a gun that's just one example of the difficulties were having these days looking around the rule the world what are the principles of great government well obviously you need a strong leader at the top that helps quite a lot but what we are running into is the life of democracies democracies really able to do the kind of thing I'm talking about or do they eventually as Plato said end up with something tock recei and you can't really maintain a democracy over a period of years but you have you know countries like France and Germany had a very discipline very prestigious civil service so did the UK that's deteriorated a lot in recent years because it's considered too elitist to to law removed from the public Ashley and I guess this is a great trick how can you get the expertise that you need and the leadership that you need and still respect the popular desire then the vote in the end and the politicians are going to decide the direction in which to go you refer to Plato's cycle on the ripple in the Republic the idea of course that democracies are threatened describe that and describe how you feel that that pertains to today's situations well I think you look at the United States that were very familiar with you have a very divisive new administration you have the kind of gridlock that we saw in the Obama administration I was friendly with mr. Obama I was disappointed he couldn't get more done but but who you had a situation where the Congress in effect said the Senate said whatever mr. bomb Obama is for were against and they maintained that position for three years really and that the government suffer from that yes did it have a really well-designed efficient health care system for the uninsured was tried very hard but it was very difficult to develop it and maintain it and you see symptoms of that sort all over the place now inability to read some reasonable consensus on how to administer certain programs or how in the first place to get agreement and what the program will be and it's done of phenomenon just for the United States unfortunately it's obviously in Eastern Europe Latin America's a hardship case almost from top to bottom but even within the established democratic countries in the euro zone having some trouble and maintaining the progress that we made internationally the developing set of international rules and developments that suit everybody and the feeling that they don't suit everybody and they're too many people have been left out I think that's that's a real problem that mr. Trump has touched upon and kind of the real base for his support but whether we're handling in the right way is my mind pretty doubtful at the moment you had probably the greatest economic challenge and you were both also the greatest most powerful man in the in the country in the world actually in terms of your control of a monetary policy so 14.8% inflation is where we hit in March of 1980 and as a result of that you tighten monetary policy I remember it very well you said an m1 target of 5.5 percent and as a result of that interest rates went up to 20% more than ever expected and when you when you tighten monetary policy like that it drove the unemployment rate up to 10% and it caused the worst downturn in that period of time since the Great Depression and you held tight in that there were protests there was anger and you held tight in that and you followed it through and as a result of that you broke the back of inflation and in 1983 that inflation rate went down to 3% inflation at that time and we began a decade of prosperity of strong growth with low inflation now you had to have a vision of what it was like yet to fight through that vision despite all the opposition that's an example of leadership under under people now look back and they say that was a great accomplishment but at that time that must have been very difficult can you describe this and then also tell us more about what you've seen to be the qualities of great leadership that you've seen in others as well well this all happened the fighting inflation inflation itself 15 years roughly and people today you know know people my age are all dying and even middle aged people were children then and they may not remember the atmosphere as was experienced the inflation rate is going up for more than a decade they were kind of feeble efforts to deal with it during the Ford administration they handed out putting slip inflation now but had no had more buttons than policy then there was always this conflict it's always exist don't tighten monetary policy too far you'll get some unemployment so we want a decade that way and we've got more inflation and more unemployment and when I took over the Federal Reserve at the end of Carter's administration President Carter was totally frustrated because he seemed to be unable to take any initiative anyway because all this inflation was backed by Iran and he couldn't do anything in the budget couldn't do anything on anything all these things he would have liked that it seemed to be stalled by this fear of inflation and it was very real at that time and so he asked me to become chairman of the Federal Reserve well it was obvious that existing policies weren't working and actually I was in the Federal Reserve before that voting against some of those policies but I decided we had the change in approach and we've got to stop worrying about increasing unemployment at any time we've got to deal with this inflation though it's going to get worse and worse because it was accelerating when they got close to fifteen percent annual rate and that we pussy-footed much longer was going to be 20% and people were really fearful about the stability of the country so we did tighten it took a long while actually for the unemployment ready to go up was very stubborn and the inflation rate was very stubborn and we made one or two false moves so we had to take back and look a little longer than we thought but I saw no other way to approach this other than kind of a bulldog in biting at it straight out and I got plenty of worried in 82 when we did begin getting unemployment the damn inflation rate wasn't coming down and the money supply wasn't coming down the way we wanted but I felt we were stuck we we couldn't back off all the effort we were making would be for naught fortunately by the summer of 82 things when he spiked him down relation rate became coming down we had a recession but by the end of the year looked like the recession could be over or at least stopped getting worse and it ended pretty quickly but it took that last year of sticking with it that I think was necessary to do the job now you talk about how unpopular was the farmers had tractors outside the Federal Reserve we had community groups we had one congressman spent every day for two years asking for my impeachment but my sense was the country as a whole understood that inflation was getting in spite of throat and they were willing to sit back and not be too aggressive because they thought I was attacking a problem that needed to be attacked and I had more support I think I know I did a good measure that was when my reemployment came on at the end of this process was first nominated it was unanimous nominated four years later it was not unanimous as a Democrat voting against me eight Republicans they were left-wing Democrats eight Lightning Republicans in 84 votes with me and I think that was a fair representation that people things were getting better than but people tolerated what it took to deal with the inflation problem and I don't think there was any other answers I can saw myself it was a tough time but you have any other answer there with you what you know I remember you going through it every single day I was wondering what Paul Volcker was thinking since you said that you said the m1 target of five and a half percent and I did the calculations of velocity and I thought oh my god is that really going to be happening because you you know you have a 14 percent inflation that means the interest rates have got to go up it was in so it was it was a time people don't have any understanding of that how challenging that time was they we think of 2008 but the 1982 the unemployment rate rising to 10% the rate at which the economy plunged all of those conditions were worse than a 1982 not 2008 so it's a it was a more dramatic time even in terms of volatility of interest rates where people forget about going back on his computer 2008 we had a bankrupt Latin America the bank said head over heels and lending the Latin America they had one and a half to two times their capital not just big American banks but big international banks hopes were invested in Latin America one day Mexico said we can't pay anymore August 1982 and what happens well we hook him by cooking with the help of the IMF which is very important we stalled stalled for time and he's like oh this isn't that very dramatic we got the bank's because they was in their own interest to continue lending enough to pay interest anyway we forced constructive reforms we thought on Mexico Brazil Argentina a lot of that's been lost since but that was with the help of the IMS and it held together we didn't have a banking collapse wasn't subprime or there was subprime subprime latin-american bar it was a good example of how you could roll things forward from 1982 until 1991 when they had the brady thought is correct and things have capital had been restored some of the debts had been lowered and he could finish it off with the so-called lady brady plan this you have known most world leaders for most of the last 50 60 70 years tell me what are your principles about what makes a great world leader or a great leader in general sometimes you get close to them they don't seem so great but you know when you look around that world leaders in recent years when you begin thinking of I think mrs. Merkel did a pretty good job in Europe and Germany we had dinner with Lee Kuan Yew you and I remember Lee Kuan Yew was the next name I was going to mention and the third name I was gonna mention is I don't know how much you went into xuanji just I mean he's been a hero of mine I didn't know him first well he was a hero of mine this this is in 1990s when I was to China quite a lot I don't go to China very little now and I don't know the Lee is now but I know the leaders in the 90s when they seem to be a blossoming capitalist economy or to exaggerate a bit with hopes for an open democratic society doesn't look that way quite now but back when dung and xuanji were where they look very promising and they come to us for advice they don't come for advice anymore you might come to us and tell us what the Tobin well they seem to be doing pretty good that's right that's right they say we don't have to follow you anymore but Lin Kuan Yew of course is a special case Hughes what are those qualities well he knew what he wanted to get done and he did it and it is small relative Enclave and he did a lot of things that we cut it about in terms of democracy he was little too easy to put people in jail and to quiet down opposition and worry about what the newspaper said about him and so forth but he had a drive to develop Singapore with a very strong civil service very effective grew up free government as near as I could say and he pulled it off and he maintained a very strong position then Singapore is economically I don't know where ranks in the world by per capita income but its way up there we I so your principles if I get it correctly your principles would be a great leader has an accurate vision of where to go a great leader has will fight the opposition in pursuit of that and deliver a great leader has a deep caring for the people that they're leading a great leader also seems to be leading with a an effective management of civil service in government or a effective bureaucracy to carry those things through those the principles well I think we have to add a principle the one you've had you've got to have a respect for the people I don't know whether you included that you know some of the qualities you mention either apply to Adolf Hitler but we don't want an eight out of Italy we've got somebody that's got some democratic instincts and recognizes that he's only there temporarily and that he is wants to lead the country effectively but peaceably and without dictatorial demands so it's a nice balance to be charged and it may be less efficient when you have to deal with public opinion and differing points of view but it's obviously essential of democracies kundo kind of last we legitimately worried about the our casino my mother who was quite a character herself I recall vaguely whining to her when I was probably a young man in government Vietnam war or something rioting history to race up on our we were threatened that the country was threatened to survive all these tensions said Sonny Boy Sheena called me Sonny Boy she said we're 200 years a democracy we've been a longer democracy everybody else in the world we've gotten over worse than this before go get back to work and do something and I take a little comfort in that thought that we can straighten ourselves out after this little turmoil that's a little turmoil what do you see the United States is future China's future over the next 10 years let's say well you know I sometimes sounds terrible but I respond more favorably to what the president of China is saying than the President of the United States President China at least says that he's looking forward to harmonious relationship over time and that early he's looking for the world being divided up through different spheres of influence and the china will take care of the Asian sphere but looking for peaceable outcomes where we're all threats and and demands so it's different story being told now there's some justice of course in what Trump is doing it is true during our period of leadership we tended to overlook in our own country some of the problems that world leadership implied in terms of willing to accept a lot of imports in particular and we began getting overwhelmed with imports and it's only part of the sections didn't bother Wall Street doesn't bother California but a bar that all those small manufacturers are not so small manufacturers that losing Ellen's and it's true we do have a big current account deficit it's not all China but in China don't go has a big surplus said it had worldwide so we ran up the analyzing this all correctly but there's no doubt we've had some unevenness and repercussions in the United States which present a real political problem and we've got to resolve it that political problem is the polarity that political problem is the wealth gap described the political problem well to reach some agreement about what an appropriate influx under what conditions immigrants are we've recent years taking a lot of immigrants maybe we don't want so many but what should the rules be both in terms of our economic needs but in terms of all moral needs when people are being oppressed in different ways and how can we develop an economy that's more balanced between the great middle part of the country and the two coastal areas where a lot of the vigor seems to exist and that's a big challenge it's not going to be healed overnight what are we gonna do about the big issues of from my point of view climate change we don't seem to be able to reach and work with other countries effectively in that area which may kill the whole next generation if we don't worry about us so a lot of issues that somehow I've been polarized to the extent who haven't very difficulty in achieving the consensus that we need Paul what would you like your legacy to be oh god my legacy I'd like to see my legacy a more effective government in general I haven't got any control over the high politics or any influence but I would like to see a general acceptance of the need for an efficient public service ethic and see people attracted toward public service because they can take satisfaction that they're doing something concrete for the country and the people generally and it can certainly test their own acumen and intelligence and energy to do that kind of thing you know my father I'm sure that rest of about spending so much time in government but I'm sure that in the end he found that as satisfying career and didn't make a lot of money he made enough to live on simply enough I would like to see that kind of spirit permeate a wider population and it once did there's no doubt about it when I grew up when I got out of college and I got out of graduate school going in the government was a popular thing to do now people scratch their head and say why would you ever want to do that and that's not a very healthy sign which goes along with the 20 percent confidence in government to do things right back when Kennedy came and it was overdone with all the spirit that he had and I was a young man and full of Kennedy glamour respect for the u.s. that same question do you trust your government could up 60 or 70 percent said yes so that's a healthy we should be skeptical I want 30% to be skeptical and what more than 30% to be skeptical these chemicals is one thing but being anti-government is another thing that we've parrot we don't dismiss it what does the Volcker Alliance do we are young and small organizations but we're trying to get some cohesiveness is what we perceived many people perceive about the needs of government for effective administration and effective people and get better connection between the needs of the government and the universities with schools the public administration of public policy that can feed this potential demand more effectively than it's been done recently the recruitment between the federal government and young people in between the universe he's so lacks it's almost disappeared then that's not right these universities have to review what they're doing to see how they can really educate effectively and the government has to cooperate with them and then see what kind of people they need and how they need to be trained how they can be employed with a minimum of red tape and and delays and be given satisfying jobs because there's no doubt that a lot of challenges of government a lot of opportunities analyzed for challenging jobs how would you hope that the government would work with the volca or Alliance to visualize that goal what parts of well you answer what you ask a sensitive question where were examining precisely that issue there are people in the OMB Office of Management and Budget the management part of that has been very weak but it still exists it's been there I guess since the Truman administration that should be a central focus for government management with a few experts and interested people they now are taking an initiative to do precisely what I'm talking about so we had us seven or eight questions we asked all 50 states with the help of summon universities how are you doing in budgeting how are you doing are you cut funds to reserve for emergencies how's your pension system and three or four other questions we published a nice shiny book all the states were ranked didn't rank them in order but we said you're doing a good job their job impossible job let's attract a lot of attention because it's competition between the states so people oh my god here we got a report for the Valco alliance it says we don't have good budgetary arrangements so some of them have actually changed their budgeting procedures that's a good example of an impact of the Volcker Alliance but yeah and it'll put the grades on those actually for everybody to see change his behavior you know everybody talks about nobody's doing anything about it that I can see anyway over you know such obvious infrastructure projects is due to new rail tunnels under the Hudson we're sitting here with leaking tunnels totally dependent upon these two very fragile existing pieces of infrastructure that would built more than 100 years ago what are we wasting time on a few blocks of the second Avenue subway why are we wasting a lot of time with some elaborate way of bringing two or three Long Island trains in the Grand Central Station when big obvious needs are going undone so I'm trying to make a little project to bring out some of those problems and does it take the federal government leadership to somehow bring people together to see which of the most urgent of these infrastructure problems and to what extent should the federal government that inevitably we gets involved be doing the financing and checking its viability working with the states and cities and it's just not being done now no it should be done in the States are all being squeezed financially which makes it all more difficult how can others help the your you achieve your legacy and the volcker alliance they can look it up look it up on their iPhone I guess they can see but we we do need some money and we are at a point where you know we've got some money to function this year next year but we're gonna continue after that we're going to need some influx of real money we're a very small organization but it's interesting what you can do with a small organization but we do have to get and we're gonna spend this year making another try demanding more cooperation from the universities themselves because they potentially have more resources and we have the public administration public management they put a lot of money in the business management not putting money in the public management economics it was a prestigious hesitate to call it a science but it's got great prestige or did until it missed the 2008 crisis pretty completely economists have lost a lot of prestige I thinking in recent years and rightfully so but the amount of money that's been poured into economic research has compared the amount of money poured into research and public administration is astonishing this just hasn't got the same respect my old University of Princeton once got a huge donation for public management training for public service where's the money too close to the Economics Department and to oversimplify when I went to Princeton the question of Princeton was a professor of Public Administration I tell people that now in the Economics Department they don't believe it that Woodrow Wilson was the father of public administration President of Princeton one of the things he did not touch upon but which I think they were a big problem is the amount of corruption in the world fiduciary responsibilities seems to vanish from the lexer doesn't vanish from their statements the nice statements of ethics that they print but when I get sounded a trading desk or good sounds Oh making a deal with Malaysian with the big payoff you wonder whether the ethical standards ever get down to the people doing the work and the enormous number of conflicts of interests that have developed in banks and elsewhere and in finance I did a study of what make countries succeed and fail with a ten year time horizon looked at different indicators and there's a negative 52 percent correlation in other words a very strong negative correlation between the level of corruption and the level of relative growth you recently received a lot of attention for making the statement that related to government that it's a hell of a mess all around and I think you were talking more broadly but clarify what you mean by that with her faint news you don't know what to believe what not to believe you got presidents that don't seem to mind either personal behavior or making outrageous statements true or not you have a Congress that's been unable to function effectively now maybe that hopefully maybe that'll change a little bit but we'll wait and see you after this past election but we have not been on a constructive track oh yeah I think that's fair to say we were M through a massive tax bill whatever you think about that tax bill shouldn't be rammed through the Congress without any debates that midnight on December 31st or whatever was done with almost nobody in the Congress having a very good idea what was in the bill what do you like what was in or not it's not it wasn't subject to the right kind of debate that we should have had but that seems to be true and other areas as well no I just refer you to the morning press if you want to know a description of how effective government is these days so a lot of people have claimed that we've always had challenges in government and we've been through these things including my mother well and my lifetime this I think there was a general after world war two again when we were king of the crop it was a broad consensus about the broad outlines of foreign policy and there was a willingness of both Republican and Democratic presidents to kind of lead what NATO leads the World Trade Organization lead the whole effort to reduce Terrace that all went hand in hand a lot of debates about it but the basic or the policy was generally accepted and that's changed and we're not always going to have happy harmony about what policy should be but you got to do a little better than we've been doing recently and go back to what I think I said some time ago of all the presidential appointments for less than half anybody's even been nominated much less appointed the quality of the people appointed through cabinet offices the sub cabinet office I think by any estimation is not up to scratch that didn't say there are not good and effective appointments but when you see lobbyists for polluting companies named head of the agency for anti-pollution you wonder by the coherent nature of the appointment and this happening too often that State Department ripped apart maybe it should be ripped apart but it ought to be done in a constructive way we haven't got haven't had an ambassador in Saudi Arabia we have all these fathers of Saudi Arabia I mean even got an ambassador there until now why not I mean too much policy seems to be out of the back pocket today and God knows what happens tomorrow look for no government man like me it doesn't look very good hence my comment let's hope it gets better well thank you Paul for spending this time and also conveying some of your principles and also some of what you're hoping will be achieved over the next few years to make up your legacy i'm i hope that we can help you achieve know thank you for coming I appreciate the opportunity to rant and rave a little bit because I think the country needs a little ranting and raising and you do that so well

  1. This has been one of the most eye opening interviews I've seen in a very long time! Mr. Volcker is someone everyone should listen to. I'll be reading his book right after I finish Principles! Thank You.

  2. Paul’s remark starting from 17:37 reminded the book “The Fifth Risk” by Michael Lewis. Our mainstream media failed to educate the public the details of what each of these government department/administration do and how our current and future lives are impacted.

  3. Fixing the economic problems were easy. Increase deficit spending by hundreds of billions per year and the economy will improve. That is what Reagan did from 1982 through 1990. Now the country is being conned again with trump increasing deficit spending by almost half a trillion dollars. If you want to see the economy boom like never before then increase the deficit spending by 2 trillion. We will see the economy boom for a short time like the world has never seen but it is not a fix. It is a con job.The 22 trillion and growing national debt is ultimately going to bankrupt and destroy our economy for good. Check it out for yourself.

  4. What a great economic mind Mr. Volcker has and such a skilled and highly competent civil administrator. A master bureaucrat, in a good sense. Excellent interview.

  5. Practically insightful from the time of Plato through the 21st Century: Anyone with ears? A form of learning dramatically underrepresented in the USA today.

  6. At least America politicians are more mature in my country Malaysia , the prime minister najib steal money for over 9 years and still get support from his party and most rural Malays. They are just too dumb and educated to be anti Western media

  7. Question: what caused the money over supply back in the 80s? And why isn’t inflation going up like crazy after 2008 even the m2 exploded since then?

  8. Ray is ok. And he’s got it all sorted out.
    And that’s nice. It’s good to see.
    But he’s not too interested in God.
    My advice to him would be to apply himself to seeking God, because although money and success is important it’s not as important as his life.
    If he doesn’t do this he will regret it.
    The quest can begin with a prayer that might go something like this.
    “God if you exist and if you want me to know you, then please reveal yourself.”

  9. He lost me at 'muh climate change'. Thanks for dumbing us down with public school and replacing us with immigrants. Great governance.

  10. This a powerful broadcast that should be mandated viewing for millennials!!!! Thank you Mr. Dalio!!!!

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