SYLVIE DOUGLIS, BYLINE: This is PLANET MONEY from NPR.
ERIKA BERAS, HOST:
Hello, and welcome to PLANET MONEY. I'm Erika Beras.
MARY CHILDS, HOST:
I'm Mary Childs.
ALEXI HOROWITZ-GHAZI, HOST:
And I'm Alexi Horowitz-Ghazi. OK, so today on the show, we're going to give our listeners a little peek behind the curtain. Every time you hear an episode in our feed, that is often just the tiniest tip of the iceberg of all the stuff we've been researching and reading and thinking about that doesn't ever make it into the podcast - whole books' worth of fascinating tidbits just lost to the cutting room floor.
BERAS: And, you know, like, some of those ideas do make their way into our meetings or through the Slack channels, but then they just kind of end there. So we thought, why not let our listeners in on our unofficial book club?
CHILDS: PLANET MONEY Book Club.
HOROWITZ-GHAZI: Planet Literacy.
BERAS: Planet Literacy.
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BERAS: All right. We're each going to share a book we're reading and why we think it's fascinating. Everything we're going to talk about will be linked in the notes of this episode. All right, Mary, you are up first.
CHILDS: OK. here we go. Mine is, I have to say, amazing. It's basically all of my interests at once. It's called "American Bonds: How Credit Markets Shaped a Nation," by Sarah L. Quinn.
CHILDS: And she is a associate professor of sociology at the University of Washington. And...
HOROWITZ-GHAZI: Go Huskies.
CHILDS: OK. OK. So it's looking at the history of America - like, all of it - and intertwining the history of credit and credit markets and securitization.
BERAS: OK. So credit markets - that's, like, borrowing, lending. And then there's securitization. That's pooling and slicing up risk. And you're telling us this book is, like, how the U.S. government interacts with that?
CHILDS: Yes, which I find so delightful, I had to pull out a highlighter for this book (laughter). I was just wilin out. Like, every line is highlighted, which I understand defeats the purpose. I want to read you the opening, actually. Let me flip here. I feel like you'll get the drift of, like, why this book is so magical. OK, Chapter One - The Problem and Promise of Credit in American Life. (Reading) Finance is always social. It is social not just because it distributes profits and risks among people, but also because those profits and risks are distributed on the basis of understandings, usually unspoken, of what people can imagine owing to and sharing with one another.
I mean, it's beautiful.
BERAS: OK. So yeah, that's a very poetic way of describing finance, but what story is this book actually telling?
CHILDS: So it's basically saying that, like, politicians have learned to use credit markets as kind of an off-balance-sheet, off-budget way to get political things done in a world in which there's often this kind of gridlock and always has been in this country, that we set up a system basically built around, you know, checks and balances, which is another way of saying maybe gridlock. So, you know, a lot of these things that they want to get done, irrespective of party, it turns out that credit helps you not have to pay for all of it right away, helps you, you know, partner with a private entity usually or create a private entity or quasi-private and do these kind of maneuvers that let you get around the actual business of passing a bill.
HOROWITZ-GHAZI: An off-budget way for politicians to get things done - does that mean, like, the government selling off land on credit to settlers back in the day to get them to move west?
CHILDS: Yes, the part that I'm excited to get to is the Fannie Mae-Freddie Mac section - you know, the government's participation in the mortgage market in America. But this whole book is about the degree of government participation and the, like, degree to which we underappreciate that, actually.
BERAS: So when you talk about, like, government participation, I feel like that's something we think of as, like, having happen, like, in this last century.
BERAS: But you're telling me this started before?
CHILDS: Yeah. One thing that I hadn't previously appreciated was that there was a sense in, like, the 1800s that corporations existed at the will of the government, that they were more or less extensions of the government and given a special dispensation to operate because the government was like, you're doing something useful here. And that changed with, like, judicial rulings. I thought that was so interesting that there's this - you know, there's this projection of individual values, like individualization onto corporations beginning way back then, and that we've had these kind of ideological battles obviously the whole time, but the way in which it's - the conversation is shaped in the way in which we talk about it has changed so much. There's this figure in here that, you know, around a third of all privately held debt in the United States is backed in some way by the federal government.
CHILDS: But that doesn't even account for, like, tax expenditures that encourage lending for example, she says. So, you know, all the tax savings you get in the many, many various structures that the government, you know - we want you to buy a house, so here's a savings on your interest. We want you to buy this. We want - like, the ways in which they encourage us to act and take on credit, that's not even accounted for in that figure. And then there's also, like, state and local. Like, this is just federal that we're talking about. So that's bananas.
BERAS: That's fascinating. Are you - this is, like, your world. Are you, like, going through the book and then highlighting stuff and then going into the index and looking...
BERAS: ...For the primary sources...
BERAS: ...On all of this? Is that - yeah.
CHILDS: Yes, but this is a sociologist. So this is a totally different world. Like, I come from a finance world where it's almost devoid of the kind of sociological perspective and framing. We don't often talk about or even see the framing of how we're talking about the things that we're talking about. We just continue forward. And I think it's so valuable. That's what I - one thing I love about this book is that it's making me consider the other ways of doing things and that the way that we seem to have chosen to do something, what that says about us and our priorities.
BERAS: Yeah. Yeah. OK, so, Mary, tell us again what this amazing highlighted book is that you're reading.
CHILDS: This book is called "American Bonds: How Credit Markets Shaped A Nation."
HOROWITZ-GHAZI: It's more highlights than book now.
CHILDS: It's all yellow. yeah.
HOROWITZ-GHAZI: That's very Coldplay of you.
CHILDS: Wow, Alexi (laughter).
BERAS: Kicking it back (laughter).
HOROWITZ-GHAZI: I'm stuck in the early aughts.
CHILDS: Great vintage.
BERAS: All right. Well, I'll go next because I, too, am stuck in the early aughts.
BERAS: And the book I'm reading is called "The End Of Globalization," and it's by an economic historian. His name is Harold James. He teaches at Princeton. I'm saying stuck in the early aughts because his book was put out in 2001, before 9/11 but in the aftermath of, like, the big WTO protests, like the Battle in Seattle.
HOROWITZ-GHAZI: Right. So this was, like, thousands of people on the streets protesting globalization and corporate power. It was kind of, like, the OG Occupy Wall Street, right?
BERAS: Right. Right. And so this book was written in that very narrow window of time. And his theory was, hey, this is it. We've reached peak globalization. The end of it is near. And it's maybe taken 20 years, because I feel like - I found this book because I have not been able to stop Googling the thing that I think a lot of us have been Googling, which is, like, ever since the war broke out in Europe, is this the end of globalization? Is this it? And so that's kind of how I ended up coming to it. It's full of all this - like, these little, glorious, little historical nuggets.
HOROWITZ-GHAZI: Love a nugget.
BERAS: Yeah, there's a lot of good nuggets. And I thought I had a pretty good grasp of a lot of this stuff, but reading it, I'm like, oh, that's what was going on with rubber manufacturing in the late 1800s. That's what happened there. I get that now.
HOROWITZ-GHAZI: Well, now I'm curious.
BERAS: And so...
CHILDS: Yeah. What happened?
BERAS: OK. So in the late 1800s, rubber is incredibly valuable. It's used to make all kinds of things, like shoes, tires, all these industrial products. And Brazil is the place to get rubber. And there's super high demand from European countries, but then these countries are like, wait a second; we can control rubber production and prices. That'll be so much better for us. So let's try to set up rubber plantations. We have colonies. Let's set them up there. And that's what happens. A whole bunch of production goes to East Asia, and Brazil has to figure out a new thing to export. And the thing that, to me, is so mind blowing, it's the same story we see all the time now. Like, manufacturing moves to somewhere cheaper, and then the place left behind is sort of out of luck or has to reinvent its economy. And I think of that dynamic as sort of recent, but here's an example of it about 100 years ago.
HOROWITZ-GHAZI: So, like, anybody who knows me knows I hate spoilers, but I'm still kind of curious. Does this book actually take a stance? Like, what do you come away with? Is globalization over?
BERAS: Yeah. I don't know if I can give the answer.
BERAS: And he doesn't really - I mean, I - it's funny because he wrote this book, like, 21 years ago. So at the time he was like, I don't know if this can really be sustained. This is, like, post-NAFTA but before, like, all of the stuff that we've seen in, like, the last two decades in terms of how trade has moved around. You know, we're not at, like, a tariff war that we had in the '20s, but we do have a lot of restrictions on things. And we are kind of breaking up into blocks again, into, like, countries that we will and will not trade with. And that is sort of shifting manufacturing. And one of the things he kind of talks about is how there was this period of time during and after the First World War when there was, you know, shipping instability. So, like, shipping had become so inefficient that it wasn't worth it unless it was really profitable. So, like, European countries would still trade luxury items. And, of course, back then that was, like, clocks or cinema film.
BERAS: But it was just kind of, like, yeah, we're not going to waste our resources just shipping random things around. We're going to be, like, really strategic about it. And I feel like just from talking to people who work in shipping right now and in freight, who are, like, looking at all the shutdowns and all the supply chain problems we've had, this is something they are starting to discuss. Like, maybe we're not going to, like - we can't put tariffs on, like, insignificant things. But, you know, we have to think about what it is that we're moving around the planet.
CHILDS: Something to think about.
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HOROWITZ-GHAZI: All right. And what was the name of the book again?
BERAS: "The End of Globalization: Lessons From The Great Depression" by Harold James. Alexi, you're up next, but first, we've got to take a break.
All right. Time for the last book in our first ever PLANET MONEY Book Club. Alexi Horowitz-Ghazi, what are you reading?
HOROWITZ-GHAZI: My book is kind of also about globalization but on a much larger timescale, kind of on the scale of, you know, hundreds of millions of years of evolutionary history. My book is "The Sixth Extinction" by Elizabeth Kolbert. She's a New Yorker writer. She writes a bunch about climate change. And this book, it's not really a deep cut. It's - you know, it's from 2014. It did win a Pulitzer Prize, so you know it's probably pretty good. And I started reading it because I was working on a story about how fossil fuel power plants have helped manatees from going extinct. I'm often reporting about climate issues for the show, and this book is really about how climate change is threatening thousands of species now. The book is kind of this episodic series of kind of morbid misadventures Elizabeth goes on around the world, looking at the human impact on the biodiversity of the planet. So, you know, in one chapter, she'll be climbing through kind of a post-industrial, abandoned mineshaft filled with, you know, bat corpses as they're dying from this new invasive fungal disease. In another one, she'll be visiting, you know, a genetic kind of cryobank, these frozen zoos, where they're trying to collect the genetic material of species that are going extinct just in case someday there's any use for them.
BERAS: Oh, like "Jurassic Park"?
HOROWITZ-GHAZI: Yeah, exactly. This is like...
HOROWITZ-GHAZI: ...The precursor to "Jurassic Park."
CHILDS: Should we consider whether we should, given that we have the opportunity this time?
HOROWITZ-GHAZI: Life will find a way. I think that's the only...
HOROWITZ-GHAZI: ...Thing we know.
BERAS: So does she come to, like, the point? I mean, this is - there's no spoilers here. Are we in the middle of it right now? Like, are we in the sixth extinction, or are we...
BERAS: ...Getting ready for it?
HOROWITZ-GHAZI: Yeah. So, I mean, the book is a history of the five previous mass extinction events that have happened throughout Earth's history, bangers like the asteroid that destroyed the dinosaurs.
BERAS: Literal bangers, yeah.
CHILDS: That was a banger.
HOROWITZ-GHAZI: Yeah, the literal bangers. And then, of course, there is now what many people are calling the sixth extinction, which is human-caused climate change, you know, habitat destruction and other impacts of human development. But there are also just these ideas that I think are incredible. It really, like, made me think about globalization differently. One idea that she kind of explores throughout the book is that, you know, biological diversity and speciation is, like, a process of isolation. So, like, as different populations of the same species move into new areas and then become isolated from each other, over the course of thousands of generations, they develop new traits that are kind of specific to their new contexts. And eventually, they become different species that can't breed with each other. And so evolutionary history is this process of colonization and isolation that fractures off all of these initial relatives into, like, you know, this kind of huge kaleidoscope of different species that we know today.
HOROWITZ-GHAZI: And that was accelerated by the splitting of the continents so that we have all these separate, huge landmasses with all of these other pockets of diversity within, all these islands of different species.
CHILDS: Which is why Australia is the raddest (ph).
HOROWITZ-GHAZI: Exactly. It's...
CHILDS: Got the best animals.
HOROWITZ-GHAZI: And basically, she describes globalization - the thing that, you know, you were looking at in your book, Erika - as an incredibly fast reversal of that process. So all of a sudden, now we're shipping, you know...
HOROWITZ-GHAZI: ...Pathogens and different animals - sometimes, you know, purposefully introducing invasive species to different places over the...
HOROWITZ-GHAZI: ...Past several hundred years. And we're basically, like, running back the clock hundreds of millions of years.
CHILDS: As someone who spent my entire summer ripping up a bed of an invasive species, English ivy...
HOROWITZ-GHAZI: You're feeling this personally.
CHILDS: Yeah. I'm feeling it in my heart and in my broken back muscles and spine.
BERAS: As someone who walks through tunnels of Japanese knotweed, I hear that as well. Sorry. Sorry, Alexi. Go on.
HOROWITZ-GHAZI: Yeah. So the way she described kind of, like, the way we've gotten this biodiversity, it just made me think about globalization in a new way and on kind of a different scale. Like, this new interconnectedness of the world, in a way, is kind of - you know, we're, like, running around this lab, and we're just mashing together (laughter) separate species and discovering new, weird Frankenstein combinations and unintended consequences. You know, things like COVID or other diseases that have spread up are in part...
BERAS: Oh, right.
HOROWITZ-GHAZI: ...A consequence of this re-jumbling of the globe.
HOROWITZ-GHAZI: And, like, one amazing thing about this book is that you think, like, it's not only COVID in humans, which has now spilled over into mink populations and deer populations and will come back into human populations, but it's things like, you know, white nose syndrome for bats. It's like these - this remixing is having existential consequences for all sorts of species.
BERAS: Are there any, like, biodiverse, like, benefits to all of the mixing? Like, is there anything positive?
CHILDS: Can you make me feel better?
BERAS: That's what I want to know. Yeah.
HOROWITZ-GHAZI: I don't know. There...
CHILDS: What do you got?
HOROWITZ-GHAZI: ...Aren't many hopeful implications from this, but I will say...
CHILDS: It's a no.
HOROWITZ-GHAZI: ...When you look at, like, an individual species level from all of these remixes, like, some species are getting, you know, hit by new pandemics of new diseases that come from far-flung places in the planet. But also, I mean, that means those pathogens or invasive species that are thriving are actually having the best time of their lives, you know...
HOROWITZ-GHAZI: ...That, like, they are winning the competition. So it really depends what perspective you're looking at this from.
BERAS: So if you're a harmful bacteria...
BERAS: ...This is your time.
HOROWITZ-GHAZI: Yeah. Or, like, all sorts of tree species or whatever else - it's this constant ebb and flow.
CHILDS: So it's a bad time to be a species but a good time to be a credit market.
HOROWITZ-GHAZI: That seems undoubtedly true.
CHILDS: If only all these animals learned to securitize.
BERAS: Alexi, what was that book that you just told us about?
HOROWITZ-GHAZI: The book is "The Sixth Extinction" by Elizabeth Kolbert.
BERAS: OK. That's it for our first book club. If you're listening and you've got an idea for something that should be on our reading list the next time around, please let us know. Today's episode was produced by Brent Baughman and Sam Yellowhorse Kesler. It was mastered by Isaac Rodrigues and edited by Molly Messick. PLANET MONEY's executive producer is Alex Goldmark. I'm Erika Beras.
CHILDS: I'm Mary Childs.
HOROWITZ-GHAZI: I'm Alexi Horowitz-Ghazi. This is NPR. Thanks for listening.
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