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Podcast episode

Exploring the US Banking Crisis with Addison Wiggin – EP192

Economics Explored host Gene Tunny interviews Addison Wiggin, a New York Times bestselling author and market economist, about the US banking crisis. Addison shares insights into the origins and impacts of the crisis, and discusses the future of the US economy and financial markets. Listeners can download Addison’s recent report “Anatomy of a Bust: Winners and Losers in the Banking Crisis of 2023” for free via a link in the show notes. 

Please get in touch with any questions, comments and suggestions by emailing us at contact@economicsexplored.com or sending a voice message via https://www.speakpipe.com/economicsexplored

You can listen to the episode via the embedded player below or via podcasting apps including Google PodcastsApple PodcastsSpotify, and Stitcher.

About Addison Wiggin

Three-time New York Times best-selling author, Addison Wiggin, is a 30-year market economist with a passion for the real-world impact of financial markets on our lives.

Addison is the author and host of The Wiggin Sessions, a podcast that connects key thinkers and industry experts for a deep dive into history, politics, and economics. Some of his most accomplished works as a writer, publisher, and filmmaker include the New York Times Best Seller The Demise Of The Dollar and the documentary I.O.U.S.A, an exposé on the national debt crisis in America.

What’s covered in EP192

  • Addison’s background and how he came to the conclusion that the US financial system is in danger of collapse. (1:53)
  • Will the Reserve Bank of Australia increase rates again? (10:46)
  • The uncertain lender of last resort: The Federal Reserve. (17:11)
  • The Fed’s job is to make sure fewer people have jobs. (21:52)
  • Banking crisis and the failure of regulation. (26:21)
  • FDIC and confidence. (32:00)
  • Why it’s important to understand how booms and busts even take place. (37:07)
  • Cryptocurrency as part of the story. (41:47)
  • What has happened to the dollar since 1913, when the US Federal Reserve was established. (46:41)

Links relevant to the conversation

Special download link to Anatomy of a Bust for Economics Explored listeners:

https://jointhesessions.com/ee/

Presentation by Addison that Gene mentions early in the episode:

Anatomy of A Bust: Banks Go First | Special Presentation by Addison Wiggin 

Transcript:
Exploring the US Banking Crisis with Addison Wiggin – EP192

N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.

Gene Tunny  00:06

Welcome to the Economics Explored podcast, a frank and fearless exploration of important economic issues. I’m your host Gene Tunny. I’m a professional economist and former Australian Treasury official. The aim of this show is to help you better understand the big economic issues affecting all our lives. We do this by considering the theory evidence and by hearing a wide range of views. I’m delighted that you can join me for this episode, please check out the show notes for relevant information. Now on to the show. Hello, thanks for tuning into the show. In this episode, I chat about the US banking crisis with Addison Wiggin. He’s a New York Times bestselling author and market economist and commentator with three decades of experience. Allison has his own podcast the Wigan sessions, in which he talks to key thinkers and industry experts for a deep dive in history, politics and economics is the author of the best selling the demise of the dollar, and one of the writers of the 2008 documentary I O USA. Thanks to Addison for providing economics explore listeners with a free copy of his recent report, anatomy of a bust winners and losers in the banking crisis of 2023. I’ve included a link in the show notes so you can download it as well as sign up for Addison’s content if you’d like to read and hear more from him. Personally, I think Addison, someone with following if you’re interested in the US economy and financial markets, and if you’re listening to this show you probably okay, let’s get into the episode. I hope you enjoy my conversation with Addison Wiggin on the US banking crisis. Addison Wiggin, thanks for joining me.

Addison Wiggin  01:53

Yeah, no worries, I’m happy to actually meet you. As I was saying before, I’ve been forwarded some of your material in the past. So I know your name. And I feel like it’s a good opportunity for us to banter a bit about economics.

Gene Tunny  02:07

Absolutely. Thanks, Addison. And I’ve, yeah, I’ve seen the very know your research. And you’ve, you’ve been doing a lot of deep analysis of what’s been happening in banking and what’s been happening in financial markets. And you’re very keen to chat with you about that. In particular, I’ve come across a recent presentation, you’ve given anatomy of a bust, banks go first. And in that presentation, you make the argument that, well, we’re in a panic of the panic of 2023. America’s financial system is in danger of collapse. We’re here to protect ourselves. Would you be able to take us through what leads you to this conclusion? Addison, please. And also, perhaps maybe to begin with, what a bit about your background? How’d you? I mean, you’ve had, as I mentioned, you’ve had deep experience of this, it sounds like you’d be looking at these issues for decades. Can you tell us a bit about your story and how you come to this conclusion, this threat of collapse, please?

Addison Wiggin  03:17

Yeah, absolutely. I’ve been studying booms and busts for a long time. Since the mid 90s. This is literally the only work I’ve done in my adult life. And just to do a shameless plug right at the beginning, I just published a book called The demise of the dollar, which looks at booms and busts as they pertain to fiat currencies in the world. And US dollar is deeply connected to the Aussie dollar. And I addressed some of that, and also, the dollar is a reserve currency of the world. So like even the Aussie banks or New Zealand or Japan or European banks, US and China as well, which is a big part of the story, use the dollar to store their wealth in. So there’s, there’s a symbiotic international connection between my currency and yours. And that’s what that’s what I’ve been interested in for this particular book. But I’ve also been studying booms and busts going all the way back to the famous ones like the tulip bubble and the Mississippi scheme from John La, back in the early 1700s. And then the South Sea bubble which the bankers from from London just ripped off John Maas idea and then they went bust too. So booms and busts are pretty common in the financial cycle of of our lives. And we’re we have just gone through one and that’s what anatomy of a bust. It’s just a special report we put out because it was interesting to have our very own movement boss how Ben right in front of our faces, it starts really in 2018, where a lot of people were using low interest rates that the Fed was fed had kept interest rates low to recover from the 2008 bus for such a long period of time, that there’s like a whole group of traders who grew up in a world where interest rates were at zero or less than that. And so money was free, and they were speculating on all kinds of things. And one of the things they speculated on was cryptocurrencies in 2018. We had this massive bubble in, in cryptocurrencies and a lot of the banks that started failing in March of 2023, which we’re still I maintain, we’re still in that crunch. And I’ll explain why I think we’re still in it, and why we don’t talk about it that much anymore. But a lot of the banks like Silicon Valley Bank grabbed the headlines when they went bust in 48 hours, because they had invested all of the money they were getting from tech entrepreneurs. They had invested it in treasuries, and then the Fed started trying to battle interest rates. And they didn’t account they didn’t either believe the Fed would they didn’t have any risks. There actually was no risk officer on the payroll at Silicon Valley Bank at the time. And they didn’t realise what the impact of an aggressive rate rate hike policy by the Fed was going to be. And that was happening simultaneously with the collapse of X FTX, which was the crypto currency trading firm that a lot of tech startups had their money, had their money. So when they when FTX went bust, they had to pull their money out as fast as they could, or they just lost their money. And in the meantime, the startups were being also financed by Silicon Valley Bank, notably, and they needed their money back to keep their their startups going. So the conflicts of different trends follow the theme of booms and busts that we’ve seen throughout history. So when when it was happening, I was like, Oh, my God, this is our very own like we could write about, it’s actually happening right in front of us. So it’s, that’s what the special report is about is like how that actually happened. And when Silicon Valley Bank collapsed, it collapsed in 48 hours, because all these people wanted to take their money out to cover their own losses in crypto, that was technically what was robbing and they were just yanking their money out. And even though as you know, as credible bankers, we would look at the way that Silicon Valley had put their assets, more than 50% of their assets were in treasuries, which are meant to be, you know, the risk free asset that banks should hold anyway. But they didn’t calculate for the rising interest rates from the Fed to combat inflation. And then when there was a run on the bank, that’s what we call it. It wasn’t I mean, it’s a modern day, extraction of digits really. But when people started taking their money out, Silicon Valley Bank had to sell their treasuries at a loss. And it it happened very quickly. No one thought that with the FDIC, which is the Federal Deposit Insurance Corporation that was set up by the Treasury to like help small banks, stay solvent help, depositors stay solvent, nobody thought that can actually happen anymore. The FDIC was set up in the 30s, to combat some of the forces that were going on in Great Depression. And then the Treasury itself gets together they get all the Wall Street banks together, and they then they construct these bailout plans like what they did for first republic. So those, all of those things happen, and they were grabbing the headlines from March until like the beginning of May. But then our debt, what we call the debt ceiling debate. I prefer to call it the debt default debate over the dancin, and nobody’s really paying attention to the banks anymore, but the underlying issues of the Fed fighting inflation and over capitalization in treasuries. There’s 36 banks in the US that are still under FDIC protection, watch conservatorship, whatever you call it. And then there’s a bunch of other banks that are borderline if what happened in March where people started pulling their money out of banks as a sector in on Wall Street than those banks are going to be in trouble too. There’s a couple others that I’ve been keeping an eye on that that have the word PacWest was one of them. And they’re just banks that are lending to more risky clients. And then depending on the depending on treasuries to rule out there, or to keep their their investments safe. And depending on how long the Fed keeps raising rates, which I think they’re going to raise them again, because inflation is not under control. It’s not only under control here in the US, it’s not under control. In Australia, I think Australia was getting really aggressive recently. Why don’t they? Well,

Gene Tunny  10:46

they increased rates more than people expected. There was a surprise rate hike. And now the the question is whether they will increase again, we’ve got a Reserve Bank meeting next week, there’s it’s a bit unclear, there’s a lot of debate about what the bank will do. Everyone expects that they’re going to have to increase at least one more time by the end of the year, possibly two. It all depends on what’s happening with inflation, we’ve got a monthly indicator that on through the year terms has, has increased or as worsen. But there’s a debate about well, what it’s it’s very noisy month to month. So it’s difficult to read much into that we need to see what happens with a quarterly figure. They’ll be watching services, inflation, so goods inflation has been coming down but services inflation is has been rising. So that’s and now we’ve got a minimum wage hike of six to 8% or something, depending on the actual, whether you’re right on the minimum or if you’re on an award. So yeah, there are, there are concerns about the future of inflation.

Addison Wiggin  11:52

I’d like to ask you a question. I spent some time in Australia. And also we had an office there for a while. So we were trying to manage our own finances there. And it might just be a myopic point of view of my own, because I am an American and the Federal Reserve is what it is. But when the Fed makes moves, often the Ozzie bank or like Japan or EU will follow, like a month later, if to you to think that that’s true. I don’t want to sound like an arrogant American, which I probably am, but But it always feels like the Fed is sort of like the central banks of the world.

Gene Tunny  12:30

Yeah, that’s true. It’s not automatic. It doesn’t always happen. But certainly one of the things that our central bank is conscious of is what’s happening with the exchange rate. And if if we keep our interest rates too low, then that leads to a depreciation of the the Australian dollar. And that’s bad for inflation. So we start importing inflation. So that’s something that they are conscious of. And when the Fed started lifting, was it last March or March?

Addison Wiggin  13:04

A little over a year ago? Yeah. Yeah. And

Gene Tunny  13:07

so the first few rate moves increases by our central bank, we’re pretty much in line with what the Fed was doing. And I mean, my take on an Earth in Michael Knox, who’s a commentator here, and he’s, he’s Morgan’s financial chief economist. I think he’s one of the best market economists in Australia. That was his view on it that, you know, by essentially copying the Fed that they had, the Fed was moving. So our, our guys had to I mean, we read our, our central bank, really, I don’t know if asleep at the wheels the right way to phrase it. But our first rate increase didn’t happen until I think it was May last year. And so it was a couple of months after the Fed, the Bank of England had gone earlier. I think Reserve Bank of New Zealand really got on to it early. But yeah, I think our central bank just wasn’t concerned enough about the risk of inflation. They were too much in that secular stagnation paradigm that they had, prior to the pandemic and those that decade or so they thought, Oh, well, we’re in this world of permanently lower interest rates, and there’s no no concern about inflation. We don’t have to worry about that anymore. For various reasons.

Addison Wiggin  14:23

I mean, that’s literally what thought some of these regional banks, asleep at the wheel was the Fed got really aggressive picket quickly, and even in the books that I’ve been writing? So I have this one, but I’m also looking at another one that’s kind of like the political analysis of how we got to a position where we have 31 trillion in debt, which is just ridiculous, right? Looking at the trajectory of Fed policy from really from 1987 When, when there was a stock market crash and Alan green The internet just become our Fed chair, he dropped rates as a response so that people could get free money in and prop up their balance sheets. That has been the response since 1987. Until now, and no one I like they caught a lot of banks sleeping, when they started raising rates as aggressively as they did, and they were afraid of 1980 81 scenario where inflation would just get out of control. There’s no anchor to the dollar. And everything is based on the dollar index, which is a basket of currencies and including the Aussie dollar that determines what the value is. There is a tone. It’s just astounding to me, actually, with all the history that we have with banking, and even the Federal Reserve since 1913. Like there could be backers who still have jobs. what was gonna happen? Yes. Well,

Gene Tunny  16:04

I mean, it’s an but they play an important role in the economy. But yes, there’s a lot of monetary mischief with a lot of mistakes that a an aid for sure. Absolutely. I like to ask Allison about. You mentioned that this started in? Was it 2018? So you think this started before the pandemic? Is that right? And then the pandemic, all the policies during the pandemic made it worse or contributed to the instability?

Addison Wiggin  16:30

Yeah, well, I would say, though, is that there were separate events, I think that the policies really started in about 2012, when we were seeing QE two, meeting that the Fed was still buying bonds in the market, or in even actually buying up mortgage backed securities in response to what the federal what the, what caused the crash in 2008, which was a global event also, because all the big pension funds and hedge funds, they’re all interconnected globally. So when when we ran into our housing crisis in 2008, it affected everyone. And we saw the ripple effect really quickly. And what the Fed did to head that off, was they dropped the interest rates, we had zero to negative interest rate real interest rates for a number of years between 2012 and 2018. But they were also buying up assets in the market, they were buying bonds in the treasury market to support bonds, because they needed to fund the government. And then they were also buying, they were actually buying assets on Wall Street, which is like, that’s an extreme measure. The bank is not supposed to be buying assets to prop up the market. But anyway, so there was a period of time where we had zero, I mean, money was free. And there was the like, I like to phrase the, the uncertain lender of last resort, that’s what they call the Federal Reserve, you never know what they’re going to do. But in the end, they’ll come in and bail out, you know, they, if they had to, they bail out, gee, JP Morgan, which has literally the fifth largest GDP of any economy of the world, and it’s a private bank. So they would come in and bail them out. That’s just thinking

Gene Tunny  18:25

that on that point about had this, what was it the unexpected lender of last resort?

Addison Wiggin  18:32

Charles Charles, my book I forgot his last name, but he wrote us. Yeah, he wrote an entire book about there needs to be a lender of last resort, but it has to be uncertain. You can’t count on them. You just have to know that they’re there in case the shit hits the fan. And yeah, and that’s what the Fed has been trying to do. But what they’ve been telegraphing what they telegraphed from 2012 until 2018, was we’re gonna keep rates low, and we’re gonna keep buying assets to keep the market propped up. And the beneficiaries of that policy are Wall Street banks, big ones, you know, yeah, Oregon, Citigroup, Bank of America, those companies, those those corporations are beneficiaries of just an extended period of ridiculous monetary policy. And a whole generation of bankers grew up in that in the environment where they believed that the money was just going to be free forever. So when the Fed turn, turned around and started trying to combat inflation, then we started having a serious problem. And the first people that got taken out, were the regional banks who weren’t paying attention to risk policy at all. So that’s why I say it started in in 2018, because there was a big boom in cryptocurrencies stable coins. We’re coming out. Bitcoin had already like fluctuated up to 60,000 and then dropped and like it was already an object of speculation and Aetherium was sort of like its step cousin, you know, it was doing its thing. But there was a lot of money getting pushed into the market because of low interest rates, that tech firms and Wall Street banks the like, and new new banks, like the FTX exchange that that was built, that was only founded in 2017. Like it became one of the largest traders have actual money, dollars to crypto currency in like, under two years, there was a lot of money flowing into the system. And that’s when if you follow Austrian economics, like I do, but a lot of other people do, too. I’m not making any kind of claim to it. But all the mistakes that are made get, they happen in the blue, when there’s money, that’s cheap credit, and people are spending money on things that they don’t understand. That’s exactly what tech entrepreneurs especially were doing, because they were excited about this new money that we could trade. It wasn’t traceable. And then banks grew up around it, that silver gate was one Silicon Valley Bank was another first republic was another pack glass was involved. And so when the tech entrepreneurs started getting nervous about their, their investments, or even their own companies, they wanted to remove the money from banks, and was sort of targeting Silicon Valley Banks specifically because they were getting a lot of deposits. And they didn’t have to loan out money to make money. So they were buying treasuries. And then when the Fed started tackling inflation, which itself, inflation itself was a result of 10 years of, of low interest rates, like we had, of course, we had the pandemic, and then we had the war in Ukraine, which cut off some supply chain, so it created like pain points. But at the same time, there was so much money flowing around in the system, that the natural outcome just in economic terms of that much money flowing into the system is that prices go up. The amount of money chasing goods is more than what the goods have, in what I would call intrinsic value. So it just costs more if you want gas, it cost more if you want eggs, eggs were a big deal. In the US. They were in, in Australia, but they were a big deal for like two years, because they went from like, I don’t know, an average of three bucks for 12 eggs to something like seven bucks. And people were like, What the hell, you know, I need an egg a day. And now it costs Yeah, three times as much. So that’s that’s the way that people feel inflation, but the cause of inflation, inflation is rising prices, but the cause of it is money supply money going in to the system. And they did that in reaction to the 2008 housing crisis, they were pouring money into the system and making it cheap for years to a degree where people just started thinking that was the new norm. But when Powell got in place, and he started raising rates, there was a lot of bankers, especially who were like, Oh, he’s not going to do that. Because this is the new norm. And it wasn’t the new norm, because there’s they still don’t have inflation controlled. So my guess is they’re going to raise another quarter point and they meet again. And then that’s going to ripple out to banks in Australia, in Japan. And mostly, those are the three that I looked at Australia, Japan and EU. Yeah,

Gene Tunny  24:14

it’s quite quite possible. I saw that the US had a good was a good jobs figure was was that what I saw? Yeah. And so that they’re saying the economy is more robust than they expected. And so yeah, they’re doing isn’t it? conundrum a little bit that the feds job is just to make sure that less people have jobs. Yeah, well, that’s the Yeah, that’s the Elizabeth Warren take. And then she was trying to pin it really gets stuck in a jay Powell over that, I think in the in Congress, wasn’t she? Oh, I’m trying to remember. Was it Powell or was it she was given?

Addison Wiggin  24:53

That was a couple of weeks ago, she was giving a speech in front of Congress, but she was taking Jay Powell to test. So he wasn’t actually even talking to him. Right. But that’s just a weird thing that that the feds job has suddenly become too slow the economy down, make sure that more people are unemployed, so that the government can then take care of them. It’s like, it’s, it’s not a free economy, like we like to think that America runs a free economy, we don’t run a free economy at all. And their goal right now is to slow everything down. And then we got the jobs report that you’re talking about. It was, I believe, is yesterday or the day before, it was more robust than what they were expecting. So they’re saying, oh, yeah, the economy is still growing, we gotta raise rates more to slow it down. Like, if we got a jobs report that wasn’t as positive as it was, then the stock market would have actually rallied. But when the draw four came out, down because people were like, Oh, that means they’re gonna raise rates again, we can’t borrow money cheaply again. It’s like, yeah, Pretzel Logic to me. But it’s kind of fun in a way to follow it, because it’s like, it doesn’t really make that much sense.

Gene Tunny  26:19

Yeah, yeah. I better get back on to banking, because I want to ask you about where we’re going there. And this banking crisis. There are a couple of things I just wanted to just quick things a good to get your views on. So you mentioned that this SBB didn’t have a Risk Officer. Is that right? Which I find extraordinary. Is that a failure of regulation? Yeah, I

Addison Wiggin  26:42

only found it in passing. So there were two kind of oversight errors that took place. They didn’t have a Risk Officer evaluating what the impact of rapidly rising interest rates would be on their the holdings that were like the core of the bank. That was one thing. And I think it was just in transition or some of the there wasn’t somebody in that position at the bank for like a year. And that was the year that the Fed started aggressively raising interest rates. And at the same time, no, nobody in the bank thought that the Fed actually pretty much nobody in the economy, though did Wall Street banks didn’t think that they would do it either raise interest rates as aggressively as they did. So even while it was happening, we were like, Oh, they’re going to stop. So there was a lot of speculation of when they were going to pause or when they were going to pivot. I remember back in even before the banking crisis started, the big phrase in the headlines was, when is the Fed going to pivot, meaning they’re going to stop raising and they’re going to turn around and start dropping among regional banks anyway, the first ones to get under stress. They didn’t have people that were taking the Fed seriously at their word, the Fed was saying we’re going to we’re going to fight inflation until it’s done, which is a tough battle. And nobody believed that. So when the cost of treasuries went down, and the interest rates went up, it was harder for a bank, like I just use Silicon Valley Bank, because it was so pronounced. It was harder for them to raise the capital to pay back their depositors when they wanted their money back. And a lot of those depositors had just lost money in the collapse of fts. So it was just sort of an act of boom and bust, you know, a line of love crumbs from what was going on in the crypto market to what happened to the regional banks. And then you saw the entire banking sector get whacked in the market, like, there were other banks that were reasonably sound that were getting taken down because everyone was trying to get out of the banking sector. So when their stocks get are getting punished by institutional investors and by pension funds, then that messes with their balance sheets, as well. And the only reason we haven’t been hearing about it in since I actually tried to pinpoint it was May 18, that the debt ceiling debate sort of took over the headlines. All the issues with the banks still exist. And that was really just a speculation on my part. But if they didn’t, for some stupid reason, come to a political agreement. On the debt ceiling, we would have seen a massive wipe out of bets because Treasuries are supposed to be risk free ish. I mean, they’re about as risk free of an investment you can make other than maybe gold or precious metals, and banks had piled into treasuries for so long because it was cheap. And it was easy and it was risk free. If we had a debt ceiling debate, I mean, that the vault if that debate failed, and we had a default, then treasuries would have been become an object of speculation, like other assets in the market, people would be like, I’m betting they’re going to do this, I’m going to bet that they’re going to do that, and the risk free part of that, where you store your money would have disappeared, that would have been a nightmare for a lot of smaller banks. And then the thing that is kind of a nightmare too, would be that JP Morgan, Citibank, Bank of America, the big Wall Street firms would have just gobbled up all of the, those assets at pennies on the dollar, which is exactly what they did with SBB. And with first republic, they just went in and just took all the assets for like, it was three cents on the dollar.

Gene Tunny  31:04

Okay, we’ll take a short break here for a word from our sponsor.

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Gene Tunny  31:39

Now back to the show. So can I ask Allison, where are we going? Now? I mean, over the next six months or a year or so will we see more banks fail? Will we see a contagion? Or will we see impacts on the broader economy? Where do you think this is all going?

Addison Wiggin  32:00

Well, I’ll answer that in two ways. There is a certain level of confidence in the FDIC to like bank to back individual depositors. So like the fear of bank runs is probably abated a bit. Because the FDIC and Janet Yellen to the Secretary of Treasury, she has been going out saying no, we’re not gonna bail everyone out. But if it gets bad, we’ll bail some people out like she’s being that lender of last resort. So I think that the crisis part has abated. But that hasn’t fixed any of the the challenges that banks are facing right now with rising interest rates, and the battle against inflation in the uncertainty of of how committed the Powell Fed is going to be to that. So it would. So that’s why I say I’m going to answer in two ways. One, I detailed all of this special report that we were talking about anatomy of the anatomy of a bust, this is exactly how it happens. And I actually got that phrase from Garrett Garrett, who was writing about how all the banks failed from 1932. Until about they were still failing into the 50s. So they failed for a long time. But the three banks that failed in march into the early part of May, were larger in capital by percentage than all 25 banks that failed in 1932. So like, that doesn’t happen by mistake. And that also doesn’t happen without repercussions. And I expect that that we’re going to be talking about banking places like three years from now, because it hasn’t worked itself out yet. And they’re still trying to fight inflation. So so I don’t know if we’ll have a panic or a crisis period like we had between the beginning of March and mid May. But I think the tension is still there. And it’s definitely something that we want to pay attention to. Because the banking system is the the bedrock for all of the other stuff that we get, like when we buy and sell stocks, when we get mortgages, when we buy cars, send our kids to school and stuff like that that system needs to be. We need to have confidence in that system. And I don’t think it’s there yet. Brought we get a paper version of the confidence from speeches from Janet Yellen. And we forgot her name already, but that was the woman who runs the FDIC. But it’s just a fact the FDIC has like 300. Now they have $37 billion to support $17 trillion worth of deposits like it’s It’s, it’s absurd. Other than me and I’ve written this to this is it’s a competence game. Like, just like the way people, you know, take advantage of retirees because they gain their competence and competence gain is what it is. It’s a it’s a sham. Yeah. Yeah, right now the government is running a competence, that literally people have confidence that the government will figure this out. And so they’re they’re just biding their time. And what are they going to do next? My, my guess is they’re going to drop interest rates. As soon as there’s like a real crisis, they’ll drop interest rates, and now get another speculative boom going on Wall Street. And usually what happens when, when that happens is that mutates into bubbles in other markets, too, like Australia always benefits from booms in the commodities market. And China always benefits from new tech development and the Europeans benefit from new speculation in travel and tourism. Like it’s it’s almost predictable. What’s going to happen next,

Gene Tunny  36:11

abroad. Okay, so this is your report anatomy of a bar stock and put a link in the show notes to that. Can I add in just trying to think about what the risks are? I mean, you make the case that more banks are probably going to fail. What do you think the chances of something like 2008 happening again, or something worse than that? What would you put the probability of that ad in the next couple of years

Addison Wiggin  36:36

right now, I’d say it’s pretty low. Because one of the things that happens is like human beings that the people who run the government also learn. And they did what they thought they had to do in 2008, I’ve written about this many times, the Paulson, delivered a three page memorandum to Congress and said it at like midnight, and said, You have to bail out these banks, otherwise, the entire global economy is going to fall apart. There’s three pages, and they just followed it. So I think they’ve learned that through monetary policy, and also working in concert with other federal, like the Federal Reserve system of the world, that they can mitigate crises. But that doesn’t mean the problems aren’t still there. So that’s why it’s important to understand how booms and busts even take place, you can’t keep interest rates at zero for 10 years, and then expect that no inflation is going to pop up. But it is ridiculous. But it’s worth understanding the mechanisms behind the banks and whatnot, because that’s the that’s where the money flows, if that’s how the markets work. That’s how, you know, they determine interest rates for all kinds of things, credit cards, and student loans, and banks and cars and all that kind of stuff. The economy functions on credit. And banks are the source of that credit. And they’re all connected to the Federal Reserve System. So it’s worth paying attention to what they say. And I hate that. I don’t like politics. And I don’t like the banking system. But I warn people that they ignore those things at their peril. Because when you need to do something financially in your lives, you’re sort of dependent on decisions made by people who live far away from you, and don’t have your interests in mind.

Gene Tunny  38:45

Yeah, yeah, I just want to try to understand what this all means. So does this mean that, like, we’re in a situation where the Federal Reserve and the government is going to have to continuously? Well, maybe not continuously, but every now and then bail out the banks? And, you know, we’re gonna keep trying keep interest rates low, keep the flow of credit going? And therefore, ultimately, this is inflationary? Are we back in? Because we had a period of very low inflation? Are we going to be in a period of higher inflation for for longer than we expect? Is that one of the arguments was that a conclusion?

Addison Wiggin  39:22

Yeah, my conclusion is that we would, it’s not a conclusion because it’s an ongoing story. But we’re going to be in a period of inflation longer than, you know, the headline news tells us like, you can’t just stop inflation. And once it starts, it’s very hard to stop. And I actually got that quote, I, I interviewed, I did a documentary about 15 years ago, and I interviewed Paul Volcker, who was famously the inflation fighter of the early 1980s. He was the Fed chair at the time. And when he said to me, he said two things that have stuck with me he said a lot of other things and I published all buddy But, but he said a couple other things that are two things that have really stuck with me one he’s like, actually, I’m going to set the stage. So this is after walking past a couple of cartoon pictures of him that he had framed in his office of him like turning off the inflation spigot. And then another one where he was like wielding a sword and a shield, and he was like fighting inflation. So he was kind of like a caricature of that time. And that was the worst inflation that the world had seen in since the late 1800s, since the panic of 1893. And the reason was, we had gotten off the Bretton Woods, dollar peg to gold that there was a lot of reasons why it happened. But when I spoke to him, and this is on camera, and in the interviews that I’ve published, he’s, well, first of all, once inflation gets started, it’s very hard to stop. Because it, it creates, like a psychosis in people where they start thinking, if I don’t spend my money for that refrigerator, in June, by September, it’s going to be 30, Luxmore, or something like that. And they start thinking like they have to spend their money now. And that creates inflation, psychosis of sorts where people are just spending more money more quickly, because they think it’s going to be worth less later. And you’d like if the Feds goal is to slow down the economy, that inflation psychosis works against any Fed policy that they can put together.

Gene Tunny  41:43

Okay, just a couple of things. Because yeah, it’s great conversation quickly. What about crypto? You mentioned crypto as part of the story?

Addison Wiggin  41:51

Well, I have a theory about crypto. And it’s the same thing that it’s the same philosophy I have about the internet itself is that we had in 2001, we had a big boom in Internet stocks, like even Toronto, like right now. But the company that makes insulation for houses was doing fibre optic and they dropped the.com on the end of their name. They weren’t even a tech company. And they they exploded in value. Yeah. What’s the pink insulation that we all use? But I don’t even know why I’m drawing a blank on the net. But it’s because it’s a big installation. The point I’m trying to make is that during the.com, boom, there were just ridiculous investment being made. Yeah, all kinds of things. And then they busted. But we were, in the end, after all, the detritus fell to the floor, and people sort of like woke up from their hangovers. We ended up with internet and things like zoom, like I’m talking to you from Australia. Right now. I’m in Baltimore. And these things are possible because of that massive innovation and the investment that went into that period. Like that it even with a Gora, the company I’ve been working with for a number of years. We exploded when we went online, and we benefited greatly from the innovation of email, or changed our lives. So I have the same sort of perspective on crypto, is that I think it’s speculative. And I think there’s booms and busts and we saw that 2018 was crazy. Yeah. And then we saw another spike in in different like Bitcoin and Aetherium. And some of the stable coins in like 2021. Last year was a nightmare. We called it crypto winter, because the underpinning actually doesn’t part of the story I’m telling to is that two of the stable coins that FTX and Alameda research were investing in the traders that were supposed to be pegged to the US dollar, but the traders on pegged them without telling anyone and that started the FTX. So I think you’re gonna continue to see that kind of speculative nature in crypto. And we’ve got this spectre of central bank digital currencies coming up. We don’t know where that’s gonna go. Suppose there’s going to be a vote in the US in July, on whether the Federal Reserve should adopt one or not. But they keep saying that to that story is going to be ongoing, I think the real benefit of the the innovation and the spikes in the highs and lows and, and, you know, the turbulent market that Kryptos has gone through up to this point will ultimately be beneficial because we’ll we’ll end up with Blockchain as a more efficient way to to conduct transactions in the financial markets. So you can make money you can lose money in crypto. I’m not a crypto evangelist. Like I believe that it’s going to be a substitute to the US dollar or the world banking system. But I do believe it efficiencies that are brought to transactions are going to be beneficial to everyone. And that’s kind of how I look at it even from an investment standpoint, I’m like, oh, bitcoins at 15,000, neither should buy some, and then it’s at 27. And then it’s at nine. And it’s like, no, I’m not getting somebody tried to buy some property from a couple years ago, I think it was in 2021. And but they would only do the exchange and in Bitcoin and I’m like, I don’t know if my property is going to be worth less or more if I take your Bitcoin, but I do know what the value of the property is. Yeah. So I think the speculative nature of it is, it’s too early to, to like I prefer gold and silver to Bitcoin or Aetherium. At the moment, maybe there’s a time when, when it makes sense to like use it as a banking tool, but not right now. too speculative for me, and, but I do think that the benefits of blockchain are going to be like email to us a couple years from now, where everyone’s going to be using Blockchain for efficiency, which I think is great. In the boom, bust cycle, that’s what happens, people invest a lot of money quickly into innovative projects, and a lot of people get burnt, a lot of people get rich. And then what we end up with is the core technology that benefits humanity as a whole. I love technology.

Gene Tunny  46:31

Yeah. One thing I wanted to cover too, is this demise of the dollar you talk about? So is that a this is this is a long run concern of yours about where the US dollars going. And I mean, this is related to the point you’re making about.

Addison Wiggin  46:43

Yeah, the thing is, like, I mean, I could slip through the book is that one great chart that shows what has happened to the dollar, I’m not going to be able to find it and make it make sense to your viewers. But since the Federal Reserve was founded in 1913, the original goal of the central bank was to stabilise the currency, and maintain its purchasing power in the economy, for payment, currency users like me, like it’s supposed to be able to, I’m supposed to be able to figure out what my dollar can buy and for how long. But it’s lost more than 97% of its purchasing power since 1913. And it’s, it’s a steady slope downwards, the more money they pour into the system, the like every dollar that you print becomes worth less than the one that was printed last. And the entire banking system of the world is dependent on the dollar as a reserve currency. And at the same time, we’re losing the value of its purchasing power, every debt, and it’s been going on for more than a century. There, their main task was to preserve the purchasing power of the currency that we use in the payment system in the economy. And they have done anything but that it’s, it could be its historic fiat currencies never worked. It accelerated after 1971, with the Bretton Woods system fell apart, the only thing you can do is understand it and then try to move your money around into assets that accumulate value over time. That’s why I like gold and silver, because yeah, there’s a little bit more speculative, but gold when I was younger, and first trying to understand how these things correlate. Gold was trading at like 253 bucks an ounce in 1999, I think and now it’s trading on average, a little bit above 2000. Over that time, he has to be 500. It’s outpaced the s&p 500, which is a broadest measure of big stocks. It’s just been a better investment over time. And that’s that’s just generally what I think is it’s a reverse correlation to the dollar, which is supposed to be managed by the bankers who keep sort of forgetting about risk and inflation and those kinds of things.

Gene Tunny  49:20

I might have to come back to fiat currencies. Yeah, it’s a big, big topic, but another time, because I’ve really picked your brain and it’s been I don’t mind it. We’re very good. That’s great. And yeah, maybe if you if you wanted to sum up your the broadly, the anatomy of a bust. Would you like to summarise it? Or is there anything else you’d like to say before we wrap up?

Addison Wiggin  49:43

No. I mean, I would just say that it’s it was my attempt when, when I was already following the story of FTX and I knew there would be a knock on effect, and I had starting in about December of 2022. So like six months ago, I was like this story is not going to go away. And there’s going to be a knock on effect in other parts of the market that we’re not aware of right now. And that was in December. And then by March, we started having banks fail, which nobody thought was even possible anymore. With the Federal Reserve System and the FDIC backing out small depositors, like nobody thought we would have bank runs ever again. And and then we had the three largest ones within a six week period. So I had already been kind of following the story, and trying to just try and understand how it would even be possible. So that’s what’s in the report is like, here’s what happened, here’s why it happens. Here’s what you need to pay attention to. And here’s how it fits into the historical perspective of booms and busts, the credit cycle is a real thing, even if the government is trying to mitigate it. It does exist and impacts everyone. Because you need a bank, to save your money to borrow to do things that we want it to, to run your business you need, you need a bank that works with you. And if they’re making dumb choices with the assets that they have, it’s better to know that in advance. So that’s what the report is about. And then there’s a couple of recommendations on investment investments you can make. Once you understand what’s going on. We actually recommend bank.

Gene Tunny  51:31

Yeah, yes, it’s for US banks, a lot of to have a lot of have to have this conversation. I don’t know if you look at Australian banks, if I don’t, I

Addison Wiggin  51:40

haven’t looked at Australian banks, except for in a macro sense, where I’m aware that the Federal Reserve decisions that move rates also has a knock on effect in Australia, New Zealand, China, and Japan and Europe. Those are like the big ones. Russia was at two until they decided to destroy their neighbours. Yeah, the

Gene Tunny  52:09

general view here is that our our banks are in a much better position than

Addison Wiggin  52:14

it could be. I haven’t studied them closely enough to know, I think their requirements are different in Australia than in the US too.

Gene Tunny  52:23

Yeah, there. There are definitely differences. So you might have to I’ll have a close look at that myself. But look at us. And it’s been terrific. Yeah, probably more time than you might have expected, delving into it. Because I think what’s great is you you do deep research, and you make a big calls, I suppose what you make you make you really let us know what you think. And I think it’s great. And yeah, it’s it makes me think about what’s going on so much more. So really appreciate all the work you do. And I’ll put links in the show notes to your work. And, and thanks for making that. That report available for listeners. That’s terrific. Yeah.

Addison Wiggin  53:03

It’s information that I like, I would just caution people that I’m learning about it as fast as I can. But I’m also passionate about it. That’s why I do it. This whole project that I have the Wigan sessions is a passion project. I like talking about this stuff. And then it makes me think just like you’re saying, it makes me think. And I want to give away the report just to spread what I’ve learned, because I think it’s important stuff for, especially if you’re trying to manage your own money, it’s really important for you to understand the bigger trends. And, you know, I have a philosophy degree and I studied literature in school and stuff. So I’m interested in the stories of what’s going on. It’s late sound perverse, but I was actually excited when we started having our own banking crisis. It’s happening right in front of my face. I just have to read the news.

Gene Tunny  53:59

Yeah,

Addison Wiggin  54:01

get the report. It’s it’s interesting. And it’s helpful to like, make sense of what’s happening in the news, too.

Gene Tunny  54:07

Yeah, certainly, I guess it could be exciting, stressful. I remember being in Treasury. And here in Australia during the world of financial crisis. We didn’t have it as bad as it was in the States. But it was still quite, quite stressful at a time when we started seeing the drop in government revenues. And yeah, borrow lots more money. And yeah, well, my

Addison Wiggin  54:28

biggest concern, and I put this in the report to but my biggest concern right now is, we were talking about the savings rate during the pandemic. I think the same thing happened in Australia to the savings high because there was a lot of government stimulus, like direct payments to citizens. So the savings rate and then nobody could go anywhere. So the savings rate went really high. It actually peaked above consumer credit for like a, you know, like, a month, and then as the economy started opening up and people started travelling and Like making decisions I, oh, we’re free, we can go to one, the savings rate plummeted. And then the consumer credit rate for all of the things that I’m only talking about the US, but I’m sure it’s mimicked in other Western economies, the consumer credit rate, skyrocket skyrocketed before the Fed started raising rates. So like, all these people are taking on adjustable rate, credit cards and loans and mortgages and things. And then suddenly, the the debt service that they have to pay on those rates went through the roof, it’s tripled. So you had a plummeting savings rate, and at the same time that you have a service to debt ratio going through the roof. It’s not a good scenario. And we haven’t even really seen that impact on, like earnings in the s&p 500, the big retailers and stuff like that. We haven’t seen what that impact is going to look like yet. So that’s not kind of like, I guess, yeah. So other than the banks themselves, because they do it for there’s two points there that I’m keeping an eye on.

Gene Tunny  56:09

Yeah, fair point. We’ll definitely I’ll keep an eye on it, too. I think they’re really good points. Okay, Addison, we’re gonna thanks so much for your time. I really enjoyed that. That was terrific. Good luck to you, man. Very good. Thanks, Addison rato thanks for listening to this episode of economics explored. If you have any questions, comments or suggestions, please get in touch. I’d love to hear from you. You can send me an email via contact at economics explore.com Or a voicemail via SpeakPipe. You can find the link in the show notes. If you’ve enjoyed the show, I’d be grateful if you could tell anyone you think would be interested about it. Word of mouth is one of the main ways that people learn about the show. Finally, if you’re podcasting outlets you then please write a review and leave a rating. Thanks for listening. I hope you can join me again next week.

57:10

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Credits

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Podcast episode

Economic development through savings and credit groups w/ World Neighbors CEO Kate Schecter – EP140

Kate Schecter leads World Neighbors, an international NGO helping poor communities in developing economies lift their living standards through local savings and credit groups among other measures. In Economics Explored episode 140, hear Kate describe how these local savings and credit groups differ from Grameen-style microfinance. Also hear Kate describe how on-the-ground, practical measures can give people a hand up, not a hand out.

You can listen to the episode using the embedded player below or via Google PodcastsApple PodcastsSpotify, and Stitcher, among other podcast apps. A transcript and relevant links are also available below.

About this episode’s guest – Kate Schecter, Ph.D.

Kate Schecter, Ph.D., joined World Neighbors as President and CEO in June, 2014. In her previous position, she worked for the American International Health Alliance (AIHA) for 14 years. As a Senior Program Officer at AIHA, she had responsibility for managing health partnerships throughout Eurasia and Central and Eastern Europe (CEE). She also managed a blood safety program in Ukraine, Central Asia and Cambodia from 2012- 2014. In the early 2000’s she managed a program on the prevention of mother-to-child-transmission of HIV (PMTCT) in Ukraine and numerous pilot sites in Russia and Central Asia.

Through her work with over 35 partnerships addressing primary healthcare, chronic disease management, hospital management, maternal/child health, Tuberculosis, blood safety and HIV/AIDS, she has extensive experience successfully implementing AIHA’s health partnership model.

Before joining AIHA, Dr. Schecter worked as a consultant for the World Bank for three years (1997-2000), specializing in healthcare reform and child welfare issues in Eurasia and CEE. She taught political science at Tel Aviv University in Israel for a year (1992) and at the University of Michigan in Ann Arbor for four years (1993-1997).

She has written extensively about the Soviet socialized healthcare system and was a principal investigator for the Carnegie Corporation’s Russia Initiative where she researched the issue of social cohesion in Russia. She is the co-editor and co-author of Social Capital and Social Cohesion in Post-Soviet Russia (M.E. Sharpe, 2003), author of a chapter in Russia’s Torn Safety Nets: Health and Social Welfare in Post-Communist Russia (St. Martin’s Press, 2000), and an entry on Chernobyl for Scribner’s Encyclopedia of Europe 1914-2004, (2006). She also has made three documentary films for PBS about the Former Soviet Union. Dr. Schecter holds a Ph.D in political science from Columbia University in New York and an M.A. in Soviet studies from Harvard University.

Links relevant to the conversation

A New Paradigm for Microfinance: Savings and Credit

COVID-19 and the Global Food Supply: Big Lessons from the World’s Small Farms

Videos – World Neighbors

Transcript of EP140: Economic development through savings and credit groups w/ Kate Schecter

N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.

Gene Tunny  00:01

Coming up on Economics Explored.

Kate Schecter  00:04

We went way up into the mountains in Timor-Leste. And they had saved this community in a couple of years, had saved $36,000.

Gene Tunny 

Wow!

Kate Schecter 

And we were able to then loan to each other and start to develop really wonderful businesses.

Gene Tunny  00:23

Welcome to the Economics Explored podcast, a frank and fearless exploration of important economic issues. I’m your host, Gene Tunny. I’m a professional economist based in Brisbane, Australia, and I’m a former Australian Treasury official. This is episode 140 on economic development, through savings and credit groups. My guest this episode is Kate Schecter, President, and CEO of World Neighbors, a non-government organization supporting economic development projects in emerging economies across the world.

I got a lot out of my conversation with Kate. In particular, I learned about the power of local savings and credit groups in rural areas. I also learned a lot from Kate’s stories in the field working on economic development projects. For instance, I learned that Guinea pigs are a delicacy in Peru. Why is that fact relevant? Please listen to the episode to find out. Unfortunately, the internet connection was a bit unstable early on in the conversation, but it gets better later on. So please stick around. As Kate has a lot of really valuable things to say about economic development. Please check out the show notes for relevant links, any clarifications, and details of how you can get in touch with any comments or suggestions? I’d love to hear from you. Right on, now for my conversation with Kate Schechter of World Neighbors. Thanks to my audio engineer, Josh Crotts was assistance in producing this episode. I hope you enjoy it.

Kate Schechter, President and CEO of World Neighbours, welcome to the program.

Kate Schecter  01:51

Thank you for having me.

Gene Tunny  01:52

It’s a pleasure, Kate. Keen to speak about the work of your organization and the work you do in economic development worldwide. Could I ask you first about World Neighbors, a bit about the organization? What it does, and also its history please?

Kate Schecter  02:13

Oh, thanks so much for asking. World Neighbors is a 71-year-old organization. So, it was founded in 1951. It is a non-sectarian, it’s not a faith based organization. But it was founded by a Methodist minister in Oklahoma, in the United States. And it has; the founder was very, how should I say it, but he was quite prescient about some of the challenges that we all face in the development sphere. He realized very early on that he wanted to create a methodology that would not create dependency, that would allow people to lift themselves out of poverty, as opposed to sort of handing out things to people. And he created this organization that really tried to reach the poorest of the poor, in the most remote, isolated rural areas of the world. And the organization has thrived despite all the challenges that, you know, all of the people who want to do good for the poor have faced over the years. And we’ve been, at this point, we’ve been in 45 countries. Today, we’re in 14 countries in Asia, Africa, and Latin America. We reach about 600,000 people a year. And the way we do that, we have; it’s a relatively small organization. We only have 57 staff around the world, with offices in the capitals of some of these countries. But the way we do it is through community-based organizations. So we go into these very poor communities, we look to see are there any kind of community organizations formed to kind of, lead the charge, and if we don’t see that there is a leadership formation, then we help them create their own community-based group that will follow through on all of this training that we’re going to do. So, the basis for our work is training. And I think a lot of organizations will tell you that, you know, the best way to help people is to do capacity building, and to create demonstration sites, etc. The big challenge there, of course, is you can train and train but if somebody doesn’t actually follow through, and watch to see that, that everything that you’ve invested is really happening on a regular basis, then, of course, it’s kind of, it could be wasted effort. So, we create these community-based organizations to be the eyes and ears on the ground and to mentor and to lead within the communities. The organization focuses on, obviously, like everybody, on sustainable development. We’re not, although, we do differentiate ourselves from humanitarian aid, we try to go into communities that are relatively stable so that we can help them to lift themselves out of poverty, and then become independent. We have a methodology that recognizes though, that this kind of change in these very rural areas can take a long time. And so, we stay in a community for 8 to 10 years. And we; with different levels of funding at the beginning and at the end, but in the middle, we’re really kind of, we’re at a high point of a lot of training and a lot of mentoring, and then ratcheting it down as we tried to help them figure out how to attain funding for all the things that they want to do. It’s, of course, focused a lot on women, because we’re trying to help women in these poor and rural communities to have more of a voice. Many times, we go into the communities, the men have to go out to, to get jobs in the cities or even out of the country. And then they send home remittances. So of course, one of our goals is to try to help these families stay together, and to have thriving farms and thriving businesses so that they don’t have to be separated. So, the model is taking from many different places. We’re partners with, wherever we can be with other organizations or with umbrella organizations are focused on innovations in agriculture, in new forms of energy, and whatever might be happening on the ground. We are part of several umbrella organizations in Africa, especially, that are doing a lot of innovative work in growing crops that are more resilient to climate change. And that can last longer, so that the communities will have more food security for more of the; for a year. And that’s happening in India and Nepal, as well. And in Indonesia, and Timor-Leste.

The other thing that’s kind of exciting about having an organization like this is that we can share these innovations around the world. So, I have a, you know, the opportunity and get to see what’s happening in all of these different communities. Well, before COVID, I was travelling a lot, to see what was happening. And I would be able to say to farmers that I met in Peru, for example, who were trying to figure out the changing rainfall patterns. Well, you know, that kind of work is also going on in Indonesia. And we could share some of the innovations that are happening there. So, that kind of; we have globalization, you could call it that or, or sharing of innovations is something that’s happening, not just at World Neighbors, but in a lot of these smaller grassroots types of development groups that are working on the ground and in agriculture, especially.

Gene Tunny  08:33

Okay. Can I ask you about whether you get support from World Bank or any of the other development banks or the overseas development assistance organizations in different countries? I know Britain has, there’s a lot of funding from Britain and then there’s USA. Is there; you’ve got; there’s an Aid organization in the US. Do you get support from those organizations?

Kate Schecter  08:59

Yes, we do. We get grants from the United States Agency for International Development USAID. But I’ve tried to not become like a lot of other organizations in the United States, who are primarily dependent on US government funds. So, we’ve tried to keep a diverse portfolio of funding. We have funding from the US government, but we also have funding from private foundations. We’ve been able to get corporate funding from corporations that have separate foundations that they’ve formed to provide funding to nonprofits. We have family foundations in the United States, that are, individual families that are interested in these kinds of work. And then we have individual donors that we reach out to and many of them have been giving, for as long as World Neighbors has been in existence, so, we are dealing with generational giving as well. So, it’s a wide portfolio of funding sources. And that’s something that we try to keep it that way. We don’t want to become dependent on one source.

Gene Tunny  10:18

Right. Yep. Fair enough. I think that’s, that’s a good strategy. So, you mentioned two countries that are close to Australia. And I mean, I’ve had some involvement with one of those – Indonesia. So, I’ve done some work with their finance ministry and their Economic Development Ministry, just short courses. We, our foreign affairs, office, funds, short capacity building courses for foreign officials. And so, I’ve managed to, you know, meet a lot of people from Indonesia and learn about their challenges. I mean, it’s, it’s similar to other emerging economies where you have still a large agrarian workforce, lots of people in the informal economy. And I mean, it sounds like you’re, so you’re part; you’d be partnering with, say, a local organization in Indonesia. So, would you be relying on the local organization to go out to the community; define the communities where you can set up these – what did you call them? You set up local organizations, community based, right? So, would you, you would rely on partners in these countries, but, and you’ve got your people in, in Oklahoma City or in other places? And would they go out and they would help; they will coordinate? Or do they need to be on the ground? Or do you rely on the people in those countries? I am just trying to understand how it all works.

Kate Schecter  11:47

Yeah, that’s a great question. And I neglected to say that, we only hire, our staff are all local people. So, they’re all people who are from the countries where we work. We do that, so that, well, for very many different reasons. One is that they are able, they speak the languages, many times we’re dealing with dialects, not just the sort of main language. And you know, that’s true in, in Indonesia, for example, that every, most people speak Bahasa, but then of course, there are other dialects. And we, so we really try to only hire people who are from the countries. We are not the kind of organization that does such grassroots that we don’t, you know, keep in touch with the government. So, one of the other motivations for having local staff is that they have relationships, and can negotiate and make sure that we’re in compliance with all national and local laws. So, we’re trying to coordinate with national programs. And Indonesia is a very good example of that. We have, we are registered in every country where we work as an international NGO. And then we create MOU – memoranda of understanding, to make sure that we’re in line with the other development groups, and with the national programs, because our main goal here is to help and then, hand over so that the villages, the communities can get the assistance that they might have, you know, might have access to local government that they don’t know about. So, we’ve become a kind of liaison for that. And in terms of identifying the communities, that’s done in conjunction with our staff. So it’s not that, you know, that the local people tell us, oh, this is where you should go, it’s more of a process of going out, making sure that we’re working in an area, in Indonesia, you know, we agree to work only in particular, on particular Islands in particular areas. Because there are so many other groups. And that’s true in many countries, too. You know, for example, in Haiti, you have a situation, there’s so many different development groups. So, you want to make sure that you’re working in a place where there’s a real need for you, there’s a real demand for you. And of course, you know, when there is a need, and there is a demand, and people are helping themselves, and there’s going to be more ownership of the changes that that are implemented. And of course, that leads to far more likelihood of sustainability in the long run.

Gene Tunny  14:41

Right? Yep, absolutely. Okay. And so, in Indonesia, have you been helping improve sustainability of agriculture is that one of the things you’re doing? I’ve seen, I saw on your website, there was an article climate change and Indonesia’s slash and burn agroforestry can help

Kate Schecter  15:00

We’re working in agriculture, we’re working in all kinds of aspects of water, making sure that people have clean potable water that they are, you know, that they have enough water for irrigation, but also managing the water so that you catch it when it rains. But then you have it when there’s drought, a lot of work on savings and credits, which we, I hope to talk more about, to help people to save money so that they can then invest in individual businesses or in their communities. We do a lot of work on disaster/risk management, or preparing for disasters, because as you know, Indonesia is very prone and at risk for all kinds of natural disasters. So, creating community groups that will then manage the situation, should there be an earthquake or, you know, a tsunami or whatever. And that has actually been very successful. We’ve had several situations now, where, on Lombok, there were some earthquakes that our communities were more prepared for, and then could help neighboring communities to manage the situation when the earthquakes hit. So that’s another thing I wanted to mention is that we work in individual communities, but the idea is to have this kind of grow organically, and not to just restrict it to only the community that we are investing in. So, we’re looking for growth, not necessarily that we’re going into every single one of these communities, but allowing neighboring communities to come in to join in the trainings, to emulate their neighbors, and in some cases, we have really great examples of farmers and community members then going and kind of becoming consultants on their own. So, once they learn these skills, they then kind of, leverage them to teach their neighbors and become quite successful as trainers.

Gene Tunny  17:21

Yeah, yeah. Okay. I would like to ask you now about the savings and credit. So, you’ve written a really nice piece – this is about five years ago for Stanford Social Innovation Review, a new paradigm for microfinance, savings, and credit. And you’ve developed or you’re implementing this new approach which is distinct from what many of us may sort of understand as the traditional or well, the micro financing in the tradition of, is it Grameen from Muhammad Yunus, if I remember correctly, won a Nobel Peace Prize. And you’ve written that to counteract the traditional short-term approach, more and more international development groups are moving away from micro-financing in the Grameen tradition, small loans from banks with low interest rates toward local savings and credit groups. So, Kate, it’d be great if you could explain, what was the, why you’re doing something different from that traditional micro-financing, and what the benefits you see of that approach. Also, I’m keen to understand how did you sort of, come across this approach? Is this something you developed in-house? Or was it something that I mean, I guess you developed it over the years of, of learning out in the field? Could you tell us that story please?

Kate Schecter  18:55

Sure. So, I think that World Neighbors is not the originator of this idea. I think it’s been happening for about 20 years and it’s evolving. And I know that there are much larger groups that also do different, slightly different permutations of this approach. The idea is well, there are a few things that it’s addressing. One of the problems with the more traditional idea of micro-financing, is that it is small loans to individuals from banks with lower interest rates, so that the idea is that the per se you know, the classic ideas is, we’ve seen is a seamstress who gets enough money to buy a sewing machine and then she starts her own business. One of the big problems that we found with that is that you’re still in debt to a bank. You have to have access to a bank. And then, what if you default on your loan? You could get into the same trap that so many people got into before the idea of microfinance that you’re still, you’re still in debt to an institution. And, you know, the, the interest is accruing and you’re, you’re getting into the trap that, that the whole idea behind microfinance was trying to avoid. So, one other things that you realize when you go out to these communities, which are very, very hard to get to, there are no banks out there, they don’t have access to this your traditional credit and loan environment that you would need for even for micro-financing. So, this evolved, I think, originally from traditional mechanisms that were already in place in communities. For example, in many parts of East Africa, they had something called a merry go round, where they were essentially doing the same kind of saving together. So, my sense is that about 20 years ago, maybe 25 years ago, at this point, this started to evolve. And it became more formalized through groups like World Neighbors. The Gates Foundation has put a lot of effort into this idea of savings and credits, sometimes it’s called savings and loans. But it’s all because they allow for communities to start to accumulate capital, they allow for, if there’s some kind of a default of one of the individuals who’s gotten a loan, then the community can kind of support that person and figure out how to help them. They are, in our case, in World Neighbors case where we’re helping women who would in other; without this kind of a mechanism, would really have no way of getting out of the home, and getting having enough access to credit to be able to start their own businesses. Of course, the groups are combined men and women. But what we find is that the interest is primarily from women who otherwise would have no other way. So, the way it works is we go into a community, we talk about how are you going to address the issues that are going to help you lift yourselves out of poverty. And when we initially talk about savings and credit groups, women will say to us, we don’t have any money, how are we going to save any money if we don’t have any money. And so, it starts very small. I mean, it could be, you know, 10 cents a week, everybody brings to the group and it starts to accumulate. What I found coming from my background is in big, giant, USAID grants for International Health Care Development, before I came to World Neighbors, so I was honestly quite skeptical about this mechanism. But I’ve been out to the field and I’ve seen in the, we went way up into the mountains in Timor-Leste, and they had saved, this community in a couple of years had saved $36,000. And we’re able to then loan to each other and start to develop really wonderful businesses. It does help when the government or your, local government or national government kind of, sees that this is working. And in the Timor-Leste case, they had built, or they had built a road that led up to this town. And all of a sudden with the road and with the savings that they’ve been able to make, they were able to really start to carry their produce down to sell in a much larger market area. And that, of course, was helping them to accumulate more and more money and then to be able to invest more into their communities. So, people invest in their children’s education, in health care, but we really try to make sure that as we’re teaching them this mechanism, that they’re not just investing in the family, but they’re also investing in some kind of business that will bring revenue in.

Gene Tunny  24:35

Right. Okay, we’ll take a short break here for a word from our sponsor.

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Gene Tunny  25:12

Now back to the show. So, you mentioned a figure. I can’t remember the exact figure, but it was something like was it $36,000 or so? So, can I ask what currency are they are they saving in? Were they saving in their local currency? Or are they saving in, I mean, were they using US dollars?

Kate Schecter  25:34

Yes. First thing you can think about Timor-Leste is they use dollars there, US dollars. Yeah. Okay. I mean, that was strange to me. But you’d see that sometimes in these very, very small countries. I mean, I worked for years in Kosovo, Kosovo is on the euro. Even though it’s been a real struggle for them to be on the Euro they are on.

Gene I just wanted to mention, because I realized I neglected to mention that we actually have gotten grants from; a long time ago, before my time, we got a big grant from the Australian government actually, in Timor-Leste. And we recently got a couple of smaller grants from the government of New Zealand in Timor-Leste. So, we have had support from your part of the world, in Indonesia and Timor-Leste.

Gene Tunny  26:28

Oh, that’s good. That’s really good. I mean, they’re important neighbors of ours. So yeah, that’s good to see that, that we’ve done that. Right. Yep. So that’s really interesting. So, I just want to understand what they’re doing. So, you mentioned, there’s no bank involved, or one of your principles. So, you’ve got six principles, which I really like you’ve set this out? Principle 5 is don’t involve banks, which I think is fair enough. But then does that mean someone in the community has to act as the banker?

Kate Schecter  27:02

Well, good, good question. And what you see happen is that, as the money starts to accumulate, initially, we just use lock boxes, and it’s passed around and you know, there’s this sort of very simple mechanisms for making sure that, the money is safe, but also not, you know, there’s no risk of somebody stealing it. But, very quickly, that becomes too simple, and people need a bigger, more institutionalized form of savings. So, the next step many times, is to create a community bank, a community-based bank, where it’s like a cooperative. And because they’re farmers, many times, they’re already very familiar with the cooperative model. So, it kind of, there’re these different stages that it goes through, from this very sort of localized and individual community based, saving together and sharing with each other.

The other thing I want to point out here is that, we have to teach people basic financial skills. I mean, sometimes we’re dealing with communities where people are semi-literate. And so, they may not really have the skills to figure out, you know, how to create percentages for loaning to each other. So, it enhances so many different skills beyond just allowing them to have access to some funding. Now, of course, you could get in, we have gotten into situations where it’s gone from just, so there’s a nice cooperative, in a central cooperative in the village and people come there. To them, it’s becoming more of a community bank model. Because, you know, there’s just, they’ve been saving for many years, more and more people want to have access to you know, you don’t want to shut people out. Initially, these are small groups of no more than 20 or 30 people. And then, as they grow, you want to make the capital more accessible to larger people, larger groups. There’s a really nice example. In Nepal, when I first started, I went to a community where they had been, beneficiaries of World Neighbors, but many years ago, and now, they had graduated years ago. And they had built a kind of a building that housed a cooperative bank, a clinic that they had built because the government had not really provided that. So, they were able to get a government worker to be the nurse at the clinic but they had built the clinic themselves. And they had a training center. So, they’ve kind of, gone from this small savings and credits model to a much larger kind of business that was addressing a lot of different issues within the community. And it had a cooperative bank for loaning to farmers.

Gene Tunny  30:24

Okay. And I’m just wondering, I mean, how, what sort of gains and living standards are you seeing through this approach? I mean, is this a way to really lift some of these communities from a subsistence level? Are you seeing really significant improvements in living standards in these communities?

Kate Schecter  30:46

Absolutely. So, I think the premise of the sort of real core value of World Neighbors is that; and you’ve heard this line many times, but I mean, we really adhere to it. We are giving a hand up, not a hand out. And it can be very tempting to just go into a very poor community, and bring things you know, material and medications or whatever, that people want to donate, or even just to bring money and to think that that somehow, is going to help them but you and I know that the real way to help people is to help them help themselves. And then, they’re going to feel a lot of pride and how they’ve been able to lift themselves out of poverty, their children will have a different; will have more access to education. So yes, we’ve seen incredible change around the world. And, and I think the main thing that I’ve really picked up is people want to be able to share their knowledge. If they’ve learned all these new skills, and they want to be able to go out and teach others, they don’t want to just, sort of, hold back on their private farm. And I think that’s the real kind of core aspect of this is that it creates pride, and it creates capacity that then is being shared and reaching more and more people every year. But I think the Nepal example is a great one, you know, you kind of imagine that you’re gonna go out to these very poor villages, and you get there, and they’ve built these beautiful buildings. They presented me with a PowerPoint presentation about their consulting firm, and all the trainings that they’re doing. And how they had, you know, built this clinic and how many people there are treating every year. It was very sophisticated. And that was eight years ago. So, I can’t even imagine today, what it looks like. And you see that all over the world. Then, of course, the farms are thriving. I mean, we haven’t even talked about genius that now with the war in Ukraine and this fear of the coming food shortage and fertilizer shortage, this kind of grassroots effort is so important because not only were our communities much more self-sufficient during the whole COVID pandemic, but they’re also going to be better off in not being dependent on imports and, and chemical fertilizers. Because they do sustainable agriculture.

Gene Tunny  33:42

Right. Yeah, I’m keen to chat about agriculture. But first, you mentioned Nepal, and you probably got a better idea than I have, because you’ve done more recent work in, economic development and field visits. How do they power themselves? Do they have a mixture of diesel generators and solar power in these communities? And what’s their internet like? Do they have satellite broadband? I mean, how well connected are they?

Kate Schecter  34:11

Shockingly, well connected. Yeah, I mean, it’s so real. It’s really incredible to me, I mean, the only place I’ve been where I did not have internet connectivity was when we went way, way up in the mountains in Bolivia. Okay, and the only time my phone literally just went black on me, you know, just went dark and I was honestly, you know, being way too dependent on connectivity. I was a little freaked out. But and, you know, they were kind of laughing at me and my staff were saying, okay, might be good for you to have a good day or two without connectivity. But, it’s surprisingly well connected. I mean, Nepal will face a very serious problem because they do import oil and gas. And that’s something that there’s a lot of concern about. But there also is a lot of work being done on solar energy throughout these very, very rural communities so that they’re not so dependent on the national grid. But, they’re more advanced than you would expect. Let’s put it that way.

Gene Tunny  35:28

Oh, that’s good. No, just wondering.

Kate Schecter  35:31

Everybody has these cell phones. They seem to be able to charge them. And it’s amazingly connected.

Gene Tunny  35:38

Yes, yes. Yeah, that’s right. Okay, very good. So, on agriculture. Now, the traditional way that economists think about agriculture and economic development; there’s this story that well, in developing economies, there’s too many people on the land, working on the land and agriculture labours badly, it’s underutilized in agriculture, very inefficient. And so, you get big economic gains, when you move people out of agriculture, you get more efficient in that – move them to the cities, and this is a big part of what’s happened in China. So that’s the sort of traditional economic development story. But, and so what I found interesting or fascinating is your article; so you’ve written an article in 2020: COVID-19 and the global food supply big lessons from the world’s small farms. And you’re talking about the benefits of small farms and locally produced fruits, vegetables, and meat. And so, this is, I want to understand this perspective and the benefits you see in small farms. And I mean, coming to you from a country where we have some very large farms, and you got to own a farm in Australia, and you hardly see anyone like that. But here, you’ve got still a lot of people on the land. So, are you arguing that you can still have people on the land working on the land, that don’t necessarily have to move to the city, they can have a sustainable lifestyle in their existing communities?

Kate Schecter  37:27

Absolutely, I think. I mean, I agree with you that there has been this, I would call it a bias that you know, who wants to stay in these rural places? Everybody wants to get to the city. You know, that’s where, they think that they’re going to be jobs. And, of course, there’s going to be higher level of technology. And so, there’s an attraction, which we all understand to moving to urban areas. Of course, you know, what’s happened, which is that, as more and more people move to the cities, the cities can’t necessarily absorb these people, then you get these urban slums with terrible poverty in urban areas as well. So, our goal is to try to help people to have better lives where they are, and not be tempted to either migrate to cities, and then get trapped in this urban poverty. Or as we have in the United States, a big problem with migration from Central America, to the United States. We want to try to help people to stay in their countries and to help them to make their farming profitable and attractive to them to stay there. You know, so trying to help them have better homes, access for their children, better health care where they are, as opposed to having these mass movements of people, which has created more and more poverty for them. And I would argue also, and I’ve written about this, I don’t think people really want to leave their homes, they leave because they have really no other alternative. In Central America, there are these gangs and crimes that’s pushing people out, in addition to climate change and poverty that they’re facing.

So how do we deal with that? We’re trying to enhance the value of their land by not doing sort of the massive Agro business type of approach of you know, mono cropping one commodity product, and so having multi cropping; having a variety of different sources of income from not just, you kno55w, sort of straight out agriculture, but also teaching them about having, you know, having animals and we do a lot of work on trying to help people to grow chickens, because they are such a lucrative business in Peru.

I know this is kind of gross to many of us, but they eat Guinea pigs and Guinea pigs are considered a delicacy, and they are not difficult to grow. And they bring in a lot of money. And so, we help women especially, to grow these very lucrative Guinea pig farms. We were focusing in on the health of the soil, the cleanliness, and the accessibility of water. One of the things that we’re really focused in on for example, and I forgot to mention this in Indonesia, is having the water much closer to the village, you know, so many poor communities, the women and the children walk for hours and carry water back. So, figuring out pretty straightforward mechanisms for canals, wells, water catchments, to have access to water, and make sure it’s clean. One of the wonderful small innovations that I saw early on is that in so many of these poor places, women and children walk for hours to get fodder for their animals in, you know, forests or jungles. And then they walk back, you’ve seen many pictures of you know, or we’ve travelled, you’ve seen them carrying it. So instead of this really sort of dangerous and time-consuming practice, we have started to teach farmers to grow the fodder right in front of their homes, they have a lot of wasted land a lot of times, patches of land, where they can grow nutritious fodder for their animals right there in front of them. And that’s been an incredibly successful and simple change. So, the whole idea is to kind of reverse a little bit what you just described, to help people to stay on the land, to enhance the quality of their lives, to diversify. Oh, another thing that I didn’t mention is encouraging people where they have access to water to creating fish farms, fish ponds. And that has been a lifesaver in Haiti, for example, where there’s so many natural disasters, our communities, which we work with are way up in the mountains. And they all have fish ponds, which provide protein to them when they can’t go down to the coast to get fish. And then they sell the fish. And that’s also created an income for them. We see fish ponds, in Mali, in Kenya, you know, all over the world. So, if you have this kind of diversified farming, where there’s various different income streams, and you’re working on better crops that provide, you know,  you don’t know. I saw, when I was in Kenya, that they’re growing a type of kale that produces leaves, all for eight months. So, they’re trying to get it to be more productive for even longer, during the year, and many different other kinds of crops also where they’re trying to extend their production. So, all of this is really to enhance life for people, not to prevent them from abandoning their, you know, their homelands and their farms and to create long term, healthy environments.

Gene Tunny  44:31

Right. Okay. So, your involvement, would it involve both assistance with some of the technology you talked about or the things on the ground, the canals, and I mean, maybe rainwater tanks, but also education in farming methods, is that right? It looks like you have a focus on organic agriculture. Is that correct?

Kate Schecter  44:53

That’s right. So yes, we would be involved in all of the different aspect of this that I’ve just described. You know, both training people, but also learning from them, we try, as I said earlier, you know, we might see that there’s a very innovative way, to do water catchment, and then we could share that with others. Our involvement is primarily training, and then following up to see that things are actually working, we don’t want to do a lot of training, and then come back, you know, after; oh, and the other thing we do that I think is done by a lot of different groups do agriculture is what we call Farmer Field schools. So, taking a taking a farm, that might be a real successful farm and identifying leaders, to train other farmers through basically demonstration sites, and then allowing; then those farmers might farm the land together, and sell the food that they’re growing together. But also, it allows for them to have a mechanism for continuing the training, after World Neighbors leaves. We have lots of these successful farmer field schools, where World Neighbors isn’t there anymore? We’ve moved on. We call them graduated communities, they’ve now, they’re running these on their own.

Gene Tunny  46:32

Great, okay. That’s excellent. Can I ask you about value adding? Is that one of; do you try to encourage some value adding to the crops where you can?

Kate Schecter  46:44

Absolutely, and honestly, Gene, in that case, we see them, you know, doing it on their own, and then we might help them to sort of, scale it up. But a lot of that happens through the community. So, a good example is women in Guatemala, who were, they had a savings and credit group. And then they got together and realize that they all knew how to make jams. So, they started to figure out how to sell the jam, not just locally, but start to move it into bigger cities. In Africa, there’s a lot of focus on value adding by drying different types of crops and making them last longer. They’re making soap in Burkina Faso, that they sell. So, that’s where we’re kind of allowing, you know, for ingenuity and innovation without directing it. I mean, we’re not in the business of telling people, you know, this is what you should do. We’re trying to get them to have that spark happen through their own work with each other.

Gene Tunny  48:06

Great. Okay. So, I’ll put a link to this article: “COVID-19, and the global food supply; a big lessons from the world’s small farms”, and you set it up quite nicely. You talk about how the COVID 19 pandemic has revealed both the strengths and limitations of globalization and the problems with the industrialized food production. So, I think there’s some good points there. And the costs of that system, the cost to the environment workers, small farmers into a regional individual nations food security, those costs have led many people to look once again at the benefits of small farms and locally produced fruits, vegetables and meats. So, I’ll put a link to that. So, if you’re listening in the audience, yes, yeah, I think it’s some;

Kate Schecter  48:58

One thing I didn’t mention is this whole concern now about the rising price of chemical fertilizers? And one of the things that’s also been happening, I don’t think a lot of people know about, is that, there has been more and more change and improvement of organic fertilizers. And we have been able to share these mechanisms for creating organic fertilizers around the world. So now, our farmers not only use, you know, manure, but also, all the waste from their animals and kitchen wastes to compost and they’re making so much of it that they can sell it. So, it’s not just being used on their farms, but they’re actually able to take their organic fertilizers and pesticides and sell them. So, there’s this kind of nice circularity to, to what they’re, you know, to all the wastes that they have. Yeah. And that’s true for the fish ponds as well. They don’t buy feed for the fish. They use their own kitchen scraps for feeding the fish.

Gene Tunny  50:20

Oh, that’s clever. That’s very economical and efficient and circular. You mentioned circularity before. So, I think that’s excellent. Okay. All right. Kate, do you have this; won’t it be nice to have a YouTube channel because it sounds like a lot of these things would be; they’d make great videos just to see?

Kate Schecter  50:41

We have some videos on our website. Okay. If you go to where it says news, and there you can see some videos there of work that we’ve done in India, Indonesia, and Timor-Leste. They’re a few years old now. But they do demonstrate quite a bit of what we’ve talked about today.

Gene Tunny  51:05

Oh, fantastic. Okay, I’ll put the link to the website and the show notes for sure. Kate, anything else to add? I mean, I think I’ve learned a lot and about what you’re doing and the savings and credit groups. I think that’s a great innovation I’ve been, I was stunned by some of the examples you gave and just how successful they’ve been. That’s, great to see. Any, other points before we wrap up?

Kate Schecter  51:37

Well, I really want to just thank you again, for your interest. I think that my sense of having done a lot of talking about this, and, you know, speaking with Rotary Club groups here in the United States, and various different, you know, churches and various places around the country, at universities, a lot of universities that we are all hungry to hear about and to learn about what’s happening out there. We are, I think, we’re more global citizens than we admit sometimes. And there’s so much, you know, focus right now on this horrible war. But I think that it’s important for people to educate themselves about these successful things, to not sort of think of the world as so divided between the rich and the poor. And the more that the people can kind of, educate themselves about these innovations and these successes, I think it provides a lot of hope that we will get through this and that we can then learn from each other.

Gene Tunny  52:50

Absolutely. Okay, I think that’s a great note to end on. So, Kate Schecter, the President and Chief Executive Officer of World Neighbors. Thanks so much for your time. I really appreciated the conversation again; I really learned a lot. So, thanks. Thanks again. And yeah, hopefully, I’ll catch up with you sometime in the future and learn about your latest successes. So, thanks so much.

Kate Schecter  53:20

Thank you.

Gene Tunny  53:23

Okay, that’s the end of this episode of Economics Explored. I hope you enjoyed it. If so, please tell your family and friends and leave a comment or give us a rating on your podcast app. If you have any comments, questions, suggestions, you can feel free to send them to contact@economicsexplored.com and we’ll aim to address them in a future episode. Thanks for listening. Until next week, goodbye.

Credits

Big thanks to EP140 guest Kate Schecter and to the show’s audio engineer Josh Crotts for his assistance in producing the episode and to Peter Oke for editing the transcript. 

Please get in touch with any questions, comments and suggestions by emailing us at contact@economicsexplored.com or sending a voice message via https://www.speakpipe.com/economicsexplored. Economics Explored is available via Apple PodcastsGoogle Podcast, and other podcasting platforms.

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