3 Takeaways - Tom Friedman: On the World Getting Flatter and More Fragile, and Elephants Flying (#26)

Episode Date: February 2, 2021

Tom Friedman, author, New York Times columnist, and winner of three Pulitzer Prizes, talks about the world getting flatter and more fragile; abolishing recessions and interrupting the natural laws of capitalism; why the U.S. needs a healthy Republican Party; and how the world AC (After Corona) will be very different from the world BC (Before Corona).

Welcome to the Three Takeaways podcast, which features short, memorable conversations with the world's best thinkers, business leaders, writers, politicians, scientists, and other newsmakers. Each episode ends with the three key takeaways that person has learned over their lives and their careers. And now your host and board member of schools at Harvard, Princeton, and Columbia, Lynn Thoman. Hi, everyone. It's Lynn Thoman. Welcome to another episode. Today, I'm delighted to be here with Tom Friedman, who's an internationally renowned author, reporter, and New York Times columnist. He's the recipient of three Pulitzer Prizes and author of seven New York Times bestselling books. Tom was prescient in writing a book titled The World is Flat

about global interconnectedness 15 years ago, before the first iPhone. The world has gotten much flatter and interconnected since then. He's one of the most insightful thinkers on global issues and U.S. politics. I'm excited to hear how Tom sees the world now. Welcome, Tom, and thanks so much for being here today. Lynn, great to be with you. Let's start with global issues before we talk about the U.S. How do you see interconnectedness now and going forward? You know, Lynn, people often ask me, is the world still flat?

And I tell them, oh, baby, it's flatter than ever. Not only have we connected more nodes, we've greased the connection between those nodes. Let's just think of the COVID-19 crisis. Between December 2019 and March 2020, there were 3,200 direct flights from China to the United States. 3,200 direct flights. There were 50 direct flights between Wuhan and the United States. 3,200 direct flights. There were 50 direct flights between Wuhan and the United States. Wuhan. How many Americans had even heard of Wuhan? Of course, that's where the virus started. If you look at connectivity back in the days of 3G, to download a two-hour video off the internet took about two and a half hours. Under 4G,

it took about three and a half minutes. Under 5G, it'll take under three seconds. All these trends have just accelerated. Think about it. When I wrote The World is Flat, when I sat down to write it in 2004, Facebook basically didn't exist. Twitter was still a sound. The cloud was still in the sky. 4G was a parking place. LinkedIn was a prison. Applications were what you sent to college. Big data was a rap star. And Skype was, for most people, a typographical error. All those actually happened since I wrote The World is Flat. So, yes, the trends are continuing. Alas, though, what is making the world actually flatter but more fragile is the fact that as we've connected more nodes and greased the connections between those nodes, we've actually been removing buffers, buffers of regulation, buffers of transparency, ecological buffers like rainforests, things that buffer the flow between different nodes and act as surge

protectors. And that's why we keep seeing these pandemic-like effects every seven, eight years. Started in 9-11, We had a geopolitical pandemic. 2008, we had a financial pandemic. 2019, we had a biological pandemic. And we're staring in the face now of a atmospheric pandemic called climate change. And that's because we are connecting more and more nodes, greasing the connection between those nodes, but removing the buffers. Some are regulatory. Some are ecological. Some are regulatory, some are ecological,

some are transparency, some are cultural, that moderated the flow between these different nodes. And as a result, the world is flatter, but more fragile at the same time. As we remove these buffers and grease these skids, Enormous companies are being born and growing. Facebook, which you mentioned, Amazon, Google, and others. They are all now so enormous that they have more members and users than the largest countries in the world. How do you see these very large digital companies? All of them are grown in part because they provide something people want. Facebook's case, they wanted the connectivity. In Google's case, they wanted search. In Apple's case, they wanted cool stuff. In Netflix's case, they wanted great streaming. There's a reason that they've all grown this far this fast. But they've also grown this far

this fast because we have decided collectively that we're going to basically abolish recessions. Recessions are to economics what forest fires are to nature. They clear out weak and dead elements and they create space for new companies to grow, which is why almost all the great new companies actually start in recessions like Microsoft. We've been doing that because maybe it's just our generation. We've been cushioning every downturn with bigger and bigger government bailouts. But starting in 2008, we really started these massive buying by the Fed of not only government bonds, but of weak companies, because we didn't want to face the implications of a real crash that would clean out the system because it would be so painful. I mean, of course, we're doing it again now with the pandemic, which is understandable. I mean, there's so many people who are hurting.

But the net effect of governments all over the world keep doing this over and over again, you distort the market. Just think about this morning, just before talking to you, I was looking at the NASDAQ and the market, and the market's been soaring. I look outside, I see a pandemic. I see rising unemployment. I see companies getting crushed, especially small businesses. The's actually not right. And whenever I see elephants flying, I start to worry because it usually ends badly. These elephants are flying because they're betting on more and more stimulus, more and more government bailout. And what that is doing, as Morgan Stanley economist, Ruscha Sharma points out, is increasing the number of zombie companies. Companies that actually would have gone under because they were weak, but now are being kept alive by the government. Well, when you have a lot of zombie companies, actually, they suck up talent and resources that prevent new startups from rising.

And we're at record low, like new startups right now. People don't realize that. That's not good. And what they also enable is these giant companies because they so inflate stock prices. So that increases the currency of these companies when their stock go up. They can use that currency then to buy up new startups and choke off new rivals. So there's a lot of deeply aberrant stuff going on in the marketplace. And Lord knows, I don't want to see people crushed.

I want people protected by the government and bailout and whatnot at this time, because they didn't do anything. I caught in a pandemic. But look at how the East Asian countries have been doing it. They protect the most vulnerable, but they've actually invested all their money in infrastructure, not transfer payments. We've fallen into a phenomena that Jan Ruscha Sharma calls, I really like this, socialism for rich people and capitalism for poor people. That's what's going on. Because if you have the owner of financial assets and the top 10% of the economy own 80% of the stocks and bonds out there, you've had an amazing decade since the bailouts of 2008. If you don't own financial assets, you're in the 50% who don't. You've actually seen zero net income growth in that time, which is one of the things that produced Trumpism. We need to step back and start asking some questions about what is it we've fallen into here.

You know, there's been a lot of focus on the neoliberal thinking and globalization and its harmful effects. Lord knows we should always be looking at those. But I think people have not paid enough attention to the other thing that's been going on here, this socialism for rich people and capitalism for the rest. It's not a healthy phenomenon. How else do you think that COVID will change the world, apart from all this government spending? Even with what I just said, we're going to see massive creative destruction, because every company has basically accelerated the digitization of its products and services, even employee interactions. We've been putting out the New York Times just fine

since March, almost a year now, with no one in the newsroom. I haven't filed a single expense report for the New York Times since the first week in March. I do it all home. And when you think about it, I even pay their electric bill because I'm using my own computer and my own electricity. So they've got a really good deal going. We will never work the same again. What it's going to do is accelerate a trend. During the industrial revolution, we lived in a world of binaries. There was a place called home and there was a place called office and factory. There was a time for education that was K through 12, maybe higher education. And then there was a time for

work and retirement. There was a thing called a job. A job was done in an office or factory, and it was the same as work. All three of those have been blown apart. First of all, this distinction between home and office and factory has been completely obliterated, and that's not going to come back. We'll move to a hybrid system, but the old nine-to-five system, it was already fraying, but that will be over. Education in a world where change is accelerating so quickly and the half-life of skills gets shorter and shorter and shorter, that is, the time that you get to use those skills you learned keeps shrinking because the workplace keeps changing rapidly. It will no longer be learn, work, retire. Your life will be learn, work, learn, work, learn, work, learn, work, learn, work.

In fact, as my teacher Heather McGowan likes to say, in the old days, we learned in order to work. Going forward, you will work in order to learn. Learn a new skill and go on. And lastly, the consolidation of jobs, work, and office will be blown apart. Jobs will be able to be done anywhere. I'm doing my near-time job from home. And jobs and work will also be separated. Companies will be able to fracture out a certain amount of work, dice it out, and actually freelance it around. The old days when job and work were the same thing will be no longer the case. I might have a job, but part of my work will be done by a machine, part will be done in an office, part will be done by a gig worker,

part will be done by a freelancer. And so those three trends are clearly going to just be completely disaggregated by the pandemic. And I think they'll be with us for the future. Other big issues in the world are trust, truth and democracy. How do you see those issues? Again, one of my other teachers, Doug Seidman, always likes to say that two pillars of democracy are truth and trust. Without used his Twitter account to destroy truth, the Washington Post's final tally, over 30,000 falsehoods and misleading statements in four years. And he governed by trying to divide us by destroying trust.

So that was Trump's business model. I think Biden was elected because enough Americans realized we needed to take a different course. But Trump still has enormous support. He got over 70 million votes, after all. I believe as a political phenomenon, he'll be with us for a long time. How do you see the U.S. right now? I've never been more worried about my country, the United States of America. Two-thirds of the U.S. Congress voted to nullify the last election, to use force majeure to nullify what wasn't just a free and fair election. It may have been our greatest election ever.

More people voted than any time in our history. Their neighbors counted the votes. Their secretaries of state and legislators and courts affirmed the votes. And they did it all in the middle of the worst pandemic in a century. It was a remarkable expression of democracy. Maybe the greatest expression of democracy in the history of the Milky Way galaxy. And in the wake of that, a president backed by not a small number of his party produced a big lie that Biden didn't win. They repeated the big lie the way Goebbels taught us to do. And so much so that it began to take

hold. Two thirds of Republicans in the House propelled by that lie tried to nullify the electoral vote count of several key swing states in order to tip the election to Trump. And then Trump on his own tried to suborn the Secretary of State of Georgia into changing the vote count there. And when none of that worked, he unleashed a mob to ransack the U.S. Capitol. All of that is bad enough. But when a majority of his party still refuse to impeach him for that, you know that something is really off in the country. And I think what's off is that one of our two big parties is off the rails. I'm a big believer we need a healthy conservative party to balance a healthy center-left party. That's when we'll be at our best. And right now,

we do not have a healthy conservative party. We have a conservative party that is really off the rails following Trump. It just is not equal. The Democratic Party is 70% center-left, 80% center-left, I would say, and 20% farther left, maybe a tiny amount far, far left. The Republican Party is just the opposite. It's 30% center-right, 20% center-right, and the other 75, 80 percent is far-right. And the bleeding edge of that is QAnon and just some really crazy stuff. So until that party comes back to its senses, and I don't know when that will be, we're going to have a problem. We will not have a healthy conservative party. President Biden knows and respects you, Tom. He even reached out to you after being elected

president. Can you tell us what was the most memorable or important thing he said to you? TOM COTTON, President of the United States of America, President of the United States The most important thing about President Biden, who I traveled with to Afghanistan once for 10, 11 days back after 9-11, so we got to know each other really well. We had a good laugh about that trip, actually. I think the most important thing about him is that he's a person who is impossible to hate in a time of rampant hate. I think we're very lucky to have a president who really does not

have a hateful bone in his body and is really impossible to hate at such a time. The question is, is the partisanship in the country too deep to take advantage of a Joe Biden at this time? And that's what we're going to see. I must admit, I just don't understand the partisanship. When Joe Biden's son, Beau Biden, passed away a few years ago, Joe had been a senator for 30 plus years. He knew all the senators, Republicans as well as Democrats. And yet my understanding is that there was only one Republican senator that came to his son's funeral. I just don't understand that lack of humanity.

Politics has really gotten so toxic and rancid and bitter that we have been in uncivil wards, not a bad description of what we've been in. I don't see us getting out of it anytime real soon. Tom, what advice did you give President Biden? Oh, I don't give advice, Lynn. Thank you. I just listen. I listen to his advice for the country. I'm not in that business. But thank you for asking. You are always looking for the best outcomes, the bright spots. Right. Is there anything that we as Americans can do? We did the most important thing, and that was electing Joe Biden as president and giving the Senate to the Democrats, because I just think the Trump Republican Party is not a governing party

right now. I think it's going to fracture, too. So I think we did a good thing there. But he's got to be able to use that power now to do things that will really impact all the American people, particularly working class Americans. And whatever we can do to help him in that, that would be a great contribution to him. But Americans did the most important thing by making the right choice last November. You just said you think Republicans will fight and you have said Republicans are going to be like scorpions in a bottle. What do you see? I've been predicting this for a while and I'm happy to say I was ahead of the curve because you can really see it now. There are three factions in that party now. They're the people who want Trumpism with Trump. They want Trump back. They want him to still lead the Republican Party. There are people who want Trumpism without Trump. That's Josh Hawley and Ted Cruz, Nikki Haley. They want that Trump base, but they just don't

want him. They want to replace him. Then you have, I would call the tactical cynics like Mitch McConnell, trying to figure out how they can stay in power and ride this tiger. And lastly, you have a few principled Republicans, Mitt Romney and Lisa Murkowski, who are real Republicans, but just see how crazy and off the rails all of this is, and are figuring out where they fit in in the future. I don't see either one becoming independent, or at least Romney, not Murkowski could potentially in the coming months, but I doubt it. Those are the four factions, and there are some people in there who just can't live with each other. And we saw that last weekend when Republicans in Arizona censored John McCain's widow, the governor of Arizona, for saying that Joe Biden won this election fair and square. This is a party that's deep into

conspiracy theories. It's got now a QAnon element, which is just completely from another galaxy. I don't see how it holds together. And that will be, I think, a great thing for the country, because if it does split, it won't be able to gain national power. We need them out of national power until they come back to their senses. Is there anything else you'd like to discuss that you haven't already touched upon? We really hit all the high points, Lynn. You did a good job. Tom, before I ask for your three takeaways, can you tell us about what your remarkable wife, Anne, has accomplished during COVID? Well, there you ask the most important questions. My wife has been building a museum in Washington, D.C. to promote reading, literature, love of language.

It's called Planet Word. It opened on October 22nd in the middle of the pandemic. We had to close when the mayor of D.C. rightly closed all museums because of the latest surge. But we'll be back open, and we hope by the end of February. You can read about it at planetwordmuseum.org, all one word, planetwordmuseum.org. I believe it's going to be the hottest, coolest, most in-demand museum in Washington, D.C. It's just an amazing place to come with your

family. People of all ages, if you love words, language, puzzles, and wordplay, we're the place for you. And I'm proud to say that Lynn Thoman's on our board. We've had some great support. It's going to be an amazing addition to the crown of museums in Washington, D.C. And so proud of my wife that she gave this gift to the city. I can't wait to come to Planet Word to see the museum in person. It was the most amazing virtual opening. You can see the virtual opening on the site too. Yeah. Thank you. Thank you. Last question, Tom, what are the three takeaways or insights you'd like to leave the audience with today? The first is we will not be healthy as a country unless we have a

healthy two-party system because our system's built on a two-party system. And right now, one of those parties is really off the rails. There is no symmetry between the two. As you know from reading my column, I'm not a particularly partisan person. I'm from Minnesota. I like people to all get along. But right now, as long as Trump is head of the Republican Party

and it's driven by that particular base, the system's not going to be healthy. That's the biggest takeaway I have. The second is that we do have to figure out going forward a way to wean ourselves off this endless addiction to bailouts from the central bank, because it's getting us through each crisis, but it's taking bigger and bigger bailouts to get through each next crisis. Because what we're doing is creating a lot of zombie companies, we're interrupting the natural laws of capitalism.

And we're making ourselves very frail. Because when you borrow this much money at low interest rates, and people think interest rates aren't going to always stay low, and maybe they will, Lynn, but what if they don't? And if they don't, then you've got the government having to spend virtually its all its budget just paying back interest on this massive debt. My last takeaway is that the world of AC after corona is going to be very different from the world of BC before corona, because this virus and the lockdowns has dramatically accelerated the digitization of everything from the menu at your favorite Chinese takeout all the way to the most sophisticated work around markets that are done by the big brokerage houses and the manufacturing that's done on factory floors. And so the world of AC is going to be very different from the world of BC

before Corona. I can't tell you exactly how, but I know it's going to be different in ways that will be material. Tom, this has been terrific. Thank you so much. My pleasure, Lynn. Good luck. If you enjoyed today's episode, you can listen or subscribe for free on Apple Podcasts or wherever you listen. If you would like to receive information on upcoming episodes, be sure to sign up for our newsletter at 3takeaways.com or follow us on Twitter, Instagram, Facebook, and LinkedIn. Note that 3takeaways.com is with the number three. Three is not spelled out. For all social

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