TED Radio Hour - Listen Again: A Century Of Money (2020)

Episode Date: July 22, 2022

Original broadcast date: December 11, 2020. Recessions, depressions, bubbles, and blue skies — our economy has a history of soaring and plummeting. This hour, TED speakers look to the past for lessons on building a more stable financial future. Guests include journalist Kathleen Day, financial advisor Tammy Lally, writer Elizabeth White, and filmmaker Abigail Disney.See pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

This is the TED Radio Hour. Each week, groundbreaking TED Talks. Our job now is to dream big. Delivered at TED conferences. To bring about the future we want to see. Around the world. To understand who we are. From those talks, we bring you speakers and ideas that will surprise you.

You just don't know what you're going to find. Challenge you. We truly have to ask ourselves, like, why is it noteworthy? And even change you. I literally feel like I'm a different person. Yes. Do you feel that way? Ideas worth spreading.

From Ted and NPR. I'm Manushe Zamoroti, and let's start today's show in the 1920s. Let me be concrete. We have passed through a great war. A hundred thousand Americans had died in World War I. And 20 to 40 million lives were lost worldwide to the 1918 pandemic. And after all that in this respect also, we are moving forward. And after all that devastation, people just wanted to forget about their troubles.

The roaring 20s, a time of growth and prosperity, or so it seemed. It was the first time that in the United States there were more people, as many or more people in cities rather than in rural areas, either on the farm or tied to the farm economy. You know, there was jazz, there were telephones, and people can drive cars. You have ribbons of highway that were being built and shopping malls, fast food, all of it. This is author and journalist Kathleen Day. She studies the history of finance, especially during times of crisis. And she says that the 20s were a decade of excess when the goals.

goal became to dress better, spend more, and outdo your neighbors. People began to start to compare themselves with each other in a way that they hadn't previously. Like in this reenactment of a 1922 dry cleaning ad. So, you're invited out to spend a week with Mr. and Mrs. Jones. And if there is one thing you are always striving to do, it's to keep up with the Joneses. People started using credit like never before, spending money that they didn't have. It began to be acceptable to borrow money for items that were not essential. As F. Scott Fitzgerald wrote about New York City in 1926, the parties were bigger, the pace was faster, the morals were looser, and the liquor was cheaper.

It was a significant mental shift. And part of why people were spending so much money was because of something not that sexy, war bonds. This was Americans' first time. really buying some type of security en masse. So by the end of the war, when people got repaid their money, Americans as a population had had a very good experience with the investing in securities. So that kind of sets the stage for the 20s when it comes to finance.

And it also sets the stage for the biggest stock market crash of the century in 1929. It was a recipe for disaster. It created what we now know as the Great Depression. Depressions, recessions, bubbles and the blue skies. It can be the best of times. Money became a source of happiness. And then just a few years later, you are running out of money.

The U.S. economy, as we know it, powered by credit and consumerism, has been around for about 100 years, building up unbelievable wealth. but also melting down over and over again. And you got to wonder, are we repeating the same financial mistakes? And so on this episode, we'll explore personal stories and lessons from the past and ideas about how we can learn from the current financial crisis to build a more stable future. And so back to Kathleen Day.

She says that many of our current financial systems actually came out of the Depression, and that the 1920s and the 2020s have one big thing in common. The disparity in wealth that we have today, the last time it was this great, is in the 20s. Okay, so let's go to the end of the decade, 1929, the stock market crashes. But why? Where was the government and the Federal Reserve, which is supposed to keep the banks in check? Well, it was, what happened is the Fed had raised rates at the beginning of the decade. And then it kept rates very low in the middle of the decade. And it did that with an eye to helping Europe.

Remember, we'd all just come out of this war. So we're going to keep our interest rates low relative to their rates so that people will invest there. Well, of course, that made it easier to borrow money in the United States. So there was too much borrowing of money. It was too much borrowed money chasing too few good assets. So there was a sort of no holds bars will lend you money. And if you keep lending people money to go out and buy something, you've created a demand that you can describe as artificial. So it's a bubble.

And the Fed was so worried about doing anything of lowering rates because they were afraid of piercing that bubble. But they had helped create it. And by allowing it to go on, they allowed it to grow bigger. So eventually it's unsustainable. And then you had Black Thursday where you had the real bloodbath. And when the dust had settled, stock prices had fallen, 85% from their high. So it was a big drop. And people lost their shirt.

I mean, it was a total disaster, right? Wall Street just got wiped out. And that made a lot of people freak out about getting their cash from their banks. But did the government know how to stop people from having a run on the banks? Well, remember, there was no deposit. insurance. So people were running to their banks and saying we want our money. They were afraid. And so right after the crash, you had about 30 to 40 percent of the banks of the United States fail in about three years. And the Fed didn't exercise its authority as a lender of last resort.

The Fed has this very powerful tool as a central banker where it can go in and give them cash so that when everyone comes running in and says, give me my money, give me my money, you have the cash to give them. And this is called the paradox of banking. If you can go in and get your money from the bank and you know you can, you don't want it. But if you think there's any chance you can't get it, that's when you show up and say, fill the suitcase with my cash. Give me my money. Okay.

So the Fed had the authority to give banks money, but it didn't do that. And that's when tens of thousands of banks failed and people lost their life savings. Yes. Things were so dire. 25% unemployment. 10,000 banks failed. Contraction of credit. So it was a pretty grim time.

Once I built a railroad, now it's done. My brother can you spare a dime. I mean, we've all heard stories about the Great Depression, which actually sound a lot like what people are going through today. But then, 1933. Right. That was kind of a pivotal moment. Franklin Delano Roosevelt, FDR, comes into office, and there's this sort of sense that the government needs to be more responsible going forward for the health of the economy. Is that right? Yes. Up until this point in the American psyche, people did not look to the federal government, the president, let's say the president and the Fed, as the keepers of the economy.

So FDR coming along came into a crisis where the banks effectively, as an industry, were crippled. Ladies and gentlemen, the president of the United States, I want to talk for a few minutes with the people of the United States about banking. And so what he did is he declared a bank holiday and said, everybody just stop. We're just, you can't get your money. We're just going to take a brief, a brief breathing. here and let everybody calm down. This bank holiday, while resulting in many cases in great inconvenience, is affording us the opportunity to supply the currency necessary to meet the situation.

So much of what happens in a crisis, not all of it, but so much of it comes from the fear of not knowing what's going on. So he comes along and all these banks have failed and there's been this idea that's of insuring deposits at banks to prevent these runs so that people won't go and run every time there's a financial problem. They won't go and run and demand their money because they know it's guaranteed. After all, there is an element in the readjustment of our financial system, more important than currency, more important than gold, and that is the confidence of the people themselves. And so this was the start of deposit insurance, like that FDIC sticker that you see on the

front of a bank and it meant that if I put my money in the bank, the U.S. government will guarantee that it's safe. And that was a big deal, right? It's a huge deal. Deposit insurance changed everything. Overns stopped. They stopped cold. And, you know, the bank holiday was lifted. People had deposit insurance. It literally stopped it overnight. Now, during the 30s, you also had lots of other changes that were put in place. You had the creation of the Securities and Exchange Commission, you had standardization of accounting rules. So there were a whole series of laws put into place. And deposit insurance, while it was put in place, its effect is to make individuals have confidence they can get their money out of banks. But the real reason, the real purpose of deposit

insurance is to keep the economy stable and prevent the kind of runs on banks that have destabilized the economy. Okay, so let's just take a pause here, though, because here we are a century later in a different kind of financial crisis, but they do keep happening. I mean, it used to be every 20 years. Now it feels like it's every 10 years. Is that why we should learn and understand what happened a hundred years? years ago because we never got the lesson? And I guess if not, like, what does that say about

the American psyche? I think one characteristic of Americans and of our culture is optimism. And there is this amnesia. And people believe things that if they thought about it, just are too good to be true. So I think two things that are often key ingredients in financial crises are too much borrowed money. Instead of making good investments, people start making riskier and riskier investments. And lack of oversight by the government, regulators forget their duty to taxpayers. That's who they're there for. They're supposed to regulate the system in exchange for the system getting those benefits. So what you really want at a time like this, and it's too bad the government can't get it together to do it. But what you want is to have some

kind of relief that does not follow people forever as debt does. You want to be able to give people a means to to tide themselves over during this period without then coming out of it, completely drowning in debt. I mean, a pandemic is a pandemic. But the things that we keep forgetting is to is over using too much borrowed money, regulators for getting their job. And people just believing things that are too good to be true. If it's too good to be true, It probably is. And that's, I don't know whether we've learned that lesson. That's journalist Kathleen Day. She's the author of the book Broken Bargain, Bankers, bailouts, and the struggle to tame Wall Street. Today on the show, A Century of Money.

I'm Manus Shumeroti, and you're listening to The TED Radio Hour from NPR. It's the TED Radio Hour from NPR. I'm Anoush Zamoroti. And on the show today, a century of money. We heard about how buying on credit and making risky investments became the American way in the 1920s. Let's fast forward now to an example of that legacy in this century, the housing bubble of the early 2000s, and a story about what happened to one family when that market began to go south. We're living in a time where people can have everything that they want if they can make a payment. People get trapped in that. This is Tammy Lally.

And I am a money coach. Okay, but Tammy, you weren't always a financial advisor, right? Like before that, you had your own financial issues. When you were growing up, what was the story around money? That it was scarce. I grew up with a single mom with three children. I was the youngest in a predominantly Catholic town in 1975. I was the kid of a domestic worker, and I lived in a neighborhood that was an upper-class neighborhood, so doctors, lawyers, and I went to school with their children.

So we didn't, my brothers and I really didn't know what we didn't have until we were told, you know, by the kids. Oh, yeah. But what happened to me then was that I internalized it to believe that there was something wrong with me. and the shame never went away. Money became a source of happiness. So I did become a high earner. I chose my career, you know, a sales career in my early 20s, so that I could become a high earner.

I was driving a Mercedes by the time I was 23. You know, had a very extensive wardrobe from Nordstrom, and I just covered up all the shame with materialism. That was how Tammy dealt with her issue. shoes with money until everything changed in 2006. If you remember, there were some early warning signs of a massive housing bubble. For Tammy, those warning signs came in the form of a phone call from her brother. It was his 40th birthday, and he called me. And it was so interesting because I was like, hey, your birthday, you know, and let's get together. I'd like to take you out to dinner. And he was like,

no, no, no, no, no, I'm not going to do that. And I said, well, what's up? And he said, I'm just really in dire straits. You know, I'm just really, and I was like, okay, okay. And I didn't know where the conversation was really going. And then he said, I need to borrow money. I need to borrow $7,500, which, you know, $7,500 is a lot of money. It was just a breaking point for him. And I said, well, I'm happy to lend you the money, but let's get together.

I'd like to know what's really happening and see if I could help in it in some other way. Because he knew he knew you were good with spreadsheets and budgeting and things like that. Yeah, and I had been in the mortgage business. And part of what he was saying to me was, you know, our mortgage is so high. And we've got this short-term arm, you know, back then it was these two-year arms because his credit had dipped. Which meant that the payments would skyrocket within a couple years. Right. And his credit score was low.

So he didn't have a lot of choices because he couldn't keep up with payments. So he'd have late payments. And so I, I'd have... I really wanted to get together with them. And so I did. Within a couple weeks, I met him and his wife at a Starbucks, you know, close to where they lived. And it was a very long meeting. I mean, we were there four or five hours, trying to like help them, you know, understand. I mean, they brought their credit report to their bank statements. And we're going. You were going through it. Yeah. Yeah. In the weeks. Okay. Yeah, and I just didn't know what was really happening between them. But there was a lot of tension.

They started blaming each other. And I just was kind of like, what's going on with you guys? Like, this is math. On paper, it was a math solution. Spend less, earn more. But there was no way that those two could have done that. with their emotional, mental capacity, because we all hide from our family. So my energy got like buck up because you've got kids.

And, you know, kind of wrapping up that meeting, you know, we left it off with. He was going to take some action steps around looking for work that paid more and she was going to, you know, start working more hours. And they were going to cut back. And it all seemed like it was a good, you know. You came up with a plan. It sounds like. And that was, that turns out to be the last time I saw him. Tammy continues her story from the TED stage.

Two months went by when I received a call. Tam, I have bad news. Keith committed suicide last night. Days later at his home, I went looking for answers. In his office, the garage. There I found a stack of overdue credit card bills and a foreclosure notice served to him on the day that he died. My brother left behind his beautiful 10-year-old daughter,

his brilliant 18-year-old son, weeks before his high school graduation, and his wife of 20 years. How did this happen? My brother was caught in our family's money shame cycle. and he was far from alone in this. Suicide rates among adults, ages 40 to 64, have risen nearly 40% since 1999.

Job loss, bankruptcy, and foreclosures were present nearly 40% of the deaths with white middle-aged men accounting for 7 out of 10 suicides. You know, those are the things that just break you. This was about money. I knew it was.

I knew it was about shame. And, you know, just... We are so grateful that you are sharing this very personal story, though, because I do think people learn and listen and understand that they are not alone with their money struggles, that when you're talking about money, you're talking about so much more. You are. I mean, you're talking about mental health. You're talking about emotional maturity. You're talking about addiction.

You're talking about trauma. So many of us have so many hard life experiences and have mental health issues that go, you know, unexamined and unspoke about. And in hindsight, my brother had mental health. health issues. If we want to sort of break this link that we have between self-worth and money, how do we even begin to do that when it is so embedded in society, in the way we live, in our families, in our culture? It starts with ourselves. We each have to do our own level of self-inquiry, our own level of work around money. If we examine our beliefs, we examine our behaviors, we examine our reactions, we look for more of a spiritual solution versus a material

solution. That's how we change things, is by each person taking money on and stop avoiding it, stop pretending like it's not the biggest thing you think about. I hear that from a lot of people, well, I don't care about money. Oh, yes, you do. Everybody cares about money. We live in a society where you have to have it. So we might as well learn how to get along with it. That's Tammy Lally. She's a financial advisor, and you can see her full talk at ted.com. On the show today, we're exploring personal stories from past financial meltdowns and how so many people are just a few missed paychecks away from crisis. There are a lot of people who on that day-to-day basis are struggling.

And I see it as getting worse not. better. This is writer Elizabeth White, and her crisis began right after the 2008 crash. But up until then, Elizabeth had been doing really well. You know, I have all the props and credentials. I have a Harvard MBA. I have a master's in international studies from Hopkins. I went to Oberlin undergraduate. You know, I worked at the World Bank. I have this background. And all of a sudden, during the Great Recession, I lost two big consultancies and suddenly, I'm unemployed at 55. And I actually wasn't worried because of my background and my network and, you know, I'd been out of work before and pretty quickly found something.

But this was different. Suddenly, here you are looking in on a life that's not yours anymore. What do you do when that's your story? In conversations with friends, Elizabeth heard lots of stories that sounded like hers. And so a few years ago, she decided to write an essay about what it's like to lose your safety net in your 50s. And I asked her to read it for us. You know me. I'm in your friendship circle hidden in plain sight.

My clothes are still impeccable bought in the good years when I was still making money. To look at me, you would not know that my electrical. was cut off last week for non-payment, or that I meet the eligibility requirements for food stamps. But if you paid attention, you would see the sadness in my eyes, hear that hint of fear in my otherwise self-assured voice. These days, I buy the $1.99 trial-sized jug of tide to make ends meet. You didn't know laundry detergent came in that size. You invite me to the same expensive restaurants that the two of us have always, enjoyed. But I order mineral water now with a twist of lemon instead of the $12

glass of Chardonnay. I am frugal in my menu choices, counting every penny in my head. I demure dividing the table bill evenly to cover desserts, designer coffees, and second and third glasses of wine I did not consume. I am tired of trying to keep up appearances. Faking normal is wearing me out. There are no media stories about me. My slide out of the middle class is not sensational enough. A friend says I'm broke, not poor, and that there's a difference. I live without cable, my gym membership, or nail appointments. I've discovered I can do my own hair. I have no retirement savings, no nest egg. I exhausted that long ago. There is no expensive condo from which to draw equity, and no husband to back me up. Months of slow pay and no pay have decimated my credit.

Bill collectors call me constantly reading verbatim from a script, expressing polite sympathy for my plight before demanding payment arrangements I can't possibly meet. Friends wonder privately how someone so well-educated could be an economic freefall. I am still as talented as ever, and as smart as a whip, but my work is sketchy now, mostly on and off consulting gigs. Friends hear about this and that assignment, but can't remember when I had a real job. At 55, I've learned how to fake cheeringness and to appear to be engaged, but my phone doesn't ring with opportunities anymore. I don't remember exactly when it stopped, but I cannot deny now having entered the uncertain world of formally and used to be. In the face of

mega-generational shifts, I'm not sure anymore where I belong. What I do know is that dozens of online job applications seem to disappear into a black hole. I am convinced that employers have set their online job recruitment algorithms to reject anyone who graduated before 1995. I wonder what is to become of me. I am facing a work-for-life proposition. So far my health has held up, but my body aches, or is it my spirit? Homeless women used to be invisible to me, but I appraised them now with curious eyes, wondering if their stories started like mine. So that original essay from 2016, what was the response to the essay? It seemed to resonate

with a lot of people. What was that? What happened? So I wrote this essay at a point of real personal despair. I remember I wrote it in one go, sort of sitting on my bed and I just wrote what I was feeling. And within a couple of days, it had thousands of likes and over a thousand comments. And I read all of them. And I was so surprised because the response was me too, my husband. This is my sister. This is myself. Why is no one talking about this?

And when I looked at the data, I was astonished because I realized that there were millions of people who had landed here. There's now like really good data that shows that more than half of people in their 50s are pushed out of the workforce. And we like to pretend that our financial woes, that the financial woes that many Americans are experiencing are not systemic. That it's the result of being lazy or irresponsible. And so there's a big shame. element here when people land here. They don't want to talk about it. And what's dangerous about not talking about it is when we're in denial, we then don't address it. Here's Elizabeth White on the TED stage. Millions of boomer-age Americans did not land here because of too many trips

to Starbucks. We spent the last three decades dealing with flat and falling wages and disappearing pensions and through the roof cost on housing and health care and education. It used to not be like this. We all remember the three-legged retirement income stool, savings and pension and social security. Well, that stool has gone wobbly. Take savings. What savings? For many families, there's just nothing left to save after the bills have been paid.

The pension leg of the stool has also gone wobbly. We can remember when many people had pensions. Today, only 13% of American workers are employed by companies that offer them. So what did we get instead? We got 401K-type plans. And suddenly responsibility for retirement planning got shifted from our companies to us. We got the reins, but we also got the risk. And it turns out that millions of us just aren't that good and voluntarily invests. over 40 years. Millions of us just aren't that good at managing market risk. And really, the numbers tell the story. Half of all American households have no retirement savings at all. That would be zero. No 401k, no IRA, not a dime. Things have changed a lot from when Social Security was introduced back in 1935. Then a 21-year-old male had a 50 percent chance of living until he was 65. So he retired at 60, did a little fishing, kissed his grandkids, got his gold watch. He'd be dead within five years of receiving benefits. That's not the pattern today.

If you're in your late 50s in good health, you're going to live easily another 20 or 25 years. That's a really long time to make ends meet if you are broke. After the break, more from Elizabeth White on how financial meltdowns affect older adults from 2008 to today. I'm Anoush Zamorodi, and you're listening to The TED Radio Hour from NPR. It's the TED Radio Hour from NPR. I'm Anoush Zamoroti. On the show today, a century of money. Before the break, we were hearing from Elizabeth White, who described hitting rock bottom after the 2008 recession.

We actually spoke to Elizabeth before the pandemic began. But of course, the conversation has changed a lot since then. And so we wanted to talk to her again. Elizabeth, how are you? How have you been? You know, I've been all over the place, but I was saying yesterday to a friend, I'm 90% good is how I would describe it.

Since we last spoke, millions of people have gone through almost exactly what you described going through after the 2008 recession, going from being fine to not being fine at all. And I think it's been really shocking for a lot of people. Have you been hearing stories about what is happening, especially for older people right now? I definitely still hear from people who still write and I've done some writing myself about this. one of the things I think that's different this time. So for, you know, as big as the 2008-2009 Great Recession was, we already in just these last few months have had more people lose their jobs

than during that whole period of the Great Recession. And with older adults, we're going to be more impacted than people who are younger. I've already described the stats that say half the people are losing their jobs in their 50s. That was happening before the pandemic. Only 10% of those workers will ever get a job again with pay that's commensurate with a job that they left. So I always think now when I see, you know, when we used to go to the gym and you'd see someone at the front desk, an older one, worker or you see somebody suddenly, you know, bagging groceries somewhere. They're maybe not there because they want to be. All of these people didn't suddenly become incompetent in their 50s when they get pushed out of the workforce. The crisis with jobs is not just jobs. We have a good

jobs crisis. That home health aid taking care of somebody's 87-year-old mother makes $17,000 a on average. She has no child care, often, no health care, no hazard care. So you can be employed, but then you can't barely support yourself. You have turned your experience essentially into an expertise in helping older people face economic disasters. But the safety nets that you're talking about, the ones that have gone away, are actually, they are not age-specific, right? You know, so this is not a pesky little boomer problem. Gen Xers are not going to have pensions either. Millennials are definitely not going to have pensions.

Everybody is facing higher cost in housing and health care. So boomers, we're just first going up this hill looking out into the future of what will it mean to be an older person in America? So kind of all of this, I think it is ripe now to have this conversation, to address things that the pandemic revealed, but we're always there. That's writer Elizabeth White. Her book is called 55, Underemployed and Faking Normal. You can find her full talk at ted.com.

So Elizabeth just mentioned that the U.S. doesn't have a jobs crisis right now. It really has a good jobs crisis, which means that a lot of people can't earn enough to afford the very basics. And so maybe we need to ask a bigger question, like what responsibility do employers, especially big corporations have, to their lowest paid workers? For our next speaker, that question is key to building a market. more stable economy. Can you please introduce yourself and tell us what you do? I am Abigail Disney and I am a filmmaker and I guess you would call me a philanthropist

and an activist. Okay, wait, so Abigail, Disney. Oh, yes, Disney, yes. That Disney. That one. Yeah. What is your connection to Disney World, Disney films, Mickey Mouse, all those things? So my grandfather was Roy O. Disney, Disney's brother.

They co-founded the company together in the 1920s. My father was Roy E. Disney, who was at the company for, I don't know, 50, 60 years, most of his adult life as different things, including the co-chair of the board. Abigail never worked for the Disney Corporation herself, but she is a shareholder. And growing up, Disney was a big part of her life. It was very much my upbringing. and I did ride with my grandfather on the first boat and the first small world rides, so that was awesome. Oh my God, I'm going to tell my mother-in-law that she's going to die. That's like her favorite thing ever.

Abigail Disney picks up the story in her TED Talk. Two things I remember the best about going to Disneyland with my grandfather. The first thing was he always gave me a stern warning, that if I ever sassed anybody who worked there, I was in deep doo-doo when we got home. He said these people work really hard, harder than you can imagine, and they deserve your respect. The other is that he never walked by a piece of garbage inside of Disneyland or anywhere else where he didn't bend over to pick it up. He said, no one's too good to pick up a piece of garbage. In Grandpa's Day, a job at Disneyland was not a gig. A person could expect to own a home, raise a family.

access decent health care, retire in some security on just what he earned there at the park. Mind you, Grandpa fought the unions, and he fought them hard. He wasn't an angel, and everyone wasn't well and fairly treated across the company, something that's well known. But I think, in his core, he had a very deep commitment to the idea that he had a moral obligation to every human being that worked for him. That actually wasn't such an uncommon attitude for CEOs of the day. What's really fascinating to me is that you say, in your grandfather's day, people who worked at Disneyland had a secure job.

They could expect a comfortable life. Right. Well, it has to be, first of all, put in the context of, look, there were no people of color working there. And women couldn't have any of the jobs that the men had. So let's be very clear that I'm not talking about some house in time where everything was fine. But in that time, a person, even the people who were sweeping the sidewalk in those days, had a salary. And with that salary came, you know, a retirement plan, sick days, health care, and all of the things that we associate with a thriving middle class. And one by one by one at Disney and everywhere else in the American economy, those things were stripped away.

And I went to Disneyland once in my 30s and, you know, kind of gave them my special card that has my name on it that gets me free tickets. And there was one employee in the guest services window who handed me back my card and my tickets and a note saying, you have to help us. Did you know what he was referring to? Yeah. Oh, yeah. I did. I didn't want to believe it at first either, but they weren't exaggerating anything. And when I sat down with the people in a room.

full of 25 people and I asked how many of you were on food stamps and every hand in the room went up. I wanted to throw up on the spot. I was so angry. When my grandfather died in 1971, a new mindset was beginning to take hold of the American and eventually the global imagination. Jiminy Cricket got shown the door by economist Milton Friedman, among others, who popularized the idea of shareholder primacy. Milton Friedman's pivotal op-ed in the New York Times was followed by decades of concerted organizing and lobbying by business-focused activists, along with a sustained assault on every law and regulation that had once held businesses' worst impulses in check. And soon enough, this new mindset

had taken hold across every business school and across every sector. Profits were were to be pursued by any means necessary. Unions were knee-capped. Taxes were slashed and with the same messetti, so was the safety net. The bottom line is that everything that turns a gig into a livelihood was stripped away from an American worker. Job security, paid sick days, vacation time. All of that went away, even as the wealthy saw their networks float to unprecedented and, yes, unusable, Abigail, you are now one of the most outspoken critics of the Disney Corporation, the company that bears your name. And you say it's because of how much things have changed. Like today, the workers at the parks, they're no longer salaried.

They're paid by the hour. I read that most of them make as little as $10 or $11 an hour. And a lot of the benefits were, as you say in your talk, stripped away. Exactly. Disney, like every other company, messes around with people's hours. when they're an hourly worker, so they really try to keep the least number of people possible working enough so they qualify for health care. And so what is your view, like what happened? So a lot of laws were passed, regulations were taken away, tax loss were changed to sort of support these skyrocketing compensation packages and all of that.

But I believe, even though we need laws to get ourselves back to a better place, a better balance anyway, what really shifted was norms. So my grandfather was not a perfect man by any stretch of the imagination, but he would never have taken a $66 million payday in a million years, in part because you just didn't do that then. There was no law against it, but you didn't do it. And partly because if he looked at his workers and they didn't have enough money to put food on the table, I just cannot imagine a universe in which he would have said that was fine with him. And, you know, that's not special to my grandfather. That was how CEO's world. There were bad actors and there were terrible people. but the norms at the time were so different.

For almost a century, Disney has turned a pretty profit on the idea that families are a kind of magic, that love is important, that imaginations matter. That's why it turns your stomach a little bit when I tell you that Cinderella might be sleeping in her car. But let's be very clear, this is not just about Disney. This is structural and this is sustainable. No single CEO on his own is culpable, and no single company has the wherewithal to buck this.

The analysts, the pundits, the politicians, the business school curricula, and the social norms drive the shape of the contemporary economy. Disney is just doing what everybody else does, and they're not even the worst offender. If I told you how bad it was for workers at Amazon or McDonald's or Walmart or any one of a thousand other places you've never heard of, It's not going to hit you as viscerally as if I tell you that 73% of the people who smile when you walk in, who help you comfort that crying baby, who maybe help you have the best vacation you ever have, can't consistently put food on the table. It's supposed to be the happiest place on Earth. So because of the pandemic, the Disney parks have let go of tens of thousands of workers.

Yeah, 28,000. What are your thoughts on that? They have 200,000 employees. They let 28,000 go, laid them off. 28,000 out of 200,000, pretty significant bite out of your workforce. Not one of those people was in management, and they had also very quietly acted to make sure that the management structure could keep compensation packages intact. Now, I understand the revenues have been eviscerated, but just know that from 2011 to 2019, so eight years, the company had made $11.5 billion in share buybacks. A share buyback is when a company buys shares of its own stock. They do that to drive the price up and to make shareholders happy.

It also has the nice ancillary benefit of making the CEO and other people who are compensated in shares happy as well. No one could have seen the pandemic coming. No one could have said, we're going to be hit by this thing. but anyone could have foreseen that something bad would have happened for which you should have cash. So this company went from historic profitability and the happiest shareholders on earth to less than a year later laying off 28,000 people and pleading poverty. Okay, so let's talk about what you would like to see happen. I mean, we started this episode with a crash course in the Depression in the 1920s and understanding what radical changes came out of that with the government. with the way we think about money. And I just want to ask you, we've had now a century of these lessons.

Do you think we need another moment where we have a reckoning and say, you know, we need to fix the system. Let's set up a better way of doing this. So what I want to see happen is if I'm a CEO and I know that some of my workers are on food stamps or going to food pantries, I want to be ashamed of myself. I want other people to feel shame on my behalf. The fact that that's not happening says that the CEO considers himself to be of a class and even a species different and distinct from the people who do the hardest work at the company. The billionaires in this country have gotten much, much, much richer in the pandemic because they've taken advantage of what people needed.

I was hoping the pandemic would force us all to say, oh my God, now I see it. look at the way we're treating the people who do the essential work, you know, and the opposite kind of happened, you know, the Bezos and everyone else kind of doubled down on the old behaviors. And what do you, how do you respond if one of them says like, well, you know, I hear you about wanting to provide more of a safety net to our least well-paid employees. But Abigail, I got to run a company here and you just don't know what it takes to survive in this market. What do you say to that? What I say is there are humans working in your company. Human beings. They have all the same needs and desires that you have. You have to treat them with the dignity. You would want to be treated with yourself. Like, that's just the starting point. Then go make all the profit you want to make. But if your business plan starts with exploitation and you can't get to profitability without doing that, then you need to go get another business plan. If you really care about your employees, Jeff Bezos, I'm talking to you right now, you should pay them well and maybe make less money and make sure everybody else is making more.

They're your fellow human beings after all. All they want is lives of dignity. That was Abigail Disney. You can find her full talk at TED.com. And by the way, as of July 2022, Disney has hired back many but not all of their park employees. They've also seen record high attendance and earnings. Thank you so much for listening to our show this week about a century of money. To learn more about the people who were on it, go to ted.npr.org and to see hundreds more TED talks,

check out TED.com or the TED app. Our TED Radio production staff at NPR includes Jeff Rogers, Sanaz-Meshkampur, Rachel Faulkner, Diba Motisham, James Delahousie, J.C. Howard, Katie Montalione. Maria Paz Gutierrez, Christina Kala, and Matthew Cloutier with help from Daniel Schuchin. Our intern is Farah Safari. Special thanks this week to William Snow for providing a voiceover. Our theme music was written by Romteen Arablewe. Our partners at TED are Chris Anderson, Colin Helms, Anna Feelin, and Michelle Quint.

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