The Breakdown - The Questions We're Not Allowed to Ask, Feat. Hidden Forces' Demetri Kofinas

Episode Date: April 8, 2020

Demetri Kofinas is the host of Hidden Forces, a popular podcast that examines markets through the lens of large patterns of change.    On this episode, Demetri and @NLW discuss: How the politicization of the Coronavirus crisis has undermined smart action How media incentivizes extreme opinions regardless of underlying expertise  What conversations are we not having around Coronavirus - in particular in terms of second order effects Why we’ve barely begun to discuss the plan for turning the economy back on

Welcome back to The Breakdown, an everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond, with your host, NLW. The Breakdown is distributed by CoinDisc. Welcome back to The Breakdown. It is Wednesday, March 8th, and today I'm excited to share with you a conversation with Dimitri Kofinas, the host of the Hidden Forces podcast. Hidden Forces started as a way for Dimitri to connect or expand. and his love of markets with numerous different disciplines, right, to try to understand markets by looking out at different domains from art to science to psychology and beyond.

It has turned into, I think, one of the most unique podcasts in the business space because it comes at business and markets topics but with this really interesting, broad kind of polyglot lens, which I find just really, really powerful. Now, the last few weeks, few months have been a really chaotic time in markets, obviously, and trying to understand them. I've turned to numerous different experts, have invited people on the show, just as a way

to have a different lens on the world. I wanted Dimitri to come have a conversation about what conversations we weren't having enough of yet, or even more specifically, what conversations it felt like we weren't allowed to have. So this conversation is a lot about the dimensions of the economic crisis that are taboo in some way or have become so rotely politicized so quickly that they're crowding out space for other types of conversations. Dimitri has a perspective that is informed not only by his own research, but by the hundreds and hundreds of guests he's talked to. So I really enjoyed this conversation and I hope you do as well. One note before we dive in, as always, I do a lot. I do

a long interview like this. We edited extremely lightly to try to keep it as much like the original conversation as possible. So without further ado, let's dive in. All right, welcome back. We are here with Dimitri. Dmitri, thank you so much for hanging out today. My pleasure, Nathaniel. Listen, you know, regular listeners of this show will know followers of Twitter of mine. Hidden Forces is my absolute favorite podcast. And the reason that I love it so much is that it is almost willfully in between and looking for the connections between industries, spaces, ideas, people, rather than comfortably settling itself into one. And so, you know, for people who don't have that context, I'd love to start by asking you

how you started at what your background was to get you there. And I guess just for framing and so people know why I was so excited to have you on the show, you know, I know that you have changed your regular routine around the podcast in an attempt to just try to keep track of everything happening in the world around coronavirus and the response to it, as have I over here on this podcast. And I thought it would be super interesting to spend some time talking about what we think is not being discussed enough, right? So these silent spaces that are important and being overlooked either willfully or unintentionally. So that's kind of the goal of the conversation. But maybe we can start with just how hidden forces came to be.

Great question. Well, Hidden Forces. The course has started, I guess, officially in the very beginning of 2017. It came out of a summer's worth of research that I was doing on a book that I had signed an agreement to write with an agency here in New York. And the book was about, it was basically a supposed to be a continuation of an article that I wrote for the Atlantic's Quartz magazine about my experience living with dementia for about six months. I had developed dementia from a brain tumor that I lived with for about four years. And during the time that I had that tumor, from the moment I was diagnosed until I developed

symptoms, I created a radio show that I ran that was that I hosted in New York on 9-1-5, drive time 7 p.m. It was a financial show called Covering the Spread. That was built off of my blog. That's where the name came from. My blog was called Covering Delta, which was again covering the spread. And then I created a television show. So I had experience in media. That was my first experience in like content creation. I was blogging on the side when I was working in application development and design and product development for cable vision, like next gen UI, U.S.

Interactive app type stuff for the set top box. And so like I just, you know, I really loved it. You know, I really loved writing. I don't write much now. I can't wait to do that again. I really got to find out how to do that because it's such, it's an incongruity between like doing the episodes, preparing for someone else, really getting in someone else's head and trying to figure out how to extract from them as much information as possible. It's very different than, you know, being in a place to really have a view and express it in writing.

And also writing for radio or writing for podcasts is very different. And it actually degrades your writing skills. So that's a challenge. But anyway, Hidden Forces was really the result of my not wanting to write a book about my experience living with dementia. You know, it was something that I signed on to do because I thought it would be a great opportunity. I was getting a lot of offers and interests from people to write the book or for a screenplay. But the truth is, that's not what I wanted. And so researching for the book, besides, you know, writing and researching my own past, it got me into reading about the sciences again, starting with neuroscience and then social science stuff and philosophy.

And eventually it brought me all the way back to financial markets. And I put all that together. And I realized that the reason that I didn't want or I hadn't been inclined since I ended my TV show in 2013 after my brain surgery or right before my brain surgery to. create another financial related podcaster media outlet, which was always the actual intention after I ended Capital Account, which was my show, was that I just didn't feel called to doing something that was just in finance. And Hidden Forces took what I loved about financial markets, which is that it's this very complex data set that has a surface phenomenon that you try and understand by going as deep down into the source structure as possible and apply that.

across the entire spectrum of human understanding. One, two, I was in a place of, you know, I've gone through these cycles at least three times in my life where I just fall in love with learning. And the first time this happened to me was when I was in college, I think junior year. I was studying foreign policy, international relations. Foreign policy was a class. I've talked about this guy, David Deneoon. And that sort of continued into my time living and working in Italy.

About a year and a half, I was reading a crazy amount of books. And this was like the whole progressive awakening movement after the Iraq invasion. And a lot of guys like Chalmers Johnson and Namchomsky and Glenn Greenwald and all these sort of folks and Howard Zinn. And I read a lot of stuff on war and the history of war and all that stuff. And to your point about you had studied imperial European imperial history, Nathaniel, I read And, you know, Henry Kissinger wrote the book, Diplomacy. He relied a lot on Bismarck and Realpolitik. And so all that stuff was really interesting to me. And I went and up through another cycle like that after the kind of failure of my video game startup in 2007. It was like a long winter for me. And I just read and read and read and I read a lot of colonial history, a lot of Latin American history. And I, I can't remember what else now, a lot of really interesting stuff. And now I went through this one, which was in the summer of 2016 ahead of summer and fall of 2016 ahead of creating hidden forces.

And it was just like this period of like wonderment and like, you know, innocent love with learning. And it was heavily focused on technology, science, philosophy. and everything else. It was just, you know, the result of after so many years of learning, eventually, you know, you hit a certain inflection point. And that's what enforces was. And that's why the early episodes reflected that. I did episodes on philosophical mathematics, volatility, postmodernism, religion, art and architecture, central banking, genomics. Like, it was all over the map, You know, so that's and so that and then also, you know, I thought people, I was tired of all of the, the vitriol and the politicization of media. And I felt that we, and this is something I've talked to you about, which is I think we live in an answers based society and an answers based culture that rewards people who are able to give you an answer, even if they have no idea what they're talking about.

or if the answer is correct. You can't say, I don't know. That's not how we're not an inquiry-based society. And so I wanted a show that was supportive of that. And I also wanted to do these long-form conversations. I believe that people really wanted to hear long-form conversations. And I think, you know, I think I've been on some level proven right. You know, you're not ever going to get everyone in the world,

but people like you and there are many others who have reached out to me over the last few years. And when people reach out and they tell me how much they love the show or what it's done for them, it's really like maybe the best part of doing the show. So that's my long-winded answer for you. You know, it's interesting. A bunch of thoughts. But one of the things that I think is really fascinating, and I think about this all the time in the context of the show and, you know, Twitter personas and things like that is the incentive

structures to be extreme are extreme, right? The incentive structures to be firmly within a single tribe, whatever that tribe is. And I'm not just speaking politically. It's like everything walls itself off into tribes and own that are extreme. But I do think that there's a lot more space and a much bigger quiet majority of people who are interested in lots of things and open to lots of perspectives than I think sometimes the incentive structures of particularly social media and just media in general make it seem, which is why it's so important, I think, to call out and create space for those conversations. I also think, too, going back to this idea of an answers-based rather than an inquiry-based society, one of the things that has been really

challenging, I think, with the response to COVID is that it has followed a similar pattern to me of trying to get politicize isn't even exactly the right word, but to try to find its way into these firmly entrenched camps that are diametrically opposed to each other at the same time, rather than understanding that we're dealing with this fundamentally new phenomena that has massive second order implications that we can all have, you know, it's like we need a confidence interval on every tweet, right? Let people tweet whatever they want, but say, what's your confidence interval on all of these things? Which one of the, you know, yeah, it's been one of the hardest things, I think, to wrap my head around with this is that how quickly it's tried to

warm its way into the political discourse and this tribal discourse as well. Have you observed something similar where as people, try to discuss COVID, it falls into similar patterns of debate that have nothing to do with COVID, right? It's just become the latest political football or social football or ideological football for entrenched battles that already existed. You know, I'd be curious to get your take on that, Nathaniel, because partly the reason is I've stayed away from the conversation for the most part. What I will say is that what I've observed both in having had one guest on who I had on to talk about COVID. And unfortunately, we weren't able to make much progress at least, you know, maybe he thought we made progress. But, you know, for me, it wasn't really constructive. Or in what I've seen from people like Mike Green, for example, who has taken a very different approach to this. He has a different view on this issue. I think at the very least, he's skeptical about the effectiveness of some of these measures

that are taken. And I share his views or I share his skepticism. And what I do see is it's very difficult to be a skeptic on this, right? Because the framing of this conversation in the public domain is that either you want to make money or you want to save lives. I've seen people in the Bitcoin community do this as well. This is the way that it's framed. And I think that framing is incorrect.

And in many cases, I imagine it's disingenuous because what we're debating here is not anything clear cut. We don't know that all we need to do is stop economic activity for a month, you know, print money to purchase outstanding corporate loans and issue small business loans. And then also issue a $1,200 check every week or every month or whatever, that we just need to do that and then everything will be all right. That's not what we're being told at all. In fact, that's a whole other conversation. I'm happy to have it because that is one of the big sort of conversations or questions. But I think, you know, to the extent that it's similar, again, bearing in mind that I really have, I've steered away, right? I do a lot to stay away from conversations that I think are poisonous or stupid, you know, or mindless.

But to the extent that it does remind me of the sort of the typical political correctness stuff or social justice stuff or left, right, damn Republican stuff, I think it's the same insofar as there's a lot of moral indignation, a lot of moralizing. A lot of people who are in the more at-risk demographic, older men or women, who are also affluent and have jobs that don't require actually going somewhere, they can work remotely. These people are in positions to moralize about what the right strategy is. And nowhere do I hear people really talking in great detail and emphasis on the millions of people that are like in a really bad situation right now.

It's not really clear what they're going to do about it. I know lots of store owners. I know I'll give you one great example, a couple from France that I know that opened a coffee shop right next to my apartment in New York. They opened a bar a few years later down on the Lower East Side, like very, very high energy good entrepreneurs. They have a daughter, their French immigrants, a family of three. What are they going to do? So what does this family do, right? And so anyway, that's just kind of one observation.

No one's really talking about that. Everyone's focused on how do we stop the spread? And I just, I find that to be lacking. That's all. Well, it's interesting. So being in the Bitcoin community, I think that there's a much higher tolerance for and even interest in skepticism, right, to a fault in many, many cases. So I think my perspective is probably a little bit warped on that.

I will say this. And I want to actually maybe break apart response to the stimulus. You had a great tweet that I want to get into where you basically said we passed the political and economic event horizon this last month. I think that's a great discussion I want to have. But let's talk about this first part that you're talking about where there's been this idea of a diametrically opposed health outcome to an economic outcome. and that you're in one of these two camps.

I actually think, so my concern, I watched this narrative happen the beginning of last week. So, no, because there's two weeks ago now, so almost exactly two weeks ago. And this was when Trump started tweeting about the cure might be, can't be worse than the disease, and we had the, we'll come back before Easter. And that set off, that immediately put this in an extreme way into a left-right dialect. in American society, at least, where the left was for health and the right was for economics. And the problem with that and why I was so frustrated in that moment is that that conversation is much too important, too scary, too ambiguous, and too full of hazard and danger to be just let into

the realm of, you know, you vote this way so you look at this way or you vote that way, so you look at it that way, right? We can't have a conversation about there's no way. to bring this economy back online with a switch, right? And so you have one side who thinks you can hold out indefinitely. You have another side who is acting like there's an on switch, which there isn't, even with the amount of time we've been offline at this point. And I felt very frustrated that we were losing weeks to the right conversation, which was, what does it look like?

How do we deal with waived lockdowns again? What does it look like to actually design the testing facilities to have? There are lots of very good questions that have absolutely nothing to do with even an assessment of how the administration had dealt with things before now. I know some of the fiercest critics of this administration are 100% right now willing to absolutely abstain from caring about that in the face of getting things done and being smart about it. And we lose that conversation as soon as we surrender it to the same political territory. Now, I will say that I feel a little bit as though it got better. It got better basically as soon as Trump said this is going to go on through April, right? As soon as we gave up the Easter thing, it took it a little bit out of that realm.

Now, it's still there to some extent, right? You have the fringes who are trying to keep it politicized. But there is at least now an openness again, I think, to talking about how do we turn the lights back on? But I would say that for me, the number one most frustrating thing is that the second that the shutdown started, we needed to start having a national conversation, including business and health officials and everyone else around the really difficult set of things and procedures we're going to have to put in place to make it work. Yeah. So a lot of thoughts. Great points. Many great points, Nathaniel.

You know, one just immediate observation is that on the news today, they were reporting that numbers, the growth of new cases in New York has been starting to slow, right? I think this is going to be kind of the scary part, right? This is kind of like, I do this all the time. This is not necessarily the correct application. It's a bit of a stretch, but I just can't seem to help myself. Sometimes I just want to bring up Jose Canseco. And Jose Konseko has this famous quote where he said that the one thing they don't tell you is that once you get to the top of the mountain, there's nothing there. And so what we've been doing here is we've been throwing the kitchen sink at everything, right?

We've got to stop the spread. We've got to stomp the curve. That's actually Nick, Nick's profile, not stop the curve. Nick Carter. We got to what's it called? Shorten the curve, flatten the curve. We have to flatten the curve. We've got to do all of this right now.

Let's do it, do it, do it, emergency. Okay, everyone's on board. Now we get the numbers they're dropping. Now what? Oh, shit. What are we going to do now? Let's say the numbers drop. Let's say the case numbers drop to zero.

Now what? Do we lift the quarantine? What happens when we lift the quarantine? What evidence is there to suggest that when we lift the quarantine, there won't be a rise in the numbers again, right? No one said that that's not going to happen, right? I think the best explanation that I've heard for this policy has simply been that we need to prevent the hospital system from being overwhelmed until we get a vaccine. Okay. So what does that mean in terms of role, in terms of, you know, social distancing and people self-quarantining a little bit?

What does that mean? What kind of economy are we going to have for the next, let's say, 18 months in the best case scenario, or the next 12 months. or whatever it is between when they start to develop vaccine to what we're going to get when they say 18 months. How is this all supposed to work? How is the economy supposed to work? Right. And I think that's a danger, the oh shit moment, the crisis, right?

Because people, I think a lot of people have just been expecting that this is all we got to do. We just kind of get through this. But what happens if we get to a point where people realize that this is not enough? And actually now there's more hardship to come or that they, They lift the quarantine and the numbers start going up. Is there going to be a panic? And we have an election that's supposed to happen in 2020. Are we going to have it? You know, how is this all supposed to work? Are we going to have crime waves in cities like New York where lots of people who, the majority of people who have, who work in the service sector or in positions where they need to be out in the

world interacting with people are not going to have money and some of those people are going to go and try to rob people's houses, and how many people are going to be distressed emotionally and they're going to develop physical problems and get sick or die beyond what would have happened if you just let everyone get this virus, which is not what I'm saying that we should do. I don't know. What I've wanted to see is really robust arguments, and that's not what we've had. We've had one policy. Another sort of parallel that I draw is the Iraq War after the invasion. once it was clear that the Bush administration and the coalition provisional authority had botched the occupation. What did we hear from Democrats?

They started, and I'm not saying Democrats Republic. I'm just saying it was Democrats because they were in the opposition. We need to listen to the generals. The generals, we've got to listen to the generals. What are the generals saying on the ground? It's the same way with the doctors. We've got to listen to the doctors. It's not the job of the doctors to dictate policy.

If you ask a doctor, what do you need? He or she will say more masks, more gowns, more ventilators, more quarantines. That's what they're going to tell you. If you ask a surgeon, what should I do, doctor? He'll say, operate. That's what these guys do, guys and gals, right? So, like, again, we're in full panic mode. We've just doubled down on this one strategy mindlessly, and no one is talking about the reality

that we live in a world where we have to grow our economy. there is a future beyond the next few months. No one's talking about that. No one's explained how we're supposed to move through it. And that's my concern. My concern is in the middle of an election year, they go to lift this quarantine, numbers start going up, and then people really start to panic. That's phase two.

That's what I'm worried about. So a lot to unpack. One of the things that's been a recurring theme for this week shows is this idea of second order effects. A couple folks started last week categorizing, or cataloging rather, are second order effects coming out of this. And we're not just talking kind of the dimensions that you took in terms of social arrests and politics and business, but everything from what types of products are

likely to be more in demand from years. And it started, so Monday's guest is a guy named Emerson Sparts, who have known for a long time. He built, when he was 11, he built MuggleNet.com, which became the biggest Harry Potter fan site and got into viral media. And just, he's really into mental models. And second order effects are one of his favorite mental models. So he started doing this.

He pulled in a friend. And they were like, there's no way we can think of all of them. They started open sourcing it. And it turned into this huge document that at any given time, hundreds of people are editing now. And these are all of the type of second order effects that there's no space for, for exactly your point, that there's just nothing but fear. But the place that I want to take the conversation, I think, and one of the things that's been so frustrating to me is this idea, this recurring idea, and this is something that Ben Hunt talks about a lot, that when any elite, class, and I don't use elites in the same way that, for example, a Bernie Sanders supporter might use it right here. I'm just saying, like, when anyone in a position of power goes for

the strategy of denying something to buy themselves time rather than leveling with the public, it tends to go really poorly. And I think that we were experiencing a lot of that with this case. One, there's just a huge amount of denialism from leadership in power right up until the last possible moment, right? It took Tom Hanks getting it and the NBA shutting down for for us to get actual, you know, anything other than it's just the flu. So there's that whole set of issues. But I think even beyond that, this kind of incrementalism around the idea of a shutdown and what it's for and how long it's going to be and we keep extending it, rather than just saying there was a moment. And maybe this is putting too much stock in the American people. But, you know, there's a

famous quote, no one ever went broke betting against the American people or betting on this, betting against stupidity with the American people. I, you know, maybe it's, I'm overly optimistic, but I also think that we tend to systematically underinvest in people's ability or willingness to try to think through complex situations. And if we had had a conversation, a national conversation where we said, look, we watched what just happened in China, like, you know, to the extent that we have any sort of reasonable data, and it probably seems to us that they didn't put a,

people into quarantine lightly, and, you know, this is a pandemic, so it's likely to spread. Here's the real issue. We need to figure out how to contain the first wave so that we don't overwhelm the hospital system because this now exists in the world. We will get a vaccine. We will figure out treatment. We will do what we always do, which is innovate and figure our way out of it. But it's going to create chaos in the short term.

And so we need to have an actual strategy for dealing with that. And it's about this. You know what I mean? And like this, even as I'm saying it, it sounds ridiculously over-optimistic, given the context that we live in. But there's no reason that that should be the case. There's no reason that we weren't able to have that conversation. And the fact that we're now in April and there's not, you know, I'm literally on Twitter

pulling from Germany's plan for what it looks like to reintegrate society so that people have some idea of what they might be looking forward to, you know? There's just a, I mean, we've had a crisis of leadership. And, you know, obviously in a crisis. of leadership, the top leaders tend to get implicated most, but I do believe it's been genuinely across the board, across domains, across dimensions here. Yeah. I mean, you said a lot.

It's funny, hearing you respond, I think I feel sympathy for all the people that listen to my long-winded questions. I don't know how they even begin to answer it. I mean, I, totally. I mean, I generally agree with what you said. I don't know if there's a specific question or... No, no, no. Let's just, I'm sure, like I said, I wanted this to be more conversational, right?

This is a, this is a trope that I've been finding that's important, which is like, actually, like, going back to the very first thing that you said, falling in love with learning, one of the things that I think is so amazing about the moment right now is that while on the one hand, we have this, we have this, it's so difficult to figure out. what is true, right, to actually go suss that out and get real information. At the same time, information is not only plentiful, people are willing to take time and share their perspective on it. So if you're willing to do the work, right, you can get this incredibly interesting experience perspective. So, you know, my goal with having this conversation wasn't to drive to any one point or another is more just kind of riff, especially as another person who, you know, you get the, the, the benefit of going out and seeking people that you find as important sources of information and truth.

Yeah, look, I mean, I guess, so one is something that I told you before, which is that, and one of the challenges, the word of the, the reason, one of the reasons that I think it's difficult to write the way I used to write and at the same time do this show is because doing hidden forces or doing it well requires that I, am constantly aware of how little I know, right? And each of my episodes are opportunities for me to learn from other people. And doing the show has helped me get better at that. And so it's, it's a, it's tough because I, I'm not in any way suggesting that I know more about epidemiology or the spread of viral disease than the CDC or Anthony Fauci, right? But I also come from a family of doctors.

My father's a doctor, my uncle's a doctor, my cousin's a doctor, my aunt's a doctor. So I know that doctors aren't, you know, ordained priests. You know, they don't know everything. They're not prophets. And lots of them aren't particularly intelligent. And that's just the truth, you know. So just because anyone in authority is saying something doesn't mean I believe it. But I'm also not a knee-jerk, you know, disbeliever or, I don't know,

conspiracy theories or whatever. It's a, it's a, the difficulty is the fact that, again, to this point about the way we frame conversations and how people have lined up ideologically after this, you know, pandemic became a concern of the American people, camps divided based on whether you were, you thought Trump was doing a good job or a bad job. And, and the, the facts came afterwards. It's difficult to point out how little is known in our society. And I think when you do that, when you ask questions, I've gotten in trouble on Twitter doing this, by the way.

And I'm not being cute when I do it. When I ask questions, I genuinely am curious, though I'll admit sometimes I'm dealing with people that I think are kind of trollish or malintended. but, you know, I genuinely ask questions because I'm curious. And I think that people have a very difficult time with that. So if you question the CDC or if you question the guidelines that I'd be putting up, or basically what we've been talking about today, like, what is the plan here? You know, people will think that you have some kind of an agenda or that you're a Trump supporter,

perhaps. I haven't had that personal experience with this, but I've had it with other cases with, you know, stuff that people think is like a Trump phenomenon. So I don't know, but I look, man, I think it's serious, okay? Because how are we supposed to run a liberal, relatively liberal Republican democracy or Democratic Republic with a relatively capitalistic economy? How is any of that supposed to function if the economy isn't working and the government is printing money to purchase outstanding assets, not just government liabilities, but also

corporate bonds and facilitate loans through the banking system by forgiving those loans. How is all that supposed to work? How long can we do that before our system collapses? I think you mentioned some tweet that I put out probably when I was in a very dark place. But like how long, you know, have we crossed the event horizon of that, right? We've crossed a series of rubicons in the past, whether it was the 2001 September 11 attacks and the invasion of Iraq, which I think was the most catastrophic error of American foreign policy in my lifetime. And then we had 2008. So 2001, the government told us that we need to allow the government to just take care of this. Don't worry, you'll be totally fine. Go out and shop. That was actually what Bush said in 2001.

Go out and shop, spend, support the economy. Greenspan dropped interest. rates. We have a standing professional army. We've got bunker busting missiles. We have laser guided satellite guided GPS missiles. Like we are king. We can do anything. We are boss. You don't worry American people. We have a professional army. They'll go and take care of this. Let us go invade a rock. We're going to go kill the terrorists where they are so they don't come and kill us where we are. Let us do this so we can save your lives, right? That was what we were promised after 9-11. After 2008, What were we told? The economy collapsed. Let's not worry about how all that happened exactly. Like, you know, people, yeah, Wall Street got drunk. As what Bush said, of course, we know that's bullshit. And so what do you got to do? Just give us trillions of dollars. Give us trillions of dollars between new treasury security issuances, liquidity facilities, purchasing back corporate stock, purchasing back MBS. Just let us, just do this. And we'll save the economy. from collapsing, i.e. give us money or we will blow up this economy. All right. So that was the deal in 2008,

right? Give us money or your economy collapses. Now it's 2020. And we have a confluence of those two impacts, right? We've got a political dynamic or sort of existential threat of quote existential. This isn't an existential threat. What is the maximum impact of this virus? What are the worst numbers you've seen? I think I've seen 3 million people. Is that the worst number you've seen? Yeah, something on that order. That's not an insignificant number. One percent of the population, Dunbar's number, you're going to know someone personally who

dies from this virus if that happens. That is no small thing. But that is not a society ending or an existential threat to society. So we have to like put perspective on that, right? That's the first thing. And then the second thing is this is an economic calamity, a self-inflicted economic calamity, right, to some extent. And so what is the government saying? Just huddle in place. Stay home, shelter in place so that you can, so that to save your lives, right? This is again like the

thing. But what is the plan after that? And so that's my concern. We're only in phase one. We haven't been told what phase two is. We don't know what that is yet, right? Everyone's just been proceeding as if like, let's just huddle in place and we'll be fine. No, that's not what's going to happen. They're going to lift the quarantine, and then we're going to figure out phase two. And that's what I'm concerned about, because Joe Biden, and this is something I've talked about, as someone, I'm not a doctor. I'm not diagnosed in Joe Biden, but he sure looks like he's in cognitive decline. His health looks like it's deteriorating. I think he's got dementia or something like it. How is he supposed to run against Donald Trump in the November elections? How is he supposed

to be president of the United States? I mean, all of this is super scary, and I just don't know how it's all going to unfold. And that's my concern. And when I had Yanir Baum on the show, who was my only COVID-19 guest, I tried to raise some of these concerns, but, you know, he really wasn't interested in talking about them. And I feel like this is a common, this is a common thing. You can't, you can't talk about it. Like, you can't talk about Biden having dementia or seeming to have dementia, right? No one wants to talk about it. It's just like, shh, shh, shh, let's not talk about it. We'll get by. We'll get by. Just ignore, just ignore it. You know, daddy just, daddy just had a long day at work. I'm now stealing from Jim Grant.

He had some phrase like that, but it wasn't about Joe Biden. It was, I forget, it was something. Something about Daddy, Daddy had a long day or it was a long night at drinking. Anyway, whatever. So that's, I hope something illuminating came out of that. Yeah, I think it's interesting. So I listened to the January episode, and I think what my read of that is very interesting, actually. Your episodes are usually so, like, free-flowing and easy and productive.

as a kind of a jarring one. I think that you might have just caught him in a moment where he literally wasn't, I mean, this is the benefit of the doubt version of this, where he was so frustrated at the lack of response that that's all that was there, right? But whatever, that's neither here nor there. Yeah, no, I mean, it's possible. Though your reaction or the reaction of many other people, this sort of, this is an odd interview, you know, or kind of jarring was very common.

I got a flood of emails from listeners really commenting on that. It was unlike other episodes for exactly that reason, you know? It did feel a little, it felt antagonistic and like it wasn't okay. I think that the biggest critique that I would have is that it felt not okay to not know enough yet about this. And I think that the problem with that is that it, you know, Now, there's a weird reference. You try to make a weird reference. I'll have one in response.

There's an episode of the West Wing where Sam has to teach CJ about the census and what the census is and why they do it. And he's like, well, what do you need to know? And she's like pretty much what it is and everything about it. And he has this line that I never get exactly right, but it's more like, let's focus on celebrating the fact that you made it to the party rather than how late you got here. And he's very pleasant about it. And it's the kind of funny little moment, but I feel like there has to be space for that.

You can't force everyone. Like, I live on Twitter, right? I mean, I got my start in some ways in crypto doing a weekly thread of threads of all of the Twitter threads. Like, I've spent an inordinate amount of time here. I've seen those threads. Yeah, yeah. You put a lot of good stuff together on Twitter.

Yeah. My job is literally to pay attention to Natives. It can't be everyone else's job. That'd be ludicrous, right? Like, it's comparative advantage. People have to be able to do different things. and because of that, people have to be able to ask questions and not be shot down. So this is, you know, whatever, I moved past the commentary on that particular episode,

but I do think it's part of this larger point. But let's come back to this stimulus, right? Because I want to talk a little bit about, I am interested in playing out some of these second-order effects. And it is jarring how quickly the Overton window shifted on some things, so much so that it feels almost as though the Overton window had already shifted on bailouts. Like, did you think, you know, I mean, you, like I said, you wrote, we passed the political and economic event horizon this last month. You could argue we already

passed it after the Iraq invasion or after 2008. But if either of those two events didn't set off the singularity, the current shutdown and open-ended state funding of the economy have, that open-ended state funding of the economy is the point that I want to ask about. Do you think that in the wake of 2008, corporations just assumed that in some cataclysmic event, like this, that the state would be there? Or do you think that they just hadn't thought about it at all? But when it happened, that was the only template they had. So they just settled right into it with ease. That's such a great question, Nathaniel. By the way, on this show, it is okay to say, I don't know. And then talk. Well, I most certainly don't know. Most certainly, I don't know.

But I think it's so interesting because we have like there's a whole school of game theory that's developed to whether you access it directly or whether you're just kind of indirectly relying on some of the core assumptions of game theory. Companies, individuals, they try and make decisions without knowing what other people are going to do, what other actors are going to do, right? But I do think that since the 2008 crisis, we got a lot of data points to suggest that at the very least we should increase the likelihood, the probability that the government would do stuff, more stuff to help aid in an economic contraction. I also something, a point that I made in, I think it was with Hari Krishna in a recent episode, it might have been in the overtime. I made the point that because we have moved to a place where so much of the society is directly

invested in the stock market, and because of the fact that we have relied on debt financing to continue this broken model of centralizing ownership, right? I mean, the disproportionate distribution of wealth to a smaller and smaller and smaller section of society is possible only because of debt, debt financing, right? And debt financing is possible at the margins only by lowering interest rates. And so we've lowered interest rates. And what has that also done? It's made it so that people can no longer save.

Savers have become specularies. They've been forced out onto the yield curve, right? And so they're forced to go out and speculate in the stock market. And as a result, now, the stock market, to Ben points point, right, Ben talks about this, that the stock market is a political utility. The stock market is now a political liability, right? It isn't just a financial liability. It's a political liability because millions of Americans have their life savings invested in the stock market.

If the stock market collapsed by 50% or 80%, God knows where the market would be if the Fed stepped away. Dude, I mean, that's not even thinkable, right? Because we're long past that point. But God forbid the stock market dropped 50%. What's going to happen to these people? You know, their finances are already significantly impaired from the 2008 crisis. So I don't know. Obviously, I think that they at the very least, they thought it was more likely that the government would do something, knowing you exactly what the government would do. But I think that if we think about this in terms of centralization of power, corporations, individuals who are in positions of power, they work more closely. They're fewer of them. They have more wealth and they work more closely with government. And so I think what we have been seeing is a trend towards some type of public, private partnership across the economy. We saw this during the Gilded Age, during the period after the fall of the crash of 1929. And a lot of what happened afterwards, the progressive area that came about, was not something, it was a compromise, but it also benefited in some ways, just given the economic realities, many of the oligarchs, right,

who put a lot of their money in trusts and who got special treatment during that transition because they understood that, you know, there was only, there was no more raping could be done, as much money was taken as possible. And they had to set up a system that could survive politically because at this point, it was a political liability. So I think, yeah, it was a great question. Ultimately, I don't know, but I think that they have been betting on more government intervention, but they probably also made some contingency plans. But clearly not too many because they were using their money to buy back their own stock, right?

So when they could have been either not taking out that debt to do that or not using those cash reserves and having them for a rainy day. That's something else that we've seen here, right? Across the economy, savings are, I think, at the lowest point they've ever been, and people can't weather a storm. So they need the government to step in and start issuing checks. To your point about how many people are invested in the stock market and how it's become a political utility, not just, I mean, it's very clearly as soon as this administration got in power.

That was the scoreboard that they wanted to point to most, right? It's very, very clear. And that's only just making more public, something that I think every other president has probably felt, too. But at the same time, it's more difficult to unwind in some way because you're not just dealing with what is the power dynamic and relationship between the private sector and government. I think there's a dangerous precedent that can get said of, you know, once one industry deserves a bailout, why doesn't every industry deserve a bailout. And then at what point does, do you actually let things fail? And why would you even let things fail if you want to retain power? Right. There's a whole, you can wrap your head around that whole, Oroboros, if you want. But the really scary thing I think in this context is that there is a third leg to this stool in American society today, which is boomers, which is retirees, right?

Who have been sold this story of, you know, the market's going to keep spitting out. Like, I know it in the context of my parents who retired. and who, you know, retired on exactly enough to live. They made a bunch of, like, very clear decisions. And if the story that has been sold for the last 20, 30 years doesn't follow through, right? Like, it's going to be huge, huge societal consequences. So all of a sudden, we're in this scenario where everyone, it's bad for everyone, to unwind this thing, which feels like it can't possibly go on forever.

Right. Everyone's invested in the Ponzi scheme, Nathaniel. You know, so Chimoth was on Pomp's podcast this weekend. It was a really interesting conversation. And he was talking about how we unwind from this, what we have to do. And a lot of what he was talking about are themes that have been echoed by your guest, Peter Zayn. You know, one thing I think that a lot of people have felt through this crisis is, hey, maybe the idea of having, you know, localized supply chains is going to make sense, right? when there's these fundamental things that we need.

And that's kind of across the political spectrum, more people feeling that that. Well, in that context, Chamoth is talking a lot about redesigning the economy for resilience rather than efficiency, right? That we've kind of maxed out efficiency at the cost, at the expense of resilience. But how do you,

how does one even begin to redesign for resilience over efficiency when this is the scenario that we're in right now? Yeah, that's very interesting. interesting point, right? Because there are tradeoffs between resiliency and efficiency, and we have been moving into a world of globalization, of just in time manufacturing, of a world that really indulged to the extreme of Ricardian comparative advantage, right? And it's something that an example I've often used in other episodes has been the common agricultural policy in Europe, CAP, because as a Greek citizen, I'm familiar very,

very well with what the implications of CAP were for Greek agriculture, right? Greek farmers were subsidized not to produce. And of course, interestingly enough to kind of to this point about Zahan who had been on the program and he identifies certain countries that are well positioned to kind of do exactly what you're describing, which is built for resiliency, countries like one of them is France. And France benefited from CAP insofar as they subsidized their domestic farming industry. And because they had the experience of World War II and the famines of World War II, and they thought it was strategically important to be able to have a robust agricultural industry within the country's borders, which I think, I guess, the natural question there is why didn't other countries

in Europe feel the same way? But the French have had strong political influence in the European Union. So anyway, I mean, I agree. I think that we... That's what we are seeing. We're seeing a rerouting of global supply chains. We're seeing just naturally countries trying to source products and goods and components closer to home, either geographically or fewer steps in the supply chain process. But I don't know how you can sort of strategically incentivize for that. You'd probably have to have a very competent government and legislative process. I don't know that we have that, but I do also just think that it's going to be happening

naturally. And I think COVID-19, I just recorded an episode yesterday that'll be out Thursday with Tom Derry, who is the CEO of ISM, which puts out the PMI number. And we discussed this. We discussed all of this, all the different impacts and risk mitigation strategies for companies and what companies are doing. But yeah, I mean, I think that's right. I don't think the measure of economic health or success should be growth.

But this is another problem. Now we're getting into another issue, which is that we measure economic success by growth, in part because we have a monetary system that is built on credit expansion, right? And if we don't have economic growth, the model goes into reverse. You know, our economy can't work without expansion of growth. So, you know, this is, again, to point to an episode I did a long time ago, one of my favorite episodes was episode 19 with Jeffrey West, who was the founder of the high energy physics group at La Salamos.

And it was very much about this, comparing socioeconomic to physical systems, you know, scale in a biological or physical system like a city or an organization. How does that compare to the socioeconomic scalings of economies? And when I say cities, by the way, I mean city infrastructure, whereas as opposed to a city's economy. And those two things, they butt heads because socioeconomic scaling happens quadratically, whereas exponentially, whereas the scaling in physical systems is a diminishing returns to scale. There are diminishing advantages to getting larger and larger.

And anyway, so that's an interesting take. I just thought I'd throw that out there. And the rabbit holes are endless in this, right? I guess I want to, you know, I've talked to your ear off for about an hour now. I want to ask you about one of the things we were sharing some ideas about things we're not discussing. And one that you sent back is, I think, very different than a lot of the other ones. You wrote, we live in a death-denying society. I think this is really interesting.

I'd love you to share a little bit about that because I think maybe the context is probably a lot larger than COVID here. But maybe let's end on this big, this big grandiose note. Yeah. Well, that's something that I have some experience with personally because of having to go. through that, really confronting death head on because of my experience with my brain tumor, which was formative. You know, I've talked about it. I talk about it here or there a lot, but I don't really talk about it too much just because I don't, I guess I don't like about talking about it in too much depth anymore. Not that I can't, but I don't know,

there's lots of reasons for it. But when I was working on my book after I had written that article for Quartz, I read a lot of stuff. I read Edward, I read Ernest Becker's, There's denial of death. I read Yalom's staring at the sun. I think it was staring at the sun or staring at the sun. And Atul Gawande and a lot of different writers who dealt with this issue of death, right? And kind of staring it in the face. And going through radiation in New York City, in a very kind of literal sense, all the people that are dying are pushed to the edges of the city. Now, the hospital networks aren't at the edges of Manhattan. by the rivers because they literally want to push people to the side. But, but, you know, real estate

is cheaper there. I guess there are lots of reasons. But regardless, it does have, it's palatable. You feel it when you're there. You know, the rest of the city, life, everything, energy is happening in the middle of the island. And all the people who are sick and slow and can't move or can't be efficient or economically efficient agents are pushed off to the side. And we, we have. have become, I think, in a much more cosmetically oriented society in my lifetime. I see more and more people with all sorts of cosmetic procedures, whether it's plastic surgery or Botox, filters on Instagram, you know, people trying to look younger. And you've got this sick cult of people that want to live forever in Silicon Valley that have really bought into this bullshit, right? The

Kurtzwillian ideas of uploading consciousness of the cloud, you know, taking. an insane number of supplements until you can kind of leapfrog to the next medical innovation, which, by the way, is more plausible to me. The idea that you might be able to forestall, at great expense, cell entropy, to me is more plausible than this absurd idea about uploading your consciousness to the cloud, for which there is absolutely no foundational evidence that's ever possible. We don't even know what consciousness is. So I think there's been an embrace of this of an idea of what we can do, what we can accomplish with our technologies and our tools. And it's a, it's a common theme, this fountain of youth dream that repeats over and over again in

mythology and in literature. And I think it's a, it's a mirage. And I think that the fact that we don't properly reckon with death, that we don't have ceremonies or rituals on a public level to really deal with it. The fact that I think more than ever before, old people have less value than ever before, I think nursing homes or old people home or retirement homes are really a phenomenon of the baby boomer's parents generation. But I think that's only accelerated, not necessarily with retirement homes, but in terms of how little value you have once you pass a certain age. So I think that's a big part of this because I don't think people know how to reckon with dying. And it's scary.

But we all die, you know, and I don't think that prolonging death or avoiding morbidity, the prospect of avoiding morbidity for some period of time is enough to justify the types of tradeoffs that I think this society is prepared to commit to. And that's where I get worried about the Rubicon, so to speak. I think that's what we saw in 9-11. People freaked out, and they were just willing to do whatever it took, and we got what we got as a result of that. And I think now, after all these years have passed, it's clear that most of that was a mistake. The invasion of Iraq was a mistake. The Patriot Act was largely disastrous piece of legislation.

the extrajudicial killings are something that just continues to go on. And it accelerated under Obama and it's probably accelerated under Trump. And, you know, I'm not convinced that any of those things are fair tradeoffs. But anyway, that's, I probably, I talk endlessly, Nathaniel. I need to be stopped. Listen, I think it's interesting because. it does get to the heart of this. Like we, if we're going to, I do think that this is a moment where we are going to have to

reckon with some huge forces, right? And I don't know what part of society or enterprise will be willing to, but I want us to have the right types of conversations, even the hard ones, the scary ones. And I think, you know, we didn't even get into the autocracy argument. or are second order effect of this, right? Things we're seeing like in Hungary. But I think that this idea that there are, there are tradeoffs that we allow in moments of fear,

and part of that fear is rooted in an inability to have conversations on a major level about death is a really interesting point that I just wanted to have you share a little bit. No, and I would say that, well, first of all, this point about second order effects, A lot of other things can happen in the interim. There can be hurricane season is coming up in like August or September, right? What if we've got a Hurricane Sandy?

How does that impact this in the current environment we're in? What if Russia decides to move into an Eastern European neighbor? What if China moves troops into Hong Kong? What if there's some type of international provocation? What if there's a cyber attack? All of these other things can happen. and we're all in a very weak place right now. And that's another example of something that isn't properly considered when we do what we do.

But I guess, yeah, I mean, I don't know. It worries me. And it worries me. Our society worries me a lot. In these moments, is there anything? This has kind of been ending conversations recently. I think, you know, clear where there's lots of pessimism or nervousness or worry or concern. Are there any things you've seen in these moments that are bringing you optimism?

Yeah. In my personal life. And I think in the personal lives with lots of people, many of my friends have shared anecdotal stories like this where this, at first, this was not welcomed. but the experience of spending so much time with a very close circle of people. In my case, I've been with my girlfriend, my sister, her boyfriend, my parents. We've kind of stayed together in the same location, and we have dinners pretty much together every night. I mean, I knock on wood because I don't like to say this out loud because I feel very fortunate that we've been able to have this experience. But it's been on a personal level, despite the hardship that many people are facing as a result of these shutdowns and these quarantines, it has been a wonderful source of togetherness from my family. And a lot of friends of mine have shared that experience. Also, you know, I got a friend out here where I am who has a gym and he's had to shut it down. But as a result of shutting it down, he's innovated and he's created a sort of online classes, online communities. And it's worked. And people have taken

to it. And I think that, you know, there's a resiliency in terms of community. So that, that makes me feel optimistic. I think that's primarily, primarily it probably. And I guess doing the podcast, I haven't, as you know, I've never taken sponsorship money for the show. That's something that I've stuck to up until now. It's something I really wanted because I believe that that was the best way to build a really strong community. And it's worked really well, especially during this time. And, like, you know, people continue to subscribe to the, to the Patreon. And it, that has, that has, like, made me feel a lot better about some of the media issues that I worry about.

You know, like, I think Matt Taibi recently did the same thing. Yeah, exactly, exactly. So, you know, I think that's promising because we have, we have a lot of issues with our broken media modeling. And many of those issues result from the fact that people need to earn a living through the ad model. And there are many ways in which that creates perversions for what people cover. And not because someone is telling them what to say, but just the reality. When your check comes from a corporation that sells ads on your platform in one way or another, then it influences what you write about or what you say.

So I think that's been encouraging too. I mean, it sounds like the common theme here is the perhaps rediscovery of these small networks and small circles and kind of the innovation and resilience within communities, which, you know, I think I've been finding this as well. I mean, you know, my family kind of designed their life for almost what people are experiencing now, right? We live in the Hudson Valley, a couple hours outside of New York City. My brother-in-law writes and also helps with stuff around our house and helps with child care

for my daughter. His fiance is now up. She's working from home from New York City. And we've had the same experience of having this. Our quarantine is incredibly strong. And we've really enjoyed that. And I think, you know, I observed on Twitter a couple weeks ago that the first few days of people in New York, all of their tweets were just, you know, holy crap, this is so hard. And, you know, especially those with kids, like, this is insane and difficult and all this sort of stuff, which is true, right? They weren't wrong. But then within the next couple days, it was turned almost entirely to people sharing these moments of joy that they never would have had otherwise. And then in the next couple days, I started getting messages about where to buy real estate in the Hudson Valley.

So who knows what's good come out of this, right? Totally, totally. But listen, yeah. No, I'll say one quick thing, too. Also, conservation. I think that's a big thing that comes out of this. I mean, it's happened in our home, right? We did the best we could to prepare for this ahead of time, but there were unexpected things that we didn't realize how much we used and we've had to be had to conserve.

And I think that's just generally made us rethink about just how much waste, how much we waste as a family and how much we wasted as society. I think that's a really positive thing. And for the people that are concerned about carbon emissions, well, there's no international air flight. So there's that. Yeah, there's that. Well, listen, DeBiuchio, I really appreciate you taking some time today. I appreciate all you do with Hidden Forces. I know it's, like I said, it's my favorite podcast.

It's the one I look forward to most each week. So thank you for hanging out and just kind of riffing on things. I think right now everyone is just trying to make sense of it the best they can. And I think more perspectives are better than less right now. No, man, congratulations. You're a great host. This was really pleasant. I don't do these very often.

And you've got, you've had a lot of great guests on your program. It looks like you've had a number of guests that have been on Hidden Forces as well. And it clearly sounds like something you enjoy. So, you know, congrats. I'm really happy that you're doing it. Thank you, sir. All right. Well, stay safe and we'll talk to you soon, okay?

All right. Thank you, Nathan. You'll have a good one. Cheers. By way of wrapping up, I want to bring it back to the Bitcoin and crypto community and world for just a minute. One of the things that's so nice about this space that's so refreshing is that sometimes to a fault, there are really no conversations or positions.

that are off limits. Now, there's certain positions, there's certain takes, there's certain things that you can think or tweet about or whatever that will firmly pin you in one camp, one tribe, or another. But by and large, I think that this community has a bigger open space for people's opinions than most do. I think that's a good thing. I think that's a healthy thing. I think that's a unique thing, an all too unique thing in a world where people just find their way to the media that seems most like them and don't really kind of challenge their views. So hopefully this space is one of those that you're going to hear from a lot of different types of people, including people you don't always agree with. Hopefully sometimes you don't even agree with me. But

what I can promise is that this will remain an open space to ask hard questions and have difficult conversations and just try to be open to, as Dimitri said, saying, I don't know, throwing up our hands and going to figure it out. I think that's an important thing to do in uncharted water. like we're in now and in unknown times. Thanks as always guys for listening. I appreciate it. Be safe and take care of each other. Peace.