Former Federal Reserve Chairman Ben Bernanke.
Katie Kramer/NBCU Photo Bank via Getty Images
Katie Kramer/NBCU Photo Bank via Getty Images
Today on the show, we sit down with Dr. Ben Bernanke, the medicine man of the markets and the money supply.
Ten years later, we’re still dealing with the effects of the 2008 financial crisis. Some industries and parts of the country are still trying to recover from the worst economic period since the Great Depression.
It was Ben Bernanke’s job to stop the crashing and pick up the pieces.
As chairman of the Federal Reserve, he had to balance the pressures of Congress, the White House, and the American people and come up with a solution to rebuild confidence in the country’s financial system. He had to make tough call after tough call.
He’s had 10 years to think it over on what happened, what could have happened and why. So, we sat down with him to ask a few questions, like:
- Why didn’t the Fed see this coming?
- Why did America bail out the banks, and not the homeowners?
- How close did we come to total collapse?
- And we ask him about his trip to Hollywood.
Social scientist Francis Fukuyama (from left), presidential adviser Michael Anton and former Ireland President Mary Robinson are some of the people NPR has interviewed in an exploration of how we got to this point in history and where we’re headed.
Larry Downing/Reuters; Ariel Zambelich/NPR; Jason DeCrow/AP
Larry Downing/Reuters; Ariel Zambelich/NPR; Jason DeCrow/AP
This story is part of a series of conversations on Morning Edition with politicians, writers, scientists, theologians, tech innovators and others. From globalization to religious tolerance, identity to climate change, our conversations seek to capture this moment and how we’re shaped by it — as individuals, nations and as a global civilization.
In 1965, the Rev. Martin Luther King Jr., said that “the arc of the moral universe is long, but it bends toward justice.”
To borrow King’s imagery in 2017: Which way is the arc of our history bending?
That’s a big question we’re posing at NPR. We can’t easily report on the future, but we can ask smart people how they think we got to this point in history, and where they think we’re going.
It’s a vital conversation at this transformative moment in our political and social order, here and around the world. Depending on where you stand, we’re experiencing either a long-needed course correction or a feeling that the world has lost its way. Whatever your view, the rate of change has been dizzying.
So what is really going on? We’re asking a diverse group of thinkers to help chart what amounts to the history of our time.
These conversations began with the social scientist Francis Fukuyama, who famously proclaimed “the end of history” just as the Cold War was coming to an end. What Fukuyama meant was that a single form of government — liberal democracy — was on its way to triumph over competing models like communism. A quarter century later, the forms of democracy remain in place around the world. But many are becoming less liberal. Russia has an elected president and parliament but has cracked down on dissent and the press. Turkey has also cracked down on the press, and in a recent democratic vote chose to concentrate power in the hands of one man.
In another conversation, Ireland’s former president, Mary Robinson, warned of a “strange moment” in history. Much of the world had committed itself to “very strong” multilateral institutions, but she says, “we seem to be now going into identity nationalism in a narrow sense.” Identity nationalism, concludes Pakistani writer Mohsin Hamid, is almost hopeless — and it boils down to fear of change.
“Technological change is intensifying. We’re becoming terrified by social media, by information, and in this state of high anxiety, we’re looking to attach that anxiety to something,” he says. “And cultural change, demographic change, is what we’re attaching it to.”
Recently we heard from an adviser in the Trump administration. Michael Anton’s official title is deputy assistant to the president for strategic communications at the National Security Council. He says he’s been so consumed by the day-to-day, he’s had little chance to focus on the long term — despite that he came to prominence as a man who was trying to think long term. In 2016, while working at an investment firm, Anton anonymously published essays that sought to make sense of the Trump phenomenon. The most famous was “The Flight 93 Election.” Anton compared Trump voters to passengers on the plane hijacked on Sept. 11, 2001, who were choosing to rush the cockpit. They might still die but it was their only hope.
In his conversation with NPR, Anton was a bit more gentle in his description of the world situation. His new boss, he says, views Britain’s exit from the European Union as both “a hopeful sign” and as “a reassertion of nationalist sentiment.”
“We want to put the brakes on globalization a little bit and reassert control over our country, our borders, our economic policy, our tax policy, with the recognition that the distinction of citizenship means something and citizens are in it together fundamentally in a way that the world community is not,” Anton says.
Anton spoke just as Trump was nearing his first 100 days in office — and as the president was discovering some of the limits on what he could achieve.
Trump recently mused in an interview on Sirius XM that “had Andrew Jackson been a little later, you wouldn’t have had the Civil War.” The president was returning to one the most studied eras of American history: the Antebellum Period, the decades leading up to the Civil War. The causes of the conflict can be traced back to the beginnings of the country. It is poignant and instructive to read the accounts of people who lived in the 80 years before the calamity. Many knew that something was going grievously wrong, that the political system was beginning to seize up, caught in its own contradictions. Some desperately warned against disaster. Yet no one truly foresaw what history had in store for them.
In the early 21st century we, too, are headed toward some destination we cannot know, but we can at least get a handle on the direction we are moving. Will we know by the end of these conversations which way the arc of history is bending? Maybe not, but it’s worth trying.
A Puerto Rican flag hangs beside a for-sale sign on a balcony in San Juan in summer 2015.
Joe Raedle/Getty Images
Joe Raedle/Getty Images
Puerto Rico has asked for a form of bankruptcy protection to help it grapple with more than $70 billion in public-sector debt. The unprecedented maneuver, requested by the governor and filed shortly afterward by a federal oversight board, sets in motion what would likely be the largest municipal debt restructuring in U.S. history.
By comparison, Detroit’s 2013 bankruptcy, which sought relief from some $18.5 billion in debt and liabilities, made it the largest such filing in the country’s history at the time.
“After extensive discussions in good faith and the opening of the financial books of the Government of Puerto Rico to the creditors, there has not been sufficient progress in the negotiations,” the U.S. territory’s governor, Ricardo Rossello, said in a statement.
After the inability of obtaining an agreement with creditors, we request to the FOM Board the protection for PR under Title III of PROMESA. pic.twitter.com/qnrPdQ8GsR
— Ricardo Rossello (@ricardorossello) May 3, 2017
The situation now heads to federal court, where the struggle between Puerto Rico and its disgruntled creditors will be decided. The territory also has more than $49 billion in pension liabilities.
But don’t call it a “bankruptcy,” exactly, since the territory isn’t technically eligible for the same Chapter 9 protection as states. Rather, Congress passed a law last year specifically to deal with Puerto Rico’s debt problem, which has been simmering for years. Among other things, the law, called PROMESA, set up a federal oversight board to handle the territory’s debt negotiations and imposed a stay on financial obligations it owed.
It set up a bankruptcy-like process tailor-made for Puerto Rico. NPR’s Camila Domonoske recently broke down the procedure:
“PROMESA doesn’t call this ‘bankruptcy,’ and it’s not identical to Chapter 9. But the underlying principles are the same.
” ‘It mirrors conventional bankruptcy processes that are ordered and arbitrated through a court system,’ says Eric LeCompte, the executive director of Jubilee USA Networks, a religious development organization that supports debt relief and debt forgiveness.
“The ‘Title III’ process, as it’s called in PROMESA, allows Puerto Rico to address all of its debts at once, in a comprehensive process — which even Chapter 9 doesn’t allow, LeCompte says. It’s essentially a bankruptcy process custom-built for Puerto Rico’s debt crisis.”
The island has been grappling with runaway debts for years, though the situation finally reached a crisis in 2015, when the island’s governor at the time announced that its debts were unpayable as long as it hoped to provide basic services to residents.
Camila notes that since then, Puerto Rico has been buffeted by “defaults on loan payments, budget cuts and tax hikes” — including significant austerity measures for Puerto Ricans.
And those economic woes have taken their toll. In a court filing Wednesday, the federal oversight board laid out some grim numbers:
- Puerto Rico’s labor participation rate is only about two-thirds that of the U.S. mainland.
- The territory’s population has dropped by 10 percent since 2007.
- Nearly half of Puerto Rico’s residents live below the federal poverty level.
The stay imposed by PROMESA expired overnight Monday, and The New York Times reports that right on cue, “bondholder groups and at least one bond insurer sued” on Tuesday.
As The Wall Street Journal reports, Puerto Rico will now “face off against angry hedge funds, mutual funds and bond insurers in the court-supervised proceeding known as Title III, a legal mechanism created by Congress to restructure debts by force if negotiations broke down.”
In its filing, Puerto Rico’s federal oversight board expressed optimism about the legal wrangling to come.
In other words, the board remains “hopeful that continued negotiations (including through mediation) will lead to consensual resolutions such that Puerto Rico will once again be able to experience economic and social prosperity after this difficult process is resolved.”
There’s a decent chance you — or someone you know — just got an odd email inviting you to edit a document on Google Docs. The email could be from a stranger, a colleague or a friend, but it’s addressed to a contact that boasts a whole string of H’s in its name.
In other words, it looks a little something like this:
This is what the subject line may look like in the email, for people using Microsoft Outlook. The telltale sign something’s amiss: that email address with that long line of H’s.
Screenshot by NPR
Screenshot by NPR
Or, if you’re looking at the invite in Gmail, it likely looks more like this:
— Zach Latta (@zachlatta) May 3, 2017
Either of these look familiar to you? Here’s a handy tip: Don’t open the link.
Trouble is, those invitations aren’t what they seem. They are in fact malicious files intended to hijack recipients’ accounts — and Google advises its users not to open them.
“We have taken action to protect users against an email impersonating Google Docs, and have disabled offending accounts,” a Google spokesperson says in a statement emailed to NPR.
“We’ve removed the fake pages, pushed updates through Safe Browsing,” the statement continues, “and our abuse team is working to prevent this kind of spoofing from happening again. We encourage users to report phishing emails in Gmail.”
We are investigating a phishing email that appears as Google Docs. We encourage you to not click through, & report as phishing within Gmail.
— Gmail (@gmail) May 3, 2017
If this public service announcement has reached you too late and you’re now staring in despair at an already opened link, Vice’s Motherboard explains what to do next:
“If you have clicked on the link, go to your Google account’s page (https://myaccount.google.com/permissions) where you can manage the permissions you’ve granted to apps (or go through the whole Google Security Checkup). Then locate the ‘Google Doc’ app. This looks totally legitimate, but it’s actually not. If that’s the malicious app that’s gotten access to your account after you clicked on the link it should have a recent ‘Authorization Time.’ Now, click on that Google Docs app and click ‘Remove.’ “
If you opened the Google Docs phishing email, here’s how to fix:https://t.co/cucndZ39ad
If you see Google Docs, delete it pic.twitter.com/UH9bDgbqhK
— Tom Warren (@tomwarren) May 3, 2017
And, in case it helps, know at least that you’re not alone.
Many people — especially journalists — reported receiving these invites Wednesday afternoon. Enough people, in fact, that the hashtag #PhishingScam began trending on Twitter and email inboxes clogged with nearly as many warnings about the scam as instances of the scam itself.
So, once you successfully delete that phishy email — or take steps to remove its gnarled claws from your hapless inbox — you can take comfort in the fact that, no matter what ails you, Twitter has some snark to cure it.
— Nicole Perlroth (@nicoleperlroth) May 3, 2017
In the midst of the current debate about fabricated facts, the former Microsoft CEO Steve Ballmer launched a new website, USAFacts.org, where people can go to check the numbers for themselves.
The site is mainly devoted to government spending and revenue, offering a wealth of data on many fronts, including analysis on the effectiveness of different programs.
The initiative is definitely welcome, given the widespread suspicion of what the government does and where the money goes. Many people get weary of paying taxes not knowing why, exactly. Of course, even if the website promises “factual and unbiased” data, without making “judgments or prescrib[ing] specific policies,” any data display involves choices, a point made by Wired. As Ballmer says in his TEDx talk, “numbers are a tool to tell a story.” More importantly, it is how people interpret the numbers that makes the story, not the numbers by themselves.
For example, searching for “Crime and Police” you find the number of arrests from 1980 (10,458,260) to 2013 (11,303,198), while “violent crime rate per 100,000 persons” goes from 596.6 (1980) to 372.6 (2015). The numbers tell a story. Violent crime rates are definitely lower. Why? Here’s where the interpretations would come in.
A fact-based narrative cannot be separated from who’s telling it. Even the choice of topics, what makes the “headlines,” reflects editorializing and consumer trends.
Meanwhile, Jimmy Wales, founder of Wikipedia, is crowd-funding his new venture, Wikitribune.com, deemed “evidence-based journalism” in a new kind of add-free news platform that brings journalists and a community of supporters together. “The news is broken and we can fix it,” says Wales in his intro video. Wales contends quite convincingly that the whole ad-based social media structure is “designed to keep people clicking at all costs, confirming biases, showing what people want to see.” The idea is that a community of volunteers will reliably protect the integrity of information, a concept based on the enormous success of Wikipedia.
In this model, anyone can upload an article, that will then be fact-checked by professionals and by readers. Wales contends that Wikitribune.com will be the gatekeeper of the Internet. As with Wikipedia entries, every story will be a permanent ongoing project, open to editing.
I imagine Wales and his team are aware of potential pitfalls. For example, a perverse entry with distorted facts and biased opinions may take a while to be detected. Unless the gatekeepers act fast, countless readers may be sold on believing what they read before the text is fixed. By then, social media may be exploding with distorted news that is supposed to be trustworthy. Trolls need to be banned. I’m curious to see how articles on climate change, for example, will be controlled.
As in philosophy, there is no “view from nowhere” in journalism. Journalists are people with personal views and they must work to ensure those don’t invade their work. But how one journalist reports and writes a story may surely differ from another. What angle one takes or what information one focuses on could diverge. And, of course, readers come with their own baggage of social values and prejudices. The same news will impact people in different ways.
We must, indeed, fight against the trivialization and distortion of the news and the rampant downgrading of expertise we see on the Internet, and USAFacts.com and Wikitribune.com are absolutely worthy initiatives. But we must not forget that every story is told by an individual in her own way, and that it is heard by another individual in her own way, as well.
Even a fact-based narrative cannot be separated from who’s telling it — and from who’s hearing it.
Marcelo Gleiser is a theoretical physicist and writer — and a professor of natural philosophy, physics and astronomy at Dartmouth College. He is the director of the Institute for Cross-Disciplinary Engagement at Dartmouth, co-founder of 13.7 and an active promoter of science to the general public. His latest book is The Simple Beauty of the Unexpected: A Natural Philosopher’s Quest for Trout and the Meaning of Everything. You can keep up with Marcelo on Facebook and Twitter: @mgleiser
Fred Upton, R-Mich., proposed spending an additional $8 billion over five years to ensure that sick people get adequate coverage through high-risk pools.
First there was Medicare, then Medicaid, and then Obamacare. Now we move to Trumpcare, or whatever it eventually is labeled, which seems to be turning into another big federal program to pay the bills for people with expensive illnesses.
House Republicans, trying to gather enough support to get their health care bill passed, keep adding pots of money to the proposal to pay the costs of people with high medical costs. The cash would likely go to “high-risk pools,” which pay the expenses of the very sick so that insurance companies don’t have to.
House Speaker Paul Ryan made the case for high-risk pools on the Charlie Rose television show in January.
“By having taxpayers, I think, step up and focus on, through risk pools subsidizing care for people with catastrophic illnesses, those losses don’t have to be covered by everybody else [buying insurance] and we stabilize their plans,” Ryan said.
The original version of the House bill, called the American Health Care Act, includes a “Patient and State Stability Fund” with $100 billion over 10 years that would allow states to help defray their citizens’ health costs or lower their premiums.
Later amendments added another $30 billion to create a federal “invisible” high-risk pool, where the money reimburses insurers who cover patients with expensive illnesses, and to pay for prenatal and childbirth care.
And on Tuesday night, Congressman Fred Upton, R-Mich, proposed adding an additional $8 billion over five years to ensure that sick people get adequate coverage through high-risk pools.
“It’s our understanding that the $8 billion over the five years will more than cover those that might be impacted,” Upton said Wednesday after a meeting at the White House. “And as a consequence, keeps to our pledge for those that in fact would be otherwise denied because of pre-existing illnesses.”
Ryan says the goal of the Republican bill is to offer more and cheaper health insurance choices. By separating out those who have expensive medical conditions, the remaining customers for individual insurance could buy stripped-down policies with fewer benefits at a lower price.
Several states have tried high-risk pools in the past, but they were typically underfunded, leaving millions of people with no access to adequate health care. Lawmakers hope that by putting the heft and money of the federal government behind them, they may work better.
The federal government is already in the business. It pays for the health care of more than 40 percent of the population, through Medicare, Medicaid, the military and the Veterans Administration, according to the Census Bureau.
Medicare is essentially a giant high-risk pool. The program pays for health care for people over 65, and was created in 1965 because that population couldn’t get affordable private health insurance precisely because their health costs were too high.
Last year the federal government spent about $591 billion on Medicare, according to the Kaiser Family Foundation.
Medicaid, which covers the poor or disabled, is essentially another high-risk pool, paid for with about $550 billion in tax money in 2016.
And then there’s the Veterans Health Administration, which pays for the care of many people who have served in the military.
Covering the people that commercial insurance left behind was also the goal of the Affordable Care Act, also known as Obamacare.
The law was designed to ensure that people in the individual insurance market who have pre-existing medical conditions, who were often shut out of traditional insurance plans, could get coverage. Obamacare tries to achieve that goal by requiring everyone, sick and healthy, to buy insurance so that the cost is spread among a broad population.
That led to higher premiums for many people who are young and healthy because they subsidize those who are sicker and older, and also because they have to buy insurance with a generous menu of benefits mandated by the government.
The Republican plan aims to cut those premiums by getting rid of Obamacare rules requiring that policies offer a broad menu of benefits, including prescription coverage and maternity care; limit how much more companies can charge older people; and require insurers to charge the same price for people with existing medical conditions.
But many Republican members of Congress, including Upton, aren’t willing to see those with more medical needs shut out of the system once again.
“We’re talking about some way to finance a social goal that was established by the Affordable Care Act,” says Joe Antos, a resident scholar at the conservative American Enterprise Institute. “I don’t think Republicans want to go back on that. They agree that we’ve turned that corner.”
Antos says the big difference between what’s being contemplated by the House Republicans this week and Medicare or other government health programs is that high-risk pools or subsidies would likely still be run through private health insurers, which have incentives to save money and be efficient.
Zack Cooper, a professor of health policy and economics at Yale, agrees.
“Once you’ve decided to cover everybody, you’re sort of arguing over where the money comes from,” he says. “The ACA makes me subsidize you. The high-risk pools are simply doing that through taxation.”
So far the House GOP bill doesn’t require states to create high-risk pools, but some of the money is allocated specifically to that purpose. Such pools could be separate state-run insurance programs similar to traditional Medicare or Medicaid, or “invisible” systems where individuals buy their insurance on the regular market but the government pays the expenses of the people deemed high risk.
Maine has an invisible risk pool where insurance companies have to turn over to the state 90 percent of the premium paid by anyone the company deems high risk. That prevents companies from abusing the high-risk status, Antos says, because insurers would be foregoing income from patients who don’t have high medical costs.
After Maine established its high-risk pool, premiums for people in their 20s fell an average $5,000 a year, and people in their 60s saw their costs decline by about $7,000. At the same time, enrollment in private insurance rose, according to a study in Health Affairs.
The Republican bill doesn’t mandate a Maine-like system. And the flexibility in the bill, combined with limits on the money available, could be a problem, says Linda Blumberg, a senior fellow at the left-leaning Urban Institute. Especially since the pot of money is limited.
“We’re going to provide X dollars, then we’ll let the states figure out what benefits they can get for these people for the money that we’re providing,” Blumberg says.
Emily Gee, a health economist at the Democrat-allied Center for American Progress, says the Republican proposal needs about $20 billion more per year to adequately pay the costs of high-risk patients.
And that’s a real risk, says Yale’s Cooper.
Government has a track record of creating programs to help the needy but not funding them adequately to ensure that they offer quality services, he says. It’s a common complaint about Medicaid, where lawmakers frequently point out that it doesn’t pay doctors enough.
“This is trying to get people off the books,” Cooper says. “The fear is once you get them off the books, you forget about them.”
Charlie Angell, a river outfitter, offers to take President Trump and his cabinet on a canoe trip through Santa Elena Canyon to show him the folly of a border wall in the Big Bend region.
Of all the wild places along the U.S.-Mexico border, Big Bend National Park, named for the great curve of the Rio Grande, is the gem.
In Santa Elena Canyon in west Texas, the international river flows between 1,500-foot-tall sheer walls of limestone — a study in light, shadow, water and time.
The Big Bend region — where the ghostly Chisos Mountains rise out of the prickly Chihuahuan Desert — is sacred ground. As writer Marion Winik described, it’s “what I imagine the mind of God looks like.”
President Trump’s executive order calls for an impregnable wall along the border, which includes 118 miles of river shared by the national park and Mexico. But in a rare show of unity, Democrats and Republicans and city and rural officeholders in Texas don’t want the wall built through here.
Critics say it would be unsightly and prohibitively expensive, it would harm wildlife and that it’s superfluousconsidering how the unforgiving terrain is a natural barrier.
Trump has vowed to forge ahead with his border wall despite opposition. His administration plans to select a prototype this summer and hopes to convince Congress to fund it next fiscal year. The administration also acknowledges the wall won’t cross all 2,000 miles, though specific plans haven’t been released yet.
“I would like to invite President Trump or any of his cabinet to come down here. I’ll give ’em a free trip on the river, and they can see how unnecessary a wall would be here and the construction and everything involved to create it would just be the worst thing you could ever do,” says Charlie Angell, a local outfitter who runs river trips up the canyon. “You might as well take away the park if that happens.”
Whiskered and sun-bronzed, he stands under a rock ledge, his red canoe beached a short distance away.
“I’ve got the boats, I’ve got the paddles and life jackets. We’ll give [the president] a free lunch. Get out here and see. That way you can cross this area of the border off the list,” he says.
Even Border Patrol agents are against a wall out here.
“For us, we’re not pressing the actual brick-and-mortar-style wall here. That’s not our objective,” says Lee Smith, a career agent and local union president. “We’ve told everyone from the [Trump] transition team to the current administration, for us here locally in Big Bend, what we need is [more] manpower.”
While Smith is interviewed in the breakfast room of a motel on Highway 90, a retired electrician from Cleveland eavesdrops from another table. Dave Wickam is just passing through on his Harley — but everybody has an opinion on Trump’s border barrier.
Albert Miller (left) and his brother Bill run cattle on their ranches 10 miles from the Rio Grande and they think the harsh terrain acts as a better deterrent than a manmade barrier ever would.
Wickam believes an ugly wall, installed as a quick political fix, would scar the land in perpetuity.
“People will build stuff but … they never tear it down and restore it,” he says. “It’ll be like Hadrian’s Wall in England going across there, but it won’t be pretty.”
‘Something … even greater than the wall’
Customs and Border Protection has identified sectors in San Diego, Calif., Tucson, Ariz., El Paso, Texas, and the Rio Grande Valley as places where a new wall is needed, but not this lonesome corner of Texas. Along the entire border, the Big Bend sector has had the fewest apprehensions of illegal crossers every year for the past 44 years.
Albert and Bill Miller run black angus cattle on ranches that cover an area more than twice the size of Manhattan.
Albert Miller knows how hard it is for an immigrant to even reach his land. “They’re already crossing 10 miles of inhospitable country and climbing a hundred-foot cliff,” he says, his pickup parked in a pasture of bluestem grass about 10 miles from the Rio Grande. He thinks Trump’s “big, beautiful wall” is pointless out here.
“I can’t see that it’s going to add anything to the barrier already in place with just the land and the mountains,” Miller says. “These guys that are comin’, they’re crossin’ something … even greater than the wall.”
The National Park Service declined to comment on the wall.
Raymond Skiles, longtime wildlife biologist at Big Bend National Park, says that animals require free access to the Rio Grande as their primary water source.
Big Bend’s wildlife biologist, Raymond Skiles, only agrees to talk about some of the park’s full-time residents: mountain lion, black bear, bighorn sheep and a rare, raccoon-like creature called the white-nosed coati. These mammals range back and forth across the Rio Grande to forage and keep their gene pools healthy. Moreover, Skiles says, in this arid environment they need to be able to get to the river.
“The Rio Grande is also the park’s most important water source for animals,” he says. “It’s as simple as that.”
In February, the Commissioners Court of Brewster County, which encompasses the national park, passed a resolution deeming the wall is unnecessary. This county that voted for Trump concluded it wouldn’t make them any safer.
“I’m a Brewster County native,” says commissioner Betse Esparza. “To imagine a wall in the midst of that landscape, which is beautiful. This is God’s country. It’s really unimaginable. I don’t want to think about it.”
These naysayers may get a reprieve. Last week, Homeland Security Secretary John Kelly told Bloomberg TV, “There are places we probably won’t build a wall,” and one of them is Big Bend.