Bloomberg Businessweek Weekend: August 21st, 2026

**Carol Massar** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**SPEAKER_2** (0:08)
This is Bloomberg Businessweek Daily, reporting from the magazine that helps global leaders stay ahead, with insight on the people, companies, and trends shaping today's complex economy, plus global business, finance, and tech news as it happens. Bloomberg Businessweek Daily with Carol Massar and Tim Stenovec on Bloomberg Radio.

**Carol Massar** (0:31)
Hi, everyone. Welcome to the weekend edition of Bloomberg Businessweek. Tim is off. Well, this week, traders took stock after US Treasury Secretary Scott Bessent announced a surprise increase in long-term bond buybacks to stem a rise in yields that had taken them to a near two-decade high. Analysts have warned the plan may be a short-term fix, giving concerns about large fiscal deficits and oil-driven inflation. Also a concern, US government debt. We got an update on that this week coming in at $40 trillion.
We also got retail earnings, continued uncertainty over the US war in Iran, a softening trade stance between the US and Canada, and the latest FOMC minutes showing some hawkish sentiment that could re-energize bets for a rate hike come September.
All ahead of remarks this coming week from Fed Chairman Kevin Warsh at the annual Jackson Hole Symposium. His lack of guidance on when or whether the central bank will adjust rates has added to uncertainty over the policy outlook. As always, the latest on all of this and more can be found on the Bloomberg Terminal and at bloomberg.com. Now one of the things we love to do is give a topic, an individual, a leader, a market watcher, an extended amount of time to talk with us. We learn more, we hope you do as well. So last week we did this on the US's latest push to secure rare earths and critical minerals. This week we feature one of the most influential and frequently cited economists in the world. We are talking about Nobel laureate and MIT professor, Deron Asamoglu.
Our conversation coincided with his new book, What Happened to Liberal Democracy? Remaking a Politics of Shared Prosperity. He joins us in just a moment. That chat is chock full of topics for weekend discussions. And since it is the weekend and because we believe in mixing thoughtful discussions with some fun, we are going to wrap up with the founder of HSP Brands on how Gen Z is impacting the cocktail hour. All right, let's get to it and let's begin with one important question. What happened to liberal democracy?
That is what Nobel laureate economist and MIT professor, Deron Asamoglu, explores in his latest book, aptly named What Happened to Liberal Democracy? Remaking a Politics of Shared Prosperity.
He argues that liberalism is dying primarily of self-inflicted wounds. His solution, what he calls working class liberalism. He began talking with Tim and me about the initial success of the idea.

**Daron Asamoglu** (3:01)
I think liberal democracy is one of the greatest achievements we've had.
From our ape beginnings and lives in very unequal circumstances, in very uncertain existence, mired by violence, today we live in very complex societies, open to ideas with lots of individual freedom. People participate in politics peacefully, reach compromise, sometimes consensus. And moreover, we get lots of things from the government, including our ability to express our voice. That is an amazing achievement. And we are, I think, at the cusp of losing it. Liberal democracy, which still, in my mind, is the best framework, definitely something we very much need for the future, is in crisis. After decades and decades of actually serving us quite well. So we have to understand that crisis, and we have to rebuild liberal democracy unless we risk, we want to risk losing it.

**Tim Stenovec** (4:00)
We're going to talk about how you think we can rebuild it, but I want to just get some parameters set here and do some definitions. Because early on in your book, you talk about the definition of liberalism and how it means different things to different people, depending on where you live. The European view versus the American view. Just straighten that out for us right now before we dive into this conversation.

**Daron Asamoglu** (4:20)
Yeah. Thanks, Tim. That's very important. Liberalism has had many meanings over the ages and today it's a big tent. But at the core of it is a commitment to protect individual liberties, also protect the weaker members of society, and also a commitment to progress from which we all benefit. Those are the defining features of liberal ideas, and they have acted as a rallying cry for people to build a better society. The way that I define it, liberal democracy is the institutionalization of these ideas.
It's carrying them to the actual practice of our lives, and it's been brilliantly successful in the grand scheme of things. We've had decades of very rapid growth under liberal democracy for about four decades following World War II. Those were not just high growth periods, but they were periods in which inequality was remaining stable, or sometimes even declining every demographic group. Men, women, bi-race, different education groups, they saw their earnings grow very rapidly. And, you know, always political disagreements were very important, but generally peacefully. Today, if you look at the pictures, very different. Shared prosperity doesn't work anymore. Inequality has increased a lot. But worse, in the United States, we've seen about half of the population without a college degree experience stagnant or declining wages for about four decades while productivity increased, while people with college degrees, post-graduate degrees improve their living standards significantly. And when you ask Americans, they have such negative views of democratic institutions, their trust in Congress, in the Supreme Court, in the presidencies, at an all-time low.