How the White House Thinks About Economic Security

Joe Weisenthal (0:03)

Bloomberg Audio Studios.

Tracy Alloway (0:05)

Podcasts, radio, news. Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:24)

And I'm Joe Weisenthal.

Tracy Alloway (0:26)

Joe, we are recording this in August 2024, which means there's only six years to go.

Joe Weisenthal (0:34)

Six years to what?

Tracy Alloway (0:35)

Six years until, according to John Maynard Keynes, we will have an era of abundance, right? He wrote in 1930- Wow, this is good. That he thought technological development would mean in a hundred years, which would be 2030, that we would have a plethora of goods and elevated living standards and reduced working times and everything will be great. So I'm excited.

Joe Weisenthal (1:00)

Yeah, I think I can hang on with the sort of charge and toil scarcity mindset for another six years, then we will reach nirvana here on earth.

Tracy Alloway (1:09)

I mean, to be fair, he did sort of caveat it.

Joe Weisenthal (1:12)

Can I say, I have no idea where you're going with this.

Tracy Alloway (1:13)

Yeah, OK. I promise I have a point and you're actually going to remember it in a second. But first, I'm going to say that Keynes did caveat his forecast. And he basically said, as long as there are no big wars or population booms. And that was in 1930s. So, you know, bad timing for both wars and population.

Joe Weisenthal (1:32)

So, yeah, a few things happened. Maybe we got to kick it back another 50 years.

Tracy Alloway (1:36)

OK. But my point is, you know, in 2024, it feels like instead of abundance, there is very much and you touched on it just then, this focus on scarcity. So, maybe we have like... Well done.

Joe Weisenthal (1:50)

Well done here, Tracy.

Tracy Alloway (1:51)

Thank you. So, maybe we have a lot of different types of goods that are available to us now. You know, I can go buy a pretty cool TV for not that much money. But in the past four years or so, we have seen shortages of very important items that have emerged.

Joe Weisenthal (2:10)

Yeah. And I would classify this into sort of two categories in my head, which is that there was sort of the acute scarcity of specific things that we saw during the COVID shock. And so, you know, there were things like, oh, suddenly we have a scarcity of protective equipment for doctors, or a certain type of lagging edge chip that went into automobiles. Certain things like that that really became scarce in that moment. But then I would say that maybe awakened a consciousness that we have these long-term scarcities that are strategic in nature. So suddenly people worried about, well, do we have the minerals that we need in order to build out a domestic electric vehicle supply chain? Do we have the industrial capacity to build out things like semiconductors, concerns about the medical supply chain? And these are like long-term strategic questions that aren't just related to sort of that exogenous shock that we got in March 2020

Tracy Alloway (3:13)

Absolutely. And you just mentioned industrial capacity there. It does feel like governments around the world, and certainly the US, have become more active in how they manage some of these concerns. And I don't know if you remember, but back in 2020, I think I framed this as like the chokepoint economy, where people become more concerned about the relative flow of goods and the idea of chokepoints in specific supply chains that sort of cascade through the rest of the economy. That was before we all started talking about the resurgence of industrial policy, but like this is kind of what we're talking about.

Joe Weisenthal (3:51)

And then I think the other really important dimension here, and it fits right into what you're saying, is that we're seeing when it comes to things like industrial policy or reindustrialization or this effort to build up semiconductor capacity, part of it is sort of like pure economics, but it's where you get this real intersection of economics and international security, geopolitical anxiety, because a lot of this stuff is like building up capacity domestically in areas in which possible strategic rivals are independents of ours.

Tracy Alloway (4:22)

Right. And then of course, how do you balance strategic independence with the risk of autarky, right?

Joe Weisenthal (4:28)

That's right.

Tracy Alloway (4:29)

So I am very pleased to say that we're getting back to our circa 2020 roots. We're going to be talking about supply chains and a lot of other interesting things, but we really do have the perfect guest. We are going to be speaking with Daleep Singh. He is of course, the Deputy National Security Advisor for International Economics in the Biden Administration. He's also the Deputy Director of the National Economic Council. He previously worked at Treasury and the New York Fed and Goldman and P-Gym. So truly the perfect Odd Lots guest.