Economic Inequality: Ex-City Trader Exposes Systemic Crisis

[00:00:00]hello I am delighted to be joined by well my cat here who's decided to get involved hi K great always great timing don't stand on the keyboard uh to be joined by the brilliant Gary Stevenson who I haven't interviewed actually for a long time but it would be deranged if I didn't interview him given he is Asing stand the author of an absolute runaway success which is the trading game a confession um I mean actually just to be clear this is the number one it's been twice now the number one best seller on the Sunday Times bestseller list which is an astonishing achievement that means in in layman's terms selling a lot of books that's what that means in layman's terms um and it really has just struck so much of a cord I think there's I think kind of some form of Gary Mania sweeping the nation um and you know I mean it is a it's a book which is it's it's a brilliant piece of literature it's kind of memoir it's politics it's economics it's lots of stuff but it also you know class masculinity Lon addiction um it's just one of these books which I think in generations to come the look you kind of look back at certain books and think you know how what was the moment they were living in you know what kind you and this was that will be this that kind of book where people go you know let's try and understand the insanity of the 2020s unless we wiped ourselves out in a massive nuclear apocalypse and combined effects of the climate emergency anyway hi how you doing good to see you again ow it's been too long yeah has been too long it has been too long right just so people aren't aware um uh of you um because what you do at the moment You've Got This brilliant do make sure everyone you check out his uh YouTube channel arrival YouTube channel no not all eoms exactly Gary's economics um which does what it says on the tin really um and what's so fasing about Gary is it's you've got quite a unique origin story I would say in terms of uh the because you obviously trying to teach people about economics how the economic system in which we live works but how you got there is is quite something so I want to start by because you were we'll talk about how you became a City Bank Trader the most you know successful one but you came from an East London workingclass background just tell talk me talk me through that talk me kind of through your background because just so everyone knows this is key in terms of going from there to the next World in terms of how he understand the world in which we live so just start with how how you you know talk about your background so I grew up in ilford ilford is kind of slightly distant East London Essex suburb um Central Alford where I grew up is one of the cheapest places to live in all of London which is why my parents moved there from South London uh you know small terrorist house on A Street full of small terorist houses um Railway Line running through the backyard I was sharing a little bunk bid and little bedroom with my brother um that kind of Po upbringing basically you know kids playing football in the street um very very immigrant area so I GRE with a lot of British Indians British pakistanis but obviously being in East London we we were sort of we could see when the canary wolf skyscrapers grew up and we had obviously the wealth of London surrounding us um I passed my 11 plus when I was 10 years old so I went off to a grammar school and S of started going to school with much better off kids and I think I I always sort of grew up aware that were poor and waned to make more and sort of seeing these skyscrapers go up on the horizon and thinking yeah I want to get in there I want to make money which which I think is what most kids to be honest from my sort of background want when they're young now I suggesting in terms of how you ended up let's just talk about let's talk this three because um you know some would look at you and go came from working-class background East London made it in the city the system works so just talk about you know in terms of your education and then how you ended up um at LSC yeah and yeah let's just go for kind of like that that kind of surroundings what what it was you know you went from this particular you ended up at LLC and the sorts of people you were surrounded by yeah when I was writing the book I was going to start it when I first started at city and then I went and I read Li poke which is sort of the big classic Finance novel by Michael Lewis and he talks about how he got the job and I thought I have to put in how I got the job because the way I got the job was was so mad basically so I was a very talented math student when I was a kid and I I won a few competitions when I was a kid and I was very good at math I always did very well in my exams and I kind of I went on to study math and economics at lsse um and I thought if I did really well in math I would get a job um it wasn't that simple I got expelled from school when I was 16 for selling drugs and I got kicked out of the grammar school I had to go back to the local comprehensive I studied hard managed to get into lsse so for those who don't know because not everybody knows what LC is lsse L School of Economics is a super prestigious economics School in the center of London and um everyone heard of Oxford in Cambridge but really lsse is basically basically just as good in terms of getting you into the top jobs and it's really the place where very wealthy people from all over the world especially in poor countries people like India China the Middle East Latin America they send their kids to LC to you know study economics for a couple of years go work for Goldman Sachs for a couple years and um then go home and around the country basically and um I got in there and it's a very kind of a crazy Place full of like kids of billionaires from all over the world world but I just thought I'll get my head down I'll do my math and I'll get a job um you get into second year and basically everybody goes absolutely mental totally mental people start wearing suits coming into University in suits they stop get into lectures all all they do is apply for internships 30 internships 40 internships different investment Banks and um I was super confused they start talking like another language cdss nbs's NBO cdos m&a all this stuff I don't even know what to do basically I start talking to my friends they say well you've got to apply for these internships problem is in second you don't have your grades yet right so so basically what you you're applying on what they call CV and cover letter but you know that you're 19 years old all you really have everybody's got straight A's at a level so all you've really got is your extracurriculars and all of these kids have been being bred to have the best extracurriculars like since they were kids they've all like founded some random charity or been head of the junior United Nations or you know played OBO at the Royal Albert Hall this kind this stuff when I was a kid I was fluffing pillows at DFS in in beckton East London retail Park you know so you realized straight away like there's no way basically I'm going to get in and um I was quite depressed I started really focusing on my maths I got kind of recognized basically for being good at math one day in the library kid from Grimsby I can't use the real names in the book we call him Luke Blackwood just turns up I never met him before said are you Gary Stevenson City Bank hires one Trader a year through a card game which is basically a math game you know I heard you're good at math so you should go into this game so this is the trading game it's the it's the um the game which gives the book its title and um I won it basically and I suppose in hindsight one of the reasons why I won it is because this guy Luke had told me the rules but I think there's kind of a beautiful irony that you know I was one of the number one students at LC and we live in a world where if you are the best mass student at LC but you come from a workingclass background the only way to get a job is to cheat in the card game which is what I did and I won and that's how I ended up in the city I mean you ended up there in 2008 just months before essentially nuclear bomb exploded in the Global Financial system and of course talking about the 2008 financial crash we still live in the shadow The Long Dark Shadow of the 2008 financial crash in lots of ways the world partly forged by that autumn in 2008 but you were there a few months before that happened and just tell us you were in something called short-term interest rate Lending MH what what the hell is that and what kind of ends up being significance of that very simply it is it is the trading of short-term loans so it's the borrowing and lending of money for a short period of time um we we would manage anything up to two years to be another desk for longer loans but a lot of what we did was like literally one day loans one week loans one month loans super super short-term loans and this was a very unfashionable area of trading before I went into it so you got to understand back in the sort of 80s and 90s we had this sort of Cockney wide boys going into trading just after the big bang but by the time I turn up in 2008 really it's the same kind of guys who are going into LC so it's it's kids of the international Elites lots of people from wealthy families private schools private universities but they weren't going into sturt trading because it was super unfashionable and um sturt was kind of a bunch of older guys and the kind of young guys who were so like socially awkward that they couldn't get a job in a more popular desk and um I kind of Loved These Guys and and they loved me and they they came in and said if you work on our desk we will let you trade from day one and this is really unusual normally when you go into an investment Bank you're sort of doing training schemes and doing exams and rotating on desk for like two three years you're probably not going to be trading until you're sort 24 25 these guys were like you can trade from day one so I said yes I turned up on this unfashionable desk then 2008 happened Leman happens suddenly nobody in the world has access to Dollars everybody needs dollar loans everybody needs to borrow dollars and none of the long-term lenders are lending the only people who are lending dollars are the short-term lenders of dollars which is basically us and what happens is this desk of kind of unfashionable Traders suddenly becomes unbelievably profitable and it was really it's from my perspective it's so crazy because you go in the world is kind of obviously blowing up all of the credit Traders over there are losing their jobs and all of these sort of old-fashioned unpopular Traders around me are suddenly making millions of dollars and they suddenly and obviously I'm sitting there thinking how do I get me some of this basically I mean that's interesting I mean in terms of just just before I just ask you about the what happens next I just digress in terms of just being in that environment where you just suddenly thrown in the deep end you know as you said working class that from Milford shed a bunk bed R way through the back garden and all of a sudden you're there you're a city Trader surrounded about I mean what was it did you feel imposter syndrome I mean how did you feel did you feel like just like what or what the hell is going on where you know just in terms of having you know all of a sudden this yeah completely because I you know lots of people would find that completely alien world to just thrown in and then off you go well as you know on I'm not really the impostor syndrome type um the thing is you know I was I was the top student LC even though I came came from you know pretty poor background you turn up on the trading floor there's a lot of wealthy people there I always remember when I was in intern one of these guys paid me and my matate MILF to go and paint his flat and his flat was enormous three floors he had no doors had rotating walls and you know he was from private school and you could see these guys were like very well off but they were pretty obviously not Geniuses you know what I mean I remember when I went in I started on my first day on the desk I spoke to a couple of guys and I had no idea what what they were saying and then I spoke to like one of the Juniors and I was like I spoke to JB and I spoke to and I've got no idea what's going on and he said to me don't worry they got no idea what's going on either because this guy behind me he the stupidest guy I've ever met and he makes millions of dollars a year so like don't worry about it and um I think obviously it's very easy to be sort of AED by these wealthy people but you know they weren't Geniuses Owen and I I mean this is so key ter of understanding what happens isn't it because the reason I ask I mean partly it's extremely impos syndrome is extremely common amongst people from workingclass backgrounds ox brid or Elite professions but for you the Cure fit was the emperor has no clothes that's that's what protected you wasn't it it was a b confidence your own abilities clearly Justified yeah it was a case of look at these P they're not actually the incredible Godlike Geniuses maybe they like to think they are yeah well I mean also the world had just blown up right and these guys are supposed to be economists and like nobody had predicted it right so I think they've kind of even the universe what they were known as yeah you can already you can already kind of see like they they didn't really know what was doing it was the banks that blew the world up so I think I mean I think I am quite un unusually willing to sort of accept that the the so-called Geniuses don't know what they're doing and I don't know where that come from um my parents are Mormons I was sort of raised in like almost a religious cult you know so I think I sort of had to accept early on the idea that sometimes big groups of people don't really know what they're doing and I think you spend any time in economics you step back and look at them you realize yeah I think a lot of the top economists a lot of the top Traders there are some good guys in there don't get me wrong but especially back then um it wasn't for the Geniuses so so why not me that was what I was thinking now you made your first million age 24 years old how what the hell happened so you know in 2008 when everything blew up um I wanted to make some money and I just sort of start you know I think it's like quite a typical career trajectory in the sense you come into the place you don't know what's going on on you tried to make some friends to teach you what you're doing and you tried to sort of copy what the people around you were doing and in my first year I I had a very successful first year I made $12 million for the bank and I got paid £400,000 myself which was way way more than I was expecting I just turned 23 um but then in my next year this kind of crazy thing happened the Swiss National Bank cut its interest rate to minus 4 and a half% in a really weird way I lost a ton of money and um it sort of got me realizing you can't just sort copy way to success and so by then we're in the beginning of 2011 I've been a Trader for a couple of years you know I spoke about how the 2008 crisis wasn't predicted what I think is really even more interesting is how the post 2008 period was really horrendously predicted so in 2008 because rates were cut so quickly almost everybody thought we'd get a really rapid recovery it's really similar to what we saw during Co 2020 2021 when rates were cut really quickly and everybody was saying we're going to have a roaring 20s we're going to have a v-shaped recovery there's a load of pent up demand was a really similar story back then everybody was like we're gonna have a massive recovery in 2009 2009 obviously that didn't happen everybody was saying okay well we're going to have the mass recovery in 2010 2010 it didn't happen we're at the beginning of 2011 now and everybody's saying we're going to have a massive recovery again so here's me beginning of 20 I'm 24 now and I've basically all I've witnessed is everybody be wrong about everything for my entire career which is three years now which is quite a long time and I sort of started to think you know this is open these guys don't know what they're doing and I I maintain that to this day most economists and most Traders they're really misreading the big economic picture and I wanted to understand why so the theory is when you cut interest rates ordinary people like the guys watching this now should go out and spend money because there's no point saving it's easy to borrow you should spend businesses should spend but it didn't happen that whole post 2008 period it just didn't happen and um I was lucky enough to work with um this really amazingly good Trader scouser who I've called in the book Billy didn't come from any very working-class background work worked his way out from being a Casher at Halifax and I spoke to him about this and um my instinct was to go back to textbooks and he said listen mate you're not a kid no more you're not going to find no answers textbooks if you want to know about the economy go home and ask your mom about her financial situation walk down the High Street look at what shops are closing down what shops are opening up look at the advertisements on the chbe right you ask your friends and your friends families about their financial situations basically the economy is the real world and you have to go out and engage in it so so I just did a simple thing you go back and you start trying to engage with people and you ask ask them why don't you spend more money why don't you spend more money and you know the people watching will know what the answer was you know 9 out of 10 people said Gary I don't have any more money I'm spending everything that I've got and then I wasn't happy with that so I sort of dug into their financial situation and what I saw then I was in my early 20s then a generation of parents who owned their own property and a younger generation My Generation who in most cases will never own property so what you have there is families their long-term wealth trajectory is down towards zero and it makes no sense to ask these guys why are you not spending more money right they're on the way down they're losing their assets they're going into de this was the beginning of 2011 and around about that time I got called into a meeting by one of City bank's best Economist the guy who I did actually respect and he went through the financial situation of all the world's major governments so Italy Spain Portugal Greece Ireland but also the UK the US Japan so some people might not remember 2011 was another massive financial crisis where basically we found out that a lot of the world's major governments were in some ways effectively B rupt basically the governments were doing the same thing that the families were doing spending more than their income going into debt selling off their assets and I come out of this meeting what really struck me was number one the similarity between the families and the governments and number two the impossibility of it because it's not possible for all of us to lose our assets at the same time and it's not possible for all of us to go into debt at the same time somebody has to get the assets and somebody has to be owed the debt right and this was rting around in my head and I'm sitting on the trading floor you know surrounded by millionaires I kind of have this penny drop moment where I realize this is it this is the problem the wealth is Flowing from the middle class from the government to the rich the next step after that is well if governments can't run a balanced budget when they're not in massive debt to the rich well what happens when they are in massive debt to the rich and if ordinary families can't run a balance budget when they own their own homes what happens when they don't own their own homes and I realized immediately this would SP out of control and get worse and worse and worse and I think what I say in the book is basically economists were then and I think still are now diagnosing a terminal cancer as a series of seasonal colds there is a fundamental structural crisis here which is we are bankrupting our middle class we're bankrupting our governments that wealth is going to the rich it will never come back and the economy will never recover and I I put a massive bet on the interest rates would stay zero for the next sort of three years which was nobody expected that the time and by the end of the year 2011 I was City bank's most profitable Trader in the world on the back of this phenomenally pessimistic bet and I've I've kind of been riding this very simple understanding ever since that there is a structural crisis of inequality it is not a recession it is a permanent worsen in crisis I mean just on that talk because obviously that's what I really hugely want to talk about quanti aming at the time because this was you know where the governments they're buying up bonds to increase the money supply yeah and that you know that was a vast in theory that was a huge amount of money going into the economy that's what that's how it was seen that that would be one of the key so what the hell happened with quantitative EO in that period because that is something you understood basically because you were there in what I suppose we call the real economy you were looking you know you were there you weren't off you weren't from some privileged background where you're thinking about what are my friends in the skis Chalet of Switzerland thinking and doing and all the rest of it which is what a lot of your peers would have been doing so what was going on quantitative easing so in quantitative easing the Central Bank it it buys government bonds so let's break that down a little bit the government is in debt okay all the world's governments are in debt um especially now especially since Co government debt is very large um what we often don't realize is they are in debt to somebody the total government debt if we if we add if we include the individuals who hold the government debt is is always zero total debt is always zero it's not possible to be in debt to nobody so if the government is in debt somebody is owed debt and of course some of that might be in pensions of regular people but in many cases is the the large Lion Share is held by the rich it's held by Rich of people Central Bank buys that debt back off them and gives them cash instead so now what you have is a load of rich people with a load of cash okay and of course you know in many ways you could you could argue okay this should be good for the economy because rich people have got a load of cash but in reality if you give rich people a bunch of cash what do they do they buy the assets they buy the assets and and you know rich people as a whole if they're buying assets then somebody needs to be selling assets and who are the weak holders of assets well it's the government and the middle class so what you see you give the rich people a bunch of cash all they do is they buy the assets of the middle class they buy the assets of government and what you then see is a massively indebted government and you see middle class losing their homes or middle class going into debt I think it's so so similar to what I was raving about in 2020 at the beginning of covid when we saw governments running massive deficits going into the economy and I'm not against those deficits I'm not even necessarily against QE but if you're going to pour a time money into the economy somebody somewhere has to say who is going to end up benefiting from this money who are the net benefits and you know I would encourage anyone who hasn't watched it to watch the very first video on my channel um which is called how the rich get richer from covid-19 which went out in June 2020 saying listen this enormous amount of money that's being poured in I'm not against it but it will end up with the richest people in society and if you give money to the richest people in society they will buy your stuff you know and it's you know distribution matters you know so I think QE same as Government Co deficit there's a massive blind spot in the minds of economists and economic media in terms of talking about who are the winners and who are the losers because you know if we stand sit here now we know now with certainty that the government spent 800 billion pound deficit since covid somebody's accumulated 800 billion pound well that's 16,000 per adult so if it's not you if you're out there not see 16,000 rich or someone else has got it all the statistics show us with the rich right we knew that would happen in advance so if I was to say to you now imagine we pause the economy which is effectively what we did in covid and during that pause we enormously increase wealth in equality and then we unpause the economy what do you think will happen to living standards the obvious answer is living standards for the rich will increase and living standards for the rest will decrease yeah which is exactly what happened but nobody spoke about it because nobody's talking about inequality and it was it's what drives me mad is as you say we have seen this film before we've made this exact same mistake in 2008 which is yes you have to pour this money in you have to pour this money in but you should also ask the question of how will it affect the distribution because both 2008 and covid were managed systemically in such a way that they massively increased the wealth and the cash Holdings of the richest they massively increased inequality and they immediately to affording living standards and it's it's wild to me that economists and well I would say Traders though Traders don't speak publicly it wild to me that we do not speak more about the distributional effects because now we're left in a situation where the government is in a massive amount of debt all of that debt is held by the richest and all of the statistics show us the last five years have been the biggest increase ever in the wealth of millionaires and billionaires so if if we don't want to close the government down we basically have the tax the rich but because nobody talks about the increased wealth of of the rich we're left in a situation where many people think we have basically no choice but to end the welfare state and that is what happens if you bankrupt yourself to the rich and pretend you can't tax the rich so I think we have to talk about distribution I realized that in 2011 we made the mistake then we're making the mistake now and the reason why I do what I do now the reason why I wrote the book is because I think the only chance we have is to get ordinary people out there realizing that unless you reverse those increases in inequality living standard fools are irreversible but they are reversible if we deal with inequality th this is what's so striky about your thesis because a lot of I'm on the left the argument Gates inequality often seems quite a moral argument and that's often been quite easy for the right to take on I mean it's it's fascinating actually um well I mean one example under the new labor period Peter mandon once infamously said intensely relaxed about people getting Filthy Rich so long as they pay their taxes don't practice tax avoidance with rampant then and but Margaret thaten her last prime minister's questions in 1990 so she's just basically being removed and that was largely in the midst of things like the pole tax um and internal skins over over Europe but the PO tax movement I think was instrumental but she she um she gets this question from Simon Hughes who was then you know in what became the liberal Democrats um or maybe they'd become the LI Dem by then taking on the increase in equality in her Reign and and she goes you'd rather that it was and she starts gesturing with her hand she you'd rather that you know if the poor you know people the rich are less rich but the poor will be poorer but then you'll be happy because it's less inequality so she's like you prefer it to be like this with the PO at bottom there rather than this so the argument she was making and has been the point about that why don't you why do you care about people becoming rich because everybody else will also become richer they won't be as rich as they're super rich fine but their living standards will also rise because huge Prospect it will be created because those rich people are getting rich because they're taking risks we've freed them from the dead weight of the state and they're making a shedload but you will benefit and the whole point of your thesis is and you you back it up by the fact you made a packet out of it is that isn't true that's Mantra isn't true it won't lift all boats just because though it it does the opposite and that's how you made your money yeah I mean I think I'm I'm in quite a sort of fortunate position to ically right and it weirdly becomes because I don't consider myself a political person you know I consider myself a very good Economist I've got a very good track record you know I was City bank's top Trader in the world you can go and you can look at the predictions I made in 2020 they all came true you can go at the predictions I made in December last year January this year they've all come true um I'm a good Trader and I'm good at making predictions because I understand this one simple thing which is the distribution matters and look if you've got high inequality even growing inequality in a rapidly growing economy and you know the rich are creating a a whole load of wealth and the you know you know for example early the Early USA when sort of the rich are creating this wealth but if you're poor you can just go and find go west and find more land you know maybe it works but you know once you reach this kind of developed saturated low growth economy then where does the 5% compound grow of the rich go they basically end up with no choice but to eat the middle class not because they're evil they have no choice but to do this and I think the most amazing thing of the last s 20 years is we see this falling wealth of governments that's extremely visible if you look at the statistics we see this falling wealth of the middle class the property middle class we see that disappearing and we see the exploding wealth of the Rich and we don't connect the two things it's sort of you see it's like if one bab is draining of water and this other bab is filling up with a we just think these two things are completely separate phenomenons but um well there was really interesting paper an academic paper fleshed out in 2021 called indebted demand three heavyweight economists Princeton Harvard Chicago yeah they argued income inequality and financial regulation LED in debted households demand households spend less because they have high levels of debt Rich households have higher savings from the biggest slice of the nation's wealth that they've been handed uh so they noted that debt owned by household and government had increased Almost 100% points of GDP the economy gross domestic product since 1980 so with poorer households landed with more debt the debt payments mean a transfer of money from poor borrower to richer saver and they say when demand is insufficiently indebted the economy gets stuck in a debt driven liquidity trap uh or debt trap so that's that's the point you're making isn't it this is what you were talking for years and years and years and there you get then you know these top academics putting fleshing out exactly what you were predicting for years that was the basis of why you made that money yeah and I've got a lot of respect for these guys that's me and and Sufi yeah and um Ludwick stra working with them no I've got a lot of respect for these academics um most the thing you need to understand is what in universities economics departments if you study economics uh your undergrad Masters the mainstream macro models you will learn which you'll spend 90% of your macro time on uh don't include any inequality you never look at inequality so economists have kind of been trained to think about this and these AC these academics have been sort of broad minded enough to think about it I've got a lot of respect for them um but look at it doesn't work it doesn't work you can see the loss of wealth of the middle class and I think we're so naive about distribution during covid the economy was literally paused literally paused and you give a ton of money to the rich you know how naive are you can you be to think that giving an enormous amount of money to one group you haven't created any new resources that that will not disadvantage other groups I think um but this is sort of I think in a sense what you have here is kind of the inevitable endpoint of these kind of thatcherite arguments that you make which is there's no such thing in society we are all individuals we all have to sort of tend our own Gardens that has allowed a small group of families to become extremely powerful extremely wealthy our kids are competing with their kids for assets okay so Rishi sunak is worth of according to the Sunday time 700 million pound father and or is much much much richer if you have 700 million P you will make a passive income of something like 3040 million pound a year nearly a million pounds a week what are you going to do with a million pounds passive income a week it's impossible not to buy the rest of the assets you know and our kids who don't make a million pounds a week are competing with rishy sunak kids for ownership of the property listen rishy sunak kids can't live in all the properties but they can own all the properties either via direct ownership or or through the mortgages you can't compete with these guys you cannot compete with these guys and I think this a problem we have I think is these ideas these stur ideas that you shouldn't look at the rich you shouldn't you shouldn't think about the rich you should just focus on yourself you should focus on yourself you're playing the same game as them and you are competing for the same assets right they will win that game you cannot compete with guys in a million pound a weak passive income you cannot we're in a situation here the way I see it you're basically being invaded by an army of people who are much more powerful than you but there's many more of you than there is of them and you're saying listen don't worry about the Army tend your own garden listen tending your own garden does not work when you're being invaded the rich will take everything the rich will and you're seeing in front of your eyes how can we have this situation in the last five years where normal living standards collapse wealth of the rich increases that money comes from government and nobody connects the two things that the whole thing that I'm doing with the YouTube and with the book is trying to explain to Ordinary People the reason you are increasingly poor is because of growing wealth inequality and this is not a moralistic argument this is an argument that I use to make millions of pounds trading the markets to make correct predictions again and again if you don't believe me read the book look at the predictions the proof is there which is why you're you're so unique because there are you know there are the dissident economists and all the rest of it making arguments and so on but you're someone who actually your bank balance literally exploded because you you made the right calls I mean just in terms of LZ Tross was right wasn't she that's just hear me out the voice yeah this well in terms of when she said she had an analysis where she said growth has been stagnant since the 1980s and though she didn't seem to understand that which is why there's a pretty strong C out there that um the 1980s was when we had the sorts of policy she pursued and tried to pursue um obviously in and and caused the crisis back in uh whenever it was 2020 2022 it's been a long long few years um in that you know the best growth that Britain had was in the 1960s postwar growth on average um in the 198s which you know had the same average GDP growth as the 1970s which is seen as one with the sck around of Europe but it was less equitably distributed the 90s was even weaker average growth yet the u0s even weaker growth yet the 2010s about the same and well this decade's not not going that well is it so I mean it's it's like I mean we're locked into both low stagnant growth which is inequitably distributed the economic model is BST isn't it it clearly is just Bost I mean you say that well I did a m at Oxford 17 to 19 you know I actually people won't believe this I worked quite hard not to use my face and my name on this campaign because I didn't want to be out there telling the guardian I'm a millionaire you know doesn't make life easy on Tinder but I was at Oxford for two years asking these professors why do you not talk about what's happening to living standards and what's happening in the real economy and how people can't afford housing how people can't afford jobs and these guys said to me what do you mean the economy is good the economy is good you know you're sitting in a wood panel hall wearing a Bowe in a cape with a bunch of guys who are millionaires saying the economy is good and I think a big part of the problem is a crisis of inequality looks great from the perspective of the rich but we are in a situation now you and I both work in the media you know you will see media academics Central Banking high levels are dominated by people who are rich and from Rich families right so you you reach a situation where ordinary people can sit Ordinary People in many many cases are legitimately struggling to simultaneously feed their kids and turn the heat in on but everyone in the debate is seeing their wealth explode and and because they only look at averages you know the averages are showing okay growth is slow but positive inflation is coming down they think that life is good but if you actually look at what's happening to different groups in society the rich are exploding and Ordinary People are are blowing up so for for you and me and I suspect for many of the people in ordinary Financial situations who who are watching and listening to this they can see the economy is collapsing but you know maybe you experienced the same thing you talk to people in high levels of Finance high levels of Economics they think things are great because things for them are great I mean this is the point I mean it's such daming and dond of the whole economics profession what you're talking about here I mean you mentioned because you you went you did you went to Oxford and did a master's degree in economics um and you you you you ask the senior economic Economist there about their view about why people weren't spending and you got this py response an exog exogenous shock exogenous shock yeah exogenous shock to consumption savings preference so what that means in practice something not in our economic model so basically they couldn't they were not able to explain why people were not spending they had no explanation so they came up with that when rather than look at for example inequality and that says a lot doesn't it about the economics profession because they're not trained to talk they've been trained not to talk about that and there they up with something I went to this guy's office and I said to him you know this exogenous shock to consumption savings preferences that just meaning it's a meaningless phrase it just means something people won't understand that and it's best because I think if you understand it you literally become stupider it literally just means something happened you might as well say God did it right and I said to him if that's what you've come down to why don't you just go and ask people why do you not just go and ask people why don't you spend more money and he literally said to me without a trace of irony that is not what we do simple as that that is not what we do and I think some people think that some people expect me to be like furious at the bankers furious at the Traders you read my book you'll see that a few unpleasant Traders going around these guys never pretended to be the good guys these guys were never supposed to be the good guys these academics they drive me mad their lack of connection their lack of care the lack of curiosity and the lack of empathy for what's happening to Ordinary People just of course there are some good guys you know you mentioned this paper by Atif and me and it's interesting isn't it because what's happened to the economics Prof um sorry Academy is a lot of those ended up in places like geography departments and elsewhere you got this overrunning of uh the economics departments in universities by people of a similar mentality and if you want dissident views about economics you basically have to go to a different department yeah I mean these these huge walls of matter have been built now such that unless you are really like a very very good mathematician and also a very patient mathematician because you have to end draw a lot of boring memorization to go far in economics it's just not accessible to you you know to be honest we reach situation where really 95% of people are basically not allowed to study economics at a high level because they don't have a certain level of of mathematical ability and I think that's ridiculous um but you know what I would like to see is a situation you know I I wandered on the trading floor as a kid from ilford and within like three years I was famous because I was making good predictions you know but in Academia my ability to out predict these guys is meaningless they don't even care I think I think one of the most amazing things I've witnessed in my life is could probably still today walk into any one of those skyscrapers I'm talking to you from close to Canary Warf get paid a million quid a year I would go and work with these professors for free I would go and work with the government for free and they're not interested and I think that tells you it's such a dam indictment of the way that we have created our economics profession you know when I talk in the book about one of the last word of my acknowledgements is I would like to thank God or whoever it is who made it so easy to bet on terrible things and so difficult to stop them you know why is it that kids like me from poor backgrounds who have excellent records of predicting the economy are worth so much money to the banks and of zero interest to government it makes no sense and but what it is is the rich will pay people like me to manage their money but governments all they care about is winning the next election you know you look richy Zak is worth 700 million quid David camon made 10 million quid within a year of leaving office Tony Blair is worth like a 100 million quid you know I would like to ask a question to to the British people and the people of the world watching this right if the people whose job it is to protect you and to protect the economy are definitely not going to protect the economy whose job is it to protect the economy because I know people out there will be thinking look I'm just an ordinary guy I'm struggling to get by this is not my job I'm sorry the fire brigade is not coming the job the people whose job is to fix this I'm sorry but they're not going to fix this and I know you have your gripes with labor and maybe we'll get our time to talk about it they're not going to fix it that's what I just that's the last part I want to talk to you about obviously terms what happens next so the conservative government is is dead in the water there's going to be a general election and the Tories are facing a apocalyptic electoral situation there will be a resounding labor situation which is why I think personally people should vote according to their conscience because they don't have to vote for the labor party and the Labour party will still win uh so they should vote green or independent anyway just plug that but the point just in terms of what labor are arguing though so labor cont to K D's leadership uh pitch aren going to increase taxes is on anyone who's doing well economically prospering they're not getting they ruled that out they've even suggested they might cut taxes yeah on on those at the top um and they're put they they say they're they're throwing everything at growth that basically what will happen is um they'll come to power and they I mean they had a plan in theory for growth before 28 billion pound a year um investment plan green investment plan but they they trashed it um so now they're talking about house building that's their big thing they'll they'll reform plan laws um and that will cause a big um explosion of houses being built and that will generate growth I think that's basically their thesis so what's your view on that because they say they that one of their commitments is they'll have the fast Britain will have the fastest growth of the G7 countries those are the key industrialized countries for those who don't know what's your thoughts on what they what labor are saying and what and what you think where you think the economy is headed listen I'm not against growth I think economic growth is is generally good in almost all cases not all cases you know economic growth is good if you can get it I think we've reached this kind of ridiculous point in society where economic growth has kind of become a code word for I am an idiot with no plant it's become a mantra it's like the M of our days if we're just going to we're going to hope our way out of it listen yeah this is like I walk into the doctor's office saying doctor I've got cancer and he says have you tried growing you know it's it's listen it's not going this problem is so severe now the growth in economic inequality is so severe now it will spiral out of control and you know my concern is we could get the economic growth you know but in a capitalist system and I don't consider myself an antic capitalist the growth will work for the people who have the money you know so what you will get if you build a a tons of houses in London I'm not against house building right if you build a ton of houses in an extremely unequal City you will build a super luxury Center surrounded by slums go just go to any unequal City you know go to South pal you know go to Manila 25 million people in Manila they built a lot of houses you know I me did it make life better you know but I don't you know I don't personally know these guys in labor I've got no I've got no grudge against them my concern is we have a massive problem of inequality that no one is addressing and we have cental parties in power in many countries all over the world in Germany in Spain you know arguably in America living standards are falling in all of those countries because they're not dealing with inequality the problem is bigger than labor the problem is bigger than K stama the problem is a broad problem of understanding you need to deal with the growing inequality if you don't you will not improve living standards and my big fear in this country is that labor will win the election they will not do anything to stop inequality from growing living standards will continue to fall and a general public who has already lost faith in the center right we'll lose faith in the center left and in 10 years we'll be in fascism that is my concern that's genu I mean we can see just so we're clear I mean it's not Fantastical that is it given Donald Trump which I think certainly his movement is heading in the fascist direction is in has a very good chance of winning the presidential election so that's the biggest the superpower um in France the national front sorry the national R now whatever called um Marine leupen has every chance of winning the next presidential election Austria the far right ahead in Germany where you may mention a government of the sort of K armor Vibe politics um that that government is chronically unpopular and the afd um the far right party there ahead of for example the social Democrats in many polls yeah um we can see in place like Hungary where they're already power essentially so in Italy they have you know quazi farri right government yeah Portugal the far right just surged I mean it's not looking good so you think basically in terms of where the is heading as things stand you just think basically this is a embedded into the model because of deal with inequality therefore in living standards are just going to keep on stagnating there's no way around that problem Oh and I wish they would stagnate they're collapsing living standards are collapsing for all and you cannot allow living standards to get worse and worse and worse year after year and keep promising people Jam tomorrow you know they're not idiots they're not idiots people increasingly know the ship is sinking they're losing faith in political parties who continually promis growth and all they deliver is falling living standards they're losing faith in the media which keeps telling them it's one two years of recession when people can clearly see it 20 years of continually worsing living standards and they want an alternative they they and and they have every right to demand an alternative they have every right to demand an alternative because they can see the ship is sinking more and more people can see that and they are demanding an alternative and it's I think it was Milton fredman who said in times of Crisis the alternative will be chosen from the ideas lying around at the top time and everybody can see what the loudest and most popular alternative voice is which is the problem is immigrants the problem is foreigners that is the loudest alternative voice these guys will increasingly get power it will not improve living standards because they're not dealing with the fundamental problem of inequality and then they will say the problem is we didn't go far enough we need to go further and people like you and I need to be providing an alternative that says no the way to improve the living standards is to decrease inequality it is to tax the rich higher and to tax you ordinary working people less provide better services and allowed you to keep more of your money but that voice is not there you know I see a lot of the left is not providing this alternative you know if we do not provide listen politics Will Change massively because living standards are collapsing people demand an alternative you know the party in Germany is literally called alternative for Germany people want an alternative the center is collapsing all around the world whoever is the loudest alternative voice will win and you and I both know that at this point the left is nowhere near as loud as this anti-immigrant movement on the right and we need to have a voice that says we can improve your living standards and the only way we can do that is by reducing inequality and you know labor will win and they will not succeed in improving living standards in fact living standards will continue to fall we need to address that I believe the only way to do it is to at the very least stop inequality from rising and you know I would encourage yourself I would encourage the listeners to take this message home with you think about whether you want to believe it and if you do you know amplify my voice and share it with your friends and and your family and say listen there is an alternative here which is reducing inequality taxing the rich taxing the billionaires cutting our taxes I think that's our only chance I mean just finally on that because I that's what I want kind of leave on I mean that point you made I think also really interesting ter of what we know is cost of living crisis because in the four years before the financial crash of 2008 under a labor government um the incomes of the bottom half to stagnate and of the bottom third they actually began to decline 2004 to 2008 because I think obviously we understandably see the cost of living crisis is something which is kind of a post crash austerity kind of period but that's not it's not true the the seeds were were swn before that so it's obviously embedd in the labor in the economic model and labor was in power when it began so a really important point just funny I mean that's the point I suppose a lot of people just feel a bit despair to be honest they they can see look they I think anyone listening to this this guy knows exactly what he's talking about he's been Vindicated in in horrendous ways for um given what that means for everyone but it's it's you know we've got now basically two L Decades of living standards um yeah it's an astonish historically unprecedented the longest squeeze in living standards for working people since the Battle of waterl yeah yeah so but people think well what the hell do we do because you know because they can see all the the Trump demagogues and all the rest of it waiting in the wings yeah people feel a bit powerless so you know how do we get this message across what do we how do we do it in the way you so eloquently do and do you check out the his YouTube tan because he does explain his Concepts and such yeah yeah yeah let's let's give people something to be hopeful about because I know my message can be depressing right um a couple of years ago I I work with this group called patriotic millionaires I didn't make make the name um and they sent me up to uh North Yorkshire to Rich senet constituency when he was still Chancellor to go to a food bank and ask people how do you feel about having the richest ever MP as your Chancellor just totally randomly happened that a couple couple of days before I went up there Russia invaded Ukraine and it totally sort of you know derailed what I was doing because I went to the food bank and it was full of people um like putting sorting food and warm clothes and medicine and toys into all these different bags and they were they were sorting them chucking them into Vans and they were going to drive them themselves to Ukraine it's a it's like a military Barrack City so theyve got like Vans and drivers and um it kind of you know it messed up what I was going to do because I wanted to go and talk to Food Bank users you know and in the end it become like a sort of community Hub so you know I'm there sort of helping Chuck into bags and being force fed about six cups of Yorks tea and um I get talking to the people and um I'm asking how' you know about this stuff and the people who were there chucking this stuff into bags with the food bank users these are the guys the food bank users the the poorest people in this country when they sensed that there were people in need a thousand miles away they St forward to help and um listen you know I see a lot of people on this country and talk down on this country and I would never turn around and say this is a perfect country or the best country in the world but it's my country and you go to a place like this and you see that there are good people in this country who are willing to step forward and work for something better and I think if we give them something to work towards that is hopeful that promises a better life they will come and support us and it's the job of people like you and I O and then people listening to provide that story to provide that narrative people want something new people want something different and it doesn't have to be negative doesn't have to be hopeful and I think if we can tell that story then they will come and back us and that's why I do the work that I do and I'm sure that's why you do the work that you do and I hope people will support me and you know you know if you can't afford to buy the book you know the YouTube is there it's for free it's for free it's out there and you know we can make it better we can make it better I believe that I wouldn't you know I gave up a lot of money to do this um because I think we can so so I would encourage everybody out there to you know pull your socks up it's going to be hard it's going to be a long battle but if enough people do it we can win it Amen brother and that is the the lesson throughout history when sufficient numbers use their Collective power together um they can force change and that's how we wanton all our rights and freedoms and periled as they are uh but there is more of us than there is of them I think it's a really important point and um it's a beautiful book everyone do make sure if you can the trading game a confession um if you can't afford it do wait for paperback obviously but it's a brilliant brilliant book do check out Gary's economics on YouTube where he you can hear he's a fantastic Communicator one of the most important voices we have right now um and we need desperately the voices like Gary if any could uh clone him not clone him because the same guys say just lots of different people like Gary in did different ways that's what we need um and there are brilliant people coming forward and being inspired by people like Gary which is also what need so I hope people listen to this as well and think feel inspired to speak out and use your voices and your platforms as best you can do make sure you get the training game a confession um it's available all over the place guys economics uh please like And subscribe on my own channel if you haven't um leave your comments um even the abusive ones I read um and listen on the podcast if you're not already if you are H but thank you very much to guy cheers thanks so keep doing what you're doing yeah as well buddy