Why Being Unpopular is Expensive for Countries

You're pointing to this weird fundamental tension within a central bank, which is that it's a fundamentally undemocratic institution.

We do not elect them.

Yeah.

And that's all on purpose because we want them.

We need them to be not political.

Exactly.

But at the same time...

When it's also inherently political, too.

And they try.

They do a great job very often of not being political.

And it's hard to necessarily measure.

You know, I think a lot of people are watching Kevin Warsh and being like, how is he going to act? And what does that mean for his disposition as a central banker and his adherence to independence or not? And it's weird to want this institution to be unaccountable to the public that it ostensibly serves.

Yeah.

And like it controls the money supply that we all sort of rely on.

Right.

So I think the biggest source of tension for me is we say it's apolitical, but any decision it makes will affect some people where they benefit.

Right.

And it will affect some people where they lose.

So the big question with 2008 is they did a lot to rescue people, to protect assets where they could, to ensure losses were minimized.

But that ultimately helps people who have assets.

Yeah.

And now we see these huge generational sort of shifts in the economy, like millennials are the first generation to have a harder time acquiring these same assets that were so protected.

And obviously, they had none in 2008 for the most part.

But if we think about the sort of uneven distribution of the effects of any policy, there's always going to be winners and losers.

Right.