President Bill Clinton’s electoral slogan "It’s the Economy, Stupid!" has hardly been more popular than now: according to exit polls, the economy was the number 1 reason for voters to support Donald J. Trump. But how can that be the case when the US economy is – according to "The Economist" – "the envy of the world"? Was Bidenomics as bad as its reputation? And how much can presidents actually influence the course of the economy?

Let’s ask an economist: Dr. Stefan Legge will help us separate facts from (electoral) fiction. He is an award-winning teacher and lecturer who is currently head of tax and trade policy at the Institute of Law and Economics (ILE-HSG).

"Grüezi Amerika. Views from the Sister Republic" A University of St.Gallen Podcast by Claudia Brühwiler. Grüezi mitenand. Welcome to a new episode with views from the Sister Republic.

Today's episode is a conversation about the state of America's economy. Who better to join me for this than Dr. Stefan Legge?

Stefan is head of Tax and Trade Policy as well as Vice Director of the Institute for Law and Economics here at the University of St. Gallen. He also serves as Global Future Council Fellow at the World Economic Forum, and he is a founding partner at Trend Econ.

He got his bachelor's in a place called Mannheim. Very suspicious, but. Well, he went for his master's and his Ph.D. to St. Gallen and spent ample time in the U.S.

first as an exchange student in San Diego, then as a visiting doctoral student at Berkeley and Princeton. Stefan, was San Diego your first US Experience?

Yes, it was.

So what did you like best about it?

I very quickly learned that in the United States, the contrasts are very sharp. Very quickly, in just a matter of minutes, things can change from being amazing to being awful. And I was all excited to fly to the United States.

And my flight was delayed and everything was arranged, but then we had to rearrange everything. So, yeah, you learn quickly that in the United States, things can be amazing, but they can also be awful.

So you learn to be quick on your feet, in other words. Right?

Yes, you have to adapt. Every single day can be very different. You thought you planned it all. Everything is arranged.

You have a meeting with a famous professor, and then the professor just doesn't show up. And what do you do? Do? Well, you wait a few hours and then you send a nice email. Not a reminder, just an email.

Forgetting about the fact that you had a meeting scheduled, you just arrange. You have to find a way to get what you want.

So we already have two anecdotes, one from air travel, one from academic life. Could you share another anecdote where you felt, well, this is very much America and now I understand this country better?

Well, I already mentioned the sharp contrast, and I've been to a number of US Universities. In addition to the ones that you mentioned, I've also spent some time at other places. And I remember, for example, the University of Chicago.

If you go to the economics department of the University of Chicago, they have an entire room with all the medals and prestigious awards that the faculty won. It's a little bit like FC Barcelona. It's crazy to see all of the awards that they won.

But you probably know that the University of Chicago is in the south of Chicago.

And when I wanted to go there, some of my colleagues told me, you might have a hard time finding a cab driver taking you there because it's so dangerous. And so I went by bus.

And every single time that I took the public transport in the us Whether that is in Chicago to the University of Chicago or whether that is later back to the airport, where you see a person almost dying in the train begging for money. That's the difference. That's the other side of the United States. And you mentioned the fact that I was at Berkeley.

Yeah, when I was in Berkeley, it's only half an hour, an hour to San Francisco. So I was frequently in San Francisco. I spent some time at Stanford University. And it's amazing, it's unbelievable what you see there.

But I was poor, so I took what is called the Bay Area Rapid Transport.

The bart.

The bart. It's awful, but it's not.

I can confirm it's awful.

It's not as awful if you compare it to taking the bus. And of course, I was a doctoral student, and so I went to San Francisco also in the evening to have a few drinks and meet friends.

And then after midnight, there is no more BART. There's only the bus. And the bus has 24 stops, and it goes right through Oakland. And you see a very different kind of America.

So I would always encourage people to go to the most amazing companies or universities, but take the public transport to see the other half of the country.

Or take your car and keep your doors locked, depending on where you're going. I think we're already in the midst of the subject because we've covered already the big contrast that we see in the United States.

And that was what many summed up the election to have been about. The economy, stupid. But how bad is the Biden economy really, from an economist's point of view.

It depends a little bit on which economist you ask.

The amazing thing is that if you look at the poll numbers, and you can, for example, look at the University of Michigan poll of consumer satisfaction and consumer confidence, you already see that the election of Donald Trump has led to A noticeable shift. That is the Republicans thought for years when Biden was in the White House that the economy was terrible.

And of course, if you get your news from Fox News, then you think the American economy is in big trouble. If you ask the economist from the Democratic side, most top economist, I would say vote Democratic for the Democratic Party.

Then of course the economy is doing reasonably well.

And so if you ask me, I'm neither Republican nor Democrat, but I can look at the data and the economy is remarkably strong, with one caveat, and that is it's benefiting a lot from fiscal and monetary policy.

And people at the end of their supermarket trip feel that they got ripped off and that they can't really afford life anymore because they, they don't really care, the voters, about the data that you're looking at, but they're looking at the price tags. So how come that the economy is doing pretty well from a neutral perspective, but that people felt that it was failing them?

And not just Republican voters who were glued to Fox News, which is actually not that many. At the end of the day, a lot less people watch cable news than we often give Fox News credit for.

But that also Democratic voters is felt that, well, the economy is the key issue. How come that economists look at the data and feel confident about America, but the Americans themselves do not share that confidence?

Well, two answers to that. The first one is always compared to what?

And the second is, well, you have to look at a lot of data points to tell a story about how a country is doing. So compared to what? When the Americans complain about the economy and they complain about their standard of living. You have to put that into context.

The United States is by far the richest country of any populous nation in the world. You cannot compare it to Switzerland. Yes, Switzerland is richer, but Switzerland is a tiny country of 9 million people.

The United States is more than 300 million people. So you have to compare the United States to Japan. Japan used to be richer, is now at about 40% of the income level.

So the Japanese are really poor compared to the Americans. And if you look at European countries are not doing so much better compared to Japan. Somewhat better, yes, but a lot poorer than the United States.

So the level, the average level, the average GDP per capita in the United States is far higher than what you would see in Europe or in Japan. However, first of all, people take that for granted. We know that from Switzerland. If you ask 100 people on the street here in St.

Gallen, how's the country doing, you wouldn't get 95% saying the country is doing great. Although if you look at the country and you compare it to the rest of the world, where do people have a better life than in Switzerland?

So people get used to a certain standard. That's the first part. And the second part is, indeed, there's huge inequality in the United States. Incredible inequality.

And so when the average goes up, it doesn't mean that the median goes up. It doesn't mean that the bottom 20, 30, 40% have a better life. And if you mention inflation, you mentioned the prices in the supermarket.

Yeah, who cares about those prices? Certainly not. If you make 150,000 or more, then that's not so much an issue.

But for certain people, food prices matter a great deal, and they don't necessarily show up so much in the aggregate statistics when we just talk about GDP and GDP growth.

But what could the President have done differently? To what extent do American presidents actually influence the way of the economy? Because everyone has been talking about it.

Both candidates had to bring up their plans, et cetera. But the question at the end of the day is, what do these plans really matter?

Well, the inflation you see in the United States is driven by a lot of factors, including the development in a lot of other countries. And what we had over the last decades, and it's now probably coming to an end, is an awful lot of cheap products coming from China.

And of course, that means prices in the United States stay relatively low with COVID and a lot of disruptions in supply chains with the new trade policies that started, not so much just with Trump. Trump started to talk a lot more about it. But even Barack Obama was to some extent protectionist. Call it a polite protectionism.

I like that phrase. I'll remember that. Polite protectionism.

Don't quote me. Quote Jim Backers.

Okay, I'll do that.

He came up with it in an article for Cato. But that protectionism certainly plays a role.

And the developments in China and the fact that we have no good alternative to China, that means some of the goods get more expensive. There's not so much Biden could have done about it. He. He could have, of course, reduced or abolished the tariffs that Trump introduced.

But in the current climate, and you would know that better than me being pro, China is a very tough sell in the United States. So what else could he have done to make sure that inflation would have been lower? Well, don't spend so much. It's Economics 101.

If you want to create inflation, you can use monetary policy. Very, very cheap money. Print A lot of money, figuratively speaking. That's of course to be decided by the Federal Reserve.

It's not so much by the Biden administration, but the other part is fiscal policy.

And if you look at how much the US Government has spent over the last couple of years in excess to the revenue they have, that's of course a huge stimulus for the economy. But it probably was too much. And it was too much. Not just looking back.

I think back when it was decided, the idea was we rather spend too much than too little. It's all about narrative. Some people recalled the financial crisis, and then Obama probably didn't spend enough, probably couldn't spend enough.

And so you had a relatively slow recovery of the US Economy after the financial crisis. And some people during COVID said this time we should rather err on spending too much. And they did.

And so that of course contributed to the inflation as well. So Biden could have changed some policies, but it's not like he has a button on his desk. More inflation, less inflation, and he can control that.

That's not how it is.

Do you think we'll see an improvement thereon during the next administration? Because actually, there doesn't seem to be reduction of spending truly on the plan, or have I missed something?

No. Long story short, no, Donald Trump is not keen on restricting spending, especially if you look at where the US Government spends money.

Now, he appointed, I think it's a right word, appointed Elon Musk, and he.

Nominated them and we'll see whether they really get through.

Exactly. But there is a narrative that Elon Musk and Vivek Ramaswamy will cut government spending.

And some already, already point out that they can do something like Javier Milei in Argentina. Okay, really? In some sense, that's about the challenge.

If you look at what Milei has actually done, he has cut government spending by about 6% of GDP. So he instantly balanced the budget.

Now, if you do the same in the United States, we're talking about 1.7 trillion of cutting the government spending. No, if you want to have these kinds of cuts, you would have to cut deeply into welfare spending, Medicare, Medicaid, Social Security.

And Donald Trump understands that this would basically destroy his reputation and his poll numbers. And just look at France. We have Michel Barnier. He tried to cut the budget by 60 billion euros. That's about 2% of GDP, and he was fired immediately.

I don't think Donald Trump will, with his administration, cut government spending. He will talk about it probably a little bit like Reagan.

That's A nice parallel. Yeah.

Many people remember Reagan as the one who cut government spending and slashed regulation. Yeah, well, in some areas. But if you look at the total tax revenue as a share of the economy, it didn't really go down.

And of course, if you're a smart politician and you want to be perceived as someone cutting taxes, you talk all day long about the taxes you cut and you never mention the fact that other taxes go up and taxes can go up silently. You don't have to raise them. You just don't adjust certain parameters.

So if there's inflation of 2 or 3% annually and you don't adjust certain deductibles, for example, then you raise taxes without people noticing so much.

Reagan is a great example of someone who has a different legacy in terms of how people ideologically and idealistically remember him.

And what has economic legacy actually was that he really contributed to the deficit enormously by, for instance, not really cutting down on entitlements and increasing defense spending enormously. And if you're looking at the agenda of Donald Trump, he would have to invest in defense spending as well.

Aside from keeping up the social entitlements that you've already mentioned, do you think that the biggest problem right now for the US budget, all these welfare programs, or do you see other areas where cuts would be needed?

Cuts would be needed is a tough word. I mean, those welfare benefits often support people and families in need. And I already mentioned the fact that, you know, contrasts are sharp.

It's not like if you, if you live in the United States, as a scholar coming from Switzerland or as someone who has a, you know, very well paid job, life can be amazing.

If you get the stipend from Switzerland, we have have to say.

Absolutely. So in other words, if you have money, life in the United States can be great. But if you don't have money, life is tough.

And much of the welfare spending at least aims to help those people. So cuts there, they would really come at a price. You might be saying that's a price worth paying.

But nevertheless, cutting welfare spending is probably where you can cut the most because it's the largest fraction. But if you do that, and Javier Melee, again, it's a very interesting example. He has done that. Well, poverty rates are now 53%.

So it does come at a price. But you're absolutely right. You mentioned military spending. A lot of people think the US Spends so much on the military. Well, it does not.

Yeah, it's quite impressive how little in terms of GDP percentage, they spend exactly.

It'S now 3.1% or so, which is very low by historical standards.

And if you think about the fact that the United States is, let's say in a conflict with Russia, is in a conflict, conflict of sorts with China, is in a conflict with various countries in the Middle east, then you would think the US should probably spend more, maybe 4 or 5%, which is not unheard of in the recent past. That would be another 2% adding to the public deficit that is already 7%. And so I don't see so much the cuts in welfare spending.

I see the need to raise spending in the military. Then you can look at another important factor, which is interest payments.

The US Running all these deficits means they have to sell the government bonds and somebody has to buy them.

What's quite interesting is that even though the Federal Reserve is thinking about cutting interest rates because inflation has come down somewhat, the interest rates on government bonds, especially the 10 year bonds, has not come down, it rather has increased. And it has increased since Donald Trump was elected because the bond market understands very well that there's a limit to all of this.

And again, look at the details. The 10 year bond yield would probably be higher if the US government had borrowed more money on a 10 year basis recently.

But recently they reduced the number of bonds they're selling because they understand they will have a hard time finding anyone to buy them at reasonable prices. In other words, the US Government already spends more on interest than military and that is a big problem.

And running these deficits and even bigger deficits, if some of the policies of Mr. Trump will be implemented, it will hit a limit. And the limit is quite frankly that they have to borrow the money.

And there's only so much appetite for US Government bonds. And so the bond market will eventually call it quits. They will eventually say no, and they've already said that.

And it's interesting that Donald Trump, in his nominations or suggestions for various posts, has kept an eye on selecting people with Wall street experience who know what he can do and what he cannot do. He does not want to end up like Liz Truss.

The UK Prime Minister was very short.

Lived because he didn't understand that if you want to run big government deficits, you, you have to have someone to finance it. And if you don't have a central bank to print the money, which you don't, then you have to satisfy the bond markets.

Well, Liz Truss got fired because he's also in a parliamentary democracy. No one can fire Trump unless there's a successful impeachment and he survived two of them. But what you drew up as a scenario sounds rather scary.

And it reminds me of a lot of people pointing out that the United States has this enormous federal debt since it has running deficits for years and years and years and years. Is there a way out of that?

Well, you can cut government spending. You can, and we discussed that, and that's going to be very, very hard. You can raise tax revenue.

The United States, if you look at it and compare it to European countries, not so much Switzerland, but God forbid France, there's a lot of room for tax hikes. But then again, the American people are not in preference of that. They don't want to have any major tax hikes, although that's always an option.

And the very fact that the US Government could in theory raise a lot more tax revenue probably calms down some of the bond markets because everybody understands if the United States ever had a shortage of cash, one option would be to raise taxes. They don't like it, but if they have to, they could. The other option is of course, inflation. You print back the public debt with newly printed money.

Now that is sounds familiar. That is something that has happened throughout history.

You can go back to the Roman Empire, you can go back to Adam Smith and his famous work on the wealth of Nations. And he says there has hardly ever been a case where a government is highly in debt that it paid back with proper money.

And so the way out probably will be inflation. And think about it this way. If you have 3 or 4% inflation annually, what that does over 10 years.

You mentioned the higher food prices in the United States. Well, overall prices in the United States have risen by 20, 25% in just a couple of years. So this can happen very quickly.

And if right now you look at the United States and you say the government has too much debt, government debt is around 120% of GDP. Well, the debt doesn't scale scale with inflation, but the GDP does.

And that's not so much a very nice prospect. It's not the future we look forward to. But then again, tell me the alternatives.

Cutting government spending, you want to cut wages, welfare spending, because if you don't do that, you probably don't cut much. And raising taxes, well, yes, you can do. But again, I don't See the political.

So that's not really a prospect we really.

Well, the economy can do well even if there's inflation. It's not ideal. But then again, take Italy.

It just means that those companies that don't have pricing power, in other words, companies that cannot pass on cost increases to the consumers, they will have a hard time because if Prices increase by 3, 4, 5, 6% a year, and you cannot pass that on, a typical profit margin is like 5 or 6%. So very quickly you're in the red. And it spells trouble for anyone personally who doesn't have pricing power.

So if inflation is 5 or 7%, can you go to your employer and tell him or her, I need 5 or 7 or 10% more money? Some can, some cannot. And we've seen that over the last very recent episode of inflation, that some workers have pricing power and others do not.

And the ones who do not can quickly fall behind. Finally, anyone who has some really hard earned savings in a bank account, you can watch that wealth melt like ice in the sun.

If there's high inflation, of course, people will be really upset if they realize they worked very hard, they saved a bit of money. Money. And that money is now purchasing a lot less. So inflation is quite painful, but it's not the end of the world.

Speaking of passing on the burden to consumers, there's the other specter, aside from inflation and government deficits, that is haunting us since the election of Donald Trump. The fear of high tariffs.

Looking at what he has promised for international trade, how likely do you think are the worst case scenarios that have been drawn up by economists? Or to what extent do you think he's bluffing?

Well, that's a question you shouldn't ask an economist. You shouldn't ask that question to political scientists.

Well, I'm asking an economist who often talks to business leaders, so I think you can do the balancing act.

To answer that question, you have to think about Donald Trump and what kind of a person he is. He grew up in real estate in New York, if you want to make it there, you have to be ruthless. It's a very tough, tough battleground.

And in real estate, it is often a zero sum logic. I get the deal or don't get the deal. Take the combination of the two.

He grew up in an environment where he learned that he will be successful if he is ruthless. He makes all kinds of claims and threats and does whatever dirty business you have to do. And he wants to make the next deal.

And the next deal has to be such that he is perceived as a winner. Whether that deal is actually good or not, that's secondary. And Donald Trump, how old is he now? 78?

I think so, yes, 78. He's close to hitting his 80s. Yeah.

So he was 70 then when he first became president. And there's an interesting line from Elon Musk. Elon Musk was once asked, why do you.

We understand why you go into space and why you go into electric vehicles because of climate change. And you do so much and you say it's from humanity, but one of humanity's biggest problems is that we all die at some point.

Nobody makes it past 130 years. Why not? Working on that. He said he's opposed to the idea that people live forever. He was asked why.

Maybe, maybe. It depends. There are always two sides. His idea and his logic, I think is he says, I will put 25% tariffs on all products from Mexico and Canada.

And then Mexico's leader and Canada's leader, they will come to him and they will quote Trump back on their knees for any kind of deal because they understand that this would really harm their economies. And then Trump will get something out of it. And to some extent, all of these threats are already working. He was invited to France the other day.

Trudeau came to Mar a Lago, as far as I recall it. So that's his way of making deals.

So we don't know whether anything will be implemented because it depends to a large extent how the trading partners respond to his threats.

What would be your advice if you were a consultant for the Swiss or the EU governments? How should we see our countries act under these circumstances? Because, well, maybe it's not something you can make a plan on.

Yes, you have to deal with uncertainty, which is something very hard for companies to do, because you basically have to hedge your business. You can't so much buy insurance for that. So you have to keep your options open. You have to prepare for different scenarios.

And of course, only one of these scenarios will play out, and whatever you spend on being prepared for the others looks like waste. So we probably have to become less efficient as a result. And that's something nobody in business likes.

But I'm a bit more optimistic in the sense that I think the European governments have learned quite a bit during the first Trump administration.

They understand better how to deal with him, and hopefully that leads to better outcomes so that Donald Trump will not go and impose severe tariffs on products coming from Europe, and so it wouldn't disrupt so much the strategies of companies that do business internationally.

And what are your takes on what is in store for Chinese US Relations and how that will affect us?

Well, in the bigger picture, I think the US has made it clear numerous times, and not so much Trump, but take Sullivan or someone from the Biden administration. They made it clear the United States is number one and we will stay number one. Now, you do the math, and it's very simple.

If you have 300 plus million Americans and you have 1.4 billion Chinese, that means the GDP per capita of the Chinese can only reach a certain. Otherwise the Chinese will have the bigger economy. And that's just the macroeconomic perspective. You then have technologies.

The United States right now has probably the best universities, the best companies, it's technologically leading, and they don't want this to be undermined by China. So the two countries are really heading for conflict. They're already in a conflict. It's not just a trade war. It's an economic war of sorts.

And that will continue unless. Unless maybe the Chinese go down the path of Japan. You probably remember the wonderful book, the Coming War with Japan.

Yes, I do. Yes, I do.

And there was a good logic behind it.

The logic was that the Americans don't like the Japanese very much, partly because of Pearl harbor, and the Japanese probably don't like the Americans all that much because of the response to Pearl Harbor.

And the aftermath.

And the Japanese back then became competitive in the car market. And there was a Plaza Accord and A lot of negotiations and threats. The Americans didn't want Japanese cars to take over the American market.

And so what happened was that for a long time, this economic dispute between Japan and the United States was sort of muted because they had a common enemy, and that was the Soviet Union. But the moment the Soviet Union disappeared, well, the Americans needed a new enemy, if you like, or they were free to now go after Japan.

They no longer posed an economic threat to the United States, and a large chunk of it was a housing bubble that popped and the demographic development that turned. Now look at China. You see something similar. We should overemphasize these parallels.

But if the Chinese continue to be successful economically, I think the Americans will not tolerate this and they will fight it. I don't think they should, but they will. And so I think that is a conflict that will last for years.

How hot it will become depends a little bit also on sort of unique and idiosyncratic decisions. Will the People's Republic of China really make a move on Taiwan? And then how will the Trump administration respond to it? I don't know.

But that is a conflict, because at the end of the day, it's very human. We all like competition. We all like competition. When other people face it, we all like competition.

We all want to have five, six, seven supermarkets or telecommunications companies. They should fight with each other, because then it means choice. It means lower prices for me.

I want competition, but nobody wants a competition in his or her own field. The Americans are fine with China rising as long as the Chinese produce what the Americans don't produce.

The Americans don't want that.

So I think we're far away from a Chinese car becoming the successor of the Toyota Camry as America's most favorite car. Not going to happen, but. Well, we'll stay tuned for that. To conclude, Stefan, what will you be looking out in the coming weeks?

Particularly, where is your attention glued to when it comes to the US Economy?

I look at the bond market because I'm not so much worried about the country from a business point of view. I mean, it's amazing how successful the US economy is and how successful the American businesses are.

The other day I pointed out that a boring company like Home Depot is worth more than the entire German car industry.

That's not a boring company. Have you ever been to a Home Depot?

Yeah, but it's, it's, it's, you know, it's a store where you can buy some stuff.

It's a DIY store and it's kind of a microcosm of American suburbanites. All the people who need stuff to build stuff go there.

15 billion market cap, 400 billion. That's a bit steep. How much growth do you expect for that company?

But anyway, depending on the housing market, you never know.

Yes, you can always err on the very optimist side, but truth be told, the US economy is very, very strong. And I don't see that changing so much, especially with the Trump administration in the next coming years.

The challenge for the Trump administration will be to continue to prime the pump, as we say. Donald Trump wants to have a booming economy and the government can do quite a lot, but only as long as they can finance the deficit.

So I would pay close attention to the bond market. How does the US government get all of the money they're currently spending and they want to spend or not tax going forward?

So that's probably the breaking point. The rest of the country, yeah, it has a lot of social problems. We shouldn't forget that life expectancy is terribly low.

We shouldn't forget in comparison to the.

Rest of the Western world. Yeah.

Yes. And that is the bench mark. It's richer than Germany, so people should live longer. Maternal mortality rate should be a lot lower.

Absolutely, yeah.

You know, you know, the prison population, 560 out of 100,000 people are in prison. In Switzerland, it's probably 10 or 15 or 20. The country has a lot of problems, but it got used to that.

They probably don't break the country, but yeah, the next government has to find ways to finance its plans and I will keep it eye on that.

As a farewell note, Stefan is an avid reader. He is currently on his project of covering 52 books in 52 weeks. If you haven't heard of that, follow him on LinkedIn.

He always gives us good summaries of the books he has read. Now, as a recommendation to all our listeners, which of the. Where are you at now? 50 books, 49 books.

I wish, I wish. I have to be very productive over Christmas and, and I will.

The thing about goals is I read the book, quit, for example, over the year and one of the important insights was you should set yourself a goal. But if you set yourself a goal of 52 books, one book every week, and you manage 45 or 50, it doesn't mean you fell short. It means you read 45 books.

Absolutely.

And so I probably end up maybe with 48 or 49 or maybe I even managed to 52, but that doesn't matter so much.

The book I would definite, definitely recommend to anyone interested in the United States is the new book by Rochia Sharma, what Went Wrong with Capitalism. It's a nice summary of how the United States got addicted to fiscal and monetary stimulus.

Typically, the idea from a macroeconomic textbook is that the government and the central bank should help the economy in a recession, but not when the economy is recovering or booming. But over time. And it's not so much Democrats or Republicans, it's both parties, they stimulated the economy one way or the other during a recovery.

And the Biden administration did it probably more than anyone before. And Trump wants to do even more than that. And eventually this hits a limit.

And Roger Sharma already a year ago said, watch out for the bond markets, because all of these governments, and not just the United States, also in Europe and Japan and other countries, governments are highly unpopular. And if you're unpopular and you face an election, one way to save yourself might be to stimulate the economy.

To boost the economy, but you have to have someone who gives you the money. That's the problem of running a government deficit. You rely on other people's money and other people's have various options.

They can buy these bonds, but they can buy other things as well. And so what went wrong with capitalism?

And capitalism can't be a popularity contest, unfortunately.

Well, it depends on what kind of capitalism you have. And you probably have a kind of capitalism.

And that's the opening chapter in the book where Roger Sharma describes how he came from India to the United States with this image of what capitalism would look like.

And over the years, partly because he has met all the wealthy and important powerful people, he understood that the American capitalism is on a track that is not so good. It's more of a crony capitalism rather than capitalism as it should be. So definitely worth reading.

The Gilded Age is back. Thank you so much, Stefan. I hope you're coming back. I think we have a lot more to talk about in coming weeks and months.

Certainly I'll come back. Thanks for having me. Thank you very much.

Thank you. And I thank all of you for listening. Uf wieder lossa. Grüezi Amerika. Views from the Sister Republic, A University of St.Gallen podcast by Claudia Brühwiler.