AI, markets, and power: A conversation with Paul Krugman

In early 2025, I hosted the legendary economist and Nobel laureate Paul Krugman on my show. We never released it in the podcast feed, but it really is too relevant to leave in the archives, so we're sharing it now. In that conversation, Paul and I covered the most critical economic questions raised by artificial intelligence. We explored whether today's tech and AI valuations look more like a genuine productivity boom or a replay of the late 1990s. We investigated why the US is pulling away from Europe, whether AI might substitute for globalization, and what that might mean for emerging economies, and we asked what happens to workers and communities as this technology transition unfolds. Listening back, it's a really sharp guide to the economic backdrop for everything we now discuss on Exponential View. Enjoy.

We need to talk about the economy in 2025 and what's going on. I know you've got opinions. So why don't you start with your view of where we are in 2025 as sort of short-term horizon headwinds or tailwinds and then I'll respond to that.

Okay. So, I mean, we are very close to a Goldilocks economy in the United States. Unemployment is low historically. Inflation is low historically. It's a little bit above the, you know, we have an official target of 2% inflation and it's if you look at probably the better measures is more like 2.5 and if you think that's really important maybe you should have a drink or two and calm down. It's really we're really in good shape. You know, it's starting with this is about as good a moment as we've seen for a very long time and there's the question is there's always going to be something some stuff happens as the bumper stickers don't quite say and there's really two kinds of stuff that can happen one of them is politics and you know I'm reading whether there's now it's possible that my president is about to impose 25% tariffs on Canada and Mexico tonight or then again maybe not. Uh and that's a big deal and we have a bunch of potential political shocks to the system have just been doing some work and if you look at tech stock valuations it really has that sort of end of 1999 feeling and are we going to be facing a sort of financial bubble burst?

You know, and so they really calm good times never last and then in this case I think it's unusual that we have at least two obvious threats to the times we're in but it all this will take time to unwind. So the numbers will continue to look good for the next few months at least.

I mean it's interesting that we head into this with such a strong American economy. I'm sitting here in North London and there's a particularly depressing series of charts which show OECD growth rate. These are the club of rich countries and you have the US as part of it and the US is just motoring away right it's the biggest economy there it's growing much faster far faster than the UK where essentially the economy is roughly the same has been the same size for you know a decade or more and and and you know Europe at some cases up until about a week ago it almost the mood felt real but I think that there has been a change in the in the last in the last few days the bit that I I query wonder about is this issue of the tech stock valuations.

I mean we're definitely at a point where this this magnificent seven I love the way how the investment bank has always come up with these wonderful terms. So the mag seven are highly concentrated. In fact, this is the highest level of stock market concentration since before the the Great Depression. And of course, you know, stock analysts love to look at things like this because, you know, history rhymes in a sense. But it does feel that there is something that is different this time round. I mean, for one thing, there is revenue momentum in in a lot of these companies compared to the dotcom bubble where companies had valuations without revenue. The second is the world economy is much richer and much more complex than it was in 99 or in 1929. And so when I look at that, I wonder of course animal spirits can upset stock market valuations as they did on Monday with DeepSeek. And if stock market valuations drop, they can spill into the real world through wealth effects or sort of other other dynamics, but it doesn't quite feel as overinflated as 99 because we can see the the revenue flow into these businesses.

Okay. I would actually mildly disagree with you on that because 1999 we think about the conspicuously sillies. we think about pets.com and so on. But you know that bubble was in large part telecoms companies rather than dotcoms and the telecoms companies had real revenue and just not enough to justify the valuations and the technological the technology actually did deliver. Maybe not on quite the ethical scale that people had hoped for, but we really did get a decade of substantially accelerated productivity growth out of the technology. So, it was real stuff. What happened was that the idea that early movers and were going to be able to, as we now say, build a moat around their position, that they were going to be able to earn sustain high profits, turned out to be wrong.

And in many ways we look similar now that this is it's I think we're past the point of wondering whether AI is actually going to do anything useful. We still don't know how much useful it's going to do but it's clearly something real and there's real revenues coming in but on the other hand are the valuations the valuations are far far above anything that you would normally expect from those revenues. So the valuations depend on the belief that these are going to lead to entrenched positions for the existing companies.

Yeah. Well, I think I think that's really true and in fact that is probably what we saw on Monday, right? When this Chinese model DeepSeek it wasn't released. I mean DeepSeek R1 had been around for a while. They declared they were doing it weeks if not months ago. I had written about DeepSeek back in December 23. And in December 2024, I said DeepSeek is a Chinese Sputnik moment for the US. So that was at you know before before the new year because I I thought that a lot of these stock market valuations are have embedded within them the idea that the US will have sustained AI dominance and sustained AI dominance will mean the best technology turning into the best product turning into the fastest revenue growth dragging forward with them the supply chain. So effectively the Nvidia the demand for Nvidia chips ultimately AMD chips and and the manufacturing and that that bet was so concentrated that of course any little wobble will have animal spirits you know running through that China shop.

Yeah. And not just that the US will continue to dominate, but that the MAG 7 will continue to dominate and that there won't be some contender, US contender, European contender. You know, it's worth remembering that although European macroeconomics doesn't look too good, there's a whole lot of it's not as if the technological sophistication is restricted to the United States. And so and it's really hard and some of it is it some of it is just I mean I suppose we need to talk about Tesla at some point and there that is really bizarre. I mean their actual business doesn't seem to be doing too well but but people have decided that that somehow or other there's magic associated maybe with the political partnership. So, but I, you know, I take the lesson of the dotcom telecom bubble of the '9s to be that even a really great technology does not necessarily justify really high valuations.

Okay. I hear that. I'm going to I'm going to stick on with this with this point because here's where I think today is different to to to the start by telling you a story. So back in 90, you know, 97 98, I was building internet companies and one of the companies that I invested in was a realtor, online realtor in France. Of course, online real estate is a huge business now, right? You have Zillow and Redfin and a whole bunch of others. When we got into that market, not only did only four or 5% of French people have internet access, you know, they were still largely on the Minel system, but that 5% wasn't far advanced in other parts of Western Europe. None of the realtors had PCs. And so when we went off to to or the the founders went off to to win business, they had to buy PCs for the realtors, train them on how to get onto the internet and how to upload their images and and their inventory. I mean, it was it was a complete nightmare.

The difference today is that every company or the large proportion of companies particularly big one are sitting on a digital stack which they've built over 20 years. All those billions of fees they paid to Accenture and PWC and SAP to do digital transformations means they've got a digital infrastructure. And today it takes a single decision in Microsoft headquarters to put an AI tool into every copy of Microsoft Excel because it's all run on the cloud. And that feels really different to 99. It feels like there's a whole set of hurdles that now don't exist that would allow a much more rapid deployment and with rapid deployment should come much faster increase in revenues.

Well, this does yes it does mean much faster increase in revenues. I think it's very clear that the whole AI thing is moving much faster. I mean, we thought things were moving fast in in the '9s, but they're much faster. The adoption rates have just been, you know, the the scurve of adoption is is just far steeper. The question is going to be revenue for whom, right? And that's now what is true and I think that which I'm I think I'm learning to some extent from you right now is that the the fact that this stuff in some way sits on top of existing technologies and existing networks may actually be a reason to think that the incumbents can actually continue to capture a lot of this.

I mean the you know when we say say something like Microsoft is it's all about network externalities. Everybody uses Microsoft products because everybody uses Microsoft products. And the interesting thing about AI is in a way how undisruptive it is that it goes, you know, it can be just put on top as I spend a lot of time turning these things off because I don't want it. Uh but but you know co-pilot is is right there and you know you're you're still after all these years using word and excel which is the network externalities and the the mode and then but it it's not some upstart competitor bringing AI to word processing or number crunching. It's it's quite straightforward for Microsoft to actually go right in there and do it itself. So that might be a difference. Now, it may be that that we're just not thinking big enough and that there's something just radically different will break through. But it is true that right now it's looking as if the this is in terms of market share kind of less disruptive than some past technologies.

Yeah, I I feel this I mean I feel that that's right. You know, Gemini from Google and Microsoft are all doing are doing reasonable well. I mean we do have the new players but what's interesting about the configuration of the market is that each of the new players like OpenAI and Anthropic and others are really closely embedded with the last generations giants and and it's not as if the Ford Motor Company or AT&T was closely allied so strategically with with the firms that went before. So it feels like this industrial transition has different you know characteristics and you know perhaps it is just that bits are bits and you're building on bits and and so you know what else can we expect at this time.

I would love to talk also about you know something that I think is is quite close to to your heart that is I think quite difficult to navigate right now which is what happened what what should we think about what happens to the workforce under the speed of this kind of AI transformation and and I will start with a little sort of pitch of how I see the state of the nation which is that know companies are really really eager to uh make productivity improvements and these tools can automate large parts of roles, right? They can automate many many tasks and so the natural outcome for for workers will be either suppression of wages or it will be you know it will be loss of jobs on the flip side of that productivity gain. And that the question is not whether new jobs will get created because historically we've all always created new jobs and you know we've seen work from some of your colleagues in in the field of academic economics to show that you know most jobs in the US are in categories that didn't exist 60 or 70 years ago. But I suppose the question that I have is that I wonder about is what is the likelihood that the econ that the economy will create enough new jobs in those categories for there not to be some kind of schismatic dislocation as this technology rolls out. How have you thought about that?

I think there's quite a lot of dislocation coming although that's not new. I mean that's a that has been the case for with every major change in in every major technological revolution that that a lot of jobs are destroyed and a lot of jobs are created and in the end one way or another there there ends up being full employment because that's more or less it you know mass unemployment due to automation has been you know people have been predicting that for a very very long time and it it never happens but the transition the a lot of people can find themselves in the in the wrong job uh in the wrong place sometimes geographically.

I mean it just it feels to me like it was just a year or two ago that it was you we were telling people learn to code and now it turns out that coding is one of those things that AI does apparently. I have no personal experience of but apparently does pretty well. and uh you know the way I' I've been thinking about it. So one of the sort of put down remarks that people make about large language models and not quite sure if it applies fully to everything else but that it was just souped up autocorrect which is but the thing is there were first of all you could say that something like agricultural machinery is just souped up guy with a guy with a scythe cutting down uh cutting down wheat which didn't stop it from being hugely disruptive and meaning that we basically have you know we we have fewer The United States is a major agricultural exporter and we have fewer farmers than we have people playing World of Warcraft.

So, a technology can be sort of not all that magical and still have enormous impacts and destroy a lot of traditional jobs and the in this case souped up autocorrect. Well, even if that's all it is, but very souped up, a lot of a lot of people's jobs are basically souped up, auto correct, and those are in many cases jobs that we considered highly skilled. So, a lot of things in middle management, a lot of I mean, I I don't know if there's a way to get this, but things that I've noticed is that translation translation software is not perfect, but damn good. And how many people were displaced by the fact that you don't actually need somebody who who uh who speaks Mandarin? How many the the uh just a lot of a lot of the jobs that we we we think we like to imagine and we can talk about this. We like to imagine that the very highest creativity level stuff can't be automated. Although that may come that may come as a rude shock at some point, but but a lot of stuff that's just a few rungs below that can go away.

I think the in some ways the safest jobs are the ones that involve manual labor and dealing with the material world.

Well, it's fascinating because 15 years ago that the story was AI was going to come after routine jobs in in offices and what we have seen is the this souped-up autocorrect. It doesn't really matter how it works in theory. If it's working in practice and doing much more than that, it will have an impact is taking enabling you know lawyers and and software developers and creatives in all sorts of areas and and and I think that that has been come as quite a surprise. the I think Goldman Sachs did did some work last year and they were showing that the sort of the pinpoint where jobs really started to be impacted by effective LLMs was about a $100,000 a year salary which is you know well above the average. So, so you you we end up in this quite interesting world and and I agree with you that we may feel that there are certain jobs that are very high pollutant and creative and the machines won't be able to at least support or augment them but with every you know release of an AI system those systems get better and better and and I think that that does create a real pressure and attention.

I mean later today, OpenAI will release their next model which is called O3. And I I think quite a lot about what policy responses to this ought to be given that there is so much uncertainty and given that it's really expensive to run a safety net, right? We know that in Europe our our tax levels are much higher. We have a much deeper deeper safety net. And that to me feels like a kind of politically quite a difficult problem to to close down, right? Nobody really wants higher taxes whether it's here or in Europe or in the US and certainly the politics in the US for the next three or four years won't won't support it. So that I think is going to be a really key point of tension which is what happens if we do start to see really mass job displacement.

Well, I mean the my point of view is that since we don't know which jobs will be lost and we don't really know how to devise policies honestly we can do you know some things here and there but but trying to efforts to deliberately promote the jobs of the future have gone rather spectacularly wrong in many cases. So safety net is mostly what you have. Now I have an American perspective where our safety net is extremely threadbear compared with Europe and our taxes are quite low and we could certainly do more of that. Now what it doesn't do even if you can have a safety net which protects people from real imiserization from the technology you can't restore you can't it doesn't restore communities.

You know, if if you have a a community that is based around an industry that ceases to exist because it's it's either because of globalization, which is what mostly has the focus, but also just technology or or even changes in taste. I mean, I I like to talk about the detachable colorant cuffed industry of Troy, New York, right? That just went away, right? And when it does, you can you can have a safety net that ensures that nobody starves or goes without health care. Maybe not in America, you can't, but anyway, but but you can't restore the community and you can't restore necessarily the dignity. And that's I don't I don't have an answer for that. I mean, you you do what you can, but we are going to be seeing a lot. I just want to key on one point. the the technology may not we may not be at a point where it replaces people of you know exceptional creativity or whatever but it does enhance their reach.

Yeah, absolutely. And we've been seeing that for quite a while. I mean uh you know I still have some ties in academia and which is a poor model but I think may have something to do with I think it's also true in things like the legal profession which is that the very top people can actually do a lot can basically cover a lot more bases because of technology and which actually makes things more hierarchical. I mean, I used to joke about a couple of fields that I followed that we were now at a stage where there were only three people in the top 10 and and that's a again it's a it's an unequalizing effect of the technology to which I have no answer.

No, I think we're we're also going to see that there is in in my other hat which is to invest in startups in particular in deep technology and AI startups there is a mood towards a belief that you could build the the billiondoll single person company like the oneman unicorn as they call it. And the idea is that there's a whole array of ordinary and increasingly complex tasks that can be delegated to tens of thousands of AI agents and you've swapped labor for capital and you're just paying a a rental to a cloud service for that. and and I think that that that is a direction of travel that we've we've seen. The number of people employed even by a huge company like Facebook is far smaller than was ever employed by General Motors and and so and so forth.

I know that we're going to go to questions in a few minutes. One thing I I would love to also for us to talk about is is trade and tariffs. you know, we've got a a a man in the White House who who loves tariffs and certainly loves the the the threat of tariffs and we also have this geopolitical fragmentation. Now, as a technologist, what I see happening is a number of different things. We've seen from the political side the building up of more and more walls around the internet. So, it's not just China's great firewall. It's also, you know, Russia being able to to seal off its internet. There is now this political pressure which is around free speech in the US and a departure from European standards and of course in technologies with the export controls most importantly in a way forcing China to start to do its own development in really hard technologies in sort of advanced semiconductors. So I see a world where there will be increasingly a couple of lanes of technology and that of course reduces the size of markets and adds quite a lot of friction to to all of it. It feels like that's a a general drag on growth.

Yeah, that's it is a general drag on growth. Now a little bit funny the the whole you know tariffs on everything push that is if you want to understand that I think you need a model of the mind of Donald Trump that really there really isn't very much of a constituency behind that except that he wants it. I I really see business kind of hates it and there's but economic nationalism more sophisticated economic nationalism is definitely on the rise. I mean the Biden administration was far more economically nationalist than any American administration we've seen for decades. Europe is clearly moving somewhat in that direction. And the reason is mainly I think at some level the world is a scarier place.

We now are, you know, we uh who thought that that large scale conventional warfare was going to make a comeback in the 21st century and now it has. And now you think that well we need to have capabilities either domestically or in our close allies that mean that we are not can't be shut out that we have the ability and if possible we're going to try and deny this stuff to people that we don't consider our friends. and that is going to fragment the world. And also by the way worth saying and I know we need to get questions. I I'm the one who said that. the the one of the things that is also true is that to an important extent technology can actually substitute for globalization. You know if you if you need customer service instead of getting somebody in Bangalore on the line you instead are talking to a chatbot. And that's a that's a real change change in dimensions.

So we may be headed for a much more fragmented world both because it's less necessary to have global trade and because it's we're much more afraid with good reason of being too dependent upon other countries. And what I worry about is the small countries who may be left out in the cold. And so you know the EU is going to be fine. I think Britain will reach some kind of accommodation with the EU. Britain will be fine. America will be fine. Bangladesh, Vietnam. Yeah, not so clear.

Well, I I love this line, technology is a substitute for globalization. I'm going to come back to you after we we finish this live live on that. In in my my first book, I talk about the coming fragmentation that was going to be driven by changing technology. And I identified this idea, although I didn't have quite the pathy communication that you have. technology is a substitute for globalization. But there are technologies that will do the job that that globalization used to do and that would be things like you know 3D printing or vertical farming that allow localized production particularly of you know food but also I think critically the change in the energy system. So you you buy solar panels once they last for 25 years. You buy batteries, they last for much longer than we ever thought and you don't need to be, you know, a vessel to a sort of a pro state.

And that I think does create a an interesting path for countries like Bangladesh or Pakistan or Vietnam where you know a lot of their sense of sovereignty and ability to to develop is is about their access to energy, right? How much energy catch do they have as an economy? How many energy services can they actually use? And in the last two years in Pakistan, there's been this remarkable change driven by the falling cost of solar panels which has meant Pakistan has become one of the largest importer of solar panels and broke the link between measured grid delivered electricity and GDP growth because businesses could not be bothered to sit behind brown outs and blackouts and went off and bought solar panels to keep their businesses running. And and I think that there is this possibility where the declining cost of this technology can provide a much more affordable energy sovereignty for the long tail of the world that that is not energy sovereign especially smaller and poorer countries. And you know the first kilowatt hour of consumption a family has in a day from zero is the one that delivers the water pump, the refrigeration, the lights, the charging of the smartphones and makes a could make a big deal. Now, of course, that is me, Paul, as an absolute relentless optimist about the human condition and and where where we can go. But it is sort of one bright spot that I look at.

Oh, the whole thing. Yes. And just to say that the renewable energy revolution is the most hopeful thing that of today's world. And it it's funny how people get all you know people get excited about it which I understand but in terms of actually really changing people's changing the prospects for development changing the prospects for the planet solar wind batteries are probably the the most important thing and they they've really had Mors law type productivity improvements so it's it's awesome.

A quick note, if you want to support us in bringing more of these conversations to the world, please consider subscribing to the show. The 2025 Adelman Trust Barometer, a trust barometer run by a big public relations firm, shows a high level of grievance worldwide, particularly against the wealthy and governments. How can markets, traditionally quite poor at addressing inequality, tackle this grievance given the potential negative consequences?

Well, that's a dooy. Over to you, Paul.

Oh, but this is not markets are not going to solve this. This is, let me just say the, you know, we had I grew up, I'm somewhat older here. I grew up in what was really a middle- class society. At least it felt like a middle- class society. There was poverty. There were some people, wealthy people, though not the way there are now, but it was mostly middle class. And I had assumed that that was a society that sort of evolved naturally. actually we kind of thought that was an end state of of of economic development but it turns out it wasn't obviously inequality soared again to back to guilded age levels but it's also turns out to be that that society both in the US and in the UK and and Europe more generally that didn't just happen that was created the US was a highly unequal society in 1938 and it was a pretty much middle class society by 1946 And it was all deliberate government action, strengthening of unions, new wage norms enforced during by wartime controls. So look, if inequality and I think this is an issue I think people are whether or not they frame it that way, the fact that there's so much spectacular inequality and perceived and I think true unfairness out there. This is this is one of those things that governments need to do. you know whether we are able to get our act together. I think we was kind of a miracle that we dealt with those tensions so well you know in my grandfather's generation but maybe we should do it again.

Yeah. I I guess the question is what is the external impetus that that that drives that and I think there is you know there is a sense amongst perhaps technologists that that impetus will be will come because technology will solve you know every every problem but of course we do find ourselves with a situation where dynastic persistence of ultra high wealth in the US is is pretty substantial major movements towards equality historically have always basically been associated with wars.

Absolutely. Yeah. And there's the old joke, sorry, European people who work at the European Commission say that they should have a statue in front of the barley mall the headquarters, a statue of Joseph Stalin, without whom none of this would have been possible. That's grim humor.

There have been a load of questions about debt, so I think we should turn turn to those. I'm just trying to read my notes. Alan Greenspan used to say, "We don't know the max, the level of maximum federal debt, and I hope we never find out because when we do, it will be too late." And I guess this is directly to you, which is what is the max according to Paul or what is the ideal level of debt?

Okay. I mean there's a a pretty good analytical doctrine called functional finance which is not MMT although there is a whole other thing but which says that the number doesn't matter right you just just think about the macroeconomics and I don't think that's entirely true but it's largely true this it as long as you're not having uncontrollable inflation particularly countries that issue debt in their own currency have a lot of running room And examples, I mean, the the max I think the max debt number we've ever seen as a share of GDP would be the UK, which came out of World War II with debt at 250% of GDP. So, you know, more than double the current US level, and there was no debt crisis. Now, uh you can argue that there was a fair bit of financial repression and controls and but you know, we we haven't lost the ability to do that if necessary. But in any case, I don't think that was the issue. I think that we're, you know, it's imprudent to just keep on running up that that debt to GDP ratio, but there is not a hint in anything I can see that we're hitting any kind of limit.

You know, people who bet against JGBs, against Japanese debt because of their debt levels have just lost money and lost money and lost money over the years. Uh it's advanced countries with stable governments that borrow on their own currency just have far more fiscal space than most people tend to imagine. Al although I mean in the UK of course we got heavily punished a couple of years ago when uh two prime ministers back it's hard to keep track really spooked our debt markets and and in a sense we're we've got the hangover today and and I guess the Chinese are contending with a whole slew of other debt problems themselves which which actually may advance the advantage the US over the next few years.

Yeah. Well, although I have to say that uh the reason that Liz Truss lost the the race with a head of lettuce as to who would would survive longer, there was I think the UK economist was calling it the premium or the I mean it was it wasn't simply that her plans look fiscally irresponsible. They look stupid and uh now of course stupidity always comes along, but I don't think that was a fair test really of of uh of the sustainable level of debt.

Yeah. Well, fair enough. I mean, we're going to we're going to figure it out. And I think the one thing I would say in the UK now is in the last week, the government has has really come out fighting. They've come out fighting for investments in infrastructure, for public private partnerships. It's a sort of I suppose quite a healthy neoanianism in a way, right? That's let's build a lot of stuff. Let's make it make sure it's infrastructural. make sure you can build on top of it rather than, you know, spinning up debt or for consumption this year or or or the next.

We had another question. When does it make it sense for the Fed to raise interest rates? Is it possible that high interest rates might help with labor disruptions? I'm not quite sure I understand the part of that. I mean, the Fed is look, they they have, as they should, a dual mandate. They're supposed to achieve full employment or sustainably full employment and they're supposed to have low inflation and the infl a target of 2% which is rather arbitrary as one of the few things in the world that you can really blame on New Zealand which is a whole story but uh the but something like that inflation basically keep inflation low enough that people are not constantly thinking about the the right level of inflation is low enough so that it does not become a major source of major use of cognitive energy and as full employment as you can manage and that's where they will set that's what will determine where they set interest rates they will judge it wrong sometimes because they are actually the dirty little secret of all this stuff is that Jerome Powell has no essentially no information that anybody who knows how to use you know knows how to use FRED.

The the Federal Reserve database doesn't have and so they'll get along but I don't think now the the labor market disruption issue not not really. I mean, we did have a big labor market disruption as we came out of COVID because uh the mix of stuff that people wanted to buy was very different and we had a period when we had a really high ratio of unfilled job openings to people looking for jobs which was transitional and probably you know and the Fed raised interest rates in part because that seemed to be kind of inflationary but that problem has kind of solved itself for the time being. of AI could produce another similar disruption although unlikely to go as quickly but I I don't think you know the fact of the the Fed has got one dial to to turn central banks they have you know the the the uh the overnight interest rate and there's only so many problems you can solve with only one dial yeah and I also wonder about um when we think about how this intersects with the with the labor market what is happening from a geographical structure perspective.

You know, as we move into these advanced economies, you get this effect of elomeration. You know, people want to get to where the other strong growing companies are. And so, you get these clusters building. San Francisco Bay Area being the most powerful in the world. And it strikes me as quite a challenging public policy uh problem to figure out how to turn a 21st century economy into one that grows across a broad geographic spread. I remember talking to somebody very senior at one of the foundation AI labs a couple of months ago and they said to me, you know, we what we can't figure out is how this technology doesn't become a giant vacuum cleaner sucking all of the the wealth to to San Francisco. And and I this is obviously not an interest rates question, but it is a it is a challenge I think about how you revitalize local economies because local economies are fundamentally where people live. It's you know where they have their roots.

Well, this is this is right up my al. I mean uh so half the Swedish thingy was for work on exactly this kind of issue. To a first approximation, the answer is we can't do that. I mean we there have been major efforts in some places to really support lagging regions when when uh technological changes is wanting to pull stuff into the already rich parts. What can you do to promote development in the lagging parts? And so Italy has poured vast sums into the messagor which mean that people have enough to eat people have healthcare but has never really caught business to go back there. Germany, the former East Germany, you know, Germany has pretty generous benefits and all of that and and nobody is suffering materially very much in former East Germany, but they also haven't sh you know, but the industry hasn't come back and it's a lot of money and so basically you have policy failures and even in the United States although we don't do very much with that explicitly although Biden tried to some, but we have because of the