Simon Johnson, a British-American economist and MIT professor, dives into economic development and banking complexities. He discusses his co-authored book with Daron Acemoglu, arguing that prosperity requires intentional effort to steer technology's benefits away from elites. Topics include the risk of 'too big to fail' banks, the implications of AI on wages, and the historical misinterpretation of the Middle Ages. Johnson critiques UK trade dynamics and emphasizes the need for institutional reforms to help regions like northern England thrive.
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volunteer_activism ADVICE
Bank Size and Systemic Risk
Explore bank failures to determine at what size systemic effects occur.
Letting banks go over $50 billion in assets may require more attention due to systemic risks.
volunteer_activism ADVICE
Managing Bank Failures and Contagion
Impose haircuts on uninsured deposits at failing banks to address moral hazard.
Insure all other banks to prevent contagion, as suggested by Sheila Bair.
insights INSIGHT
Insuring Deposits Above $250,000
Insuring all deposits above $250,000 could incentivize excessive risk-taking.
Money might move to less regulated money market funds, exacerbating the problem.
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Published in 1992, 'Snow Crash' is a science fiction novel by Neal Stephenson that delves into a future where the United States has fragmented into corporate city-states and the internet has evolved into a virtual reality called the Metaverse. The story follows Hiro Protagonist, a pizza delivery driver and part-time hacker, and Y.T., a teenage skateboard courier, as they navigate a complex world threatened by a mysterious computer virus and a powerful drug known as Snow Crash. The novel explores themes of history, linguistics, anthropology, and computer science, and is noted for its prescient vision of the metaverse and its influence on Silicon Valley innovators[2][3][5].
Power and progress
G. C. Thornley
Jump-Starting America
Simon Johnson
Jonathan Gruber
In 'Jump-Starting America', Jonathan Gruber and Simon Johnson argue that the U.S. faces significant challenges in innovation, including a slowdown in productivity growth and regional imbalances. They propose a solution by investing heavily in scientific research, similar to past federal investments that drove economic growth. The authors suggest targeting investments across the country to reduce geographic inequalities and promote broader prosperity.
What’s more intense than leading the IMF during a financial crisis? For Simon Johnson, it was co-authoring a book with fellow economist (and past guest) Daron Acemoglu. Written in six months, their book Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity, argues that widespread prosperity is not the natural consequence of technological progress, but instead only happens when there is a conscious effort to bend the direction and gains from technological advances away from the elite.
Tyler and Simon discuss the ideas in the book and on Simon’s earlier work on finance and banking, including at what size a US bank is small enough to fail, the future of deposit insurance, when we’ll see a central bank digital currency, his top proposal for reforming the IMF, how quickly the Industrial Revolution led to widespread prosperity, whether AI will boost wages, how he changed his mind on the Middle Ages, the key difference in outlook between him and Daron, how he thinks institutions affect growth, how to fix northern England's economic climate, whether the UK should join NAFTA, improving science policy, the Simon Johnson production function, whether MBAs are overrated, the importance of communication, and more.
Conversations with Tyler 
