Browse content similar to John Lanchester, How to Speak Money. Check below for episodes and series from the same categories and more!
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Not it's time for this week's Meet The Author, | :00:00. | :00:00. | |
with the journalist and novelist John Lanchester. | :00:00. | :00:00. | |
The phrase interest rates crops up all the time when people are talking | :00:00. | :00:07. | |
about finance and the economy, but how many of us can truly say we | :00:08. | :00:10. | |
know what economists and bankers and politicians mean | :00:11. | :00:13. | |
Or just why interest rates are so important. | :00:14. | :00:20. | |
Step forward John Lanchester, whose book How To Speak Money, What | :00:21. | :00:26. | |
The Money People Say And What They Really Mean, is a lexicon of money | :00:27. | :00:31. | |
speak, from triple A ratings to zombie banks, via derivatives, risk | :00:32. | :00:34. | |
weighting and something called the hot waitress index. | :00:35. | :00:39. | |
John Lanchester started out as a novelist, but he is also | :00:40. | :00:41. | |
a journalist who writes regularly about finance and economics and, | :00:42. | :00:44. | |
which aimed to explain just why the 2008 crash happened at all. | :00:45. | :01:07. | |
John Lanchester, since this is a dictionary, what is the hot waitress | :01:08. | :01:16. | |
index? It is a nakedly sexist term people in Wall Street and the city | :01:17. | :01:21. | |
use to describe the level of economic activity, one is looking | :01:22. | :01:26. | |
out the window and counting the number of creams, and it is the idea | :01:27. | :01:32. | |
that when the economy is thriving, attractive women get high`paid jobs | :01:33. | :01:39. | |
as models and actresses, but being waitresses when things are doing | :01:40. | :01:45. | |
less well. And interest rates come up when talking about money, and a | :01:46. | :01:50. | |
lot of baggage that comes with that, which to the lay reader or Lesnar | :01:51. | :01:56. | |
may not be evident. When people who understand money used AAA interest | :01:57. | :02:03. | |
rates, what are they thinking about? It is the cost of money, which is a | :02:04. | :02:09. | |
strange idea for civilians to think about. That money has a price, the | :02:10. | :02:15. | |
interest rate is that price. And the rate at which you can invest without | :02:16. | :02:19. | |
risk, because you can buy a government bond and now you will get | :02:20. | :02:26. | |
your money back. So there is a J can't exceed ease of knock`on | :02:27. | :02:30. | |
effects, the rate at which dismisses can borrow. When rates go up, | :02:31. | :02:38. | |
business is harder, and harder to compete, if your business is having | :02:39. | :02:43. | |
to compete with a high guaranteed rate of interest. And when interest | :02:44. | :02:47. | |
rates go up, the currency goes up, sucking money into that government | :02:48. | :02:53. | |
bond, life becoming much harder for exporters, because goods more | :02:54. | :02:58. | |
expensive. And all these effects which compound and overlap, packed | :02:59. | :03:05. | |
into two words, and people who understand money now and follow | :03:06. | :03:09. | |
that, but you can be on the back foot and lose the train of the | :03:10. | :03:13. | |
argument. So what is the purpose of this book? I was interested in the | :03:14. | :03:20. | |
way city and Finance works, because it is such an essential thing in | :03:21. | :03:26. | |
London and the UK more generally, but you look out the window and see | :03:27. | :03:32. | |
the effects of finance in London, especially how it has changed. So I | :03:33. | :03:36. | |
ended up educating myself to write the book and then being asked to | :03:37. | :03:42. | |
write or comment about it. And what always happens, the common thread | :03:43. | :03:47. | |
was always about explanation. That people really seem to feel the need | :03:48. | :03:54. | |
simply to understand. Often linked to a scandal or disaster, something | :03:55. | :03:59. | |
that has blown up, such as the situation with LIBOR, such as the | :04:00. | :04:09. | |
gold spot price, JP Morgan lose $8 billion through their London unit, | :04:10. | :04:16. | |
and some derivatives I still do not understand. But something that has | :04:17. | :04:25. | |
blown up and what is it? You quote a conservative officer called Michael | :04:26. | :04:34. | |
Oakeshott, and you set him opposite the tendency of economists to talk | :04:35. | :04:41. | |
about science, and you clearly do not believe in economics is a | :04:42. | :04:45. | |
science? Presumably you are hoping to draw us into that conversation? | :04:46. | :04:54. | |
Exactly, the idea from Michael Oakeshott was seen to be a bit | :04:55. | :04:59. | |
English, but it is very compelling, the idea that philosophy and | :05:00. | :05:05. | |
history, across time, talking to the past, and also talking to each | :05:06. | :05:11. | |
other, and economics is more like that, and my framing, my background | :05:12. | :05:19. | |
is in writing, so I would see it as a question of language, but I do, | :05:20. | :05:24. | |
and that is something basic about literally not understanding the | :05:25. | :05:32. | |
words. And there is an element of responsibility about it. I have a | :05:33. | :05:36. | |
Porsche degree from a Porsche University, working on a political | :05:37. | :05:41. | |
magazine for ten years and I was nearly 50 before I knew what fiscal | :05:42. | :05:48. | |
and monetary meant. `` I have Porsche degree. And after hearing | :05:49. | :05:51. | |
that thousands of times over the radio. And that is what I would like | :05:52. | :05:58. | |
people to do, too bothered to find out. And also political subtext, you | :05:59. | :06:05. | |
are now find of neoliberal economics. Quick definition and what | :06:06. | :06:09. | |
is wrong with it? The idea that you take away the rules and livery and | :06:10. | :06:17. | |
open up markets, rapidly and openly, that the rich will get rich quick | :06:18. | :06:21. | |
than everyone else, but everyone will get rich, so do you really `` | :06:22. | :06:30. | |
so you deregulate and the trickle`down effect will make | :06:31. | :06:33. | |
everyone better off. It would be fine if it works, but it would have | :06:34. | :06:39. | |
trickled by now. It came in with Margaret Thatcher and Ronald Reagan | :06:40. | :06:43. | |
at the beginning of the 1980s, but the previous approach was seen to | :06:44. | :06:49. | |
have failed, which some people may call Keynesian, after John Maynard | :06:50. | :06:54. | |
Keynes, had that field? She seems to be put in the `` John seems to be | :06:55. | :07:02. | |
spoken about as being in favour of government spending. And that | :07:03. | :07:05. | |
government spending equals a good thing. But are economies had become | :07:06. | :07:13. | |
problematic. And bogged down. And clearly our moment of inflection was | :07:14. | :07:20. | |
needed, a historic turning point, and very clear across the developed | :07:21. | :07:26. | |
world that in the late 70s and early 80s something was needed. So I am | :07:27. | :07:33. | |
not calling for revolution, but we need an equivalent inflection back | :07:34. | :07:38. | |
to watch the fact that ordinary people's living standards have not | :07:39. | :07:42. | |
improved. Three decades of these policies and the people in the | :07:43. | :07:49. | |
middle are stuck, not fear that the rich get richer and the people in | :07:50. | :07:53. | |
the medal more permanently stuck. John Lanchester, thank you very much | :07:54. | :07:55. | |
indeed. The weather is out there right now. | :07:56. | :08:07. | |
Some clear spells | :08:08. | :08:09. |