Hello, everybody. Welcome once again to the weekly show podcast. My name is Jon Stewart. I am the host of the program. I have my two fabulous producers, Brittany Mimedevic and Lauren Walker are going to be joining us. And it is un week here in New York. It's when the countries of the world gather together to not solve the problems facing the world because they can't even solve the problem of how to get to the fucking un building without ruining the rest of New York City. Am I right? It's maddening. Maddening. I'll tell you what's not maddening. You know, last week we had Jason Furman on who was an economist who was basically daring us to give him a noogie. I think that was, you know, he might have had the data, but boy, did I want to wedgie that dude. But we got a lot of response from different economists. We're going to actually have one on at the very end of the show who's going to help explain. Her name is Stephanie Kelton, professor of economics. She has some interesting thoughts on the deficit. We'll do that at the very end. But because it's un week, we've got some interesting people in the city.

Siddi Khan, mayor of London, is going to join us and we're going to talk to him.

Very excited.

All the different things, similarities between the uk elections, the american elections, different dynamics. I'm excited about that. So let's jump in. We got a packed show and so we are delighted to have with us joining us for the conversation, the mayor of London, Mister Sadiq Khan. Mister Mayor Sadiq, thank you so much for joining us for the discussion today. And by the way, congratulations to labor. How long has it been since labor had their historic, smashing victory in the recent election?

Well, it's great to be in the second greatest city in the world.

Oh, you're in New York right now.

It is, yeah. So it's been 82 days since history was made. And the Labor Party, the party that I'm proud to be a member of, won a general election for the first time in 14 years. And to give you context, John, and your listeners in America don't realize this, but for the last hundred years, the conservatives, our version of the republican party, have been in power for two thirds of, of that time. So labor has only been in power for a third of the last hundred years. So us winning is unusual. So it's great that we've won after 14 years and we won pretty big. We wanted, we won a landslide victory.

And in some ways counterintuitive to the direction that so much of Europe is going in. And even, you know, after, after Brexit, the direction that the UK was going in. Generally, the populists and the right have been gaining a foothold. This was a bit of a counter.

If you look across the globe, and Europe's not excluded, over the last ten years, there's been a rise of right wing parties. And even in some parts of Europe, far right parties. Look at France, look at Amsterdam, look at Germany with the AfD, look at Italy. Across Europe we've seen this, where basically right center politicians have played on people's fears and won elections using fear as a motive. We and our election, both my election in May, but also the general election in July, talked more about hope and about change and about positivity.

Hope and hope and what now? Hope and change. Where'd you wait? Did you read that off one of our old posters? That's what we used to go with. We used to go with hope and change.

Well, you stole that originally from us, if you remember. Son of a bit. Really.

Now, are you surprised? Keir Starmer, he basically ran against the corruption of the Tories and I guess his first hundred days, people are feeling a little underwhelmed. He did something with restricting pensioners funding and he's overpaying some of the folks in his cabinet. Was that a surprise to you, that those were moves labor made early on in this administration?

One of the things that Keir has tried to do, and I think, in my view, all good leaders should do this, is be teachers in an unpatronising way, explain to people some of the challenges, some of the problems, and then try and address them. And one of the things that Kears tried to do, the prime minister has tried to do, is to explain to the british public, look, we need a long term plan to fix their foundations, to address the inheritance we have. And I've got to be straight with you. We've got a black hole just this financial year, 24, 25, we're going to find 22 billion pounds. And rather than making false promises or over promising and under delivering, I'd rather under promise and over deliver. And the idea is, John, wait, isn't that austerity?

Hold on a second.

Well, let me explain why you were.

Labor, where you just say, like, let's just print money. Let's print a little bit more money, go into a deficit and take care of business.

No, it's okay, in my view, to borrow, to invest in infrastructure and so forth, but you shouldn't borrow to, for revenue, ordinary day to day running costs. That's a, yeah, not a smart thing to do. So at the same time as he's making tough decisions in the short term, he's planting the seeds for the middle to long term in relation to growth, in relation to investment in infrastructure, in relation to saying, listen, there's going to be a dark tunnel for the short term, but there is light at the end.

Did he explain that beforehand? Did he say to the people during the election, hey, by the way, we're in a dark tunnel and I'm going to have to do some things.

No, to give. One of the things that he was criticized for was the manifesto that he published, not making big promises. He was actually criticized for the manifesto being quite sober. And he said during the campaign, I'm not going to make any promise I can't deliver. I'm not going to have any commitment in my manifesto that isn't fully costed. And many people criticized him for, because where's the hope? Where is the excitement? And the point he made was, look, the phrase that I've been echoing is actually stability is the new change. We've had situations on where we've had five prime ministers in the last five years. Just think about that. We had one prime minister who lasted 49 days. A lettuce has a longer lifespan ahead of lettuce.

I saw that.

Yeah. I mean, for those of you listeners who don't realize there was a competition, who'd last longer, this lettuce or prime minister?

Liz Truss, by the way, it has changed the way that I approach eating salads. I now I will let something sit for much longer. It's the, I call it the Liz truss salad, and I will eat it days after. I shouldn't have even gone near as.

Long as it's a salad you're eating and not prime minister's.

That's ok. Now. Are you surprised? You know, we are in a very similar situation. And it's interesting how immigration and migrants has, it's not just in particular countries, it's a worldwide phenomenon that is driving these populist movements. I mean, it drove Brexit. It seemingly seems like if Brexit had not passed, maybe labor wouldn't have had the great success it had in this election. But I was surprised. The slogan for the Tories was stop the boats.

Correct.

And I think the slogan for labor was stop the gangs who are funding the boats. But both leaned into this idea that migration, and confusingly sometimes immigration is an enormous issue.

I think progressives around the globe haven't yet found the language to talk about these issues in a way that I think we should be talking about this issue. Look, this great country that I'm in now, this city that I'm in now in New York, you know this better than I do. What made this city, this country great was successive waves of migration. I speak as a child of immigrants, you know, my parents migrated from Pakistan to London. My grandparents, by the way, from India to Pakistan. No migrant, you know, goes through what they do to arrive in a city or a country, to sit on their bum to receive benefits. They arrive because they've got a can do attitude. They want to contribute. Sometimes they may be fleeing persecution, sometimes family reunion. And we've got to explain the positives of migration. At the same time, we've got to recognize there are some members of society who've got genuine grievances. They can't get decent healthcare, they can't get affordable housing, they can't let their child into decent school. But the reason for that is not because of the migrants. It's because politicians have failed to invest in these sorts of issues.

But there are obviously limits. I mean, if you can't. As somebody who does believe immigration, migration is an important part of infusing a country with new energy and new ideas and new enthusiasm and all these kinds of things. I'm also of the mindset that we have to have a discussion of what can countries. Certainly the United States has a different absorption rate than the UK or than, let's say, Liechtenstein or whatever we're going to be talking about. That's the part that we don't ever really discuss.

So I think one of the things. I've not met a sensible progressive who says open borders, anybody?

I haven't either. It's an easy conditions demagogue, but, you know, spot on.

So there's got to be. There's got to be control borders, there's got to be a process. And by the way, not every asylum seeker will have a successful case. Right? They may not be a genuine asylum seeker, they may not be fleeing persecution. There going to be a rule system that assesses this, sends people back who shouldn't be here. But it's going to be a process. And if you haven't got safe routes, safe passages, don't be surprised if people use unsafe routes, criminal gangs or all the rest of it and stuff. And that conversation is really important. It goes back to one of the things I think my profession, politicians, has been poor at, which is to be teachers to explain to people some of the challenges, some of the issues, and to address them where you can. And I think what's happened, John, to go back to your point about the rise of populist nativist movements, is what politicians have been doing is rather than addressing people's concerns, addressing people's fears, they've been playing on them. And the easiest thing to do, and, you know, this go back histories, is to blame the other.

The reason you can't get into healthcare is the other's fault. The reason why you can't get your mom operation is the other's fault. And it's easy to do. And as progressives have got to get better at responding to genuine concerns, but also calling out a lie and misinformation in relation to what migrants have been blamed for doing across the globe.

Well, you had that situation in England recently where, tragically, I think, three children were stabbed to death. The misinformation about where the attacker came from, it actually turned out to be somebody from Wales, maybe his parents had immigrated here, but it set off really terrible riots in the streets, for those.

Of you listening aren't aware. So this summer, in July in Southport in the northwest of England, there was a lovely kids session taking place of yoga, a Taylor swift themed yoga event. A lovely event. Children, teachers, a man came into this yoga themed party, killed, tragically, a six year old, an eight year old and a nine year old, injured eight other children and injured two adults. Now, this person responsible is born in Cardiff in Wales, and there's a criminal case taking place. I won't talk too much about the case. What happened then was very shortly afterwards, a lie was put out on social media which said the person responsible was a Muslim. Not true. The person responsible was an asylum seeker. Not true. And this was amplified on social media, by the way, one of the owners of the social media company got involved in spreading the lie.

That's unusual for him.

Well, I mean, what happened then was. John, a inverted Commons protest took place that night and then the far right turned up. They tried to burn. Well, they did burn down a hostile house in. Asylum seekers tried to attack places of worship where Muslims worship. John, they were stopping cars to see if the person inside was a person of color or was white. And these rights spread across the country. Combination of lies, disinformation, misinformation and social media. And so in the end, Prime Minister Keir Starmer stopped this by tough law and order in London, by the way, we had thousands coming out in solidarity and allyship, because here's the irony in those parts of our country where there's the most diversity, actually, you don't have these sorts of problems because people realize that actually, somebody who's a person of color isn't the boogeyman. Somebody who's a child of immigrants isn't the bogeyman. A migrant isn't the bogeyman. It's those parts of the country where actually there is very little diversity, where these disturbances took place.

And by the way, it's also, there's a certain kind of implied problem here that I think is also needs to be addressed, which was, well, it turns out it wasn't an asylum seeker or it wasn't a Muslim or it wasn't a migrant. But even if it had been spots on, none of this is justified. And it brings up, and I'd like to talk to you about this, this is kind of a broader point, but, you know, we talk about democracy under threat and what we can do to bolster liberal democracy and the forms of government that we've all fought so hard, sometimes even against each other. Let's face facts. We're friends now, but it was, we had a hard time. But the challenge, I think, you know, we talk about the demagogues and the right wing using migrants and Muslims and all these other groups and Jews and people of color as weapons against each other. I think one of the main, if there's a unifying theory to this, if we go up and get kind of a macro view, we are in an environment where the media and social media are incentivized to conflict and to catastrophizing.

And so we have a population that is far more stirred up that whose reptilian brains have been stimulated by these media companies who are incentivized to keep you scared and to keep you watching. And this is where it gets interesting. I think a democratic system, which is naturally analogous, it's kind of slow moving, it's not that agile. And so you have a government that might not be very responsive and a population that's far more intensely engaged, and maybe that mixture is what's putting democracies at risk.

So we've got examples of this, actually, 2016, the referendum you mentioned in the UK, Brexit. We now know that, you know, lies were told, but Facebook and a company called Cambridge Analytica were some of their methods used in relation to that election campaign. We know there's been all sorts of serious issues in Myanmar because of lies being spread on social media. I think a number of things just to unpack the challenge you posed in the modern time. One is this. When you and I were growing up, the mainstream media we relied upon for information, there'd be fact checking, there'd be two sides of the story, and we would get both sides of the story. And you and I, as rational human beings, could form a view, right? There are young people now in both our respective countries being raised where the way their algorithm and their phone works is whether it's TikTok, whether it's Facebook, whether it's x, the way the algorithms are set up, they get one side of the story with no fact checking. And if you look at a certain video, the algorithms work that you get the same sort of video.

It could be a misogynistic man. It could be. And racist man, and worse. And there's no fact checking. And over a period of time, you become indoctrinated and brainwashed and start believing that that is your truth, and that's.

How they make money. All right, we got to take a quick break back with the mayor of London.

And what's worse is they monetize these algorithms so negativity gets more money. So that's why this phrase clickbait is so apt for what we're talking about. And so people know if they mention certain names, it's a trigger, which will lead to the algorithms work in a certain way, which means there's no incentive for these social media companies to have negative algorithms to stop that staff, to stop those lies being spread. And so, in the last couple of years, X has gone the other way. Fewer staff employed to check truth algorithms designed to spread misinformation rather than designs to take truth off. Now, if you were to say anything on your program that was against, you know, defamation, copyright, intellectual property, incitement laws, it's the wild west on social media. There are no rules that apply. And the famous Mark Twain saying, you know, allies halfway around the world before truth's got its socks on. Nowadays with social media, I mean, a lie is spread. We've had riots in the UK because of allies misinformation. Disinformation. And the context in a democracy is really serious. And that's before you mentioned foreign agents.

Sure.

That's before you mention bot farms, people.

That are weaponizing it. Now, the challenge is free speech. So, in liberal democracies, we have a value on free speech, which I think is incredibly important. I think the distinction I want to make is this isn't free speech. This is incentivizing people to engage more with lies, with weaponization, with things that create fear. It's not. An algorithm, isn't neutral. It's not benign. It drives you to further and further places of dispute. And in some ways, I think that can be suppressive for free speech as well, because that, isn't that the balance? How do we maintain free communication, free speech for people, allowing them to exchange ideas without necessarily incentivizing the most damaging of those ideas for further engagement? Does that make sense?

It does. But I'd qualify what you've said, which is we've got to recognize that even in the most liberal western democracies, there are limitations on free speech. So you aren't allowed to breach copyright or intellectual property or be defamatory or incite hatred and so forth.

Incite hatred I don't know about. But the other ones, I think you're right.

So we've recognized there's some limitations to have in a civilized society. Here's where I think where the problem is. Lawmakers have been slow to respond to, to the rise of social media. And here's what social media companies need to recognize. Unless they sort themselves out, regulation is coming down the road, because we've got to regulate this. And if you can't do it as nation states, there's got to be multilateral agreements because people will try and play.

Around with, like, nuclear power.

Absolutely. Let me give an example of a real life study. You've heard of deepfake, right?

Sure.

So in the UK, we have every November 11 at 11:00 a.m. we commemorate our fallen heroes. It's called Remembrance Day in the UK. And at the cenotaph, we have an event where veterans come along and we pay our respects to them. Last year, we also have been having regular protests in support of people in Gaza taking place. You know, it's really important in a democracy, we allow protests to take place as long as it's peaceful, lawful, and safe. Now, here's. That's the background. So in the week before Remembrance Day last year, some malevolent people put out a deep fake, deep fake of me instructing the police to cancel Armistice Day, to cancel Remembrance Day, because I wanted the police to allow a palestinian protest to take place.

So you. This is you coming out and saying, we want to cancel our remembrance, and I want there to be a pro Palestinian.

Bottom.

Okay. Okay.

Bottom.

And this is a video. This is an actual video.

This is a deep fake audio.

Oh, because.

And it was supposed to be a secret recording of me instructing the Metropolitan Police commissioner. So I'm instructing the police saying, listen, the most important thing is pro Palestine Council Remembrance Day, John, this thing spread and went viral. Right? What happens then is the far right organize a protest at the cenotaph because they believe that I want to cancel Remembrance Day. What happens then is they rock up at the cenotaph and there are disturbances. They assault police. They attack the police. There are broken bones. And here's the irony. Romance day was disrupted not by pro Palestinians, but these patriots. Inverted commas. Right? That is just one example of what we're talking about. And so you're spot on. You know, this technology has been used in a malevolent way, and we've got to regulate it, because if we don't regulate it, it's the Wild west. And that's why I'm saying to the social media companies, look, wake up. If you don't sort yourselves out, there'll be a problem. Now, they must have known, John, early on this was a deep fake. And if not, why not check with me? Why don't you? Listen? By the way, this thing's gone viral.

Can you please confirm, is this you or not?

Oh, but sometimes it's coming from the leaders themselves. Donald Trump and JD Vance knew that haitian immigrants, who, most of whom were there legally, were not actually going around Springfield, Ohio, and eating people's pets. But they said it, when told it wasn't true, said, well, it may not be specifically true, but that's how people feel. And this is a larger point. Sometimes it's not fakes at all. It's actually coming from inside the house.

Well, in that case, what I think we need to be better at doing is not giving equivalents. I'll give you an example. You've probably heard this before. I think I may have got it from you, which is, look, if you tell me it's sunny in New York, I tell you where I am, we're in the same room, it's raining. Rather than it being reported that Jon Stewart said it's raining, Sunni Khan said it's sunny. Your job as a journalist, say, I've looked outside the window and it's raining. That's right. And then the recipient of the fake news, the disinformation, can know that actually, somebody has checked. And that's a lie. With the Springfield, Ohio story, John, don't be surprised if some people believe it's true.

Not some people. I'd say 80% of a certain political party in the United States not only believes it's true, but is being somehow covered up and is evidence of not only the truth of what was happening with asian immigrants, but of a media conspiracy. But I want to get to the point that you said earlier, which is we do have to regulate that. And that's, again, that's the second half of this equation. I have watched congressional hearings on social media where they'll haul in the heads of these companies or they'll do it. These senators and these congressional representatives are so in over their heads. You know, we used to do a big bit about Ted Stevens from Alaska, who would, you know, very famously was the Internet is a series of tubes as though it's literal plumbing and, you know, food goes down there. So even when you said, we've got to regulate these social media companies, well, AI is around the corner. We haven't effectively done anything to stem any of this in the first place. That was my point about how do we make representative government more responsive and agile to the needs of the people as also a counterweight?

It's one thing to be against misinformation and all those things, and that is an absolute issue. But to be fair, government has not been, particularly, especially here in the united states. And I obviously can't speak as much to England.

No, it's same. It's the same.

The discomfort that people feel in their own lives is not being adequately represented, I think, by our government mechanisms. And that creates the fertile ground for demagogues.

I mean, I think you're being generous to lawmakers and I speak. I think it's not, it's not, it's not just an issue of them being Luddites or inexperienced. Don't forget that the social media companies are really, they're lobbying, right? They're lobbying, of course, and they're spending a huge amount of money to avoid regulation. They're hedging their bets. Right? There's a very good reason why the owner of one of the companies wants Trump to win rather than Harris is a very good reason for that. You know, the impact Facebook had in 2016, both in the referendum and in the presidential elections, they got skin in the game.

They're saying Trump is for free speech while he's literally threatening to jail Mark Zuckerberg. If Mark Zuckerberg acts in a way that Trump feels is election interference, I mean, its cognitive dissonance is rampant in this new environment.

Yeah, thats one of my points about actually, the reason why its a bit even more serious than you say is because theres a new generation of young people raised on TikTok and other forms of social media who only see one side of the story. They absorb things in an echo chamber. There is no challenge. And that's a big concern for all of us. And so one of the things we've got to do, and we're trying to do this in London, is trying to, at an early age, teach young people the skills to be more stoic, to be resilient when it comes to sort of brainwashing, to fact check, to have the sort of cognitive ability to check for themselves. But also we're trying to speak to the social media companies to. To make them explain their responsibility in relation to algorithms, how they monetize certain things. I'll give you an example. If you were to record a song today, a Bruce Springsteen song.

Hey, hey, you go easy, buddy.

You'll support me in a second. So if you were to do a Springsteen song and breached copyright, it would come down like that because there's a consequence of you breaching copyright. And Bruce Springsteen's got great lawyers, and it will come down, but there's no consequence of you doing social media. A lie, a disinformation, so forth. And that's why I think we've got to explain to the social media companies, look, you got to sort it out. If you don't sort it out, there's regulation coming, which won't be necessarily what you want.

No, but let's take the flip side, though. So here's where I think government finds itself in trouble, and let's take the COVID pandemic as our example for that. So everything that you're saying is incredibly reasonable. But to do those types of things, you have to earn a certain trust from the public that you're being upfront and even handed. So let's go through Covid. You've got a lockdown. Everybody's got to stay in their houses. Meanwhile, oftentimes, government officials are having sex parties and cocktail parties and doing all these things. So immediately there's a disconnect. The people aren't going to trust it. Then they come out and say, you have to take this vaccine. If you don't take the vaccine, is 100% safe and effective. Now, clearly nothing is. I mean, you watch, you know, pharma advertisements. I know they don't do them over there, but over here, man, there's a list of 20 things that could happen to you if you also want to cure your headache. And now that same entity is going to come in and say, okay, we're going to regulate and pull off disinformation and misinformation. Without having a very good track record of being able to discern what's misinformation and what's disinformation and of producing misinformation.

So do you see the difficulty? This is the point I'm making about. We can always point to social media and all those things. And any new media form from the printing press on has been disruptive. What I'm saying is our governments have to also be self reflective and have to find a way. How do we attack that side of it?

Well, firstly, nowhere in the globe will you ever get a government that's perfect. And we never have.

No question. No question.

And we can't allow best to be the enemy of the good. But if you think about a rectangle, if you think about on the one extreme people accepted straight away the importance of the vaccine, on the other extreme people, no matter what, think it's a conspiracy. Covid doesn't exist. People aren't dying, the vaccines are evil. Those are two extremes in the rectangle. The vast majority of people are actually in the middle, right? They just want to be presented with the evidence and the science. And that's where experts come in. Whether it's experts on climate change, experts on whether the earth is flat, experts on whether, when you're on a tooth, that you go to a dentist, experts on the vaccines, and I think you were basically, John, write off this extreme in relation to the COVID deniers, conspiracy theorist, you got to take those who are definitely on side and then educate the vast majority in the middle with people who are respected, trusted message carriers. So in London, we had a real life problem, which is this, which a lot of people in the middle, particularly people of color, actually good reason, didn't trust the pharma companies, right?

Because in the country of origin, they were used as guinea pigs.

Hey, we did it here in America. Tuskegee experiments and all kinds of other things. Yeah, sure.

So what we had to do, we realized there was an issue of the phrase was vaccine hesitancy, which is certain communities weren't taking the vaccine for actually genuinely good reasons, for historical reasons, and all this for it. So what we did, John, is I recognized that actually we need respected message carriers who they trusted to say, look, I've taken the vaccine, it's okay, or whatever, whatever, whatever. And the same applies in relation to any issue. I think we as politicians have got the humility to realize we need other experts to come in and, and explain to the public.

I guess the question is, how did the experts gain? Because here exact same mechanism I think it was. And I think they would admit this now, in retrospect, that the experts were not, were so concerned about that side of the rectangle that you're talking about the kind of the crazies that couldn't have been convinced at all.

You're not going to win, mother.

That they went overboard in the way that they talked about. They didn't educate in a manner that spoke to that middle, that might have had valid concerns. They went too far. And so ultimately they ended up hurting the credibility of the expert class. And listen, big pharma has a long way to go to gain the trust of, there's nobody that could look through the Sackler papers and what's been done with OxyContin and all those other things and think, oh, those guys are on our side. I think we have to recognize and speak honestly and openly to skepticism. Skepticism is not conspiratorial.

There's nothing wrong with that. That's a good thing. I'd rather, you know, the age of deference, in my view, is gone. And so it should be. I'm all in favor of getting a second opinion in relation to a doctor or a mechanic or a dentist. But I make this point, whatever issue it is, if my car's broken down, I'm going to go to a mechanic. If I got a toothache, I'm going to go to a toothache. Of course, if I got a backache, I'm going to a doctor. I think my concern is politicians have tried to downplay the importance of experts. I'll give you an example. In my country, during the Brexit campaign, those of us who wanted to remain in the European Union said, look, speak to these business people. Speak to these university lecturers. Speak to those experts. They were telling you the benefits of the European Union. There's a phrase used by a lead in Brexit. He said, the public is fed up of experts. And so what happened was the public started ignoring the experts. And it was an emotional decision. It was emotion rather than rational. And I'm all in favor of experts because, you know, as I said to you, in our personal life, we use experts.

Right, right.

But there's a certain humility to expertise that has to be spot on.

Spot on. I think we should welcome people asking for us. I would say to doctors and lawyers, you should welcome somebody asking for a second opinion. Because if you're, if you're doing your research and you've done your, presented your case properly, you don't need to be scared. Of nothing wrong at all.

You know, it's interesting. And when you ultimately come down to it. So one of the most emotional, driving forces of Brexit was that idea of these people of color coming and changing the very fabric of England. Ultimately removing yourself from Europe, made it harder for so called european white people to come in. Many of them left. What are they replaced with the very immigrants that they feared in the first place.

That's one of the ironies.

It's all turning around now.

That's one of the ironies of Brexit, actually. Immigration in the UK has gone up. The immigration that's gone up is people of color.

Right.

And so you can imagine.

Wait, what happened? What's going on?

Quite all right.

We gotta take a quick break. Okay. We're back. By the way, the fact that you guys do your elections in the amount of time that you do. God bless. I wish, I think that would take care of so many problems in this country in terms of a never ending campaign and election cycle that constantly provokes and pushes people's emotions. What. What is that? What did it take eight weeks for you guys?

Six weeks? Here's the issue as well.

Oh, my God.

I. So I've got friends who, of course, are american politicians. As soon as they've won the election, the next day they start fundraising for the next one. Right?

Crazy.

And that leads to short termism. But also, frankly speaking, you're obsessed by raising funds. Right. Rather than delivering your manifesto. How can you make a long term, ten year plan or eight year plan if your obsession is raising funds for the next campaign? But also, you know better than I do, if you're always obsessed by poetry in a campaign, where's the pros of making the tough decisions and foundations making the plans?

And we'll spend, I mean, billions and billions of dollars. I think I read somewhere that the entire election for labor was under $100 million.

Oh, no. No. So you'll love this even more. So, during that six week campaign, I mentioned the six week short campaign. Each party, maximum, maximum for the six weeks, can only spend 35 million pounds.

And for those of you who are listening at home, a pound is equal to, I think, a nickel, and it's six weeks and it's $35 million. And then you've got five years. You won't necessarily have five years, but you've got five years to govern. To actually govern.

And that's the rhythm of our cycle. So that. That rhythm is really important, because you. At the beginning of this interview, you mentioned a tough decision made by the prime minister. He will have worked out. I've not spoken about this. He will have worked out. The rhythm is make the tough decision now and the fruits will come in before the five years are up. Now, if he was obsessed by the next election, you'd be thinking, oh, my God, I can't do this because I may not be able to raise money for my election. Oh, my God, the donors may not like it, and so forth, which doesn't lead to good long term governance. It's not conducive to making long term plans for the best interests of the country. And I think it's really important because, listen, you know, the Churchill saying as well as I do, I think Churchill once said that, you know, democracy is an awful thing, but it's the best we've got.

That's right. They say the same about capitalism as well.

Yeah. You know, similar. The point being is that, look, it's not great, but actually, we've got to try and make it work because I think the problem is, if you're always obsessed by the election, what about the governing?

And it really does open the door to these kinds of less stable movements. I mean, look, it really does seem like, and we go back to kind of that post world War two order, there is a movement afoot to replace what has been sort of the stable, what they call rules based order, and by the way, not perfect and oftentimes exploitative of resources from underdeveloped areas. And I don't think anybody's been able to, to fix that. But it really does look like at this point, it's going to come down to, what are the new axes of power if Trump wins? I imagine the axis of power goes through Russia, Hungary and the populist movement, whereas I think, if not, it stays within kind of that. Who's going to carve up the world? Is it going to be China and Russia, or is it going to be the US and Europe? Unfortunately, that seems to be where we're headed.

So there's a great saying that I, that's an american saying from an American Democrat politician that I think it's really important that we remember this. All politics is local, right? So, you know, most people in America on November 5 will be voting in relation to what's best for me and my family. And I understand that. But your elections in November are so much more important than that. The geopolitics of who is the president of the USA, you set the weather, you can either send out ripples of hope or you send out ripples of fear.

Guess which one we're leaning.

Well, but it really matters.

No, I know. I'm with you.

If you're somebody in another part of the globe and you see that the president of the USA doesn't follow the rules, treats the women a certain way, treats people of color a certain way, has certain views about the second biggest religion in the world, has certain view.

In relation to NATO, destabilizing. It's very much disrupting.

What impact does it have on the rest of the globe? It's really important. And so it does matter. And so, of course, I appreciate your listeners and those in the USA who have been making decisions based on all policies local, but understand the consequence of this.

You're asking us to think about other people, to think about somebody other than ourselves.

What would Ukraine have done without the support of the USA? Right. In a parallel universe. Understood, where would nature be right now? And so it's really important to understand that actually all of us, all of us around the globe are watching with so much keen interest what happens on November 5.

Right. Well, we hope to have an answer for you by November 6, but chances of that are not good.

The question is, John will ever accept the result?

Oh, God. Don't even. All right. Mayor of London, Sadiq Khan. I want to thank you so much for joining us today. It's been a pleasure, such an insightful conversation, and I really appreciate you. Enjoy your time in New York and get home safe.

Great. Take care, mate. See you soon.

Siddi Khan, the mayor of London. Fabulous, interesting ideas on how we, we balance that free speech and government. My, my faith in government being able to regulate these complex and modern digital technologies is not so high. But we are going to talk a little bit more about the economy from last week's episode. For those of you who remember, we were discussing inflation and the economy. We had on Jason Furman from Harvard, which he made very clear that's where he was from. And Kitty Richards, often what happens when we have discussions about inflation or the economy with economists is another economizer. Other economists will contact us and suggest that, well, I've got something I could perhaps proffer that's a different explanation. And we had that happen with this one as well. So we are delighted to welcome back Stephanie Kelton, economics professor at Stony Brook University, author of the Deficit Myth. One of the things we were talking about, Stephanie, was that these larger deficits might be inflationary because obviously people are paying higher rates for their mortgages and things like that. And also, if the government is paying a lot of money on interest, on the debt.

It may not have the resources to do the kind of stimulus that would maybe be more helpful for individuals, whether it be demand side or anything else. But you've got a very different approach to this. So talk to me.

So there has been for a very long time this idea that when the government increases spending or cuts taxes and the deficit increases, that it leaves you with fewer resources. Like you're less able to respond to a crisis in the future. And we've heard that over and over again. And I'll just give you an example. When the Republicans pass their tax cuts in 2017, right? 1.7 trillion, it's in that range of $2 trillion. So, you know, people like Larry Summers, for example, did not like the idea of the Republicans pushing these tax cuts through. I didn't like it. But when Larry was arguing against the republican tax cuts, he said, and I'm going to quote him, okay, so this is exactly what he said. He said, if the Republicans are successful in pushing these tax cuts, cuts through, we are going to be living, he said, on a shoestring for decades to come because of the increases in the deficit. Whoa. And Larry has warned, God help us if they get away with this. There isn't going to be money. If a crisis comes, we're really up the creek because we're living on a shoestring.

And lo and behold, a crisis comes only a couple of years later, Covid is at our doorstep and do we find ourselves without the fiscal firepower? There's no money. The cupboards are bare. No, of course not.

Well, to be fair to summers, he was against the amount of money that the government gave to the american people during the COVID crisis too. So he was consistently against everything and consistently wrong.

I mean, you couldn't have been more wrong than to say that because of the tax cuts and the increases in the deficit, the government was going to be unable, would not have the resources.

To respond to a crisis because we can make money.

And we did. Congress authorized bill after bill, fiscal package after fiscal package. 2.2 trillion, 900,000,000,001.9 trillion, 5 trillion in the span of twelve months, John. And for exactly the reason you just said. Because Congress has this thing called the power of the purse. They get to spend money into existence. There is no running out of money. What you can run out of are things to buy. And, and that's where political will. Yeah, or political will, which is what we didn't have. And I could also talk about Larry there as well. What we didn't have in 2008, we had all the firepower that we needed.

That made me so angry.

We chose not to use it because politically, people like David Axelrod and Larry Summers were advising Barack Obama and saying anything with a t, you cannot say trillion. Right.

But Stephanie, there must be a limit to what the government can do. Yes. Like, if we got to a certain point, wouldn't it just be devaluing of currency?

That's why I said a few seconds ago that you can't run out of money, but you can run out of things to buy. So inflation was always the thing that we should have been preoccupied with, not the number that pops out of the budget box. If it's a trillion or a trillion and a half or whatever the size of the deficit, you can have very large deficits and de minimis inflation, but you could also have fairly small deficits and an inflation spike. So inflation is the thing to watch out for. Can Congress spend too much? Sure they can. Instead of a $1,400 check, they could have sent 14,000 or 140,000. Who would have had a real problem?

Stephanie, the thing that I kept trying to get to with Jason Furman was the idea of the efficiency of capital, that it seemed like our experience in 2008 and the experience with the Trump tax cuts and the experience then with the stimulus money that was sent out by the government, shows that money from the government, delivered at the demand level, like the stimulus, rather than the tax cuts, is a much more efficient use of government capital. It stimulates much more growth, much more demand, much more GDP. So why don't we do that more often? We could spend less, get more pop, keep people in their homes. Yet almost overwhelmingly, politically, stimulus goes to the highest and the corporate level.

Okay? Because a couple of things. One is that when you think about macroeconomic policy, and you have, like, two policy levers, right? One is monetary policy. That's what the Fed does. And the other is fiscal policy. That's what Congress does. So we have, for the past 50 years or so, just relied disproportionately on the central bank, on the Fed. It's like, your job is to give us a good economy. You give us full employment, you give us price stability, and Congress will just worry about, like, managing the budget and trying to bring down deficits and whatever. So fiscal policy, which you just described, works really, really well, has been like the thing that we put on the wall and we put the thing above it that says, you know, in emergency, break glass, we don't use it except in an emergency.

So monetary policy is more on that supply side, fiscal is more on the demand side. We don't use it as much.

Well, Republicans will use fiscal because they always do tax cuts because it's in their DNA. So any chance they get, they will come through and pass tax cuts, the Bush tax cuts, the Trump tax cuts, and so forth. Reagan.

But even those go to who are supply side generally. I mean, they go to the highest.

Exactly. So then it becomes like, how are they structured and who benefits? So take the Trump tax cuts. If you look at the personal tax cuts, it is true that everybody across the income distribution got a little something from the Trump tax cuts, but it is very true that the people at the tippy top, those in the 1%, got the lion's share. So some 83% of the benefits went to folks in the top 1% of the income system.

And corporations got like a 30% tax cut. They went from 35% to 21%.

Yeah. And then you use the word stimulus, which you asked about earlier, and you have to at some point, kind of shake your head and go, why are we calling it stimulus when it doesn't actually stimulate anything? I mean, we've been running the experiment for 50 years. The results are in. We have the data. It doesn't work. There's a recent study out of the London School of Economics. Wherever a team of researchers looked at the last 50 years, they looked at the data, they looked across countries, and they found that the supply side policies of the kind we've just been talking about have benefited exactly one constituency, and it is the very rich.

Right? Stephanie, would you say so to put a bow on it and thank you for this. This is really helpful.

Sure.

At what level would you say the debt or the yearly deficits become an issue? Like, listen, Trump is out there. Like, let's just use crypto to pay down the debt. Like, now it's just about a shell game of moving magic around. But what, you know, and Krugman would say trillion dollar coin, like, does it make sense to just create something to go in there to lessen our interest payments? What do we do then with that debt and with those yearly deficits?

John, the first thing I would say is that we should ask ourselves, why are we issuing treasuries in the first place? Like, why do we do that? People say the government has to borrow to cover the shortfall, the finance deficits and all that. I don't think that's the correct way to describe what the government is doing, you know, the government is paying contractors. Think of defense contractors.

They're paying benefits, 400 billion a year.

Paying people on Social Security. They're paying federal workers. Everybody gets paid to paid in dollars. Government makes its payments and then it collects some tax. So let's say this fiscal year, the government's going to spend around $7 trillion. It's going to collect back around $5 trillion. We call that the government deficit. Right. Because they're spending more than they're collecting back in revenue. So what's really happening? What's really happening is they're putting $2 trillion into the economy. Their deficit becomes the stimulus.

Yes.

Well, it may or may not stimulate very much, but it is $2 trillion that goes into somebody else's pocket. You could be done right there. You could leave people holding that $2 trillion and say, okay, the government added $2 trillion. But we don't do that. What we do is we match the deficit each year by having the treasury issue bills, notes and bonds. And when they do that, we call it borrowing. And we say they're driving up the debt. All they're doing is allowing people to trade in some of the dollars the government has spent into their hands for a different kind of dollar called a treasury security. Those are.

So you're saying we could do this without ever selling our debt?

Sure.

You're saying we can run these deficits or run this debt without allowing the chinese government or somebody else to come in and buy up treasuries and hold our debt, and then we wouldn't have to make interest payments to those entities.

You got it. And if you. John, look, look, you know who wouldn't want to do it? Look, the beneficiaries of this are the people who get that sweet, sweet nectar that you're talking about, which investment capital, the interest income. It's interest income. It's like people talk about entitlement programs and all this sort of stuff, and they wring their hands, say, oh, this is terrible. We have this entitlement problem. This is the biggest, most regressive entitlement program that we have. It goes exclusively to people who already have money in proportion to how much they already have. It is a subsidy largely for the wealthy.

It's unbelievable. It's this idea. You're almost like saying, like, you could buy a house without a mortgage. Like that's kind of what we're talking about. But what would then hold those deficits in the real world if somebody isn't holding that debt?

Well, okay, this is the other really strange thing, which is that if you have a dollar in your wallet right now and you look at it, it says, Federal Reserve note. That is a liability of the Federal Reserve, which is part of government. We don't call those debt. We don't say, I'm walking around with government debt in my pocket. We don't put it up on a big debt clock and try to terrorize the population by saying, you know, all of this is part of the national debt.

We do do a big debt clock.

To terrorize the population, but that's because we're keeping track of the treasuries, the bills, the notes, and the bonds. Those get called the government debt. They're just as much debt as the dollar bill in your pocket. But we label one the national debt and we don't call the other one the national debt. All of the dollars that are, you know, banks have at the Federal Reserve are kept in accounts, called reserve accounts at the Fed. The Fed pays interest on those. And the Financial Times had a piece up just a few days ago that said, are you ready for this number, John? The Financial Times said that because of the interest rate hikes, the Federal Reserve has been paying out interest on those deposits that the banks keep at the Fed. $1.1 trillion to the banks just since the Fed started raising interest. It's just interest paid on deposits. It's cash in their accounts.

And that's a trillion dollars that we are not able to use for investment or infrastructure or standard of living. None of that stuff from the government. That's all just to enrich the banks, to hold our treasuries.

But the point is to just recognize that the way we describe things, right, that we call treasuries the national debt, but we don't call reserve balances the national debt. We don't call the dollars in our wallet the national debt. They're all liabilities of government. And I think what we really have is just a failure to communicate properly.

But you do believe there is some limit to all this?

Sure. As I keep saying, coming back to inflation is the limit. You cannot, yeah, you cannot just take out the money bazooka and go wild and expect no consequences. Your inflation is the thing you have to manage, and you have to do it carefully.

Stephanie Kelton, thank you for coming on and offering those explanations, and thank you for doing it in an accessible way that allowed me to understand it more clearly without making me feel like the dumbest person in the universe, which sometimes happens. Stephanie Kelton, thank you so much. Economics professor Stony Brook University, author of the Deficit Myth. Fabulous. Lots of show. I hope you guys enjoyed it today. It was very dense. We'll have one next week. Maybe we'll take our time. Maybe we'll relax. Maybe we'll enjoy ourselves. Thanks again, as always. Lead producer Lauren Walker, producer Brittany Mimedovic, video editor and engineer Rob Vitolo, audio editor and engineer, Nicole Boyce, researcher and associate producer, Gillian Spearhead and the executive producers, Chris McShane and Katie Gray. Thanks so much. We'll see you guys next time. The weekly show with Jon Stewart is a Comedy Central podcast. It's produced by Paramount Audio and Busboy Productions. Paramount podcasts.