Gary Stevenson
Appearances
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
Well, it probably mainly started when I was working as a trader at Citibank. So to give a little background for those who don't know me, I'm from London. I grew up in a place called Ilford, East London, quite a poor family. Was very good at maths, managed to get into the London School of Economics, which is a very fancy elite university here.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
And when I was there, I won a competition called the Trading Game, which used to be run by Citibank. And through that, I got a job working as a short-term interest rates trader for Citibank here in London. And I worked there from June 2008 through the crisis. And I basically made my money by predicting that we would have a very weak recovery from the 2008 crisis.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
People sometimes forget that during the crisis itself and immediately afterwards, we basically had 12 years, I guess, from 2008 up till COVID of continual predictions that we'd have a really strong recovery, which never really happened. Markets spent almost the whole time saying interest rates will go up aggressively next year for that whole period 2008 to 2020, which obviously... Thank you.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. This is why for most of history, inequality has been high. Really, the unusual thing that's happening is not what's happening now, it's what happened for the 50 years after World War II.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
Once the inequality is very high, then you have these flows of cash from governments and from ordinary people towards the owners of the assets, which will be offset by... basically asset flows. It's really the same as a trade deficit and a capital account deficit. So if you don't do anything, the rich will squeeze all of the remaining assets out of government and the middle class.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
That will happen relatively quickly. You have to introduce a flow of cash, a flow of wealth into that system away from the richest. If you do not, you have to do that. So realistically, this has to be taxation. And for me, I think what you want to be doing is you want to be trying to find a way to tax asset hoarding. So a wealth tax. A wealth tax or a tax on inheritance is at very high levels.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
I think anything that you can get in is good. I'm not sure how much more practical an alternative minimum tax is. To be honest, I actually think the problem with wealth taxes is less practical implementation and it's more political will, to be honest. China does not allow billionaires to own $2 billion of Chinese assets and not pay tax because they live in Monaco.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
If you think about it, taxing wealth is much less mobile than a person. It's physical assets. Of course, we have a situation in the West where we tax on domicile, regardless of where the assets are located.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
makes tax voluntary for rich people you don't need to do that china doesn't do that i think we don't have to do that but listen i am not i'm not religious about wealth taxes as the solution i think i think raising tax on income of very wealthy people would be beneficial but i think it's important to recognize if you raise tax on the income of the rich all that is going to do
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
is slow down the rate at which inequality increases in the majority of cases. If you want to actually improve living standards, you probably do need to think about will this wealth ever be returned to the people? And I mean, To be honest, really, more than anything, I'm someone who's identified a problem and I want to start a conversation about what are the possible alternatives.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
Yeah, I think the middle class is a historical abnormality and it's an international abnormality. Obviously, you know, taking the small scale from the perspective of an American or a British person, it seems like the norm, but it's not the norm. We had it for 70 years. I think it should be obvious that we're losing it. Yeah, power tends to accumulate over time.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
These ideas existed in the founding of the USA, the idea that you need to keep power distributed, you need to keep power divided. I think this is just a truth for all human societies. If the masses do not consciously try to stop the elites from concentrating power, the elites will concentrate power. I think all of history supports that as an idea.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
I think we can. I believe we can. I wouldn't do the work that I'm doing if I didn't think we can. My hope is really... The conversation needs to be being had. At the moment, the conversation is not being had. I think the question which Scott brought forward is the right one. And also the question you brought forward is the right one.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
But there's a kind of a jump towards the technicalities of what would be the correct taxes to bring in. I think if we're being realistic about how to achieve this change, you have to accept that we are a long, long way away from ever having the power to implement these taxes. I think what...
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
what needs to be done is more people need to understand in the absence of something being done here to stop inequality from rapidly rising, we will see really, really aggressive, fast, dramatic falls in living standards in the UK, in the US, across the Western world. I think the more people that recognise that,
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
the more we can start having this conversation on the basis of something needs to be done. But the truth is we are a long way away from that at the moment. So I always view this as really two separate battles, which is one, technically what you need to do to the tax system, but two... What do you have to do to actually get any changes done at all?
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
Because the reality is active changes are being made at the moment to reduce taxes on the rich. Rich are taking more and more power every year. They're getting more and more control over politics, more and more control over media. We are not moving in the right direction, even in the argument.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
So in my mind, I always split into two separate things, which is winning the argument and changing the tax system. Because people always push me to change in the tax system when the truth is we are going to lose the argument. And the reality of that is in the next 20 years, you will see collapse into widespread desperate poverty of ordinary people in the UK, in the US, in Europe, across the world.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
So really, you do have to win the argument first.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
I think you're kind of seeing, in a way, an interesting shift towards taxing consumption, which is really aggressive compared to taxing income. In a way, I can't help but look at this and think, finally, here's somebody thinking about the flows of wealth.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
Because this is what my big thing is like, look, you have the middle class and the government being drained of wealth and the rich and the super rich accumulating all of this wealth. And that's a problem. And the kind of argument behind these tariffs, whether this is the real motivation or not, it's kind of a similar argument, which is we're running these trade deficits.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
It means that wealth is leaving the country and being accumulated in places like China. And that's a problem. To be honest, I would love to hear what you guys think. I mean, I'm sure you will have been watching it the last few days as much as I have. I'm trying to figure out in my head. I'm super sceptical.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
I'm very sceptical of the idea that Trump is trying to protect the best interests of American workers. But maybe he thinks that's what he's doing. But if he was doing that, the big thing to me is you want to see who's going to get richer, right? When you bring in these tariffs, the primary people who are going to be hurt in America are the poorest people because consumption taxes work like that.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
Are they going to cut other taxes on the poor or are they going to cut other taxes on the richest? It looks to me they're bringing in policies which at the very least in the short term hurt the poor and the tax policies they're matching with that, which should be supporting the poor, are instead supporting the richest.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
And I think they're going to see real problems once the inflation hits and once... the poorest people in the country start seeing that they can't afford to buy cheap clothing, to buy cheap phones and computers and cheap appliances, because these are the guys who won't be able to afford it.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
But to be honest, I'll be honest, it's probably the most interesting thing I've seen a Western leader do to the economy in my lifetime. I'm worried about it. I'm not the only person who's worried about it. But if I'm being totally honest, I've spent the last four or five days trying to get my head around it just like everybody else.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
And I'd be lying if I said to you, I think I've got this totally nailed down.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
If the Titanic's going down, what do you do at an individual level? Listen, don't get me wrong. You can try aggressively to reduce your spending. You can do everything you can to get yourself and your kids into good jobs. You can encourage them to study mathematical degrees that have good career options, and you can try and get them in.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
And maybe social mobility is better in the US than it is here in the UK. But I've been to the elite universities. I've been to the best jobs in the world. There ain't no kids from poor backgrounds getting in. So I'm very hesitant to turn around to your audience and tell them to try and solve things on an individual level.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
If we as a society are countries which try to respond to societal problems with individual solutions, then our societies will collapse as soon as they encounter a societal problem. So listen, I'm not going to tell anybody, don't work hard, don't try to make money, don't try to save, don't try to protect your family.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
But I'm going to try to encourage people to protect their class, to protect their community, to protect their society. And that does mean you have to be prepared to work together
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
The message that I think I would like most to deliver to young men in America and the UK is I want them to understand that we have really significantly reduced social mobility.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
The reason I want them to understand that is because I think we still send a message to young men that success is about how hard you work and what you put in, when the reality is, and I know people might not like to hear this, the truth is success is like 85, 90% who your dad is now. I'm sorry to say that, but that's the truth.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
The reason I want people to know that is not because I want them to give up and not work hard, But because the reality is, if you come from a poor background, it is very, very difficult to even be able to buy a home and afford a family.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
And I want people to know that because I want young men to go out there, work their hardest and recognise that if they are able to buy a house and support a family from a poor, ordinary background, they are doing really well. They are doing really, really, really well. Because I think this message...
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
that tells young people you are what you make, you get out what you put in, and then gives all the money and all the wealth to people from rich families who then go and post it on Instagram, is making our young men feel like absolute shit. It's making our young men feel like, and we're lying to them. Listen. The truth is we've kind of broken society now.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
And if you come from a poor background, it's almost impossible for you to ever be rich. But it is possible for you to have a family, protect that family, support that family and live a dignified life where you are proud of yourself and what you achieve. So what I want young people to realise is yes, Social mobility has been destroyed.
Prof G Markets
Tariff Chaos & Trading on Inequality — ft. Gary Stevenson
And yes, if you are from a poor background, that makes it maybe impossible for you to get rich. But that doesn't mean your life is over. There are important things that you can achieve, that you can do for yourself and your family and for the people you care about.