Pippa Magram is a former senior economic advisor to President George W. Bush and founder of HRobotics, a renowned author, and the founder of Trigandometry. She tells us about her journey into the White House, how she got her start as an economist, and what it's like working in the Oval Office.
00:02:19.220So I just was always interested in what was going on in the world economy and studied it and somehow ended up working in the White House, being President's advisor on economic policy.
00:02:30.360That's when we had Enron, WorldCom, seven of the nine largest bankruptcies in American history in one year.
00:04:20.660I have one chief executive who came into my office.
00:04:23.680He goes, the president's policies are terrible, and he should fire the secretary of the treasury, and it's all a disaster.
00:04:28.560And I'm like, great, let's go over and tell him.
00:04:30.480And as we're walking, he's just bombarding me with how bad it is.
00:04:33.040We arrive at the Oval Office. As he crosses the door, he turns in this totally obsequious,
00:04:39.980Mr. President, I am so delighted to meet you.
00:04:43.580What happened to you? Come back to me. Come back. Don't look into the light.
00:04:48.040And he never said a word. Because why? He suddenly has visions that he is going to be the American ambassador to name the country I love best.
00:04:55.840That he's going to be invited on Air Force One.
00:04:57.520And this is one of the biggest problems, I think, for all leaders, but heads of state, literally, you know, people get obsessed by the power and the paraphernalia and the, my precious, and it's a huge danger for all leaders, and they have to pick people to be around them who aren't affected by all that stuff.
00:05:16.220Talking about obsession with power, the question that you probably get more than any is, what do you make of Donald Trump at the moment and what's been happening?
00:05:23.480The economy seems to be booming under Donald Trump at the moment. Has it gone too far? I mean, what is happening?
00:05:27.980Well, okay, so first of all, presidents don't make the economy do stuff.
00:05:33.180But their policy stance does matter. It sends a signal.
00:05:37.300But a lot of the things that are happening right now kind of started well before Donald Trump.
00:05:41.340So like, for example, wages went up in China like five times in the last three or four years.
00:05:47.860So the Chinese manufacturing picture is not very competitive anymore.
00:05:51.480And in fact, the U.S. is very competitive in comparison.
00:05:54.840So the job started moving back to the U.S.
00:06:00.460And you're like, well, actually, it kind of was already in motion, and you're a bit lucky with that.
00:06:04.660On the other hand, it's also true that his policies are helpful for that outcome.
00:06:11.340So drawing a line between what a president gets to take credit for, I mean, basically all presidents are entitled to their luck, and they all claim credit for stuff that they didn't necessarily actually cause.
00:06:23.520The other awkward thing, I mean, awkward is putting it mildly, but what he represents, in my view, he represents a desire by those who supported him, not just to be a change in Washington, but literally to burn the whole thing to the ground.
00:07:26.740So one of the things you realize from being around that environment is it matters how it's structured.
00:07:32.040So at that time, the National Security Council had like literally 50 people.
00:07:38.040Today, after President Obama was in power, it was 450 people.
00:07:43.340Now, there's not enough time in the day for 450 people on one area, national security, that doesn't include the National Economic Council that I was on, or the Domestic Policy Council, or Homeland Defense, to all brief the president.
00:07:57.560So, you know, I'm kind of with, that sounds so terrible, but I'm kind of with Trump on the, you have to make it smaller because it doesn't work.
00:08:05.200but it still needs to work somewhat and he's like well i don't really care whether it works or not
00:08:11.980i just want it out of the way the other thing is you know the way he talks is so toxic
00:08:17.740and i think there are a lot of people who might be aligned with him philosophically
00:08:22.740make government smaller have lower taxes more freedom for businesses but do we have to insult
00:08:29.360every possible member of the community that doesn't look exactly like a middle-aged white
00:08:35.520male yeah so you're troubled by this well yeah absolutely it's unnecessary no but isn't that
00:08:42.840how he won though it is well and i would say his negotiating style also reflects this right
00:08:48.620so um you know he announces stuff like the steel tariffs or he announces you know we're going to
00:08:55.600use the entire nuclear arsenal on North Korea, and everybody goes, ah, you know, but then
00:09:02.420what happens, the North Koreans agree to come to the negotiating table, I suspect what we'll
00:09:08.940find on the threat of trade wars is everybody comes to the table, so he's like the bully
00:09:15.160at school who comes up to you on the playground, and first he just whacks you, you know, just
00:09:20.500a punch to the chin, and when you're lying on the ground, you're like totally off balance,
00:15:27.240We've talked about Trump. Let's keep it light. Let's move on to Brexit.
00:15:41.240Essentially, what is Brexit? And if you could just explain.
00:15:45.340And does it make it racist if you vote for Brexit?
00:15:49.360So, OK, I think what it's really about is centralisation versus decentralisation of power.
00:15:57.240And all over the world, people have been damaged by the huge debt burden that's bearing down.
00:16:04.840I kind of think it's the debt burden that's like the huge silent wrecking ball that bears down on the society,
00:16:10.980and it literally breaks the promises that hold the society together.
00:16:14.520So suddenly you realize that government used to say you could retire at, you know, 65,
00:16:19.480and now the message is it's going to be like 93, right?
00:16:22.640Because you don't have any money, right?
00:16:23.800And, you know, things that you used to get your trash picked up, I don't know, twice a week, and now it's like once a month.
00:16:30.260And you have to pay for it if you want more.
00:16:31.960All these little things cause people to start getting angry and upset.
00:16:35.860And they're like, hey, what has happened here?
00:16:38.400And then it got worse when we had the financial crisis, and suddenly everybody who was rich and powerful got a blank check for having messed up.
00:17:20.420It doesn't get as much air time, but it's been a very big issue,
00:17:23.500and partly why we've seen a tightening of the control of power by Xi Jinping.
00:17:28.320So that's actually a response, as opposed to him just coming in and going,
00:17:31.500I want to do the Russian-style lifetime president.
00:17:34.040In my view, it's absolutely responding to the same set of forces, so they're all global in nature.
00:17:39.840So I don't actually think that it was a racist impetus behind it.
00:17:44.580It's more that if the finances don't add up and you can't, and the government can't look after me, then what are we going to do with all these other people coming in?
00:17:55.240And it's a kind of demand and request for decision making to not be made so far away, but to come back to people that I've elected, people that I have a connection with.
00:18:06.360And I think that's at the core of it, to be honest.
00:18:10.180And it won't end until we get the finances sorted.
00:18:15.420So as long as the debt problem is there, we can expect populism to persist.
00:18:20.260And what I find is people keep thinking that if we elect one politician like President Macron of France,
00:18:26.520that he can somehow, like, wish it all away and make it better.
00:18:29.480but until you sort the finances problem then the problem is economies can't grow fast enough to
00:18:37.280deliver on people's aspirations for the future and that makes them frustrated with politicians
00:18:42.060and they go okay if you can't fix this I chuck you out until we bring in somebody who can and
00:18:46.860you get ever more radical results absolutely do you think the conservative policy of austerity
00:18:52.960indirectly led to Brexit or do you think that was not really connected uh you know what I
00:18:59.460I think across the board, we're experiencing,
00:19:02.860now this is a very technical economic term that I'm about to use.
00:19:28.720Now, that is when you look at your bank account and you realize that more than 50% of your income is needed to cover your rent or your mortgage, and that is before your groceries and anything else.
00:19:39.740And at that point, you just are so upset, and you are like, well, I want something to change.
00:19:47.340And I think this is, again, if you really want to know what's behind populism, it's not any specific policy decision.
00:19:54.680It's the inability to get the public past their castration feeling.
00:20:21.580But my question is, this narrative in the run-up to Brexit and since Brexit has been the British people are these monstrous racist xenophobes, which I really haven't found to be my personal experience as an immigrant in this country.
00:20:35.700So my curiosity about that is, do you think the narrative in the run up in the last 15 years, there has been this narrative in politics, this idea that if you bring up the issue of immigration, if you're concerned about large numbers of people coming to this country from Poland and from other countries, particularly when under Blair's government, there was no, what do you call it, the period where the adjustment period when the countries joined, all the other countries put restrictions on immigration in the European Union, but Britain didn't.
00:21:04.800So that kind of forced everybody who wanted to leave their country, Poland or others, to come to Britain, right?
00:21:12.860And at that time, there was this notion that anyone who brings up the issue of immigration must be racist.
00:21:18.240Do you think that is something that pushed a lot of people into the arms of UKIP, into the arms of the Brexiteers?
00:21:24.640I also haven't really come across this racist element.
00:21:29.080At the time that Brexit was unfolding, I had my book out, my book Signals, and I was up in the north and talking to people about how they felt.
00:21:40.060And what they kept saying was, I have no problem with immigrants.
00:21:43.280I've had immigrants in my community all my life, my parents' life, ever since empire.
00:21:47.520My problem is immigrants getting a check for a new car.
00:21:51.900And I live here and I don't get a check for a new car.
00:21:54.280In other words, they were aggravated about what the British call queuing.
00:21:59.080that somehow the outsiders were jumping the line
00:23:14.620They get to continue to own all the assets, even though they messed up.
00:23:17.860And the people at the bottom, the immigrants who don't have the connections, the education,
00:23:23.320the doors of opportunity are closed to them.
00:23:25.980and that this is a serious problem because the inequality people could live with that if they
00:23:32.260knew they had a fluid ability that you could make it if you worked really hard if you were bright
00:23:37.720if you put your elbow grease in and that there would be consequences if you messed up but all
00:23:42.480that is frozen now so I talk to a lot of cheap executives and they complain about populism and
00:23:47.540I'm always like okay so when is the last time you hired someone who didn't have a university degree
00:23:52.900or who came from a displaced background in some way.
00:23:56.320And they're like, oh, well, I don't hire any of those people.
00:23:58.220And I'm like, well, you know, you hold the doors of opportunity.
00:24:00.940And if you hold them shut to those people, you can't be surprised that populism results.
00:24:06.620And by the way, the public is going to push you out of the way if you don't open the doors of opportunity.
00:24:11.760So that's why I think the immigration question, we can focus on it, but it's part of a much bigger problem.
00:24:19.440And let's face it, in Western Europe, we've got aging demographics, all innovation benefits from diversity of thought, from new energy, younger people.
00:24:31.420So immigration absolutely is working in our favor.
00:24:36.940The question is, how do you manage the movement of people?
00:24:40.140And I think that's another thing, is to expect immigrants to show up in an entirely new society, entirely new culture, and that they should just fit in right away and go get a job.
00:24:49.440yeah this takes some education on the part of the the locals how do you integrate i mean heck
00:24:56.080in in our militaries we're not integrating the former military guys into society right
00:25:03.600we have a lot of vets who are not employed this is insane right that we can't even integrate people
00:25:10.720who've come from our society and gone off and fought our wars so i think there's something about
00:25:16.560about how do we create structures that are more inclusive more generally and um so that's why i
00:25:25.720don't know i just don't think immigration by itself is the either the question or the answer
00:25:30.260that's absolutely fascinating thank you pippa i was going to say do you envisage brexit becoming
00:25:34.960a success or do you think it is going to be this financial disaster as it's painted in some of the
00:25:40.200more left-wing press? I think it's painted a disaster in all the press. I think I'm the only
00:25:47.040one who is saying, actually, the country's going to be fine. My personal view is Britain would have
00:25:54.420been fine either way. It's just easier to have the economy grow more strongly out, and I'll explain
00:26:02.940why. But it's not like it's a binary win-lose. And also, it's not a case that it's either Britain
00:26:09.360is successful, or the European Union. Both of them can be successful. I mean, the world economy
00:26:13.940is full of many economies. They're all successful in their own different ways. So what really bugs
00:26:19.280me is this idea that the British economy is going to slide into the North Sea and just sink.
00:26:24.220I'm like, this is not what happens to the fifth largest economy in the world. So here's how I
00:26:29.560think about it. The decision's been made. So money is a lot like water. It literally flows to
00:26:38.200wherever it faces the least resistance so unless the british are going to raise their taxes and
00:26:43.840their regulatory red tape to be at or above the eu levels which personally i think is an impossible
00:26:49.360task the british couldn't do it even if they want to do it's not going to happen uh so and also if
00:26:55.620they were to abandon the traditional british rule of law and be comfortable moving to the napoleonic
00:27:00.700code environment that dominates the continent yeah then maybe but the fact is that's not where
00:27:07.080the british are and so i think actually the economy is turning out to be just fine and we
00:27:13.260can see the data is all better right employment is higher unemployment is lower growth has gone up
00:27:19.080well we haven't left yet well i know but you know what markets discount all that in advance so this
00:27:23.780idea that somehow we just haven't hit that wall yet doesn't really work for me and i'm working
00:27:29.700with the world's biggest investors right i'm talking to the biggest institutional investors
00:27:33.720sovereign wealth funds, a pension fund. Here's what they say. They say, I may not like the
00:27:38.320uncertainty of Brexit, but I still can't make any money in Italy, in France, in Germany, because
00:27:44.280the economies are too slow. They're not growing fast enough. They're not dynamic enough. You don't
00:27:49.440have enough innovation going on. You still have, you know, in Italy, nearly 40% unemployment of
00:27:56.680people age 25 and under, which is why they're all in the UK, because there's nothing for them to do
00:28:00.940at home. So all that innovation came here. So they're all saying, you know, I'm going to continue
00:28:06.480to deploy foreign direct investment into the UK, even though Brexit has happened. So my hope is
00:28:12.140that what happens in the EU is they move more in the British direction, which is to free up
00:28:19.580and to have less regulatory red tape, less sort of top down state control. But I fear they're
00:28:26.740moving in the other direction. And that's something people haven't talked about yet is
00:28:30.660you know, the new EU without Britain may be much more centralizing, much more centralizing power
00:28:39.220than before. And I think this is partly why we're seeing the voters say no. And so you see the rise
00:28:45.520of the right voters, the right wing voters in Italy, in Germany, in Denmark, in Sweden, in
00:28:53.600Austria. Well, is this coming from the blue? No, it's coming because the more the EU try to tighten
00:30:13.460And so if you believe there should be competition between these nations to see who can be most competitive, then you're not really comfortable with where the European Union is going.
00:30:23.980but that doesn't mean you don't love Europe or you don't admire the ideals of of a unified Europe
00:30:30.120the question is what is the right direction and the voters in Europe are going to express
00:30:35.000themselves and we're we're seeing that so that's totally their call where they want to go with that
00:30:40.040because it's fascinating how I mean because working in comedy in the comedy industry it's
00:30:45.160incredibly left-wing and a number of people I mean I voted remain but a lot of people were saying well
00:30:51.080we should have another referendum and that to me is undemocratic do you agree with that or do you
00:30:56.480think we should absolutely stand by the referendum yeah I find it you know hard to imagine going to
00:31:02.820another referendum I don't see I don't see how it would make things better and I could see how it
00:31:08.320make things worse my big question is why they threw it out on the table to begin with you know
00:31:13.280and I don't think enough people kind of go back and ask David Cameron what were you thinking you
00:31:18.320know what was that about exactly and it's a good example of of uh politicians who assumed
00:31:25.920they just assumed and actually the public's in a different place from what they assumed
00:31:31.260and this is part of the problem he thought he was gonna win 100 for sure and everybody working in
00:31:36.180the cabinet office was like we were completely shocked totally shocked i'm like have you been
00:31:40.540outside of london at all you know all you have to do is get outside of london and you hear it
00:31:45.780right away um you know it's a question of perspective i think that's one of the problems
00:31:50.580i would just i'm just finishing a book on leadership leadership in the 21st century and
00:31:55.360and one of the things that's interesting is we move so fluidly right we get on a plane we go to
00:32:01.040china we're in the united states so we go oh i know what's happening but just because you go
00:32:06.260somewhere doesn't mean you know what is happening and i think that's one thing we've all got to be
00:32:11.820better at is to not just go and assume but to go and listen and you'll hear people tell you things
00:32:20.000that won't be consistent with what you thought well it's fascinating and we'll make this the
00:32:24.240final point on brexit it's fascinating to me because uh the reason we're doing the show
00:32:29.700is that for us i think brexit and trump they were massive wake-up calls i can certainly speak for
00:32:35.280myself it was it was like i knew what was the truth and then suddenly the next day it wasn't
00:32:40.460true anymore we and i realized in how much of an eco chamber we've been living and that's why we
00:32:46.400really want to talk to different people who have different ideas and different input on these
00:32:50.360issues because i feel like if you just go online for your news like we have been doing you are
00:32:55.840really not getting a full picture at all no not at all so this is a reason i started to to write
00:33:02.140my book signals because i feel like what what happens is it's literally like everybody's going
00:33:07.020through life blind in one eye because they'll only look through a mathematical lens at data
00:33:13.380and models this deep almost religious belief that all the answers are things that can be quantified
00:33:20.460and all of the models missed what has happened and i'm like okay so why don't we open the other eye
00:33:27.460that just looks at all the common sense things right in front of you and begins to detect you
00:33:32.660know, how much pain are people feeling? I mean, show me a metric that measures the amount of pain
00:33:37.760people are feeling. But if your rent is going up and your job security is going down, you're going
00:33:43.660to feel pain. So I'm very big on reintroducing into the study of economics, the discussion of
00:33:50.040economics, the qualitative factors, which should weigh just as much and count for just as much as
00:33:56.900the quantitative factors but it's a really hard argument because everybody in economics is like
00:34:02.940these quant math guys and they want to all argue about the numbers and it's 0.04 and you're like
00:34:09.060but the person is crying they're clearly in pain about their situation how do you put that in the
00:55:21.640And so I'm very confident that actually we will continue to have fantastic levels of employment and innovation.
00:55:30.280And robotics will work with us to that end.
00:55:33.320So I just think a little bit of optimism on that front.
00:55:36.580And, you know, again, why are we all preparing for a car crash when, in fact, we're about to have the best assistance we've ever had in history?
00:55:43.180Well, I think that's the most amazing way to end the show.
00:55:50.440Pippa, is there anything before we go that you would like to tell the audience about, whether it's your Twitter handle or your books or whatever else?