Do economic sanctions work in a crypto world?
Feb 16, 2022
Episode 602

Do economic sanctions work in a crypto world?

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The Treasury Department and DOJ have thoughts.

On this Whaddya Wanna Know Wednesday, we’ve got a listener question about how effective U.S. economic sanctions are when cryptocurrency can be used to evade them. Then we look at what’s causing the nursing shortage — COVID-19 isn’t the only reason. Plus, Kai Ryssdal fields a question about his career in the foreign service.

Do you have a question you want us to answer? You can send us a voice memo or call us at 508-UB-SMART (508-827-6278). You can also email us at makemesmart@marketplace.org!

Here’s everything we talked about on the show today:

Make Me Smart February 16, 2022 transcript

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.

Kai Ryssdal: Hey everybody, I’m Kai Ryssdal. Welcome back to Make Me Smart where we make the day make sense without popping our p’s. Thanks for coming on and being with us or whatevs!

Samantha Fields: And I am Samantha Fields it is Whaddya Want to Know Wednesday, the day we answer listener questions, you can send those to us by email to makemesmart@marketplace.org. Or leave us a voicemail at 508-UB-SMART. Our first question today comes to us from Kevin in Ohio, who sent us this via email. He writes: “With the decentralization of cryptocurrencies and its greater acceptance around the world. How would government sanctions work in the future? Or will they?” Great question, Kai, you want to take this one?

Kai Ryssdal: Yeah, it’s actually a really good question. And the answer, I think, is in that coda to the question, which is, will they and it’s gonna be really hard, right, because one of the things that cryptocurrencies do is let you get around many of the formal regulatory structures of the global financial system. And that is where sanctions work. So look, here’s the deal. The United States government, both the Fed and Congress and the executive branch have been paying more attention to crypto of late and by of late I mean, the last like 18 months, two years really is when it’s when it’s gotten to be really high profile, because all the ransomware attacks, and they do believe that decentralized cryptocurrencies can affect economic sanctions. And if you wonder, well come, on how real life can that be? One of the things that they’re talking about with Vladimir Putin and Russia now is economic sanctions. So here’s the deal. Treasury Department has guidelines for cryptocurrency that they want the cryptocurrency industry to follow. Who knows if crypto is going to do that? There are things they can do like geolocation tools to talk about blocking certain IP addresses, although there is spoofing and VPNs and all of that stuff. There has been one crypto exchange sanction, that’s called SUEX, S-U-E-X that’s all in caps. That’s a Russian crypto exchange for allegedly helping to launder ransomware payments. And if in October, just last year, actually, the Justice Department created a national cryptocurrency enforcement team to investigate and if need be prosecute and enforce cryptocurrency offenses. But look, here’s the deal. And look, I’m deeply deeply skeptical of crypto as anything other right now, right now, as anything other than what number one a speculative instrument, see also comma, Bitcoin. But also, number two, a way to avoid financial regulation. Now, let’s break this down for two seconds. And then I’ll get off my soapbox. There are legitimate reasons why you need something like cash in a global economy. And here’s a really good example, let’s say you want to help out an organization in a totalitarian economy that is doing good charitable work like in in China, I’m sure there are groups who could use a contribution from the West and that might ordinarily come in something untraceable, like cash as we move to a decentralized economy. You could see that coming in cryptocurrency so that’s a positive, that’s a good but there’s also ransomware, and sanction evasion and all of those kinds of things. So crypto is not tested yet. It’s not viable as a means of exchange. And it’s really challenging to the global financial infrastructure. Lesson and lecture ended.

Samantha Fields: It’s still pretty new, though, like you were saying, right, that Treasury that the federal government is trying to or has released guidelines on this for crypto, right.

Kai Ryssdal: Yeah.

Samantha Fields: October.

Kai Ryssdal:  But look, so here’s the deal. This is one of those cases where I think actually regulators are much like with hacking. Regulators are always going to be behind the power curve. Because the people using the new technology. Like some of the things you can do with Ethereum, there was a there was a Twitter thread two days ago where this guy was talking about how he almost this guy who’s knowledgeable about crypto and Ethereum, he almost got scammed out of his crypto, it was like a 20 tweet thread. And I will go back and look it up and we’ll put it on the show page. The words were well, it’s really funny. The words actually were not in English, they were like in crypto speak. And I had no idea what the guy was talking about. But it was clear it was real. He was sober. He was legitimate, sober, I mean, serious. And he was a legitimate player in that space. And I had no idea what he was talking about. They will always be far ahead of the regulators and the challenges for the regulators now to keep up in a thing as complicated as the global financial markets. I think it’s really challenging.

Samantha Fields: Yeah, I was gonna say how realistic do you think it is? At least anytime soon?

Kai Ryssdal: Yeah, no, I don’t think we’re gonna be able to manage it and control it for a good long while. I mean, look, the Federal Reserve is just now – and these are not the same things, Crypto and central bank digital currencies are not the same thing. But the Federal Reserve is just now publishing its white paper like a week and a half ago on the digital dollar. So we’re not we’re not regulators are not ahead of the curve. by any means, any means. Anyway. Alright, so here we go. Next question, Carol in Santa Cruz, California. Roll the tape.

Carol:  Hello, Make Me Smart. What is the cause of the nurse shortage in the United States? And especially California, it appears there are insufficient nurse training programs, but why and what other factors might contribute to this shortage? I’d appreciate any information you have. Thanks for all of your amazing reporting, and making us all smart.

Samantha Fields: Thank you, Carol, it is a great question. And you’re right, there is a huge shortage of nurses in the United States, California is particularly bad. I think it’s number one in terms of severity of the nurse shortage. But it seems to be true pretty much everywhere around the country. I’ve done a fair amount of reporting on this in the last six months, both during the Delta wave and again, most recently during Omicron. And everyone I talked to, in pretty much every state was saying, we’re having significant shortages of nurses of doctors, of pretty much everyone that works in hospitals all the way down to janitors. In January, I believe one in four hospitals that was reporting data to the federal government said that they were critically short staffed. So it is very widespread. Some of the issues predate the pandemic, some are pandemic specific. So sort of break that down. Even before the pandemic, you know, there were a bunch of factors that were leading to nurse shortages that have been around for years. Some of it has to do with people living longer and more people aging and needing care, baby boomers are getting older, a lot more people are in hospitals, or you know, just go into doctors needing help. And a lot of nurses are older too, I saw some a statistic that about 50% of nurses are over 50 nearing retirement. And you know, that includes both nurses that are working in hospitals, of course, but it also includes nurses who work as teachers to teach other nurses. And so this goes back to the point in Carol’s question about issues with nurse training programs. And the thing is, if nurse training programs don’t have enough teachers, they have to reduce the number of students that they have, and that they can train. And so there are issues with the pipeline, some of that has to do with just people getting older aging out and not sort of being replaced fast enough. And then you know, one of the other things that’s going on is that, you know, there’s a huge amount of burnout because of the pandemic. And that’s manifesting in in different ways, right, some of it’s manifesting, and people actually leaving the profession, some of it is manifesting in people retiring early, which is certainly a way of leaving the profession. But you know, with so many nurses being close to retirement, sort of figuring “you know, what, I’m just gonna, I’m just gonna leave early, because I don’t want to stick around for this, it’s too much.” But then there’s also a lot of opportunities, because there is so much need everywhere, there are a lot of opportunities for nurses to choose what jobs they have. And a lot of them are going to these traveling nursing companies that pay a lot more money that are more flexible, you know, they can take a contract, work for a bit, and then take another contract and sort of be choosing where they go. And there’s also just a lot more people who are sick. That’s because of COVID. It’s because of people who have complications from COVID. And it’s because of people who put off care for other illnesses, because they didn’t want to go in during a pandemic or because their elective procedure was delayed because of a pandemic, and now they’re coming in sicker than they were before. So there are a lot of things that are driving up need for nurses, and pushing down the number of people who are actually in the profession. And of course, as we all know, education to become a nurse takes time. You know, that’s not something that you can just say, “Okay, we need more nurses. Let’s turn that on right now.” One thing that’s really interesting, though, I spoke to somebody in Alaska, who was talking about how the state has always had, has long had a real shortage of health care workers partly because of location, right. But one thing they’ve done in the pandemic is they’ve created this new program to encourage more people to become certified nursing assistants. So they’re paying them bonuses to come and train to become nursing assistants. And they’re also fast tracking and changing training so that people can get on the job sooner and get some of that training to get certified while actually working. And they were saying that’s already helping in a noticeable way. So there’s a lot of aspects to this, and it’s gonna take a long time to resolve.

Kai Ryssdal: As with most things coming out of this pandemic, it’s gonna take a long time to resolve, you know, I think, the pandemic has exacerbated a whole bunch of things. Yeah, for sure.

Samantha Fields: Absolutely. Yeah. So let’s see. Our last question comes from Peter in Washington, DC who’s got a question for you Kai. And he says: “You talk frequently about your time in the Navy, but you don’t often mention your time as a Foreign Service Officer for the State Department. As a college senior in the international relations field who’s trying to figure out what they want to do with their life. What was your experience as a diplomat? Like, why did you decide to leave the department in favor of journalism?”

Kai Ryssdal: Oh, so that’s good question. All right. So let’s see. So I just like we’ll do the chronology here. And I’ll do this sort of fast. So we’re not wasting this whole show on me. I got out of college, I spent eight years in the Navy, as I think I’ve said before, in this podcast, and then I wanted to keep going overseas, and I wanted to keep going overseas on the government’s dime. But I didn’t want to have to go to sea for six months at a time on an aircraft carrier with 6000 of my closest friends to do that.

Samantha Fields: Fair.

Kai Ryssdal: So I took the Foreign Service exam. And I got into the Foreign Service and started it actually, I got out of the Navy on a Friday in March of 1993. And I started the Foreign Service on that following Monday of March of 1993. So yeah, and and look, so a couple of super quick things, Peter, number one, the lifestyle is amazing, right? I mean, it’s really challenging, you move every couple of years, once you have a wife, and if you have a family or a spouse, that can become really challenging, right, finding your spouse a job and pulling the kids out of school and all that jazz but it’s a lifestyle that honestly I think is second to none. It really was great for me and my then girlfriend now wife, excuse me, the challenge is that in the early years, at least, the work is not especially rewarding, right? You are doing, you’re bright, you’ve passed the Foreign Service exam, you know, it’s, it’s, it’s a big deal. And you’re doing a lot of not really motivating things. And that’s because the State Department is set up to, in a lot of ways provide services and not clerical work, but support work to Americans overseas to the American mission overseas. And that involves some lower level work what you wind up doing as the new person on the block. But that’s not why we left, why we left, we left for a couple of reasons. Number one, by that point. I had been in the government for 12 years, and it was time for me to do something else. But more to the point my then girlfriend and now wife wanted to go to business school. And she applied to and got into a bunch of business schools. And so I said, “Yes, of course, sweetie, I’ll go with you.” And so we got out for that reason. But the other reason we got out was that and look, this was 30 years ago, so I’m sure things have changed somewhat. But the reason we got out was that the State Department can be challenging, unless you’re at really senior levels. Right. And, and the process of getting there is deeply bureaucratic, it is deeply structured. And it’s it’s not necessarily a thing that go getters would find rewarding. And so that’s why we left. Look, I placed great value in the work that foreign service officers do, obviously, and they’re deeply needed, but it wasn’t for me at that time. But Peter look, you know, DM me or hit me up in my emails on my Twitter page, right, hit me up and we can have a conversation if you’re serious about this. Alright, anyway. So last thing and oh, look, it’s about me, more again, which I love so much, Bridget, thank you for making me do this. Here’s the thing we’re doing to generate some interest on newsletters because newsletters are, of course, what drives a whole lot of stuff in terms of digital and subscribers and all that stuff. Let’s be honest. Here’s what we’re going to do to get you to subscribe to the Make Me Smart newsletter or any other marketplace newsletter. Thank you very much. I’m going to sign and I don’t know, faithful fans will have seen these already. I’m going to sign a couple of those T shirts that have the old picture of me when I was in the Navy driving my 1973 Oldsmobile red with a white top convertible best car and truly best car ever had. I’m going to sign I think three of those right and when you subscribe, you can enter to win one of those signed T shirts. Deadline to sign up is February 28th marketplace.org. Of course there’s a light green banner on the homepage. And oh by the way, if you’re already a newsletter subscriber, you can use that same form to enter the sweeps marketplace.org click on the banner and I’ll sign a shirt and there we go.

Samantha Fields: There we go. That is it for us today. Thank you for listening Kai and I will be back tomorrow with Hollowed Out Shell Thursday.

Kai Ryssdal:  Next week we’re gonna do a whole Wednesday show by the way answering questions about inflation send them along makemesmart@marketplace.org We will see how many we can pack into 15 minutes. Leave us a  voicemail if you’d like 508-827-6278. 508-UB-SMART. I should say that number slower actually Kai,Jesus 508-827-6278 or makemesmart@marketplace.org send us your questions about inflation and and I think Bridget we’re gonna do a call in or something too. I don’t know that’s supposed to be a surprise but I just blow it. Whatever. Host prerogative. Anyway call us. Call us leave us a voice memo.

Samantha Fields: Make Me Smart is produced by Marissa Cabrera and Marque Green. It was engineered by Juan Carlos Torrado. Our intern is Tiffany Bui.

Kai Ryssdal:  Just got a Slack from Bridget that says that was going to be a surprise.

Samantha Fields: Not anymore.

Kai Ryssdal:  Oh well. Sorry. Ben Tolliday and Daniel Ramirez proposed our theme music. Our senior producer who’s very annoyed with me right now is Bridget Bodnar. But she still loves me. Come on Bridget. We’ve been working together a long time. Come on.

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