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Everyone’s going to be looking for dollars
Feb 28, 2022
Episode 609

Everyone’s going to be looking for dollars

What sanctions against Russia are going to mean for the global economy.

This What’d We Miss Monday, we catch up on the conflict in Ukraine, including the ugly reality that economic sanctions against Russia hurt its individual citizens. And that’s the point. The West is betting economic collapse will turn those citizens against Vladimir Putin. Also today: what’s next from the Federal Reserve, and a new report that warns humanity and nature are running out of time to adapt to climate change. Ready for a Make Me Smile? We’ve got one that’s appropriately banana pants.

Here’s everything we talked about on the show:

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Make Me Smart February 28, 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: Alright, Jayk, let’s go. Come on. There we go. There we go. Hey, everybody, I’m Kai Ryssdal. Welcome back to Make Me Smart on a Monday making today make sense. It’s what we do.

Marielle Segarra: I’m Marielle Segarra, it is What Did We Miss Monday. So we will catch you up on today’s news. And you know, whatever you missed over the weekend, there’s really only one big story, right?

Kai Ryssdal: Yeah, there is one big story continues to be the story. I guess I was thinking today about how long it’s going to continue to be the story. And I’m not taking any bets. I just do kind of wonder about that. But yeah, if there’s one thing going on, that’s it. That’s it.

Marielle Segarra:  Yeah. You want to start?

Kai Ryssdal:  All right. Yeah. Well,  on the ruble, I was thinking about this. And I know you guys covered this on, Kristin covered this on Marketplace tonight. I was talking to her about it. So we know that the collapse of the ruble, we know what it’ll mean, for Russians, you know, the evaporation of their savings and just the inability to, to buy the basic things that they need. One thing I’m wondering is, what does it mean for the global economy? If anything, like what are the –  I feel like they’re knock on effects to everything, but what are they that’s what I what I couldn’t exactly figure out today. Which, by the way, sorry, not – yeah, well, so we’ll start obviously, with with some of the, you know, the headline news about the sanctions and the collapse of the ruble and central banks going after other central banks. But but the thing about it is, and we’ll get to this in a minute, there are other news stories happening that on any other day would be the global lead. Right? Would be absolutely it’d be on the top of the news on every NPR newscast in every newspaper and on television. And it’s just not and that’s fine, because the land war in Europe is a big deal. But I guess, you know, perspective and context, I suppose. Anyway, anyway, so yeah, you go ahead, what do you like – what do you like of the big story of the day and then I’ll throw mine in there. So So here’s my understanding of this. Everybody’s going to be looking for dollars, everybody’s going to be looking for dollars, it’s the global reserve currency, it’s stable. It’s universally accepted. Oil is denominated in dollars. So everybody is going to want dollars. And the question is, are there enough dollars out there? And one of the things to look at for a sign of market agita  is whether or not the Federal Reserve sets up a series of swap lines like it did in the beginning of the financial crisis, sorry, of the of the pandemic, when the markets were looking really shaky, so that everybody who needs dollars to meet their obligations, whether it’s money market funds, so they don’t break the buck, or overnight facilities or whatever, so that everybody who can get dollars, who needs dollars can get dollars. And I think that’ll be really interesting. You know, Powell is testifying on Wednesday and Thursday, I think on his I think it’s – Humphrey Hawkins is coming around. So it’s semiannual monetary policy report to Congress. And he will certainly be asked about this when he goes to testify. So what the Fed is doing in terms of swap lines, and dollar liquidity is going to be a big, big deal. So let’s let’s look out for that. That’s, that’s one thing I’m keeping an eye on.

Marielle Segarra: Yeah, for sure. Well, you know, the other thing I was thinking about when it came to the ruble too, is what its collapse means politically in Russia or geopolitically? Because it creates a kind of desperation in the population. And what does that lead to? What kind of I think that’s what led to Putin’s rise to power, right, in the in the late 90s, after the collapse of the ruble back then?

Kai Ryssdal: Yes. Yes.

Marielle Segarra: And it’s what led to Hitler’s rise to power within Germany, in the 1930s. Right. So I mean, we could argue we’re already there. You already have a Putin in Russia, but but it does create a situation and a mood in Russia, and what does that lead to politically? The other thing –

Kai Ryssdal: I think that’s totally right. The one thing sorry, the one thing I would want to say. And Kristin pointed out this out in her spot today, Kristin Schwab, that the collapse of the ruble hurts the Russian economy, yes, but it hurts individual Russians. And we need to be really clear-eyed about this. That’s the point. That’s the point of the sanctions punishment. And the Biden administration in the West are betting on economic collapse or or something close to it, to make it ordinary Russians realize that they don’t necessarily want Vladimir Putin running the country anymore. And we need to be really clear-eyed about that. Because it’s it’s unsavory, right? It’s not it’s not a nice thing, in essence, and children are going to not have enough food or what have you. But that’s really what’s going on here.

Marielle Segarra: Yeah, well, that’s the shock and awe part that we talked about the other day. That is the strategy. And it’s not palatable, but at the same time, you know, innocents and children in Ukraine are dying. So that’s the – that’s the choice, I guess. Something else that caught my eye. And I think, even Stephen Beard also covered this on the show, is Germany upping its defense spending. And I’ve been thinking about this, because I did a fellowship in Germany a few years back, it was actually 2016. And we went to NATO. And we went to the European Commission, and we talked about Russia. We talked about what was coming.

Kai Ryssdal: Oh wow. Funny.

Marielle Segarra: And one of the – yeah, one of the big points was that, you know, Germany and other EU nations had committed to upping their defense spending to 2% of their GDP, but it was just not going to happen in Germany. And part of that Germany has long hesitated to have a strong military because, in partly as penance for World War Two, World War One and World War Two, it’s cultural in a lot of ways. And its defense spending hasn’t been that high since just after the Cold War. So this is a really interesting shift. And it’s, it’s now committed, you know, more than 2% to put more than 2% of its GDP towards defense spending. It’s a big cultural change in addition to practical one.

Kai Ryssdal: Absolutely. And look, Germany is  the European economic superpower, right, and what they do matters. This is the whole thing that President Trump was talking about, about, you know, he framed it the wrong way. He said they owe us money. That’s not true, right. But the common defense commitment is 2% of GDP. And many European nations, Germany, among them, the richest economy in Germany had not been meeting it. And now they are. And it’s interesting that it took the threat of a land war in Europe, an actual land war in Europe, actually, to concentrate the mind. You know, it’s big deal. Totally big deal. Glad you pointed that out.

Marielle Segarra:  And then I guess, just a couple quick mentions on Russia, that I stories I read this weekend that are less economic, but the some of the stories, some of the coverage has done a really great job at interviewing just ordinary people about what this is like for them. And there was a story from Reuters of a mother from Ukraine, who basically brought a – a couple children to safety, who were a stranger’s children, the husband, or a father had like two kids, and he went to the border, and he wasn’t allowed to leave Ukraine because he had to go fight. So he basically handed off his kids to this woman who took them across the border and waited for their mother to come from Italy and meet them. And they just – the two women just embraced for, you know, five minutes or something like that. And she became a sort of surrogate mom to these kids for a short amount of time. Stories like that. I mean, it’s it’s just wild. Or a grandmother sitting in the subway station with her family and talking about how her own, I believe it was grandparents, experienced World War Two and she’s in a state of belief, disbelief, and she just said like, “this cannot be my life. Like I can’t believe this is happening.”

Kai Ryssdal:  Yeah, that was that was on the Daily episode about the Battle of Kyiv, right?

Marielle Segarra: Yes. That was from the Daily. Yeah.

Kai Ryssdal: Right. So the New York Times is doing great work, NPR has got reporters over there you know, Laila Fadel had a lot of peace this morning from the the Polish of the Ukrainian Poland border. I mean, they’re doing great stuff over there and getting no sleep and are in you know, at risk for their lives. So consume that content and contribute to your local public radio station too. That’s all I’m saying. That’s all I’m saying. Okay, so here’s my little and it’s a little niche of my interest as an aviation guy, but the world’s biggest airplane has been destroyed, bu  Russian invaders to Kyiv, Antonov 225, the biggest airplane in the world. Its wingspan is as long as a football field it’s got six engines on it. Biggest cargo plane in the world carries 250 pounds or tons worth of cargo used to carry the Soviet space shuttle which never actually flew itself, was destroyed and it’s just that only one ever built. One of them ever built by by a Kyiv based aviation company called Antonov. Anyway, that’s a little sad, little sad. Whatever.

Marielle Segarra: Yeah, that is.

Kai Ryssdal:  Collateral dmage, I guess is is what that is.

Marielle Segarra: I wonder if that was targeted? Because is it like I don’t know much about airplanes.

Kai Ryssdal: Good question. Good question.

Marielle Segarra: Is that like a powerful plane or like a very useful plane to have?

Kai Ryssdal: Yeah. Yeah, not not. Yeah, not not militarily significant. It was mostly cargo and humanitarian aid and those kinds of things like it, carried humanitarian aid the cargo to Haiti after the earthquakes and stuff, but but it’s just it’s a little symbolic of wars. Just sucks man, war just sucks.

Marielle Segarra: Everything about it. It’s it’s the loss of life, the loss of cities and you know and not not to compare them, you know at all. But the the fact that there was a woman who was interviewed I can’t remember, I think it might have been the Daily too, who said, “I’m so angry. It’s beautiful outside. It’s springtime. I don’t know where she is. Because what I’ve seen in Ukraine, it looks like it’s freezing, but it like she was like, it’s springtime. And I’m angry that that war has been forced on like, I just want peace. I don’t. I don’t want this.” Yeah.

Kai Ryssdal: Yeah. And last I heard, by the way, nothing coming out of those talks, in Belarus between, between Russia and Ukraine.

Marielle Segarra:  No.

Kai Ryssdal: So I don’t know where this is going. Don’t know where it’s going. Alright, couple of other big stories, which as I said, would ordinarily be a global lead today. The first one for me is this report from the IPCC, the International –  I think it’s the International Panel on Climate Change. Anyway, their latest report from the United Nations, basically saying climate change is happening and the risks and dangers are mounting faster than our ability to adapt to them is, which is just terrifying. And look, people have been saying for years, we’re coming to the tipping point. And clearly we’re past it. And that is just deeply, deeply stressful. Deeply stressful.

Marielle Segarra: Yep. I mean, yeah, I don’t even know what to add on that front. It seems like it’s, the more you hear about it. The more people hear about it, I think the more numb they get to it, in some ways. It’s like, oh, yeah, that again. Sky is falling. But we know it’s, it’s real, and it’s here. And yet, like there’s a Supreme Court case today, the the justices of the Supreme Court heard arguments, in this case over air pollution and the ability of the federal government in the US to regulate greenhouse gas emissions from I believe it’s power plants, right. And it doesn’t look like it’s gonna go in the administration’s favor, and it will make it a lot harder for any presidential administration in the US to regulate around climate change. So it’s like where are the, where are the solutions?

Kai Ryssdal: Today’s not even Hollowed Out Shell Thursday. What the hell are we doing here? Jesus. Anyway, sorry for swearing. Alright, let’s let’s move briskly. Do a Make Me Smile, and then we’ll get we’ll get people to get on their way. How about that Jayk, hit us. Alright, this one’s at me. And for me, I guess based on something I said where I disparaged the early set of banana pants that I got, which if we remember came up to like my armpits. If we recall, I think we posted a picture. Anyway. Monday Make Me Smile has come from all y’all. We get it that the news has been fairly grim. But we do kind of count on you to let us know what is amusing out there because we can’t always find it. So get them to us if you like makemesmart@marketplace.org Here’s this email that came from Christine. Here’s what she says: “Yes, Kai, the banana pants never fit lol they are hella big, but I do tie them up at or around her ankles so as to taper them in some semblance of sweatpants. Love them anyway. And love you all. Rock on.” Well, Christine, that was very nice. Mine. I think I’ve been designated to the rag bag in this house. Don’t tell Molly. But I think that’s what happened to them.

Marielle Segarra:  Do you like clean with them? The rag bag? Is that what you use to clean your car?

Kai Ryssdal: Yeah. You need rags. You need rags.

Marielle Segarra: Yeah, I don’t understand Kai you’re, you’re pretty tall. Right? Like, how big are these pants? How could they fit anybody?

Kai Ryssdal: So you know, it’s, you know, it’s interesting. So I have very short legs for my height. I mean, look, I’m only six one. But I have very short legs. And in point of fact, more than perhaps anybody wants to know, my mother – the very first time my mother-in-law met me when my wife and I were still dating. And and my mother-in-law is a very nice and polite woman and she’s one of those who like doesn’t say anything mean if there’s or doesn’t say anything if there’s nothing that she can say. The first response, the first reaction to me to me that she said to my then girlfriend was well, he’s very long-waisted. Isn’t he? Kind of like, oh Jesus.

Marielle Segarra: Strange.

Kai Ryssdal: I know. I know. She’s a lovely, woman. I don’t think she listens to this podcast. Although maybe she does. I don’t know. Yeah, but you know, we have a great relationship but I’m kind of long waisted so that’s why they didn’t fit that’s where I’m going with Ellen that’s where I’m going. Anyway. Anyway.

Marielle Segarra: Oh wow, I was gonna say if my significant other’s like parents said if their first comment was like wow, what big hands she has or something like that, I’d be like oh!

Kai Ryssdal: I give her a hard time every now and then. I give her a hard time about it every now and then. Oh man. All right, we’re gonna go before I get in any more trouble.No, yeah, very, very normal sized. And we’re leaving. Come back tomorrow. And Kimberly, you’re gonna talk more about Ukraine with somebody who can help us break down what it means that an actual land war has come to Europe after 75 or 80 years of collective peace, yes, for the economy, but also sort of this moment in history because it’s a big deal. And we’re living through it, which is not always fun. Let’s just say that.

Marielle Segarra: Yep. And if you have been thinking about your answer to the make me smart question, which is what is something you thought you knew that you later found out you were wrong about? Send it to us either as a voice memo or in an email to makemesmart@marketplace.org. Or you can call and leave us a voice message. You know the number maybe by this point? 508-UB-SMART.

Kai Ryssdal: I’m right now thinking back to the exchanges I’ve had with my mother-in-law about this podcast. I don’t think she listens, but she does follow me on Twitter, so that could be that could be problematical too. Anyway. Make Me Smart is produced by Marissa Cabrera with help from Marque Greene. Today’s program was engineered by Jayk Cherry.

Marielle Segarra: Our senior producer is Bridget Bodnar. And the director of On Demand is Donna Tam. And I’m really the one who roasted your mother-in-law, not you. So.

Kai Ryssdal: I think I just shared a family secret or something. I don’t know. It’s part of the founding mythology of my marriage. I don’t know whatever.

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The team

Marissa Cabrera Senior Producer
Bridget Bodnar Senior Producer
Tony Wagner Digital Producer
Marque Greene Associate Producer