How the government got hedge funded
The episode explains how U.S. government debt is issued as Treasuries, how auctions work, and how primary dealer banks help distribute this debt. It then traces how hedge funds have become major players in the Treasury market via the "Treasury basis trade," using heavy borrowing and Treasuries as collateral, which can amplify risk. The hosts and guests discuss the March 2020 turmoil, the Federal Reserve's massive intervention, and the resulting moral hazard and policy trade‑offs between safe banks, stable markets, and allowing risk‑taking.
Is the U.S. Really Less Corrupt Than China? (Update)
Stephen Dubner interviews political scientist Yuen Yuen Ong about her research on corruption in China and the United States, based on her book "China's Gilded Age." Ong explains her four-part typology of corruption, how certain types of corruption can coexist with rapid economic growth, and why she believes the U.S. and China are both experiencing different versions of a "Gilded Age." She also critiques common corruption metrics, discusses China's evolving political-economic model under Mao, Deng, and Xi, and reflects on the strengths and weaknesses of capitalist prosperity and democracy.