Richard A. Werner on the Tucker Carlson Show

For most non-specialists, including college students subjected to introductory macroeconomics courses, the field of economics has the reputation of being “boring.” However, though clocking in at nearly three hours, world-renowned economist Richard A. Werner’s charming and enlightening July 28 interview with Tucker Carlson is anything but boring! In fact, we are so enthusiastic about this interview that we are publishing our Movie of the Week recommendation early.

Professor Werner is no stranger at the Solari Report, having broken down—in various interviews and publications—complex topics ranging from the threat of programmable CBDCs (or comparable digital control mechanisms) to the economic opportunities afforded by sovereign state banks and banking decentralization, and from the travesties of plunder capitalism to the vast yet uncomplicated potential for abundance.

In his conversation with Carlson, we learn that Werner’s experience as the very first Shimomura Fellow at the Development Bank of Japan in 1991 (a prestigious fellowship offered to non-Japanese researchers) piqued his intellectual curiosity about some baffling features of the roaring Japanese economy of the time—a period when no one but Werner anticipated the 20-year recession to come. As Werner explains, his determination to solve the economic puzzles he encountered in Japan eventually led him in the early 2000s to write Princes of the Yen—one of the best dissections ever written of how central banks engineer economic takedowns. (The initial Japanese-language edition became a bestseller in Japan and later overcame powerful censorship hurdles to get published by the UK’s Quantum Publishers in English.) Werner notes that spilling the beans on what causes boom/bust cycles earned him a visit from the U.S. State Department, which let him know quite bluntly that the CIA was keeping an eye on him.

Part of the fun of this interview is watching Carlson’s evident fascination as Werner explains banks’ unique—yet still largely unrecognized—power to create money “out of nothing” (Werner’s 2014 paper on that topic is the most downloaded Elsevier publication of all time) and Carlson’s astonishment that economic models and theories leave out banking! (Werner comments, “And that is, of course, why [the theories] don’t work.”)

The interview includes other riveting stories, such as how the invention of double-entry accounting helped usher a transition from material alchemy (e.g., attempts to turn mercury into gold) to financial alchemy (creating money out of thin air). This neat trick helped keep usury secret. The story of how French Navy battleships came to Manhattan in the late 1960s to claim France’s gold—and how that led the U.S. in 1971 to “temporarily” suspend the convertibility of the dollar into gold—is also entertaining.

Listening to Werner, it is not hard to conclude that central banks are a terrible invention, but he emphasizes that the credit creation powers of smaller banks, in particular, could redeem the banking industry. When small local banks create credit for productive small- and medium-sized business investment—in goods and services, new technologies, and new ideas—they can become the “magic elixir” for noninflationary growth and prosperity.

“Big banks want to do big deals with big customers. That’s how they earn big money. Who lends to small firms? Only small banks.”

If you have not already dived into John Titus’s War for Bankocracy series (with three episodes published to date), we recommend it as excellent complementary viewing.

Watch Tucker Carlson’s interview with Professor Richard A. Werner: