“Insanely Concentrated Wealth Is Strangling Our Prosperity” is the title of a recent article on a website that proposes to offer ways in which we can, as a country, address what one amateur economist calls the worst income inequality in the history of time. The article’s sub-heading is, “Today’s amounts of wealth throttle the very engine of wealth creation itself.” The website is called” “Evonomics” and the author of this piece is Steve Roth, a Seattle resident who agreed to an interview about his article. It has been lightly edited for clarity. The audio is here:
Part 1 – 7:20.

Part 2 – 10:50.

Part 3 – 11:24. 

Part 4 – 11:59.

Paul Nelson: Can you tell us about the Evonomics website?

Steve Roth: Yeah, Evonomics was founded by founding Editor Robert Kadar. He and I were both working for The Evolution Institute. He was the editor of “This View of Life” online magazine about topics evolutionary. There’s a lot of the interest at The Evolution Institute, and a fairly academic topic at that time called Evonomics, which basically looks at economics through an evolutionary lens of competition and cooperation, survival of the fittest, the common ideas between evolution and economics. Robert decided to launch this site called Evonomics. I was very interested, because two of my huge intellectual passions are economics and evolution.

I was like, “Yeah, nobody’s going to want to read that.” Within a few months he was getting a quarter million page views a month. For the last two years Robert and I have been working on building it up, and we’re currently reaching millions of people a week on Facebook and getting hundreds of thousands of page views. Average person reads an article for five minutes, which is off the charts for website metrics.

Paul Nelson: In this era.

Steve Roth: In this era, right. People go to it and they read it, and the one thing I want to add is it’s not just about evolution economics anymore. We settled on the tagline, the next evolution of economics, which lets us do a much broader variety of …

Paul Nelson: Content.

Steve Roth: … content and topics. Wherein, what I liked in the economic scene wherein I like to call a very non-Kuhnian the moment, Thomas Kuhn wrote the structure scientific revolutions. You’ve heard of paradigm shifts before. He’s the guy that came up with that idea. The idea in that book is that a new paradigm comes along and replaces or supersedes: Copernicus, Einstein, Newton [are examples].

We’re in a fast name period in economics where the traditional paradigm is crumbling or is crumbled where many, or most have huge difficulties with its basic premises, but unlike a Kuhnian revolution, no single paradigm has replaced that. There is you might describe best as a whole plethora of competing research projects, where people are going at how the economy works in many different very diverse ways, and we’re trying to be a place for that, see change to be read about and understood.

Paul Nelson: As you were talking, I was thinking about the evolution of economics, and it seems to me there is an exact parallel between the devolution of our electoral system, and the person representing the country at this time – the 45th President of United States – and the current economic situation, both are so horribly wrong and horribly out-of-date and horribly inept at addressing the situation that we have today, would you say that’s accurate?

Steve Roth: Yeah. I would actually take it far more broadly to look at basically the economy over the last century. We had a Gilded Age in the 20s, crashed in ’29. Basically, we got the new deal where a huge amount of progressive agenda was enacted and put in a great deal of redistribution and social support programs. They simply built the spring board and platform that allowed tens of millions of Americans to stand up and change the world. The period after and then we had World War II where we ran our national data up to 120% of GDP, and the period that followed that was the greatest burst of widespread prosperity and wellbeing in the history of the United States.

It was just spectacular what was delivered unto the normal person in that period. That started to fade basically after Roosevelt. Truman was okay. Kennedy delivered the most massive tax cut for rich people we’ve seen in forever in 1964. (It was implemented in 1964.) Then came the Reagan “revolution.” If you look at any economic metrics, the economy has basically sucked and increasingly sucked ever since. The implementation trickled down, which actually started with that Kennedy tax cut has strangled our economy.

Paul Nelson: Trump is so horribly unqualified, but you’re talking about the problem going back to Kennedy who has looked back as maybe one of the last good presidents. Jimmy Carter’s tenure was seen as unsuccessful, and he was not reelected. If people liked Kennedy, Trump is fathoms and fathoms worse than that.

Steve Roth: Understand that I can’t help idolizing Kennedy. I have here a postcard that I keep on my computer screen of John-John and Catherine dancing in the Oval Office, with John F. Kennedy and it still brings tears to my eyes, but I know he was no paragon of progressive values and virtues. I think most progressives understand that, or I hope they do.

Paul Nelson: I’m not so sure they do, because I think the era that you’re talking about starting with Jimmy Carter continued with what you called the Reagan “revolution.” I would call that a “devolution.”

Steve Roth: Right.

Paul Nelson: That’s really neo-liberalism and that’s the problem we have now, because we have neoliberals saying, “No, we need to elect someone who’s more like the way things are and who’s not that far out, Hillary Clinton, and we see what happens.”

Steve Roth: Yeah.

Paul Nelson: We will talk about the neoliberal period, but I’d like to get a sense of your background. You’re calling yourself a student of economics and evolution.

Steve Roth: I have had a very varied career. The last real job I had was loading chair lifts at the ski area in 1980. I was a ski bum.

Paul Nelson: To me, that suggests you’ve been hugely successful, because you’ve been able to live your life the way you want to live it.

Steve Roth: I have been. Right, well, I was lucky I was born to a prosperous family. My dad was a classic 1960s St. Louis, do-gooder, Jewish lawyer, national board of the ACLU, health and hospitals, aid the victims of crime. He was that kind of guy and that’s been imbued in me, but I was also quite prosperous, I was lucky. I was able to start my own businesses, and I did quite well. I’m not wildly rich, but I’m very comfortable, because of the month, built and sold quite a few, and I’m an equity investor in various things now. I was lucky. I started on third base. In the process, I’ve built a lot of businesses, and I’ve really come at this whole thing very much from that perspective.

I’m also just naturally a sort of intellectual guy, and I get super interested in things. I got super interested in economics and about 15 years ago, I started studying that hard and started writing a blog, which is how I figure out what I think or try and work through problems. I’m totally an autodidact, a self-trained student of economics that results in some spotlight knowledge that an autodidact ends up with. I don’t have some of the broader stuff that you would get if you went to graduate school for instance, so I’m a self trained student of economics, but I’ve studied hard and read thousands and thousands of things.

Paul Nelson: The gap between rich and poor in the United States at this time is the greatest gap in the history of time, isn’t it?

Steve Roth: I think it is, it’s hard to say, but if you look at Thomas Piketty’s work, we’re certainly at or above where we were in the late 19th century and early 20th century. This raises a point about the article I wrote is that wealth has always been extremely difficult thing to measure, because basically rich people don’t want to tell you for very obvious reasons.

Paul Nelson: They don’t want to tell you how much they have or where they’ve hidden it.

Steve Roth: Right, exactly. I think Piketty’s colleague Gabriel Zucman has said, “There’s at least $20 trillion in household wealth hiding in the world just for a benchmark, U.S. household wealth that’s $100 trillion.”

Paul Nelson: How much?

Steve Roth: About $20 trillion. Now the $20 trillion is from worldwide.

Paul Nelson: Right. Those are in the mattresses somewhere in the world, right?

Steve Roth: Yeah, they’re in the labyrinths.

Paul Nelson: Right, and the gap between rich and everyone else in this country?

Steve Roth: Yeah, the top 1/100th of 1% in the U.S. today, for instance, 2014, I think had about average $420 million in 2014. In the 70s and the 80s that was more like 30 million, so they have 12 times as much as they did then, and they already had a huge amount. Anybody below the top 10%, it’s almost invisible how much wealth they have individually compared to that.

Paul Nelson: Compared, yeah. You say these people could spend 20 million every year, and they’d still just keep getting richer even if they did absolutely nothing except choose some index funds.

Steve Roth: And shop for a yacht for their 8 year old. Yeah, we pay people for two things in this world; we pay them for doing things, and we pay them for owning things. Increasingly, it’s been the later. Much of that ownership income and people like to call it investment income, but if you have $420 million, you put it in a handful of index funds and never touch it and you can easily spend 20 million a year and still get richer.

Paul Nelson: Index funds, explain that to me.

Steve Roth: Index funds are like you say, “Okay, invest in all this S&P 500 stocks or invest in all the emerging market stocks.” They’re just a fund, you put some money in to maintain a portfolio of whatever type stocks and modern portfolio, for reasons that’s how you should invest. You just buy a few index funds and ignore them. Warren Buffet proves that with a bet recently. He said, “I’ll bet you,” some hedge fund guy, “I’ll bet you if you put money in an S&P fund for 10 years compared to 10 hedge fund, funds, funds of hedge funds, you’ll come out ahead with the S&P 500 index fund”, which is a tiny little management cost compared to the hedge funds who charge a huge amount and the S&P 500 just won hands down, so that’s what rich people certainly can do with their money, is just sit on it.

Paul Nelson: Just to get a sense of that, the market right now under the current president is doing fantastically.

Steve Roth: Well, it’s been doing fantastically since March of 2009, which was the bottom and so that’s eight years, it’s been doing fantastically.

Paul Nelson: Right.

Steve Roth: That I want to suggest has a lot to do with the whole game being rigged for owners to do well.

Paul Nelson: Right. The people who don’t have that kind of wealth and aspire to it, who is the one who said, “There’s no poor people in America just temporarily embarrassed millionaires.”

Steve Roth: Yeah.

Paul Nelson: I think it was Steinbeck that said that, I’m not sure, but they believe that the rich earned this. This is a typical response. You allude to this in the article. First of all, where does this notion come from, that the fact that they’ve rigged the system to benefit them, they’re getting enormously wealthy beyond what anyone could ever need in lifetimes and lifetimes and some people who go without that, who may be go without basic things like health care believe, no, they deserve that?

Steve Roth: Yeah, I think that the most interesting statistic on that is in the U.S. 50% to 70% of wealth, that’s a $100 trillion in wealth. 50% to 70% of that wealth is inherited. We just haven’t even known that number until the last few years. Wealth, again is extremely difficult to measure and Piketty and company, Gabriel Zucman  have been doing the world changing work to actually analyze that and also some of the accountants at the national accounts agencies, we didn’t even have a measure, a complete and coherent measure of U.S. wealth in the national accounts until 2006. We didn’t have quarterly numbers until 2012. We had some early efforts to measure that by the national accountants in the 80s, improving in the 90s, but when Mr. Kuznets in 1930 first created the national income and product accounts, it was just designed to measure the flows of money in production and income. There was no way they could hope to measure. Well, they just didn’t have the wherewith all to do it. I think that this focus on wealth has not occurred before, because we simply didn’t have the information. I think I diverged from the question you just asked me.

Paul Nelson: Well, yes. For people keep voting against their best interests have the sense that these people are rich, because they deserve it on some level. You’re saying, “No, they just were lucky.” I mean like you, in other words.

Steve Roth: Well, certainly, I worked hard. When I was in my heyday, I was working 60, 80, 100 hour weeks, but let me make this perfectly clear, I was loving it. It was fun. It’s not like I was some diligent Calvinist with my nose to the grindstone, I was doing cool stuff and I loved it. Yes, many people do make fortunes, but again, 50% to 70% of wealth is inherited. I just saw a number today, the average household in the top 1% has inherited more than $400,000 in their lives. My most successful business, I started shortly after my father died. He died somewhat young. I got a small six figure inheritance, nothing like a retirement or anything, but I was just about to have kids, I was married. It was a buffer. I knew that if this business I was going to try failed, I’d have a place to stand. I’d like to see every American, every guy in the world have that kind of solid platform spring board, a place to stand, a comfortable life, secure, where they can take some chances, where all of us can be that kind of risk-taking entrepreneur, because it’s one thing to risk some money if you’ve got a million or millions of dollars. It’s quite another thing to risk your family crashing and burning.

Paul Nelson: Living under a bridge somewhere.

Steve Roth: It can happen.

Paul Nelson: There’s no health care, because there’s no health care in this country.

Steve Roth: Right, there but for the grace of God, go I.

Paul Nelson: Right. Since, 1976, the game has been rigged to the rich, so we see it really starting during the Carter Administration and you might suggest or you did suggest that 1964 with Kennedy’s tax cuts, we began to see a change from the new deal ethos.

Steve Roth: Yeah, I like to say that the Kennedy tax cuts were a pre-abdication to trickle down, before trickle down had even been coined.

Paul Nelson: Exactly.

Steve Roth: I mean we heard the same arguments in the progressive era with very same fights. Teddy Roosevelt was having the very same fights.

Paul Nelson: Exactly. There was a different ethos back then with… who was it the dimes, I’m trying to think of the name of the dime. The guy was giving away the dimes, the rich guy.

Steve Roth: I don’t know.

Paul Nelson: Well, anyway Carnegie, let’s look at Carnegie Library.

Steve Roth: The Rockefeller.

Paul Nelson: Rockefeller was the name I was trying to think of. The Rockefellers, the Carnegies, the Robber Barons. Back then they knew that if they didn’t give it away somehow their souls were going to rot in hell. That ethos is gone. Not only is that ethos gone by and large, but what’s happening now is a system — and this is your thesis — that the rich people hoarding the wealth, is strangling the whole economic situation except for the richest of the rich.

Steve Roth: Yeah, now this is interesting, because it’s a thing that economists, I think just don’t perceive. You’ve got this $100 trillion in wealth and if 20% of it gets spent in a year, you got 20 trillion in GDP and so producers produced 20 trillion dollars worth of stuff, because as a producer I’m here to tell you that producers produce stuff for one and only one reason, because people are spending on it and buying them. The economy is always and everywhere demand-driven, at least from my perspective as a producer and entrepreneur, there’s no other reason I produce stuff.

Paul Nelson: The rich holding on to all the wealth is strangling any kind of multiplier effect or any serious multiplier effect we might have if there were more of that money circulating.

Steve Roth: Yeah, I don’t even like to use that word multiplier effect, because it sort of confuses income with wealth. I prefer to just talk about the velocity of wealth. I think it’s easy to understand and fairly simple arithmetic. In the article that brought you here to talk to me, I pulled a little table. I’ve been meaning to do this for years, I finally did it. Bottom line is the bottom 60% of people and this is as a group. Don’t think individuals, so group, the bottom 60% turnover 40% or 50% of their wealth a year in spending, driving production.

Paul Nelson: Buying milk and paying rent basically.

Steve Roth: Yeah, well, or buying boats for their family vacation, I don’t care. I want people to have that kind of basic comfortable life to be able to take their family on vacation once a year, once every two years. Sure, that seems like we have plenty for that to be true for pretty much every American. The bottom 60% turns over about 40% or 50% of their wealth a year. The top 20% turns over 5% of their wealth a year. They are quite literally sitting on a hoard of money and turning it over very slowly. It’s important to say turnover. When they spend it, it doesn’t go away. One person is spending is another person’s income. All this wealth turnover is a circular thing. Wealth also grows over time, but there’s through a couple of various effects, but I’m not going to talk about that at this instant.

Paul Nelson: Other than the huge tax breaks to the uber-rich. We know the Reagan era, the decimation of unions starting with the decertification of the air traffic controllers — the PATCO Union. These were some of the things that began to happen. What were some of the other things that have happened in this neoliberal era that have just made it horrible for working people?

Steve Roth: Yeah, it’s a whole panoply of things if you go back to the 70s and the famous Powell Memo. Lewis Powell, Supreme Court Justice wrote a memo to the captains of industry saying, “People are trying to destroy capitalism, we need to get together and fight back,” on the founding document of Koch brother’s-type effort that has been his expended hundreds of billions of dollars in propaganda over the decades. They were so fully aware that they bought grad schools, they built think tanks. They hired armies of lobbyists. There were many ways that this happened. I could point to a few things. One of the key ones was a bill that went through in the waning days of the Clinton Administration when he was struggling with the whole Monica Lewinsky thing called the Commodities Futures Modernization Act. It basically took the shackles off Wall Street and the shadow banks. It’s one of many things. I think the deregulation of the financial industry to the point that finance delivers maybe 5% of “value added” to our economy, but extracts 25% of corporate profits is the result of that. I could run through a long list of things. It’s been a full spectrum attack and spectacularly, brilliantly executed, spectacularly successful. Killing unions, Reagan and the air traffic controllers was just a classic moment, but there are so many of those moments over the decades.

Paul Nelson: The Bernie Sanders campaign seemed to believe that going back to the new deal era would have made things better, but is that possible? Can we just have a second New Deal or has the situation changed so much that it’s a lot more complicated than that?

Steve Roth: There’s two questions; one is economic, the others political. Economically, yes, why in the hell not; politically, the essential problem is those decades of propaganda have been so effective that even the left has been ideologically captured.

Paul Nelson: Hence, neo-liberalism.

Steve Roth: Hence, neo-liberalism.

Paul Nelson: Hence, Clintonism.

Steve Roth: Yeah, the “Washington Consensus,” the austerity campaigns, you can go on and on, yes. I think maybe the biggest problem is that democrats abandoned, really in the 60s and 70s, abandoned the full-throated economic progressive populism that won FDR, four resounding terms. One of his campaigns, he lost one state. For some reason, Democrats have been for many decades unwilling to pick up that torch and waited, and left-winged economists are maybe the worst. They’re so weak-voiced. This assertion I make that concentrated wealth is strangling the economy. You can throw that at any left-wing economist. “Let’s say, well, yes, we really don’t have the data to demonstrate that conclusively. I think you’d be in a little over, you’re overstating the case. Wah wah wah…”Meanwhile, the republicans are absolutely unabashed, the right-wing economists and republicans are unabashed saying, “Oh, yeah, we’re going to create a million jobs and bring all the jobs back from overseas.” They’re unabashed about just saying the most outrageous thing. That “cutting taxes increases tax revenues.” The right-wing economist saying that for decades many of them in the bottom paid for think tanks …

Paul Nelson: Proven wrong in Kansas.

Steve Roth: Proven wrong over and over and over again without remiss.

Paul Nelson: Kansas, especially, is a great example of that.

Steve Roth: Yeah, that’s just such a beautiful recent small example. Now, we’ll say you always have to look at long periods and big samples to really draw conclusions from this stuff. Kansas is only one, but it’s a very good one.

Paul Nelson: Elaborate on why it’s a good example, Kansas? Governor Brownback.

Steve Roth: Brownback, yeah. I thought you said brown bag.

Paul Nelson: We’re left holding the brown bag in this case.

Steve Roth: It’s just a good example, because it was a very distinct move in time from point x to point b, there’s a big cut. Since it’s only one example, it’s anecdotal, but we do can compare it to Nebraska, Missouri, the states around that and the other similar states, which is a good way to sort of evaluate these kind of things judiciously and sensibly. It just got its fanny whooped economically, it’s just been terrible. It’s, by all appearances, been terrible for Kansas. They’re slashing education and again. That’s another thing is this kind of wild austerity is incredibly short sighted short-termism. There is no more valuable payback or mid businessmen, payback, ROI over 10, 20, 30, 40 years than robust investments and education. Thanks for the G.I. Bill and what it did for America. To strangle that funding as the republicans have been doing here in Washington here for years to the point that there are under $100,000 a day, a week fine for underfunding education, the legislature is, that it’s just so contrary to my businessman’s approach to building a successful long-term business or country.

Paul Nelson: How to fix this, one thing that’s been suggested is a universal guaranteed basic income?

Steve Roth: Yeah, I should just mention that there’s quite a bit of controversy in the progressive community between UBI and job guarantee. An important thing to say is it’s not either or we should be trying both. I’m very much a fan of a broad panoply of progressive programs. The Republicans love to say “unintended consequences” and they are sure it’s right. Really, we never know how one particular thing is going to work. You got to try a whole lot of things, which is what FDR was brilliant at. He tried things, when they failed, he stopped doing them and he did other things. UBI, I think… we have a hundred trillion dollars in household wealth in America, that’s three quarters of a million dollars for each household. I’m not saying everybody gets three quarters of a million dollars, but there is just a vast amount of wealth that everybody can be sharing and income as well. Much of it goes to owners for doing nothing; I think that should be shared commonly, because it basically comes from our collective economy. I like to say the primary input to production is cooperation, is people working together. There’s no way you can say that person deserves this share of the cooperation money. Just two concrete examples I’ll give of how that might work well: Alaska’s Permanent Fund, I think it’s called permanent fund…

Paul Nelson: Based on oil revenues.

Steve Roth: Right, and Norway’s sovereign wealth fund, in both cases, they’ve built funds that invest in a wide range of assets, just like an individual prosperous person does. Then they deliver dividends to the populace, each person gets a certain amount and their rules for whether kids get it. Do you have kids? There are different rules. They’re an incredibly reasonable, effective and fair way to make sure everybody shares some of the prosperity that we built together. It’s not insane. It’s just a straightforward thing. I’m not saying that everybody should get a universal basic income up $40,000 a year every household, but how about $10,000, $5,000.

Paul Nelson: What safeguards would there be that someone just doesn’t end up spending it on pure grain alcohol or living under a bridge?

Steve Roth: Look, I’m a rich guy and I’ve been spending a great deal of my life hanging out with rich people, you know what we do? We sit on beautiful decks and drink really nice alcohol.

Paul Nelson: If you want to do that, it’s okay, is what you’re saying?

Steve Roth: Yeah. We basically say: “If you sit on this nice deck in this fancy house and drink really good wine. It’s okay, but if you sit on the stoop of your apartment building and drink a beer, it’s not.”

Paul Nelson: Okay, all right, fair enough. Job guarantees evoke memories of the Civilian Conservation Corps and the Works Progress Administration, two New Deal projects that give us lasting legacies,  such as if you walk in Queen Anne and you see the beautiful stairways that were built and all these other projects were built by these two government agencies. Is that what you’re talking about when you say job guarantees?

Steve Roth: That is what the job guarantee advocates are talking about and I’m all for it. I want to see it ramped up slowly as I would with UBI to see how it works, because the way I’ve heard it described so far I just don’t really get the mechanics. The idea they’re talking about is that nonprofits have their employees paid for by this job guarantee, so maybe you’re a social entrepreneur, you know, the nonprofit that-

Paul Nelson: Let’s does literary arts and interviews, for example.

Steve Roth: That would be fine or that builds civic structures like those stairways you’re talking about.

Paul Nelson: Right.

Steve Roth: What I haven’t heard explained to me to my satisfaction as a business owner and super systems organizational guy, is who decides, which nonprofits have their employees paid, and who decides, which employees at those nonprofits are paid? I have a lot some really practical questions about the job guarantee, but I think we should be trying it all over the place and see how it works and see what the kinks are and work it out. I did want to say one more thing about job guarantee. I really object to the idea — and this is something that conservatives rant on about all the time — the idea that we should be working more.Understand that in Europe they have a standard of limit about equivalent to ours, they live really well. They work six weeks a year less than we do. If you believe in family values, we should be trying to work less. In the 1930s, Keynes said that by now he expects us to be working 15 hour weeks. Instead of devoting our productivity to giving people more free time and time with their families, time doing things that they want to do, we have devoted this increased productivity to delivering … he did Corinthian leather car seats and million dollar Maseratis. For $1 million Maserati, you can deliver 40, $25,000 Toyotas. One, were devoting it to the wrong products, because of the concentrated wealth distorts the production incentives that way. Two, we’re devoting it to products instead of time. Time is the one thing that we all have a very limited amount of.

Paul Nelson: It’s interesting how the millennials by and large are choosing to not buy cars, to use public transportation, to live in cities and instead of buying things so much, buying experiences or traveling, so maybe that’s a harbinger of coming things.

Steve Roth: Maybe, will they be willing to sacrifice income to spend time with their families, so for instance, one of us want the father or mother or one of the parents stays home.

Paul Nelson: Right. One other thing we haven’t discussed about economic matters is the notion of worker-owned businesses. That’s another thing you’d throw up there, perhaps legislation that would benefit something like a worker-owned business.

Steve Roth: I don’t know much about that subject. The reason is and maybe this is stupid, but because I’ve never see much of it out there. It seems sort of small change. I intend to look for this sort of big opportunities that’s what interest me for whether they’re a pie in the sky or maybe they are, but I’m always looking for the big things like $100 trillion in wealth, as opposed to,  for instance, United Airlines at one point, one worker only, it didn’t last long. That was one of the big ones. I just haven’t paid much attention to it though. I’d certainly see it as a strong possibility. Currently, corporations are very much C-Suite owned. They have big ownership shares and when I ran businesses, big ones, I gave a big ownership share to my employees just because I thought it was the right thing to do. I thought we’d all do well by it.

Paul Nelson: Also, the notion of cooperatives. REI for example, PCC, here in this city in Seattle, people have a choice to shop at the local Safeway, the local QFC, the PCC or increasingly having their food delivered to them via Amazon/Whole Foods. Now anyone who’s a real progressive looks at Whole Foods, sees them as another corporation who’s trying to take wealth out of towns and bring it to their corporate headquarters, whereas PCC for all its efforts of becoming more corporate is still cooperatively owned and came out of this area and is connected more deeply to this area, so that’s one example I think.

Steve Roth: Yeah, that’s true. REI, I think is pretty much a big corporation. I’ve been a member since forever, but that doesn’t mean anything to me. I still shop there just like I shop with any other store.

Paul Nelson: Are you optimistic that things get better in the near term or that we’re going to see a crash?

Steve Roth: I think we’re long overdue for a financial, for a stock market decline, I would fully expect that to happen soon. There’s a lot of indicators. Anybody that says they know when it’s going to happen is lying to you, but certainly if it doesn’t happen on the next few years, I’d be very surprised if it doesn’t happen in the next few years. That’s a stock market decline and that’s what generally causes real economy declines. This is a fairly simple explanation. All of a sudden a whole lot of people look at their brokerage accounts and have less wealth, so they spend less. This is a behavioral economic assertion when people have less money, they spend less. When they spend less, producers produce less, they hire less, pretty straightforward. Yeah, these price meltdowns when the price … we had a very interesting one in 2008 and of the real estate market was the first cause, but then the stock market went after it. That usually doesn’t happen. Usually, it’s just the stock market that causes the recession, but every time real household net worth has declined over the last… since the 1960s, since basically the end of the Bretton Woods Monetary Agreement since the early 70s. Every time the real household net worth has declined, you’re either in or about to be in a recession. I see that, basically, they’re not really business cycles, they’re financial cycles and the financial cycle causes the real economic recession.

Paul Nelson: To find out more about your work we can go to Evonomics and what other website would you put out there?

Steve Roth: My personal website, which I blog, which I’ve been working on for about 15 years haven’t done much just lately, but there’s a huge mass of my research from work. There is Asymptosis. It’s like an asymptotic approach and the tagline is, “always approaching.”

Paul Nelson: Thanks for your time today.

Steve Roth: Thank you very much. It was fun talking to you.

Steve Roth serves as Publisher of Evonomics. He is a Seattle-based serial entrepreneur, and a student of economics and evolution. He blogs at Asymptosis, Angry Bear, and Seeking Alpha. Twitter: @asymptosis. We caught up with him