Authers’ Notes: Benjamin Ho on ‘Why Trust Matters’

On Nov. 17, I led a TOPLive discussion with Benjamin Ho, Vassar College professor and author of “Why Trust Matters: An Economist’s Guide to the Ties That Bind Us,” which explores how relationships, expectations and human interaction shape the world around us — be it in trade, employment or democracy. Before Vassar, Ho taught MBA students at Cornell, served as lead energy economist at the White House Council of Economic Advisers, and worked or consulted for Morgan Stanley and several tech startups. He also teaches at Columbia University, where he is a faculty affiliate for the Center for Global Energy Policy. His work has been featured in the New York Times and the Wall Street Journal. Ho holds seven degrees from Stanford and MIT in economics, education, political science, math, computer science and electrical engineering.

I was joined by stacy-marie ishmael, Bloomberg’s managing editor for crypto, to discuss how the book can apply to the latest developments in the ways people relate to one another. Here is the transcript.

John Authers: J.P. Morgan himself once famously said that trust mattered more than any collateral. In the congressional hearings that led to the establishment of the Federal Reserve, he said: “A man I do not trust could not get money from me on all the bonds in Christendom. I think that is the fundamental basis of business.”

But how do we define “trust,” and how do we build it? And what can we do about what is widely believed to be a catastrophic breakdown of trust within society in a number of critical government and economic institutions? And what can be done to rebuild trust in money itself, now that cryptocurrency is surging on the back of widespread lost trust in “fiat currency”?

To answer these questions, the Bloomberg book club has been reading “Why Trust Matters” by Benjamin Ho, a former White House economist who now teaches at Vassar College. It’s a great interdisciplinary dive into how trust works, and how we might harness it to help the economy grow.

The Fed: How would you score the Fed approach right now? Under Jay Powell they have stressed transparency and conceded that some traditional economic models are no longer effective. Is this combination of telegraphed intent and humility a good playbook for fortifying trust, or limiting anxiety, in high-stakes decisions?